FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of December, 2015
Brazilian Distribution Company
(Translation of Registrant’s Name Into English)
Av. Brigadeiro Luiz Antonio,
3142 São Paulo, SP 01402-901
Brazil
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F)
Form 20-F X Form 40-F
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101 (b) (1)):
Yes ___ No X
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101 (b) (7)):
Yes ___ No X
(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes ___ No X
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Publicly Held Company with Authorized Capital
Corporate Taxpayers’ Registry (CNPJ/MF) No. 47.508.411/0001-56
Trade Registry (NIRE) 35.300.089.901
MINUTES OF THE EXTRAORDINARY SHAREHOLDERS’ MEETING
HELD ON DECEMBER 22, 2015
1 DATE, TIME AND PLACE:December 22, 2015, at 11:00 a.m., at the headquarters of Companhia Brasileira de Distribuição (“Company”), at Avenida Brigadeiro Luís Antônio, No. 3.142, Jardim Paulista, CEP 01402-901, in the City of São Paulo, State of São Paulo.
2 CALL NOTICE:Call Notice published in the State of São Paulo Official Gazette, on December 5th, 8th and 9th, 2015, on pages 11, 13 and 14, respectively, and in the newspaper “O Estado de São Paulo” on December 5th, 8th and 9th, 2015, on pages B12, B13 and B11, respectively.
3 QUORUM:Shareholders representing more than two thirds (2/3) of the Company’s voting share capital, according to the signatures on the Shareholders’ Attendance Book. Therefore, legalquorum for the Meeting to be held was verified.
4 CHAIR:The meeting was chaired by Mr. Ronaldo Iabrudi dos Santos Pereira, CEO of the Company, in accordance with Article 9 of the Company’s By-laws, who invited me, Marcelo Acerbi de Almeida, to act in as secretary of the meeting.
5 AGENDA:To resolve on the following matters:
(a) Approve the merger into the Company of part of the spun-off assets of Nova Pontocom Comércio Eletrônico S.A. (“Nova Pontocom”), in accordance with the terms and conditions described in the “Spin-Off Protocol and Justification of Nova Pontocom Comércio Eletrônico S.A.”, executed among the management of the companies involved, assuming that the total and disproportional spin-off of Nova Pontocom will be approved and completed;
(b) Ratify the appointment of Magalhães Andrade S/S Auditores Independentes, enrolled with Regional Accounting Council of the State of São Paulo, under No. 2SP000233/O-3 and with the CNPJ/MF under No. 62.657.242/0001-00, with head offices in the City of São Paulo, State of São Paulo, at Av. Brigadeiro Faria Lima, No. 1,893, 6th floor, Jardim Paulistano (“Magalhães Andrade”), as the expert company responsible for the elaboration of the appraisal report of Nova Pontocom’s spun-off assets and of the spun-off assets to be spun-off and merged into the Company, at the base date of September 30, 2015 (“Spin-Off Appraisal Report”);
(c) Approve the Spin-Off Appraisal Report;
(d) Approve the merger into the Company of its subsidiary, Sé Supermercados Ltda. (“Sé”), in the terms and conditions described in the “Merger Protocol and Justification of Sé Supermercados Ltda.”, executed by the management of the Company and Sé (“Merger”);
(e) Ratify the appointment of Magalhães Andrade as the expert company responsible for the elaboration of the appraisal reportof thenet equity of Sé to be merged into the Company, on the base date of September 30, 2015 (“Merger Appraisal Report”);
(f) Approve the Merger Appraisal Report;
(g) If the abovementioned matters are approved, authorize the management of the Company to take all necessary actions in order to carry out the resolutions proposed and approved by the shareholders of the Company
(h) Approve the amendment of Article 2 of the Company’s By-laws, to include, in the Company’s corporate purposes, the activity of “import of beverages, wines and vinegars”; and
(i) Approve, in view of the resolution above, the restatement of the Company’s By-laws.
6 RESOLUTIONS:After discussions on the matters indicated in the agenda, the shareholders decided on the following:
6.1 Approve, by unanimous vote, in accordance with Articles 227 and 229, paragraphs 3 and 5, second part, of Law No. 6,404, of 15 December 1976, as amended (“Brazilian Corporate Law”) the total and disproportional spin-off of Nova Pontocom and the merger into the Company of part of the spun-off assets, proportionally to its interest in the net equity of Nova Pontocom, as well as to ratify the “Spin-Off Protocol and Justification of Nova Pontocom Comércio Eletrônico S.A.”, executed on December 3th, 2015 among the management of: (i) Nova Pontocom; (ii) Via Varejo S.A., apublicly-held company, headquartered in the city of São Caetano do Sul, State of São Paulo, at Rua João Pessoa, No. 83, Centro, CEP 09520-010, enrolled with the CNPJ/MF under No. 33.041.260/0652-90 and registered at JUCESP under NIRE 35.300.394.925; (iii) of Company; (iv) QE Participações Ltda., a limited liability company under incorporation, headquartered in the city of São Paulo, State of São Paulo, at Rua das Açucenas, No. 206, Cidade Jardim, CEP 05673-040 (parte); and (v) Camberra Participações Ltda., a limited liability company under incorporation, headquartered in the city of São Paulo, State of São Paulo, at Rua Gomes de Carvalho, No. 1.609, 7th floor, Vila Olímpia, CEP 04547-006 (parte), and included inExhibit I attached hereto (“Spin-Off Protocol”);
6.2 Ratify, by unanimous vote, the appointment of Magalhães Andrade as the expert company responsible for the elaboration of the Spin-Off Appraisal Report;
6.3 Approve, by unanimous vote, the Spin-Off Appraisal Report, which copy is included in Annex 3.2 to the Spin-Off Protocol, prepared by Magalhães Andrade, on the base date of September 30, 2015, according to the balance sheet prepared by the management of Nova Pontocom on the same date, pursuant to which the total book value of Nova Pontocom is equivalent to BRL 10,000.00 (ten thousand reais) and the part of the spun-off assets that will be merger into the Company is equivalent to BRL 5,320.34 (five thousand, three hundred and twenty reais and thirty four cents) (“CBD Spun-off Assets”);
6.4 In view of the decisions above, approve,by unanimous vote, in accordance with Article 229 ofBrazilian Corporate Law and of the Spin-Off Protocol, the merger of the CBD Spun-Off Assets into the Company. As set forth in the Spin-Off Protocol, the merger of the CBD Spun-off Assets shall not change the Company’s share capital, since, as a result of the merger of the CBD Spun-off Asset, the interest that the Company holds in Nova Pontocom will be cancelled and replaced by the assets and liabilities of the CBD Spun-off Assets;
6.5 Approve, by unanimous vote, in accordance withArticle 227 ofofBrazilian Corporate Law,the merger into the Company of its subsidiary Sé, effective as from and including, January 1, 2016, in the terms and conditions described in the “Merger Protocol and Justification of Sé Supermercados Ltda.”, executed on November 18th, 2015 between the management of the Company and of Sé andincluded inExhibit II attached hereto (“Merger Protocol”);
6.6 Ratify, by unanimous vote, the appointment of Magalhães Andrade as the expert company responsible for the elaboration of the Merger Appraisal Report;
6.7 Approve, by unanimous vote, the Merger Appraisal Report, which copy is included in Annex 3.1 to the Merger Protocol, prepared by Magalhães Andrade, on the base date of September 30, 2015, according to the balance sheet prepared by the management of Sé on the same date, pursuant to which the total book value of Sé that shall be merger into the Company is equivalent to BRL 2,713,030,406.64 (two billion, seven hundred and thirteen million, thirty thousand, four hundred and six reais and sixty-four cents);
6.8 In view of the above, approve,by unanimous vote, in accordance with Article 227 ofBrazilian Corporate Law and with the Merger Protocol, the merger of Sé into the Company. According to the Merger Protocol, the merger of Sé shall not change the Company’s share capital, since, as a result of the merger of Sé, (i) the Company shall absorb the totality of Sé’s net equity in exchange for the quotas held by the Company in Sé’s share capital, which shall be canceled as a result of the merger; (ii) the interest held by the Company in Sé shall be replaced in the balance sheet of the Company by the assets and liabilities which are part of Sé’s net equity, by their respective book value; and(iii) Sé shall be extinguished,effective as from and including, January 1, 2016, and succeeded by the Copmany in all of its rights and obligations. Sé’s branches are consequently extinguished, and the respective activities shall be performed by the Company;
6.9 Authorize,by unanimous vote, the management of the Company to take all necessary actions in order to carry out the resolutions proposed and approved by the shareholders of the Company;
