EXHIBIT 1.1


BY-LAWS
 TIM PARTICIPAÇÕESS.A.
   CHAPTER I
 THE COMPANY’S
CHARACTERISTICS
   Section 1 -TIM PARTICIPAÇÕESS.A.is a publicly-held company, governed by
these By-laws and by the applicable legislation.
  Section 2 -The purpose of the Company
is to:
  I.
              Control the companies which
      explores telecommunications services, including mobile personal telephone
      services and others, in their respective authorization and/or concession
      areas;
 II.
              Promote, through its controlled or
      affiliated companies, the expansion and implementation of mobile telephone
      services in their respective concession and/or authorization
      areas;
 III.
              Promote, perform or give guidance
      in relation to the borrowing of funds from internal and external sources
      to be invested by the Company or by its controlled
      companies;
 IV.
              Promote and incentive study and
      research activities for the development of the mobile telephone services
      industry;
 V.
              Provide specialized technical
      mobile telecommunications services through controlled or affiliated
      companies;
 VI.
              Promote, incentive and coordinate,
      through controlled or affiliated companies, the education and training of
      the staff required by the mobile telephone services
      industry;
 VII.
              Perform or promote the import of
      goods and services for the controlled or affiliated
      companies;
 VIII.
              Engage in any other activities
      related or akin to its purpose;
and
 IX.
              Hold interest in the corporate
      capital of other companies.
   Section 3- The Company is
headquartered and its forum is based in the city and State of Rio de Janeiro, at
Avenida das Américas, 3434, Bloco 1, 7o andar – Parte; upon resolution of its
Board of Directors, the Company may open and close branches and offices anywhere
in Brazil or abroad.
  Section 4- The duration term of the
Company is indeterminate.
   
 
   CHAPTER II
 CAPITAL STOCK
  Section 5 - The subscribed and
fully-paid capital stock is of seven billion, six hundred and thirty-two
million, three hundred and seventy-one thousand, three hundred and seventy-three
reais and fifty-six cents (R$7,632,371,373.56), represented by two billion,
three hundred and forty-eight million, four hundred and forty-seven thousand and
thirty-six (2,348,447,036) shares, of which seven hundred and ninety-nine
million, nine hundred and twenty-four thousand, eight hundred and five
(799,924,805) are common shares and one billion, five hundred and forty-eight
million, five hundred and twenty-two thousand, two hundred and thirty-one
(1,548,522,231) are preferred shares, all of them nominative shares, with no par
value.
  Section 6- The Company is
authorized to increase the capital stock upon resolution of the Board of
Directors, irrespective of an amendment to these By-laws, up to a limit of two
billion and five hundred million (2,500,000,000 ) shares, either common or
preferred shares.
  Sole Paragraph– Within the limits of the
authorized capital stated in the caput of this section, the Company may grantstockoptions to its officers, employees or
individuals rendering services to the Company or to its controlled companies, in
compliance with the plan approved by the Shareholders'
Meeting.
  Section 7- The capital stock is
represented by common and preferred shares, with no par value; there is no
obligation of keeping a ratio between them in capital increases, except as
otherwise provided by the law or hereby.
  Section 8- The Shareholders' Meeting
may cancel the preemptive right in the issue of shares, convertible debentures
and subscription bonus, which placement is made by:
  I.
              Public subscription or public
      trading;
 II.
              Exchange for shares of stock in a
      tender bid for the controlling interest, pursuant to sections 257 through
      263 of Law No. 6,404/76;
 III.
              Use of tax incentives, as provided
      in the applicable special
law.
  Section 9- Each common share
corresponds to 1 (one) vote in the Shareholders' Meeting
resolutions.
  Section 10 -Preferred shares have no
right to vote, except in the case provided in the sole paragraph of section 13
hereof, being assured to them the following priority or
advantages:
  I
              priority in the capital stock
      refund, without any premium;
 II
              payment of a minimum and
      non-cumulative dividend of 6% (six percent) per year
   2
 
  over
      the amount resulting from the division of the subscribed capital stock by
      the total number of shares issued by the
Company.
  Paragraph One:Preferred shareholders are
ensured the right to receive, every year, a dividend on their shares
corresponding to 3% (three percent) of  the book value of the share,
as stated in the last approved balance sheet, whenever the dividend determined
by this criterion is higher than the dividend calculated by applying the
criterion set forth initem
IIof this
section.