6.10 Approve,by unanimous vote, the amendment of Article 2 of the Company’s By-laws, to include, in the Company’s corporate purposes, the activity of “import of beverages, wines and vinegars”. In view of such resolution, Article 2 of the Company’s By-lawsshall be in force with the following wording: “ARTICLE 2 - The corporate purpose of the Company is the sale of manufactured, semi- manufactured or raw products, both Brazilian and foreign, of any type or species, nature or quality, provided that the sale of such products is not prohibited by law. First Paragraph - The Company may also engage in the following activities: (a) manufacture, processing, handling, transformation, exportation, importation and representation of food or non-food products either on its own or through third parties; (b) international trade, including that involving coffee; (c) importation, distribution and sale of cosmetic products for hygienic or make-up purposes, toiletries, sanitary and related products and food supplements; (d) sale of drugs and medicines, pharmaceutical and homeopathic specialties, chemical products, accessories, dental care equipment, tools and
equipment for surgery, production of chemical products and pharmaceutical specialties, with the possibility that such activities of the Company are specialized as Drugstore, Allopathic Drugstore, Homeopathic Drugstore or Manipulation Drugstore of each specialty; (e) sale of oil products, filling up of fuels of any kind, rendering of technical assistance services, garage, repair, washing, lubrication, sale of accessories and other similar services, of any vehicles; (f) sale of products, drugs and general veterinary medicines; veterinary consultation, clinic and hospital and pet shop with bath and shearing service; (g) rental of any recorded media; (h) provision of photo, film and similar studio services; (i) execution and administration of real estate transactions, purchasing, promoting subdivisions and incorporations, leasing and selling real estate properties on the Company’s own behalf as well as for third parties; (j) acting as distributor, agent and representative of merchants and industrial concerns established in Brazil or abroad and, in such capacity, for consignors or on its own behalf acquiring, retaining, possessing and carrying out any operations and transactions in its own interests or on behalf of such consignors; (k) provision of data processing services; (l) building and construction services of all kinds, either on its own behalf or for third parties, purchase and sale of construction materials and installation and maintenance of air conditioning systems, cargo loaders and freight elevators; (m) use of sanitary products and related products; (n) general municipal, state and interstate ground freight transportation for its own products and those of third parties, including warehousing, depositing, loading, unloading, packaging and guarding any such products, and subcontracting the services contemplated in this item; (o) communication services, general advertising and marketing, including for bars, cafes and restaurants, which may extend to other compatible or connected areas, subject to any legal restrictions; (p) purchase, sale and distribution of books, magazines, newspapers, periodicals and similar products; (q) performance of studies, analysis, planning and markets research; (r) performance of market test for the launching of new products, packing and labels; (s) creation of strategies and analysis of “sales behavior in specific sectors”, of special promotions and advertising; (t) provision of management services of food, meal, drugstore, fuel and transportation vouchers/cards and other cards resulting from the activities related to its corporate purpose; and (u) lease and sublease of its own or third-party furnishings; (v) provision of management services; (w) representation of other companies, both Brazilian and foreign, and participation as a partner or shareholder in the capital stock of other companies irrespective of their form or object of same, and in commercial enterprises of any nature; (x) Agency, brokerage or intermediation of coupons and tickets; (y) Services related to billing, receipts or payments, of coupons, bills or booklets, rates, taxes and for third parties, including those made by electronic means or by automatic teller machines; supply of charging position, receipt or payment; issuing of booklets, forms of compensation, printed and documents in general; (z) Provision of services in connection with parking lot, stay and the safeguard of vehicles; and (aa) Import of Wines, Beverages and Vinegars. Second Paragraph - The Company may provide guarantees or collateral for business transactions of its interest, although it must not do so merely as a favor.” ; and
6.11 In view of the resolution above, approve, by unanimous vote,the restatement of the Company's By-laws, which will be in force pursuant to theExhibit III attached hereto.
7 ADJOURNMENT:With nothing further to come before this board, the works were concluded and these minutes were drafted as a summary, which was approved and signed by the shareholders in attendance.
8 SIGNATURES: Ronaldo Iabrudi dos Santos Pereira – Chairman; and Marcelo Acerbi de Almeida – Secretary.ATTENDING SHAREHOLDERS: by: Wilkes Participações S.A., Philippe Oliveira Lins de Medeiros; by: Almacenes Exito S.A., Jessica Winge.
Summary of these minutes drawn up in Company’s books, under paragraph 3 of Article 130 of Brazilian Corporate Law.
São Paulo, December 22, 2015.
Marcelo Acerbi de Almeida
Secretary
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NOVA PONTOCOM COMÉRCIO ELETRÔNICO S.A., VIA VAREJO S.A., COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO,
QE PARTICIPAÇÕES LTDA. and CAMBERRA PARTICIPAÇÕES LTDA.
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PROTOCOL AND JUSTIFICATION OF TOTAL SPIN-OFF OF NOVA PONTOCOM COMÉRCIO ELETRÔNICO S.A. |
PROTOCOL AND JUSTIFICATION OF TOTAL SPIN-OFF OF NOVA PONTOCOM COMÉRCIO ELETRÔNICO S.A.
By this private instrument:
(1) NOVA PONTOCOM COMÉRCIO ELETRÔNICO S.A., a closed corporation (sociedade por ações fechada) headquartered in the city of São Paulo, State of São Paulo, at Rua Gomes de Carvalho, nº 1.609, 3º ao 7º andares, zip code 04547-006, enrolled with the Brazilian Corporate Taxpayers’ Registry of the Ministry of Finance (“CNPJ/MF”) under No. 09.358.108/0001-25, and with the Board of Trade of the State of São Paulo (“JUCESP”) under NIRE 35.300.386.540, hereby represented pursuant to its By-laws (“Nova Pontocom”);
(2) VIA VAREJO S.A., a publicly-held corporation (sociedade por ações aberta) headquartered in the city of São Caetano do Sul, State of São Paulo, at Rua João Pessoa, nº 83, Centro, zip code 09520-010, enrolled with CNPJ/MF under No. 33.041.260/0652-90 and with JUCESP under NIRE 35.300.394.925, hereby represented pursuant to its By-laws (“Via Varejo”);
(3) COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO, a publicly-held corporation (sociedade por ações aberta) headquartered in the city of São Paulo, State of São Paulo, at Av. Brigadeiro Luis Antônio, nº 3.142, zip code 01402-901, enrolled with CNPJ/MF under No. 47.508.411/0001-56 and with JUCESP under NIRE 35.300.089.901, hereby represented pursuant to its By-laws (“CBD”);
(4) QE PARTICIPAÇÕES LTDA., a limited liability company under incorporation, headquartered in the city of São Paulo, State of São Paulo, at Rua das Açucenas, nº 206, Cidade Jardim, CEP 05673-040 (parte), hereby represented pursuant to its Articles of Association (“QE Participações”); and
(5) CAMBERRA PARTICIPAÇÕES LTDA.,a limited liability company under incorporation, headquartered in the city of São Paulo, State of São Paulo, hereby represented pursuant to its Articles of Association (“Camberra Participações”and jointly referred to with Nova Pontocom, Via Varejo, CBD and QE Participações as “Parties” and, individually, as “Party”).
THE PARTIES DECIDE, in compliance with the provisions set forth in Articles 224, 225, 227 and 229 of Law No. 6,404, dated December 15, 1976, as amended (“Brazilian Corporate Law”), to enter into this Protocol and Justification of Total Spin-off (“Protocol”), which shall regulate the terms and conditions applicable to the total spin-off of Nova Pontocom followed by absorption of the respective spin-off assets, as indicated below, by Via Varejo, CBD, QE Participações and Camberra Participações (“Receiving Companies” and “Spin-off”, respectively), subject to the approvals referred to in Clause 4.2 below.
1 Purpose
The purpose of the Protocol is to establish the basis of the non-proportional Spin-off, upon subsequent transfer to each Receiving Companies of a portion of assets of Nova Pontocom proportionally to their interests in the net equity of Nova Pontocom, as provided for in Article 229, paragraph 3 and Article 229, paragraph 5, part two, of the Brazilian Corporate Law and pursuant to the spin-off provided for in the Shareholders’ Agreement of Nova Pontocom, entered into on 23 July, 2014 among all shareholders of Nova Pontocom, provided that the spin-off assets allocated to the merger will be transferred to the Receiving Companies, which will be resolved on by the board of directors and the shareholders of Nova Pontocom, the shareholders of Via Varejo andCBD and the shareholders of QE Participações and Camberra Participações.
2 Justification and interest of the Parties to perform the Spin-off
Management of Nova Pontocom and of the Receiving Companies understand that, if approved, the Spin-off will result in the transfer to, and the consequent absorption by, the Receiving Companies, of all assets and liabilities of Nova Pontocom, which will result in capital and financial nature benefits to the Parties and will optimize the corporate structure of the group to which they belong by enabling each of the Parties to have greater autonomy and flexibility to manage their investments.
3 Appraisal of Spin-off Assets
3.1 Spin-off Assets. As a result of the Spin-off, the total net equity ofNova Pontocom, comprised by the assets and liabilities described in the Report (as defined below), will be transferred to and received by the Receiving Companies, provided that:
(i) the assets and liabilities of Via Varejo, equivalent to 43.900% of total amount of Spin-off Assets, are listed in Exhibit 4 attached to the Report (“Via Varejo Spin-off Assets”);
(ii) the assets and liabilities da CBD, equivalent to 53.203% of total amount of Spin-off Assets, are listed in Exhibit 4 attached to the Report (“CBD Spin-off Assets”);
(iii) the assets and liabilities da QE Participações, equivalent to 2.723% of total amount of Spin-off Assets, are listed in Exhibit 4 attached to the Report (“QE Participações Spin-off Assets); and
(iv) the assets and liabilities da Camberra Participações, equivalent to 0.174% of total amount of Spin-off Assets, are listed in Exhibit 4 attached to the Report (“Camberra Participações Spin-off Assets” and, jointly with QE Participações Spin-off Assets, Via Varejo Spin-off Assets and CBD Spin-off Assets, the “Spin-off Assets”).
3.2 Appraisal. The Parties agree that, pursuant to the appraisal report provided for inExhibit 3.2 attached hereto (“Report”), the book value of each of the Spin-off Assets was appraised byMAGALHÃES ANDRADE S/S AUDITORES INDEPENDENTES, enrolled with the Regional Accounting Council of the State of São Paulo under No. 2SP000233/O-3, and with CNPJ/MF under No. 62.657.242/0001-00, headquartered in the city of São Paulo, State of São Paulo, at Av. Brigadeiro Faria Lima, nº 1.893, 6º andar, Jardim Paulistano (“Appraisal Firm”), as of the date of reference on September 30, 2015, based on the balance sheet prepared by the management ofNova Pontocom as of the same date and for this specific purpose. Pursuant to the Report, the total book value of Spin-off Assets, to be absorbed by the Receiving Companies, is equivalent to R$ 10,000.00 (tem thousand reais), of which (i) R$ 4,389.97 (four thousand, three hundred and eighty nine and ninety seven cents) is equivalent to Via Varejo Spin-off Assets; (ii) R$ 5,320.34 (five thousand, three hundred and twenty reais and thirty four cents) is equivalent to CBD Spin-off Assets; (iii) R$ 272.27 (two hundred and seventy two reais and twenty seven cents) is equivalent to QE Participações Spin-off Assets; and (iv) R$ 17.42 (seventeen reais and forty two cents) is equivalent to Camberra Participações Spin-off Assets.
3.3 Spin-off Assets.
(i) Via Varejo Spin-off Assets will be received by Via Varejo in replacement of 26,643,996 (twenty six million, six hundred and forty three Thousand, ninehundred and ninety six) shares issued by Nova Pontocom which are held by Via Varejo;
(ii) CBD Spin-off Assets will be absorbed by CBD in replacement of 32,290,656 (thirty two million, two hundred and ninety thousand, six hundred and fifty six) shares issued by Nova Pontocom which are by CBD;
(iii) QE Participações Spin-off Assets will be absorbed by QE Participações in replacement of1,652,465 (one million, six hundred and fifty two Thousand, four hundred and sixty five) shares issued by Nova Pontocom which are held by QE Participações; and
(iv) Camberra Participações Spin-off Assets will be absorbed by Camberra Participações in replacement of105,721 (one hundred and five thousand, seven hundred and twenty one) shares issued by Nova Pontocom which are held by Camberra Participações.
3.4 Equity variations. If the proposed Spin-off is approved, the Receiving Companies shall receive and directly record in their respective financial statement potential equity variations resulting from the Spin-off Assets between base date 30 September 2015 and the date of receipt of Spin-off Assets by the Receiving Companies, if any, proportionally to their interests held in the corporate capital of Nova Pontocom.
3.5 Conflict. The Appraisal Firm represented not to be directly or indirectly interested in the Parties, or also, in the Spin-off itself, in a way that could prevent or affect the preparation of the Report requested to it, for purposes of the Spin-off.
4 General Spin-off Aspects
8.1 If the proposed Spin-off is approved, the Spin-off will be implemented pursuant to the following conditions:
4.1 Corporate Capital.
4.1.1 Current composition.
(i) The corporate capital of Nova Pontocom, fully subscribed and paid up, amounts to R$ 50,741,294.71 (fifty million, seven hundred and forty one thousand, two hundred and ninety four and seventy one cents), divided into 60,692,838 (sixty million, six hundred and ninety two Thousand, eight hundred and thirty eight) common, registered shares with no par value, distributed among shareholders as follows:
Shareholder | Common Shares | Interest % |
CBD | 32,290,656 | 53.203 |
Via Varejo | 26,643,996 | 43.900 |
QE Participações | 1,652,465 | 2.723 |
Camberra Participações | 105,721 | 0.174 |
Total | 60,692,838 | 100.00 |
(ii) The corporate capital of Via Varejo, fully subscribed and paid up, amounts to R$ 2,895,453,338.98 (two billion, eight hundred and ninety five million, four hundred and fifty three thousand, three hundred and thirty eight reais and ninety eight cents), divided into 1,290,885,925 (one billion, two hundred and ninety million, eight hundred and eight five thousand, nine hundred and twenty five) book-entry shares with no par value, (a) 655,869,693 (six hundred and fifty five million, eight hundred and sixty nine thousand, six hundred and ninety three) of which refer to common shares; and (b) 635,016,232 (six hundred and thirty five, sixteen thousand, two hundred and thirty two) of which refer to preferred shares;
(iii) The corporate capital of CBD, fully subscribed and paid up, amounts to R$ 6,806,089,454.81 (six billion, eight hundred and six million, eighty nine thousand, four hundred and fifty four reais and eighty one cents), divided into 265,699,779 (two hundred and sixty five million, six hundred and ninety nine thousand, seven hundred and seventy nine) book-entry shares with no par value, (a) 99,679,851 (ninety nine million, six hundred and seventy nine, eight hundred and fifty one) of which refer to common shares; and (b) 166.019.928 (one hundred and sixty six million, nineteen thousand, nine hundred and twenty eight) of which refer to preferred shares;
(iv) The corporate capital of QE Participações, fully subscribed and paid up, amounts to R$ 29,643,342.00 (twenty-nine million, six hundred forty-three thousand, three hundred forty-two reais), divided into 29,643,342 (twenty-nine million, six hundred forty-three thousand, three hundred forty-two) quotas, with par value of R$ 1.00 (one real) each, distributed among its partners as follows:
Partner | Quotas | Interest % |
German Pasquale Quiroga Vilardo | 14,821,671 | 50.00 |
Eduardo Khair Chalita | 14,821,671 | 50.00 |
Total | 29,643,342 | 100.00 |
(v) The corporate capital of Camberra Participações, fully subscribed and paid up, amounts to R$ 1,007,655.00 (one million, seven thousand, six hundred fifty-five reais), divided into 1,007,655 (one million, seven thousand and six hundred and fifty five) quotas, with par value of R$ 1.00 (one real) each, distributed among its partners as follows:
Partner | Quotas | Interest % |
Cintia Mendonça | 18,586 | 1.84% |
Demetrius Ferreira da Silva | 10,617 | 1.05% |
Deni Yuko Higa | 86,306 | 8.56% |
Gabriel Chagas Cordeiro | 9,293 | 0.92% |
Hilda Luzia Kozlowski | 53,108 | 5.27% |
José Ricardo Ficher Tancredi | 37,172 | 3.69% |
Julia Barreto Rueff | 18,586 | 1.84% |
Lilian Tiemi Takada | 37,172 | 3.69% |
Lucas Correia dos Santos | 34,512 | 3.43% |
Luciano de Freitas Manolio | 37,172 | 3.69% |
Marcel Baldi Jacob | 26,544 | 2.63% |
Marcelo Luiz Pagotto Recco | 37,172 | 3.69% |
Marcelo Machado Estevão | 17,261 | 1.71% |
Marcia Teixeira | 18,586 | 1.84% |