  Paragraph Two –Preferred shares shall
acquire the right to vote in the event the Company ceases paying the minimum
dividends provided above forthree (3)consecutive years, and shall retain
such right until the full payment, in the event such dividends are
non-cumulative, or until the cumulative dividends in arrears are paid, all
pursuant to paragraph 1,
section 111 of Law No. 6,404/76.
  Section 11– The shares of Company
shall be book entry shares and shall be kept in a deposit account, at a
financial institution, on behalf of their holders, with no issuance of share
certificates. The depository institution may charge shareholders for the cost of
transferring their shares, as provided in section 35,paragraph 3rdof Law No. 6,404/76.
   CHAPTER III
 SHAREHOLDERS’
MEETING
  Section 12– The Shareholders' Meeting
is the ruling body of the Company, with authority to decide on all business
concerning its corporate purpose and take the actions deemed convenient to the
protection and development of the Company.
  Section 13 –The following are exclusive
powers of the Shareholders' Meeting:
  I.
              to amend the By-laws;
 II.
              to authorize the issue of
      debentures and convertible debentures into shares or their sale, if they
      are kept in treasury, and also authorize the sale of any convertible
      debentures into shares issued by controlled companies held by the Company,
      and the Company may vest on the Board of Directors the authority to
      determine the time and conditions of the maturity, amortization or
      redemption; the interest payment terms and conditions; profit-sharing and
      reimbursement premium, if any; and the placement or subscription method;
      as well as the type of
debentures;
 III.
              To decide on the appraisal of
      assets given by shareholders to pay up capital
    stock;
 IV.
              To decide on the Company's
      transformation, merger, take-over and split-up; its dissolution and
      liquidation; to appoint and remove liquidators and appreciate their
      accounts;
 V.
              To authorize the Company to grant
      guarantees to third parties’ obligations, excluding its controlled
      companies’ obligations;
   3
 
 
 VI.
              To suspend the rights of
      shareholders that do not comply with their duties imposed by law
      orbythese
    By-laws;
 VII.
              To elect and remove, at any time,
      the members oftheBoard of Directors
      and the members of the Statutory Audit
  Committee;
 VIII.
              to determine the global or
      individual remuneration of the members of the Board of Directors, Board of
      Executive Officers and members of the Statutory Audit
      Committee;
 IX.
              to annually take the accounts of
      the management and decide about the financial statements submitted by the
      management;
 X.
              to decide whether the Company
      shall file a civil liability law suit against the management for losses in
      the Company’s assets, as provided in section 159 of Law No.
      6,404/76;
 XI.
              to authorize the sale of all or
      part of the shares of a controlled
  company;
 XII.
              to resolve about capital stock
      increase by means of subscription of new shares, as provided in the sole
      paragraph of section 6 and whenever the limit of the authorized capital
      has been attained;
 XIII.
              to decide on the issue of any
      other securities inBrazilor abroad, in particular the
      issue of shares and subscription bonus, in compliance with the laws and
      the provisions hereof;
 XIV.
              to authorize the exchange of
      shares or other securities issued by controlled
      companies;
 XV.
              to previously approve the
      execution of any agreements with a duration exceeding 12 (twelve) months
      between the Company or its controlled companies, on the one side, and the
      controlling shareholder or companies controlled, affiliated or under the
      same control or the controlling companies of the latter, or parties
      related to the Company, on the other side, except when those agreements
      are governed by uniform
clauses.
  Sole Paragraph -Without prejudice to the
provision under paragraph
1, section 115 of Law No. 6,404/76, the holders of preferred shares
shall have right to vote on the shareholders' meeting decisions mentioned in
item XV of this section, as well as on those concerning the amendment or
cancellation of the following provisions of these sections:
  I.
              item XV of section
      13;
 II.
              sole paragraph of section 14;
      and
 III.
              section
  49.
  Section 14- The Shareholders' Meeting
shall be convened by the Board of Directors, represented by its Chairman, and
may also be convened as provided under the sole paragraph of section 123 of Law No.
6,404/76.
  Sole Paragraph- In the hypotheses
provided under section 136 of LawNo.6,404/76, the first call to the
Shareholders' Meeting shall be made at least 30 (thirty) days in advance, and
the second call at leasteight (8)days in advance.