Marcio Vianna de Melo | 37,172 | 3.69% |
Marco Antonio Andre Provetti | 55,758 | 5.53% |
Regis Borghi | 185,870 | 18.45% |
Valeria de Almeida Valentim | 37,172 | 3.69% |
Vicente Rodrigues de Rezende Filho | 185,870 | 18.45% |
Werner Germano Dopheide | 63,726 | 6.32% |
Total | 1,007,655 | 100% |
4.1.2 Spin-off Effects to the Parties.If approved, the Spin-off:
(i) will result in the extinction of Nova Pontocom;
(ii) will not result in the change of the corporate capital of Via Varejo, considering that, as a result of the Spin-off, the investment made by Via Varejo in Nova Pontocom will be cancelled and replaced with the assets and liabilities included in Via Varejo Spin-off Assets;
(iii) will not result in the change of the corporate capital of CBD, considering that, as a result of the Spin-off, the investment made by CBD in Nova Pontocom will be cancelled and replaced with the assets and liabilities included in CBD Spin-off Assets;
(iv) will not result in the change of the corporate capital of QE Participações, considering that, as a result of the Spin-off, the investment made by QE Participações in Nova Pontocom will be cancelled and replaced with assets and liabilities included in QE Participações Spin-off Assets;
(v) will not result in the change of the corporate capital of Camberra Participações, considering that, as a result of the Spin-off, the investment made by Camberra Participações in Nova Pontocom will be cancelled and replaced with assets and liabilities included in Camberra Participações Spin-off Assets;
(vi) will be carried out based on the total net equity of Nova Pontocom, upon transfer to the Receiving Companies of assets and liabilities proportionally to their interests held in Nova Pontocom;
(vii) balances of assets and liabilities related to existing agreements between Nova Pontocom and Via Varejo and between Nova Pontocom and CBD, which are described inExhibit 4.1.2(vii) attached hereto, will be liquidated by means of equity merger; and
(viii) all suits, claims, action and judicial or administrative proceedings of any nature, including, but not limited to, of labor, social security, civil, tax, environmental and commercial nature, related to acts performed or triggering events occurred until the date of Spin-off consummation will be attributed to CBD, which shall, upon succession, plaintiff/defendant in such suits, claims, action and proceedings.
4.2 Conditions to implement Spin-off. Spin-off implementation, upon transfer of Spin-off Assets to the Receiving Companies, appointment of Appraisal Firm, Report approval and other terms and conditions set forth herein, were approved (i) by the board of directors of Via Varejo and by the board of directors of CBD, on 18 November 2015; (ii) by the board of directors of Nova Pontocom, on 18 November 2015, and are subject to the approval or ratification, as the case may be, (a) of the shareholders of Nova Pontocom, the shareholders of Via Varejo and theshareholders of CBD; and(b) of the partners of QE Participações and Camberra Participações.
4.3 Succession of rights and obligations. In accordance with the provisions of item 4.1.2(viii), the Receiving Companies shall succeed Nova Pontocom in all of its rights and obligations not expressly described herein, proportionally to their respective Spin-off Assets, pursuant to Article 229, paragraph 1, part two, and shall be held jointly liable for Nova Pontocom’s obligations, pursuant to Article 233,caput, of the Brazilian Corporate Law.
4.4 Reimbursement amount. The right of withdrawal is not applied to the shareholders of Nova Pontocom since Spin-off approval depends on consent from all shareholders of Nova Pontocom, that is, all Receiving Companies, pursuant to Article 229, paragraph 5, part two, of the Brazilian Corporate Law
4.5 Interests in the corporate capital of the Parties. As of the date hereof, CBD holds 410,352,691 (four hundred and tem million, three hundred and fifty two Thousand, six hundred and ninety one) common shares and 149,168,394 (one hundred and forty nine million, one hundred and sixty eight thousand, three hundred and ninety four) preferred shares issued by Via Varejo, which will not be changed as a result of the Spin-off. As described in item 4.1.2 above, the shares held by CBD, Via Varejo, QE Participações and Camberra Participações in the corporate capital of Nova Pontocom will be cancelled as a result of the Spin-off.
5 GENERAL PROVISIONS
5.1 Severability. Possible order rendered by any court to cancel or deem any of the covenants set forth herein unenforceable shall not affect the validity or effectiveness of the other covenants set forth herein, which shall be fully complied with, provided that the Parties shall use their best efforts in order to be validly adjusted to obtain the same effects of such cancelled or unenforceable covenant.
5.2 Entire agreement, exhibits and amendments. This Protocol and its exhibits constitute the entire understanding and covenants between the managers of the Parties, as applicable, with respect to the matters regulated herein. This Protocol and its exhibits may only be changed or amended through a written instrument signed by all managers of the Parties.
5.3 Filing. Upon Spin-off approval by the shareholders ofNova Pontocom,by the shareholdersVia Varejo and CBDand by the partners of QE Participações and Camberra Participações, the management of the Receiving Companies shall file and publish all acts related to the Spin-off, pursuant to Article 229, paragraph 4, of the Brazilian Corporate Law.
5.4 Applicable law.This Protocol shall be governed by and construed in accordance with the laws of the Federative Republic of Brazil.
5.5 Recommendation. In light of the foregoing, including all requirements provided for in Articles 224 and 225 of the Brazilian Corporate Law, the Spin-off is deemed to meet the interests of the Parties and its shareholders, reason by which the implementation thereof is hereby recommended.
IN WITNESS WHEREOF, the Parties execute this Protocol and Justification of Total Spin-off in fifteen (15) counterparts, same in content and form, in the presence of the two (2) undersigned witnesses.
São Paulo, 3 December, 2015.
NOVA PONTOCOM COMÉRCIO ELETRÔNICO S.A.
_________________________________ |
|
VIA VAREJO S.A.
_________________________________ | ____________________________________ |
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
_________________________________ | ____________________________________ |
QE PARTICIPAÇÕES LTDA.
_________________________________ Eduardo Khair Chalita Manager |
|
CAMBERRA PARTICIPAÇÕES LTDA.
_________________________________ Regis Borghi Manager | ____________________________________ Manager |
Witnesses:
Name: |
| Nome: |
NOVAPONTOCOMCOMÉRCIOELETRÔNICOS.A.
AppraisalReportbasedonbookvalueforpurposesoftotalspin-offwithmergerNov.05.15 100080/15
DearShareholdersof
NOVAPONTOCOMCOMÉRCIOELETRÔNICOS.A.COMPANYBRASILEIRADEDISTRIBUIÇÃO
VIAVAREJOS.A.
MAGALHÃESANDRADES/SAUDITORESINDEPENDENTES,auditandadvisoryfirm,enrolledwiththeRegionalAccountingCounciloftheStateofSãoPauloundern°2SP000233/O-3and withthe National CorporateTaxpayers’ Registryundern°62.657.242/0001-00,headquarteredatAv.BrigadeiroFariaLima,1893-6°andar,JardimPaulistano,SãoPaulo,SP,appointedbyyouastheappraiserresponsiblefortheappraisalofthenetworthofNovaPontocomComércioEletrônicoS.A.,forpurposesoftotalspin-offand mergerofthespun-offportionsintothenetworthofCompanhiaBrasileiradeDistribuição,Via VarejoS.A.,Holding1andHolding2,uponcompliancewiththenecessarydiligencesand verificationstoperformthework,presentstheattached
AppraisalReport
Inwhichterms,wesubscribe.SãoPaulo,5November2015
MAGALHÃESANDRADES/S
IndependentAuditorsCRC2SP000233/O-3
[signature]
GUYALMEIDAANDRADE
Partner
AccountantCRC1SP116758/O-6
APPRAISALREPORT
INTRODUCTION
1. GrupoPãodeAçúcarisundertakingareorganizationwhereby,accordingtothemanagementsofNOVAPONTOCOMCOMÉRCIOELETRÔNICOS.A.(NOVAPONTOCOMorSPUN-OFFCOMPANY)andRECEIVINGCOMPANIES,COMPANHIABRASILEIRADEDISTRIBUIÇÃO(CBD),VIAVAREJOS.A.(VIAVAREJO),HOLDING1andHOLDING 2,the Spin-offwilltriggerthetransferandthesubsequentmergerofthetotalassetsand liabilitiesofNOVAPONTOCOM,whichwillresultin equity andfinancialbenefitstothePartiesandoptimizethecorporatestructureofthegrouptowhichthesecompaniesbelong,asitallowseachofthePartiestohavemoreautonomyandflexibilityinthemanagementoftheirinvestments.