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  Section 15- The Shareholders' Meeting
shall be opened by the Company's Chief Executive Officer or by its expressly
appointed proxy, with specific authority therefore, who shall then elect the
presiding board, formed by a chairman and a secretary, chosen among theattendingindividuals.
  Sole Paragraph– In order to prove the
shareholder status, it will be observed the provision of section 126 of LawNo.6,404/76; holders of uncertified or
deposited shares shall deposit with the Company's head-office, no later than two
(2)working days before the
shareholders' meeting, their identity document and respective proxy, when
needed, and the receipt/statement issued by the depository institution, issued
no later than five (5) working days before the shareholders'
meeting.
  Section 16- The Shareholders' Meeting
proceedings and resolutions shall be recorded in minutes, signed by the
presiding board and the shareholders attending the meeting that represent, at
least, the majority required for passing resolutions.
  ParagraphOne- The minutes shall be recorded as a
summary of the facts, including dissents and protests.
  ParagraphTwo- Except as otherwise decided by the
Meeting, the minutes shall be published without the shareholders'
signatures.
  Section 17- Annually, within the
first four months following the end of the fiscal year, a annual Shareholders'
Meeting shall be convened to:
  I.
              take the management accounts;
      examine, discuss and vote the financial
  statements;
 II.
              decide on the uses to which the
      net profits of the fiscal year should be put and on the distribution of
      dividends; and
 III.
              elect the members of the Statutory
      Audit Committee and, when applicable, the members of the Board of
      Directors.
  Section 18- A Special Shareholders'
Meeting shall be convened whenever the Company interests so
require.
  Section
19. – The shareholders
shall exercise their voting rights in the Company’s
interests.
  CHAPTER IV
 COMPANY MANAGEMENT
   SECTION I
 GENERAL RULES
   5
 
  Section 20- The Company shall be
managed by the Board of Directors and by the Board of Executive
Officers.
  Paragraph One -The Board of
Directors, as a decision body, shall carry out the high management of the
Company.
  Paragraph Two- TheBoard ofExecutive Officersisthe Company’s representative and
executive body, and each one ofits membersshall act within his/her respective
scope of authority, provided that the limits set forth in sections 13, 25 and 32
of these By-laws are observed.
  Paragraph Three- The duties and powers
vested by law on each management body cannot be assigned to
another.
  Paragraph Four– The members of the Board
of Directors andoftheBoard ofExecutive Officers are released from
providing a pledge as guarantee of their term of office.
  Section 21- Managers will take office
by signing an instrument of appointment recorded in the Book of the Minutes of
the Board of Directors or Executive Officers’ Meetings, as the case may
be.
  Section 22
–At the taking of
office,the Company’s Managers shall sign, in
addition to the instrument of appointment, a statement pursuant to which they
shall adhere  to the terms of the Company’s ethics code and the
“Policy of Disclosure and Use of Information and of Securities Trading”
Manual.
  Section 23– In addition to the events
of death, resignation, dismissing and other events provided for in the law, the
position shall become vacant wheneverthe manager fails to sign the
instrument of appointment
within the thirty (30)days
as of its election or is absent from exercising its duties for more than thirty (30)
consecutive days or ninety (90)non-consecutive days during the term of
office, everything with no just cause, at the discretion of the Board of
Directors.
  Sole Paragraph– The resignation from the
position of manager shall be made upon written communication to the body
integrated by the resigning member, and it shall become effective as of such
moment to the Company and,
to any third parties, after the filing of the document of resignation with the
Board of Trade and its publication.
  Section 24- The managers' mandate shall be of two
(2)years, with reelection
allowed.
  Sole Paragraph –The managers' mandates
shall be considered extended until their elected successors take
office.
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  SECTION II
 BOARD OF DIRECTORS
   Section 25– In addition to the duties
provided by law, the Board of Directors is responsible for:
  I.
              approving and following up the
      Company's annual budget, as well as that of its controlled companies, in
      addition to the goals action plan and business strategy plan for the
      period covered by the
budget;
 II.
              deciding on the Company's capital
      increase up to the limit of authorized capital, as provided in section 6
      of these By-laws;
 III.
              authorizing the issue of
      commercial papers for public
offering;
 IV.
              deciding, when so empowered by the
      Shareholders' Meeting, on the conditions for the issue of debentures, as
      provided in paragraph
      1, section 59 of Law No. 6,404/76;
 V.