2. HOLDINGS1and2,whichwillincoporateaportionofthenetassetswereinprocessof incorporationatthetimeofpreparationofthisreport.CapitalstockoftheholdingsshallbepaidupbysharesofNOVAPONTOCOMheldbyminorityshareholders.
3. Accordingly,thepurposeofthisReportistodeterminethevalueofthenetworthatbookvaluetobespun-off,takinginto considerationthefinancialconditionof NOVAPONTOCOMasat30September2015.
4. TheReportisissuedinconnectionwiththeauditofthebalancesheetofNOVAPONTOCOMpreparedforsuchpurposeasat30September2015.ThemanagementisresponsibleforthepreparationandappropriatepresentationofthesefinancialstatementsinaccordancewithaccountingpracticesadoptedinBrazilandforsuchinternalcontrolasmanagementdetermines isnecessary toenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,regardlessifcausedbyfraudorerror.
5. TheappraisalwasconductedinaccordancewithBrazilianandinternationalauditingrules.Suchrulesrequirethecompliancewithethicalrulesbytheauditorsandthattheauditisplannedandperformedwithpurposestoobtainreasonableassurancethatthefinancialstatementsarefreefrommaterialmisstatement.
6. Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements.Thechosenproceduresdependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementsofthefinancialstatements,regardlessifcausedbyfraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttotheCompany’spreparationandappropriatepresentationofthefinancialstatementsinordertodesignauditproceduresthatareadequateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheCompany’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriateness of accounting policies used and the reasonableness of accounting
estimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthe
financialstatements.
7. Webelievethattheauditevidenceobtainedisenoughandappropriatetosupporttheopinion.
FINANCIALCONDITIONOFNOVAPONTOCOM
8. Theassessmentiscarriedoutatbookvalue,asset forthinarticle226of Law6404/76, andbasedonthefinancialconditionreflectedintheBalanceSheetasat30September2015,includedasEXHIBIT1andwhosefinancialconditionofnegativeequityisbrokendownasfollows:
ASSETS | 236,205,960.79 |
(-)LIABILITIES | 250,692,486.65 |
NEGATIVEEQUITY | (14,486,525.86) |
9. SuchbalancesheetwaspreparedinaccordancewithaccountingpracticesadoptedinBrazil
andconsidered,forpurposesofassessment,thatthecompanyshallcontinueasagoingconcern.EXHIBIT2describesthemainaccountingpracticesandpoliciesadoptedbyNOVAPONTOCOM.
10. NOVAPONTOCOM maintainsitsaccountingrecords inaregularmannerin own booksandthebalancesaredulyrecordedandreconciled.
11. InNOVAPONTOCOM’sassetstherearetaxcreditsarisingfromaccumulatedlosses,netoftheprovisionforimpairmentlossoftheseassets,intheamountofR$4,014,222.34(fourmillion,fourteenthousand,twohundredandtwenty-twoandthirty-fourcents).Asthisbalancecannotbeoffsetagainst theRECEIVING COMPANIES’profit,this balanceshallbereducedtozero.SuchadjustmentwasadoptedinthisReportandis describedinEXHIBIT3hereto.
12. Inassets,thereisalsoacreditarisingfromdeferredtemporarydifferences,whichshallbeadjustedtoreflectthebenefitthatshallbetransferred,whichreducesthebalancebyR$1,375,225.63.
13. On5November2015,managementusedaportionofthebalanceoftheloanagreementsenteredwithshareholdersCompanhiaBrasileiradeDistribuiçãoandViaVarejotopartiallyoffsetaccumulatedlosses.ThisoffsetisintheamountofR$19,885,973.83(nineteenmillion,eighthundredandeighty-fivethousand,ninehundredandseventy-threeReaisandeighty-threecents),outofwhichR$10,895,645.22(tenmillion,eighthundredandninety-fivethousand,sixhundredandforty-fiveReaisandtwenty-twocents)againstCBDandR$8,990,328.61(eightmillion,ninehundredandninetythousand,threehundredandtwenty-eightReaisandsixty-onecents)againstViaVarejo.
14. TheSPUN-OFFCOMPANYhasacurrentaccountbalancewithCBD,intheamountof
R$2,406,046.80(twomillion,fourhundredandsixthousand,forty-sixReaisandeightycents).ThisbalanceshallbeoffsetuponmergerandshallnotimpacttheRECEIVINGCOMPANY’snetworth.
15. Inliabilities,theSPUN-OFFCOMPANYhascreditsarisingfromloanagreementswithCBD,inthetotalamountof,aftertheadjustmentreferredtoinparagraph13,R$88,982,827.52(eighty-eightmillion,ninehundredandeighty-twothousand,eighthundredandtwenty-sevenReaisandfifty-twocents)andwithVIAVAREJO,inthetotalamountofR$74,876,159.77(seventy-fourmillion,eighthundredandseventy-sixthousand,onehundredandfifty-nineReaisandseventy-sevencents).ThesebalancesshallbeoffsetuponmergerandshallnotimpacttheRECEIVINGCOMPANIES’networth.
16. Byvirtueoftheadjustmentsdescribedinparagraphs11,12and13,thefinancialconditionofNOVAPONTOCOM,asat30September2015,forpurposesofspin-off,isdescribedinEXHIBIT4andissummarizedasfollows:
ASSETS | 230,816,512.82 |
(-)LIABILITIES | 230,806,512.82 |
SHAREHOLDERS'EQUITY | 10,000.00 |
17. ThecapitalstockofNOVAPONTOCOMamountstoR$50,741,294.71(fiftymillion,seven
hundredandforty-onethousand,twohundredandninety-fourReaisandseventy-onecents)andisdividedinto60,692,838(sixtymillion,sixhundredandninety-twothousandandeighthundredandthirty-eight)shares,distributedasfollows:
Quantity
Shareholders | Shares | CapitalStock | Interest |
CompanyBrasileiradeDistribuição | 32,290,656 | 26,996,096.19 | 53.203% |
ViaVarejo S.A. | 26,643,996 | 22,275,294.71 | 43.900% |
GermanPasqualeQuiroga Vilardo | 826,232 | 690,758.30 | 1.361% |
EduardoKhairChalita | 826,233 | 690,759.13 | 1.361% |
DeniYoku Higa | 9,055 | 7,570.29 | 0.015% |
WernerGernanoDopheide | 6,686 | 5,589.73 | 0.011% |
HildaLuzia Kozlowski | 5,572 | 4,658.38 | 0.009% |
MarcelJacob | 2,785 | 2,328.36 | 0.005% |
Marcelo Machado Estevão | 1,811 | 1,514.06 | 0.003% |
Lucas Correia dos Santos | 3,621 | 3,027.28 | 0.006% |
DemetriusFerreira da Silva | 1,114 | 931.34 | 0.002% |
Cintia Mendonça | 1,950 | 1,630.27 | 0.003% |
Gabriel Chagas Cordeiro | 975 | 815.13 | 0.002% |
José Ricardo Tancredi | 3,900 | 3,260.53 | 0.006% |
Julia Barreto Rueff | 1,950 | 1,630.27 | 0.003% |
LilianTiemiTakada | 3,900 | 3,260.53 | 0.006% |
Luciano de Freitas Manolio | 3,900 | 3,260.53 | 0.006% |
Marcelo Luiz Pagotto Recco | 3,900 | 3,260.53 | 0.006% |
MarciaTeixeira | 1,950 | 1,630.27 | 0.003% |
Márcio Vianna de Melo | 3,900 | 3,260.53 | 0.006% |
Marco Antonio Provetti | 5,850 | 4,890.80 | 0.010% |
Regis Borghi | 19,501 | 16,303.51 | 0.032% |
Valériade Almeida Valentim | 3,900 | 3,260.53 | 0.006% |
Vicente R. de Rezende Filho | 19,501 | 16,303.51 | 0.032% |
60,692,838 | 50,741,294.71 | 100.000% |
18. BasedontherestatedbalancesheetofNOVAPONTOCOM,onthespin-offisbased,theequityvalueofiharesisR$0,000165.
Caption:
Valorpatrimonialdasações–Equityvalueoftheshares
Valordopassiveadescoberto–Valueofinsufficiencyofassets
Quantidadedeações-NumberofShares.
EFFECT OF THE SPIN-OFF ON NOVA PONTOCOM
19. As a result of the spin-off, NOVA PONTOCOM shall be extinct, and its net assets shall be absorbed by the RECEIVING COMPANIES, as set forth in EXHIBIT 4.
Shares held by CBD, VIA VAREJO, HOLDING 1 and HOLDING 2, equal to the spin-off shall
20.
be forfeited and replaced with assets and liabilities incorporated thereby.
EFFECT OF THE MERGER ON CBD
21. CBD absorbs part of the net worth of NOVA PONTOCOM in the amount of R$5,320.34 (five thousand, three hundred and twenty Reais and thirty-four cents), as demonstrated in EXHIBIT 4.
22. NOVA PONTOCOM’s shares held by CBD shall be cancelled and replaced with assets and liabilities incorporated thereby, while CBD’s interest in NOVA PONTOCOM is extinguished, in the exact amount of the net assets incorporated hereby, without any impact on its net worth.
EFFECT OF THE MERGER ON VIA VAREJO
23. VIA VAREJO absorbs part of the net worth of NOVA PONTOCOM in the amount of R$4,389.97 (four thousand, three hundred and eighty-nine Reais and ninety-six cents).
24. NOVA PONTOCOM’s shares held by VIA VAREJO shall be cancelled and replaced with assets and liabilities incorporated thereby, while VIA VAREJO’s interest in NOVA PONTOCOM is extinguished, in the exact amount of the net assets absorbed hereby, without any impact on its net worth.
EFFECT OF THE MERGER ON HOLDING 1
25. HOLDING 1 absorbs part of the net worth of NOVA PONTOCOM in the amount of R$272.27 (two hundred and seventy-two Reais and twenty-seven cents), as demonstrated in EXHIBIT 4.
The shares of NOVA PONTOCOM held by HOLDING 1 will be replaced and forfeited by the assets
26.
and liabilities incorporated thereby, at the same time as the interest of HOLDING 1 in NOVA PONTOCOM will be extinct, at the exact amount of the net asset absorbed, without any impact in its net asset.
EFFECT OF THE MERGER ON VIA HOLDING 2
27. HOLDING 2 absorbs part of the net worth of NOVA PONTOCOM in the amount of R$17.42 (seventeen Reais and forty-two cents), as demonstrated in EXHIBIT 4.
28. The shares of NOVA PONTOCOM held by HOLDING 2 will be replaced and forfeited by the assets and liabilities incorporated thereby, at the same time as the interest of HOLDING 2 in NOVA PONTOCOM will be extinct, at the exact amount of the net asset incorporated, without any impact in its asset.
CONCLUSION
29. Given the findings and statements, it can be concluded that the Spun-Off Company’s installment of NOVA PONTOCOM on 30 September 2015, transferred to COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO, to VIA VAREJO S.A., and to two new Holdings, represents an adjusted net worth of R$10,000.00 (ten thousand Reais) and is in compliance with article 226 of Law 6,404/76.
REPRESENTATIONS
30. The appraisal expert expressly represents that she has no interest, directly or indirectly, in NOVA PONTOCOM COMÉRCIO ELETRÔNICO S.A., in COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO, in VIA VAREJO S.A., in HOLDING 1 and in HOLDING 2 or even in the transaction, and that there is no other circumstance that could characterize a conflict of interest. She also informs that the managers of NOVA PONTOCOM, CBD, and VIA VAREJO did not limit, difficult, or perform any acts that could have compromised the access, use, or knowledge of information, properties, documents, or work methods relevant to the quality of the respective conclusions.
This Report is issued in six (6) counterparts and has seven (7) pages and four (4) exhibits, printed on just one side and initialed by the undersigned expert.
São Paulo, 5 November 2015.
MAGALHÃES ANDRADE S/S
Independent Auditors CRC2SP000233/O-3
[signature]
GUY ALMEIDA ANDRADE
Partner
Accountant CRC1SP116758/O-6
NOVAPONTOCOMCOMÉRCIOELETRÔNICOS.A.
EXHIBIT1
BalanceSheetasof09.30.2015(amountsinReais)ASSETS
Current |
| ||
JudicialDeposits | 3,124,729.26 | ||
RecoverablePIS | 4,250,121.39 | ||
RecoverableCOFINS | 20,567,217.42 | ||
IncomeTaxtobeRefunded/Offset | 3,405,094.21 | ||
RecoverableINSS |
| 491,684.76 | |
| |||
TotalCurrentAssets | 31,838,847.04 | ||
Non-current |
| ||
CreditReceivables-Globex | (0.04) | ||
CreditReceivables-CBD | 2,406,046.80 | ||
DeferredIncomeTax-TaxLoss | 12,951,887.15 | ||
ProvisionforLoss-DeferredIncomeTax-TaxLoss | (8,937,664.81) | ||
DeferredIncomeTax-TemporaryDifferences | 1,448,086.98 | ||
PIS | 47,384,918.22 | ||
COFINS | 214,248,882.40 | ||
EquityInterests-CNova | (77,483,243.53) | ||
EquityInterests-LuxCo. | 12,295,904.46 | ||
EquityInterestatCDiscount | 52,296.12 | ||
Totalnon-currentassets |
| 204,367,113.75 | |
| |||
TOTALASSETS |
| 236,205,960.79 | |
| |||
LIABILITIESANDNETWORTH |
| ||
LIABILITIES |
| ||
Non-current |
| ||
ObligationsExtra.COm | 5,517,241.38 | ||
NPC-Brussels(ReimbursementofExpenses) | 61,215,986.06 | ||
OtherProvisions | 214,298.09 | ||
ProvisionsforContingencies | 4,415,252.59 | ||
IndemnificationAssets | (4,415,252.59) | ||
LoanAgreement-CBD | 76,144,039.11 | ||
LoanAgreement-ViaVarejo | 63,937,417.39 | ||
InterestwithoutLoanAgreement-CBD-NPC | 23,734,433.63 | ||
InterestwithoutLoanAgreement-ViaVarejo | 19,929,070.99 | ||
TOTALLIABILITIES | 250,692,486.65 | ||
NETWORTH |
| ||
Paid-upCapitalStock | 50,741,294.71 | ||
EquityMethod | 165,853.33 | ||
CapitalReserve | 6,120,324.11 | ||
LegalReserve | 404,762.17 | ||
Transactionswithnon-controllingshareholdersNPC | 320,613,633.33 | ||
FairValue-FinancialAssets | 8,585.88 | ||
Profit(Loss)intheCorporateInterest | (15,871,321.17) | ||
AccumulatedProfit(Loss) | (295,506,586.68) | ||
EquityValuationAdjustment(Law11.638/07) | 21,697,831.21 | ||
CNStockOptionReserve | 7,166,617.12 | ||
DiscountStockOptionReserve | 5,248,080.01 | ||
SharesHeldinTreasury | (742,846.83) | ||
PensionPlan-CDiscount | (1,531,120.81) | ||
AccumulatedConversionAdjustments |
| (113,001,632.24) | |
| |||
TOTALNETWORTH |
| (14,486,525.86) | |
| |||
TOTALLIABILITIESANDNETWORTH |
| 236,205,960.79 | |
| |||
NOVAPONTOCOMCOMÉRCIOELETRÔNICOS.A.
EXHIBIT2
MainAccountingPracticesandPolicies
1. Accountingrules
ThefinancialstatementswerepreparedpursuanttotherulesissuedbytheBrazilianAccountingPronouncementsCommittee–CPCandapprovedbytheFederalAccountingCouncil–CFC.
Thefinancial statementswerepreparedbasedonthehistoricalcost,exceptforcertain financialinstruments,measuredatthefairvalue.
Thefinancialstatements aresubmitted inReal,which is thefunctionalcurrency andthepresentationcurrencyoftheCompanyanditssubsidiaries.
2. Preparationandpresentationbasis
2.1. Useofjudgmentsandestimates
ThepreparationoftheCompany’sfinancialstatementsrequiresmanagementtousejudgments,estimates,andassumptionsthataffectthestatedamountsofrevenues,expenses,assets,liabilities,andtheirrelevantdisclosure,inadditiontothedisclosureofthecontingentliabilities.Uncertaintiesregardingsuchassumptionsandestimatesmaydeliverresultsthatrequirematerialadjustmentstothecarryingamountofaffectedassetsorliabilitiesinfuturefiscalyears.