              authorizing the purchase of shares
      issued by the Company, for the purposes of cancellation or holding them in
      treasury and subsequent
sale;
 VI.
              deciding on the approval of
      a program of depository receipts issued by the
    Company;
 VII.
              approving the purchase or sale by
      the Company of its interest in capital stock of other companies, except in
      the case provided in item XI of section 13 of these
      By-laws;
 VIII.
              authorizing the waiver of
      preemptive rights to the subscription of shares, debentures convertible
      into shares or subscription bonus issued by the controlled
      companies;
 IX.
              authorizing the creation of
      subsidiary
      companies;
 X.
              authorizing the Company, as well
      as its controlled companies and affiliates, to enter into, amend or
      terminate shareholders’
agreements;
 XI.
              previously approving any
      continuous rendering agreements, with a term equal to or below 12 (twelve)
      months, of an amount equal to or greater than R$5,000,000.00 (five million
      Reais)  per year, between the Company or its controlled
      companies, on one side, and the controlling shareholder or controlled
      companies, affiliated, under common control or holding companies of the
      latter, or companies in any way related to the Company or its controlled
      companies, on the other
side;
 XII.
              submitting to the approval of the
      Shareholders’ Meeting the performance of any business or transaction
      included among those listed in item XVof thesection 13 of these
      By-laws;
  XIII.
              authorizing the granting ofsecuredor personal guaranty by the
      Company in favor of controlled
companies;
 XIV.
              authorizing the sale or
      encumbrance of the Company’s real estate properties, or those of the
      companies controlled thereby, whose book value is greater than
      R$250,000.00 (two hundred and fifty thousand
  Reais);
 XV.
              authorizing the sale or
      encumbrance of any assets integrating the Company’s
   7
 
  permanent
      assets, or those of the companies controlled thereby, whose book value is
      greater than R$5,000,000.00 (five million
Reais);
 XVI.
              authorizing the purchase by the
      Company, or by its controlledcompanies, of assets for the permanent
      assets whose individual value is greater than 2% (two percent) of the
      Company’s net worth, accrued on the latest annual balance sheet approved
      by the Shareholders`sMeeting;
 XVII.
              approving the contracting by the
      Company or its controlled companies of loans, financing or other
      transactions implying indebtedness to the Company or its controlled
      companies, whose individual value ishigher than two
      percent(2%)of the Company’s net worth,
      accruedon the latest annual balance sheet
      approved by the Shareholder’s
Meeting;
 XVIII.
              by virtue of the Company’s
      social responsibilities and those of its controlled companies, authorizing
      the performance ofnon-profitacts, for the benefit of
      employees or the community, whenever the value involved is greater than
      R$250,000.00 (two
      hundred and fifty thousand Reais), provided that the granting of
      guaranties to employees in the case of interstate and/or intercity
      transfers does not depend on previous approval by the Board of
      Directors;
 XIX.
              approving the Company's
      supplementary pension plan and that of its controlled
      companies;
 XX.
              electing and dismissing, at any
      time, the Executive Officers, including the Chief Executive Officer,
      determining their specific duties and scopes of authority in compliance
      with the provisions of these By-laws, and also approving the assignment of
      new duties to Executive Officers and any amendment to the composition and
      the duties of the Executive Officers;
  XXI.
              dividing the total global
      remuneration amount established by the Shareholders' Meeting among the
      Directors and Executive Officers of the Company, as the case may
      be;
 XXII.
              approving any Executive Officers'
      proposal concerning the Company's internal regulations with the respective
      organizational chart, including the scope of authority and specific duties
      of its Executive Officers;
 XXIII.
              establishing the guidelines for
      Company proxies' vote in the Shareholders' Meetings of its controlled or
      affiliated companies, as far as the matters approved by the Board of
      Directors are concerned;
 XXIV.
              appointing the Company's
      representatives in the management of the companies in which it holds
      capital interest;
 XXXV.
              electing and dismissing the
      Company’s independent auditors, provided that the recommendations of the
      Statutory Audit Committee are
observed;
 XXVI.
              perform any other activity
      assigned to it by the Shareholders'
  Meeting;
  XXVII.
              deciding the cases not provided
      for herein and performing other duties not assigned to another body by law
      or by these By-laws.
   8
 
  Section 26 -The Board of Directors is comprised of three (3)
to nine (9) permanent
members and the same number of alternates.
  Section 27- The Directors and the
respective alternates thereto shall be elected by the Shareholders'
Meeting,that shall also appoint, among them,
the Chairman of the board.
  Paragraph One -A Director shall have a
spotless reputation;andexcept as waived by the
Shareholders' Meeting, the following may not be elected: (I) those who hold
positions in companies that might be considered competitors to the Company; or
(II) those who have or represent conflicting interest with that of the Company.
A Director shall not be able to exercise the right to vote in the case those
same impediments specified in this paragraph 1 supervene.
  Paragraph Two- Pursuant to Section 115,
paragraph 1 ofLaw No.
6,404/76, the right to vote
for the election of the Directors shall not be exercised in the circumstances
where there is a conflict of interest with that of the
Company.
  Paragraph Three- A Director shall not have
access to information nor attend a Board of Directors’ meeting concerning
matters in which he/she has or represents conflicting interest with the
Company.
  Section 28 –The members of the Board of
Directors shall be replaced when they are absent, hindered or vacant, by the
respective alternate thereto.
  Sole Paragraph -In the case of a vacancy in
the position of a permanent Director and, in the absence of the alternate
thereto to serve for the remaining time of the mandate, the remaining Directors
shall appoint a substitute that will exercise the office until the first
Shareholders' Meeting.
  Section 29 -The Board of Directors
shall meet regularly every quarter and whenever called for a special meeting by
its Chairman,by any 2 (two) Directors orbythe Company’s Chief Executive
Officer.
  Paragraph One– The call notices shall be
sent by mail, fax or e-mail, delivered at least 7 (seven) days in advance,
except in the cases of evident urgency, at the sole discretion of the Chairman
of the Board. The call notice shall specify the agenda.
  Paragraph Two– The members of the Board
are authorized to participate through video and/or audio conferences, everything
with no prejudice to the effectiveness of the decisions made. Votes by letter,
fax or e-mail are allowed as well, as long as they are received by the Chairman
of the Board of Directors or the alternate thereto until the time of the
respective meeting.
   9
 
  Paragraph
Three– The Chairman of the
Board of Directors may invite to attend the meetings of the body any other
members of the Board of Executive Officers, other Company’s high-ranked
employees, as well as any third parties that may contribute with opinions or
recommendations related to the matters to be decided on by the Board of
Directors. The individuals invited to attend the meetings of the Board shall not
be entitled to vote.
  Section 30- The Board of Directors
decisions shall be passed by majority of votes, with the presence of the
majority of the Directors; and in the event of draw, the Chairman shall be
entitled to the deciding vote.
  Sole Paragraph– In any case, the Board of
Directors meetings shall be recorded in minutes, which shall be signed by all
that attended such meeting.
   SECTION III
 BOARD OFEXECUTIVE OFFICERS
   Section 31- The Board of Executive
Officers, who may or may not be shareholders themselves, shallbe comprised of a minimum of two (2)
and a maximum of six (5)members, which shall have the following titles: I – Chief Executive Officer, II
– Chief Financial Officer;
III– Chief Supplies
Officer;IV – Chief Human Resources Officer; V – Legal
Officer. All Executive
Officers shall be elected by the Board of Directors, which may dismiss them at
any time.
  Paragraph One -The Chief Financial Officer
shall also perform the duties of Chief Investor Relations
Officer.
  Paragraph Two- In the case of a vacant
Executive Officer position, the Board of Directors shall elect a new ExecutiveOfficer or an alternate to fill it in for
the unexpired term of mandate.
  Paragraph Three -In the absence or temporary
incapacity of any Officer, an alternate shall be appointed by the Chief
Executive Officer or, in the event of his/herincapacity, by majority decision of the
Executive Officers.