Trials
IntheprocessofenforcingtheCompany’saccountingpolicies,Managementadoptedthefollowingjudgments,whichsignificantlyaffectedtheamountsrecognizedinthefinancialstatements:
Estimatesandassumptions
Wedescribebelowthemainassumptionswithrespecttofuturesourcesandothermainsourcesofuncertaintyintheestimatesonthedateofthebalancesheetthatmayposeasignificantriskofrequirementofmaterialadjustmentstothecarryingamountsofassetsandliabilitiesduringthenextfiscalyear.TheCompanybaseditsassumptionsandestimatesonmetricsavailableatthetimeofthepreparation ofthefinancial statements.However,the realcircumstances andassumptionsregardingfuturedevelopmentsmayvaryaccordingtochangesinthemarketorcircumstancesbeyondthecontroloftheCompany.Suchchangesarereflectedontheassumptionsastheyoccur.
2. Preparationandpresentationbasis(Continued)
2.1. Useofjudgmentsandestimates(Continued)
a) Impairmentofnon-financialassets
Theimpairmentoccurswhenthecarryingamountofanassetoracashgeneratingunitexceedsitsrecoverableamount,whichisthehigherofthefairvalue,lessanydisposalcosts,anditsvalueinuse.Forthisclosing,theCompanyperformednoimpairmenttests,whichshallbeperformedasoftheendoftheyear,butthereisnoevidenceofchangeinthebusinessenvironmentthatleavesroomtothereversaloftherecoverabilityoftheassets.
b) Taxcredits(PIS,COFINS,andICMS)
TheCompany issubjecttothemethodologyfortaxdebitsandcreditsthatmayaccrueundertheapplicablelawsandregulations.Managementtookintoaccountthepossibilitiesofrealizingthetaxcreditsbased onthetechnicalfeasibilitystudyonthefuturerealizationoftaxes,consideringtheongoingspin-offandtheuseofsuchbalancesbytheRECEIVINGCOMPANIES.
c) Provisionforjudicialclaims
TheCompanyisapartytoseverallegalandadministrativeproceedings.Theprovisionsforlegaldemandsaremadeforallactionslikelytogiverisetoresolutionexpenses.Theassessmentoftheprobabilityoflossincludesassessmentoftheavailableevidence,lawhierarchy,availablecaselaw,themostrecentcourtdecisionsandtheirlegalrelevance,aswellasassessmentbyoutsidecounsel.Managementbelievesthattheprovisionsfortax,civil,andlabordemandsareproperlypresentedintheconsolidatedseparatefinancialstatements.
d) Stock-basedcompensation
TheCompanymeasuresthecostofstock-basedcompensationtoemployeesbasedonthefairvalueoftheequityinstrumentsatthegrantingdate.
TheestimatedFairValueofstock-basedcompensationtransactionsrequireschoiceofthemostsuitableassessmentregime,dependingonthetermsandconditionsoftheaward.Thisestimatealsorequires choice ofthe mostsuitablesourcestobe usedintheassessmentmodel,includingtheexpectedusefullifeoftheshareoption,thevolatility,andthedividendyield,inadditiontotheuseofassumptionsinthisregard.
3. Mainaccountingpolicies
3.1 Controlledcompanies
TheCompanyisdeemedtobeincontrolwhenitisexposedorholdsrightstovariedreturnsresultingfromitsengagementwiththeinvestedcompanyandwhenitisabletoinfluencesuchreturnsthroughitspowerovertheinvestedcompany.
Specifically,theCompanyisdeemedtheparentofaninvesteeonlywhentheCompany:
• Haspowerovertheinvestedcompany(thatis,existingrightsensuringtheabilitytocontroltheinvestee’srelevantactivities);
• Is exposedor holdsrightstovaried returnsresultingfromits engagementwiththe investee;
and
• Canuseitspowerovertheinvesteetoinfluenceitsreturns.
IntheeventstheCompanyholdsanon-controllinginterestinthedecisionsorotherrightstoaninvestedcompany,theCompanytakesintoaccountallrelevantfactsandcircumstanceswhenanalyzingitspoweroveraninvestedcompany,suchas:
• Contractualagreementswithotherholdersofvotingrightsintheinvestedcompany;
• Rightsarisingfromcontractualagreements;
• TheCompany’svotingrightsandpotentialvotingrights.
TheCompanyreassesses itspositionofparentofaninvestedcompanyortheabsenceofsuchpositionifthefactsandcircumstancesindicatechangesinoneormoreofthesethreecontrolelements.
On30September2015,onlyLuxCo.isdeemedacontrolledcompany,inwhichtheCompanyholdsinterestof95.13%ofthecapitalstock.Incaseoftheotherinvestedcompanies,theCompanyisamemberofthecontrollinggroup,butitholdsaninterestlowerthan50%.
TheamountoftheinvestmentinthesecontrolledcompaniesisassessedthroughtheEquityMethod,basedontheinvestedcompanies’financialstatementsasofSeptember30,2015.
3.2. Impairmentofnon-currentassets
Theintangible assetswithindefiniteusefullifearetestedforimpairment atleastonceayear,on
31December,orwhenthereisanysignofimpairment.Otherassetsarealsotestedforimpairmentwheneverthereisanysignthereof.
3.Mainaccountingpolicies(Continued)
3.2. Impairmentofnon-currentassets(Continued)Cash-GeneratingUnits(CGUs)
Acashgenerationunitisthesmallergroupofassetsgeneratingcash,whichassetsare,mostofthetimes,independentfromthecashofotherassetsorgroupofassets.
Impairmentindicators
InadditiontotheexternalsourcesofdatamonitoredbytheCompany(economicenvironment,assetmarketvalue,etc.),theoperationalperformanceisusedasanimpairmentindicator.
Recoverableamount
Therecoverableamountofanassetisthehigherofitsfairvalue,lesssellingcosts,anditsvalue
inuse. Itisusually determinedonanindividualbasisforeachasset.Incasesuch determinationisnotpossible,therecoverableamountoftheCGUgrouptowhichtheassetbelongsisused.
FairValueis thepricethatwouldbereceivedforthesaleofanassetor paidforthetransfer ofaliabilityinanordinarytransactionbetweenmarketplayersonthedateofmeasurement.
The value in useisthepresent valueoftheexpectedfuture cashflowsfrom thecontinuoususeofanasset,plusaterminalvalue.Itisassessedinternallyorbyexternalexpertsbasedon:
• forecastedcashflowscontainedinthebusinessplanorbudgetswithmaximumtimehorizonoffiveyears.Cashflowsbeyondtheforecastperiodareestimatedthroughapplicationofaconstantordecreasinggrowthrate;
• theterminalvalueisdeterminedthroughapplicationofaperpetual growthrateuntilthe endoftheforecastedcashflow.Thecashflowsandterminalvaluearediscountedatlong-termrates,netoftaxes,reflectingthemarketestimatesofthetemporalcashvalueandspecificrisksrelatedtotheassets.
Reductiontorecoverablevalue(impairment)
ImpairmentlossesarerecognizedwhenthebookvalueofanassetorCGUtowhichitbelongsishigherthanitsrecoverableamount.Impairmentlossesareaccountedforasexpensesintheitem“Assetimpairmentloss”.
3.Mainaccountingpolicies(Continued)
3.2. Impairmentofnon-currentassets(Continued)Impairment(impairment)(Continued)
Impairmentlossesrecognizedinapreviousperiodarereversedif,andonlyif,therewerechangesintheestimates usedtodeterminethe recoverableamountofthe assetssincethelastrecognitionofanimpairmentloss.However,theincreaseinthebookvalueofanassetduetothereversedimpairmentlossesmaynotexceedthebookvaluethatwouldhavebeenassessedifnoimpairmentlossoftheassethadbeenrecognizedinpreviousyears.
On30September2015,theCompanyhadnointangibleassets.
3.3. Netequity
Stock-basedcompensation
Employees(includingseniorexecutivesoftheCompany)mayreceivesharecalloptionsandshareawards.
Thebenefitgrantedthroughshareoptionplans,assessedatthefairvalueuponaward,correspondstoanadditionalcompensation.Thefairvalueoftheoptionsonthedateoftheawardisrecognizedasemployeebenefitexpensesduringthevestingperiod.