  Section 32– Pursuant to the
provisions of section 143, paragraph 2ndof Law No. 6,404/76, it is incumbent upon the Board
of Executive Officers, acting as a decision body:
  I.– approve the proposals, plans and
projects to be submitted to the Board of Directors and/or the Shareholders’
Meeting;
   10
 
  II – previously approve the execution of
any agreements between the Company or its controlled companies, on one side, and
the controlling shareholder or controlled companies, affiliates, companies
subject to common control or controlling companies of the latter, or companies
that otherwise are parties related to the Company or its controlled companies,
on the other side, provided that the provisions of sections13 and 25 are
observed;
  III – authorize the participation of the
Company or itscontrolledcompanies in any joint
venture, partnership, consortium or any similar structure;
  IV – authorize the sale or encumbrance
of any Company’s real estate properties, or those of its  controlled
companies, provided that the provisions of item XIV of section 25 of these
By-laws are observed;
  V - authorize the sale or encumbrance of
any assets integrating the Company’s permanent assets, or those of its
controlled companies, whose book value is greater than R$1,000,000.00 (one million
Reais), provided that the
provisions of item XV of section 25 of these By-laws are
observed;
  VI – approve the execution by the
Company or by its controlled companies, of active or passive agreements for the
supply or lease of goods or services whose annual value is greater than
R$15,000,000.00 (fifteen millionReais);
  VII – approve the contracting by the
Company or by its controlled companies of loans, financing, or any other
transactions implying indebtedness to the Company or its controlled companies,
whose individual value is greater than R$30,000,000.00 (thirty million Reais), provided that the provisions of
item XVII of section 25 of theseBy-laws are
observed;
  VIII – authorize the settlement in
administrative or judicial proceedings, lawsuits or litigation related to the
Company or its controlled companies, whenever the amount involved is greater
than R$5,000,000.00 (five million Reais);
  IX – by virtue of the Company’s social
responsibilities and those of its controlled companies, authorize the
performance ofnon-profitacts to the benefit of employees or the
community, provided that  the provisions of item XVIII of section 25
of the By-laws are observed;
  X – approve the execution of collective
agreements by the Company or its controlled companies;
  XI – establish the internal policy of
authorizationsofthe Company andofits controlled
companies;
   11
 
  XII – authorize the appointment of
proxies for the practice of the acts listed in this Section
32.
  Section 33
–The Board of Executive
Officers shall meet whenever convened by the Chief Executive Officer or by 2
(two) members of the Board of Executive Officers.
  ParagraphOne- The call notices shall be sent by
mail, fax or e-mail, delivered at least 2 (two) days in advance, except in the
cases of evident urgency, at the sole discretion of the Chief Executive Officer.
The call notice shall specify the agenda.
  ParagraphTwo– The officers are authorized to
participate through video and/or audio conferences, everything with no prejudice
to the effectiveness of the decisions made. Votes by letter, fax or e-mail are
allowed as well, as long as they are received by the Chief Executive Officer or
the alternate thereto until the time of the meeting.
  ParagraphThree– The decisions of the Board of
Executive Officers shall be made by majority of votes of the Executive Officers,
and the Chief Executive Officer shall be entitled to the deciding vote in the
event of draw.
  ParagraphFour– In any event, the meetings of the
Board of Executive Officers shall be recorded in minutes, which shall be signed
by the attending officers.
  Section 34- The Chief Executive
Officer, acting severally, is vested with full powers to practice any and every
act and sign any and every document on behalf of the Company, provided that the
limits set forth by Sections 13, 25 and 32 of these By-laws and under the law
are observed.
  ParagraphOne–The Board of Directors is responsible
for determining the scope of authority of each one of the other Executive
Officers, as well as the value up to which they are authorized to perform acts
and sign documents on behalf of the Company, provided that the limitsset forthin sections 13, 25 and 32 of these
By-laws and under the law are observed.
  ParagraphTwo–Without prejudice of the provision of
paragraph one of this section, any of the Executive Officers may act severally
in matters the value of which does not exceed R$100,000.00 (one hundred thousand
Reais), as well as to represent the Company before third parties, including
federal, state and local government agencies.
  Section 35
–Provided that the limitsset forthin sections 13, 25, 32 and 34 of these
By-laws and under the law are observed, the Company shall be represented and
shall be validly bound by the act or signature of: (I) any Executive Officer,
acting severally, or (II) 2 (two) attorneys acting jointly. The Company may also
be represented by a single attorney, acting severally, as long as the respective
power of attorney has been signed by 2 (two) Executive Officers, one of them
necessarily being the Chief Executive Officer.
   12
 
  Sole Paragraph -The powers of attorney
granted by the Company shall be always signed by one Executive Officer, within
the scope of authority of such Officer. The powers of attorney shall specify the
powers granted and, except for those for judicial purposes, shall be valid for a
maximum of 1 (one) year. Thegrantingof powers of attorney “adnegotia” is
prohibited.
  Section 36 –The Board ofExecutive Officers shall manage the Company strictly
complying with the provisions of these By-laws and the applicable legislation,
and the members thereof are not allowed to jointly or severally practice any act
strange to the Company’s corporate purposes.
   CHAPTER V
 STATUTORY AUDIT
COMMITTEE
   Section 37 -The Statutory Audit
Committee is the body responsible for the surveillance of the Company’s
management acts and information to shareholders, and shall be operated
permanently.
  Sole Paragraph– In addition to its
ordinary duties, the Statutory Audit Committee also performs the function of
Company’s Audit Committee.
  Section 38- The Statutory Audit
Committee shall be comprised of 3(three) to 5(five) permanent members and an equal
number of alternates, shareholders or not, elected by the Shareholders’
Meeting.
  Paragraph
OneThe members
of the Statutory Audit Committee shall be independent, and for such, they shall
comply with the following requirements: I – not be or not have been in the past
3 (three) years an employee or manager of the Company or any company controlled
thereby or under the common control therewith; II – not receive any
remuneration, either directly or indirectly, from the Company or from a company
controlled thereby or under the common control therewith, except for the
remuneration as member of the Statutory Audit Committee. Individuals who are not
qualified as independent, as provided for in this paragraph 1, may not be
elected for the Statutory Audit Committee;
  Paragraph Two- The term of office of
Statutory Audit Committee members shall end at the first Annual Shareholders'
Meeting following the respective election, reelection being allowed. The members
of the Statutory Audit Committee shall remain in office until their successors
are installed.
  Paragraph Three- The members of the
Statutory Audit Committee, in their first meeting, shall elect their Chairman,
charged with effecting that organ's decisions.
   13
 
  Paragraph Four- The Statutory Audit
Committee may request the Company to appoint qualified staff to provide it
clerical and technical support.
  Paragraph Five-  Upon their
installation, the members of the Statutory Audit Committee shall sign, in
addition to the instrument of taking of office, a statement whereby they shall
abide by the rules of such agency’s internal regulation, the Company’s ethics
code and the “Policy of Disclosure and Use of Information and of Securities
Trading” Manual, as well as a statement certifying that they are not under any
hindrance, as provided for in the internal regulation of the Statutory Audit
Committee.
  Section 39– In addition to the duties
provided for at law, the Statutory Audit Committee shall, as the Company’s Audit
Committee:
  I.advise the Board of Directors on the
contracting of or the termination of the agreement with the Company’s
independent auditors;
  II. previously approve the services to
be rendered by the independent auditors, whether such services are audit
services or not, as well as the respective fees to be paid by the Company,
everything as provided for in the respective procedure as approved by the
Statutory Audit Committee;
  III. analyze the annual working plan of
the Company’s independent auditors, discuss the outcome of their activities,
works and revisions made, as well as assess their performance and
independence;
  IV. issue opinions and judgments and
supervise the activities of the Company’s independent auditors, including, to
the extent allowed by the law, assist in the settlement of any possible
discrepancies between the management and the independent auditors as far as the
submission of financial statements and information is
concerned;
  V. review the work plan of internal
auditors, discuss the outcome of their activities, works and revisions
made;
  VI. analyze the efficacy of the
Company’s internal control systems and risk management, in order to monitor the
compliance with the provisions related to the submission of financial statements
and information, among other things;
  VII. carry out the duties provided for
in the internal regulation of the Statutory Audit Committee related to
receiving, processing and handling anonymous denunciations pertaining to any
accounting, internal accounting control or audit matters (“reporting
channel”).
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  Section 40- The Statutory Audit
Committee shall meet regularly every quarter, and specially whenever
needed.
  Paragraph One- The meetings shall be
convened by the Chairman of the Statutory Audit Committee or by 2 (two) of its
members or by the Company’s Chief Executive Officer, and they shall be
established upon the attendance of the majority of its
members.
  Paragraph
Two-The Committee resolutions
shall be passed by majority vote, the majority of its members being present and
the dissenting member of the Statutory Audit Committee shall state his
dissenting opinion on the meeting minutes and shall inform it to the managing
organs and the Shareholders’ Meeting.
  Section 41-The members of the
Statutory Audit Committee shall be replaced in their absence or incapacity by
their respective alternates.
  Section 42 -In addition to the events
of death, resignation, removal and others provided by law, a position shall
become vacant when the member of the Statutory Audit Committee fails to appear
at 2 (two) consecutive meetings or 3 (three) non-consecutive meetings in a
fiscal year.
  Paragraph One- In the event a position
in the Committee becomes vacant, the replacement shall be effected as provided
under section 41 hereof.
  Paragraph Two- If a position in the
Statutory Audit Committee becomes vacant and there is no alternate to be called
to serve for the remaining term of office, a Shareholders' Meeting shall be
convened to elect the alternate.
  Section 43 -The remuneration of the
members of the Statutory Audit Committee shall be determined by the Annual
Shareholders' Meeting electing them, and for each acting member it shall not be
less than one tenth of the average remuneration paid to each Executive Officer,
not counting profit sharing.
  Sole Paragraph- The acting alternate
shall be entitled to the member's remuneration for the replacement period,
counted month by month, on which case the permanent member shall not receive the
monthly remuneration.
  Section 44– As suggested by the
Statutory Audit Committee, the Company’s Shareholders’ Meeting shall set aside,
on an annual basis, a reasonable amount to pay the expenses incurred by the
Statutory Audit Committee, which shall be incurred pursuant to the budget
approved by the majority of its members.
  Paragraph
One– The Company’s
management shall take the actions required for the Company to bear all costs and
expenses as approved by the Statutory Audit Committee, provided that the limit
established by the Company’s Shareholders’ Meeting is
observed.
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  ParagraphTwo– The Statutory Audit Committee, upon
decision of the majority of its members, may hire external consultants, including
independent auditors and lawyers, to assist it in complying with its duties and
assignments, provided that the annual budgetary limit determined by the
Shareholders’ Meetingis
observed, as provided in
the head paragraph hereof.
   CHAPTER VI
 FISCAL YEAR AND FINANCIAL
STATEMENTS
   Section 45- The fiscal year shall
last one year, starting on January 1st (first) of each year and ending on the
last day of the month of December.
  Section 46- The Management shall
submit to the Annual Shareholders' Meeting, together with the financial
statements, a proposal for employee profit sharing and for the destination of
the net incomeofthe year.
  Paragraph One- The net income shall have
the following destination:
  I.
              5% (five percent) for the legal
      reserve, up to 20% (twenty percent) of the paid-up
      capital;
 II.
              25% (twenty-five percent) of the net
      income, restated pursuant to items IIand III of section 202 of Law No.
      6,404/76 shall be
      distributed as mandatory minimum dividend to all shareholders, respecting
      the provisions of the next section; such amount shall be increased to meet
      the amount required to pay the preferred shares priority
      dividend.
  Paragraph Two -The net income balance not
allocated to the payment of the mandatory minimum dividend nor to the preferred
shares priority dividend shall be allocated to a supplementary reserve for the
expansion of corporate business,and shallnot exceed 80% (eighty percent) of
thecapitalstock. Once that limit is reached, the
Shareholders' Meeting shall decide on the destination of the balance, either
distribution to shareholders or capitalization.
  Section 47- The amount corresponding
to the mandatory minimum dividend shall be destined to the payment of the
preferred shares priority dividend up to the preference limit; then the owners
of common shares shall be paid, up to the same limit of preferred shares; the
balance, if any, shall be prorated among all shareholders.
  Paragraph One -The management may pay or
credit interest on capital as provided underparagraph 7, section 9 of Law No.
9,249/95 and applicable
laws and regulations, which can be deducted from the mandatory dividends under
section 202 of Law No.
6,404/76, even when
included in the preferred shares minimum dividend.
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  Paragraph Two- Dividends not claimed
within a period of 3 (three)yearsshall revert to the
Company.
   CHAPTER VII
 LIQUIDATION
  Section 48- The Company shall be
liquidated in the cases provided by law, or upon decision of the Shareholders'
Meeting, which shall determine the method of liquidation, elect the liquidator
and install the Statutory Audit Committee for the liquidation period, electing
its members and determining their respective remuneration.
  CHAPTER VIII
 GENERAL AND TEMPORARY
PROVISIONS
   Section 49 -The approval by the
Company, through its representatives, of the merger, split-up, takeover or
dissolution of its controlled companies shall be preceded by an
economic-financial analysis by an internationally acknowledged independent
company, that shall confirm equitable treatment is being provided to all
companies involved, the shareholders of which shall be granted ample access to
the report on that analysis.
  Section
50– These By-laws shall be
interpreted in good faith. The Shareholders and the Company shall act in their
relationship with the strictest good faith,both subjectively and
objectively.
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