ThefairvalueoftheoptionsisdeterminedthroughtheBlack&Scholesoptionpricingmodel,basedonthecharacteristicsoftheplan,marketdata(includingthemarketpriceofthesharessubjecttotheoptions,volatilityoftheshareprice,andrisk-freeinterestrate)onthedateoftheaward,andonassumptionsrelatedtotheprobabilityofkeepingtherelationshipofthebeneficiarieswiththeCompanyuntiltheoptionsbecomeexercisable.
Thefairvalueoftheshareawardsisalsodeterminedbasedonthecharacteristicsoftheplan,marketdataonthedateoftheaward,andonassumptionsrelatedtotheprobabilityofkeepingtherelationshipofthebeneficiarieswiththeCompanyuntiltheoptionsbecomeexercisable.Intheeventtherearenorestrictionsontheexerciserelatedtotheshareawardplan,theexpenseisfullyrecognizeduponcreationoftheplan.Otherwisetheexpenseisdeferredthroughoutthevestingperiod,aslongastheconditionstoexercisearesatisfied.
3.Mainaccountingpolicies(Continued)
3.3. Networth(Continued)Dividends
WhenapplicabletothedistributionofdividendstoshareholdersoftheCompany,itisrecognizedasliabilitiesintheendoftheyear,basedonthemandatoryminimumdividendsdefinedinthebylaws.Anyamounts exceedingtheminimumdividendsshallbe accountedforonlyonthe dateonwhichsuchadditionaldividendsareapprovedbytheshareholdersoftheCompany.
3.4. FinancialliabilitiesDefinitions
Financialliabilitiesareclassifiedunderthecategoryofloansrecognizedattheamortizedcost.
Financialliabilitiesareclassifiedascurrentliabilities,iftheyexpirewithinoneyear,ornon-currentliabilities,iftheirexpirationdateiswithinmorethanoneyear.
Recognitionandmeasurementoffinancialliabilities
a) Financialliabilitiesrecognizedattheamortizedcost
Theloanagreementswithrelatedpartiesarerecognizedattheamortizedcostthroughtheeffectiveinterestratemethod.
b) Financialliabilitiesrecognizedatfairvaluethroughprofitorloss
FinancialliabilitiesthattheCompanyintendstomaintainfornegotiationintheshortterm.Theyaremeasuredatthefairvalue,andanygainsorlossesarisingfromreassessmentofthefairvaluearerecognizedintheincomestatement.On30September2015,theCompanyhasnofinancialliabilitiesunderthisclassification.
3.5. OtherProvisions
ProvisionsaremadewhentheCompanyhasa(legalorconstructive)presentobligationresultingfromapastevent,whichamountmaybereliablyestimatedandwhenthereisaprobabilityofoutflowofresourcesthatincorporateeconomicbenefitsforacquittanceoftheobligation.Theprovisionsarediscountedwhentherelatedadjustmentismaterial.
3.Mainaccountingpolicies(Continued)
3.5. OtherProvisions(Continued)
Contingentliabilitiescorrespond toapotentialobligationthatresultsfrompast eventsandwhichexistenceshallbeconfirmedonlybytheoccurrence,orlackofit,ofoneormoreuncertainfutureeventsnotcompletely undercontrol oftheCompany,orpresentobligations forwhichnooutflowofresourcesthatincorporateeconomicbenefitsforacquittanceoftheobligationareexpected.Contingentliabilitiesarenotrecognizedinthebalancesheet,butaredisclosedinanotetothefinancialstatements.
3.6. Classificationoftheassetsandliabilitiesascurrentandnon-current
TheassetsexpectedtoberealizedorthattheCompanyintendstosellorconsumeduringtheregularcycleofitsoperationsorwithintwelvemonthsofthedateofthebalancesheetareclassifiedascurrentassets,togetherwiththeassetskeptwiththemainpurposeoftradingandcashandcashequivalents.Theotherassetsareclassifiedas“non-currentassets”.TheliabilitiesexpectedtobesettledduringtheregularcycleofoperationsoftheCompanyorwithintwelvemonthsofthedateofthebalancesheetareclassifiedascurrentliabilities.TheregularcycleofoperationsoftheCompanyisof12months.
Allreceivableorpayabledeferredtaxesareclassifiedasnon-currentassetsorliabilities.
3.7. Taxes.
CurrentIncomeTax
Currenttaxassetsandliabilitiesforthecurrentyeararedefinedattheexpectedrecoveryamountortheamounttobepaidtothetaxauthorities.
Thecurrentincometaxrelatedtoitemsdirectlyrecognizedasshareholder’sequity,whenapplicable,isrecognizedintheshareholders’equity,ratherthanintheincomestatement.Managementassesses,fromtimetotime,thepositionsaccountedforinthetaxreturnswithrespecttosituationsinwhichtheapplicabletaxlawsandregulationsaresubjecttointerpretationsandmakesprovisionswhenappropriate.
ThetaxationontheincomecomprisestheCorporateIncomeTax(“IRPJ”)andtheSocialContributiononNetProfits(“CSLL”)andiscalculatedbythetaxableincomeregime(adjustedprofit)attheapplicableratespursuanttothecurrentlawsandregulations:15%onthetaxableincomeandadditional10%onwhatexceedsR$240intaxableincomeperyear,forIRPJ,and9%forCSLL.
MainAccountingPracticesandPolicies
3.Mainaccountingpolicies(Continued)
3.7. Taxes(Continued)Deferredincometax
Thedeferredtaxesarerecognizedaccordingtothebalancesheet.Theyarecalculatedbytheliabilitymethod,whichconsistsintheadjustmentofthedeferredtaxesrecognizedinpreviousyearsduetoanychangesintheincometaxrate.
Thedeferredtaxassetscorrespondtofuturetaxbenefitsarisingfromdeductibletemporarydifferencesandcertainadjustmentswithexpectedrecovery.
Thedeferredtaxliabilitiesarefullyrecognizedfor:
• temporarytaxdifferences,exceptwhenthedeferredtaxliabilityresultsfromrecognitionofanon-deductiblegoodwill impairmentlossorfrominitialrecognitionofan assetorliabilityinatransactionotherthanabusinesscombinationthat,atthetimeofthetransaction,hasnoimpactontheaccountingprofitoronthetaxableprofit ortaxloss;and
• temporarytaxdifferencesrelatedtoinvestmentsincontrolledcompanies,exceptwhentheCompanyistheparentatthetimeofreversalofthedifferenceandifthereversalis notlikelytooccurinthenearfuture.
EXHIBIT3
NOVAPONTOCOMCOMÉRCIOELETRÔNICOS.A.
Adjustedbalancesheet(amountsinReais)
|
| Adjustments |
| |||
| Balanceas of 09.30.2015 | Debt. | Credit | Adjustedbalance | ||
ASSETS |
|
|
|
| ||
Current |
|
|
|
| ||
JudicialDeposits | 3,124,729.26 |
|
| 3,124,729.26 | ||
RecoverablePIS | 4,250,121.39 |
|
| 4,250,121.39 | ||
RecoverableCOFINS | 20,567,217.42 |
|
| 20,567,217.42 | ||
IncomeTax tobeRefunded/Offset | 3,405,094.21 |
|
| 3,405,094.21 | ||
RecoverableINSS | 491,684.76 |
|
| 491,684.76 | ||
TotalCurrent Assets | 31,838,847.04 |
|
| 31,838,847.04 | ||
Non-current |
|
|
|
| ||
CreditReceivables -Globex | (0.04) |
|
| (0.04) | ||
CreditReceivables -CBD | 2,406,046.80 |
|
| 2,406,046.80 | ||
DeferredIncomeTax-TaxLoss | 12,951,887.15 |
| 12,951,887.15 | - | ||
ProvisionforLoss -DeferredIncomeTax-TaxLoss | (8,937,664.81) | 8,937,664.81 |
| - | ||
DeferredIncomeTax-TemporaryDifferences | 1,448,086.98 |
| 1,375,225.63 | 72,861.35 | ||
PIS | 47,384,918.22 |
|
| 47,384,918.22 | ||
COFINS | 214,248,882.40 |
|
| 214,248,882.40 | ||
EquityInterests -CNova | (77,483,243.53) |
|
| (77,483,243.53) | ||
EquityInterests -CDiscount | 52,296.12 |
|
| 52,296.12 | ||
EquityInterestat-LuxCo. | 12,295,904.46 |
|
| 12,295,904.46 | ||
Totalnon-current assets | 204,367,113.75 |
|
| 198,977,665.78 | ||
TOTAL ASSETS | 236,205,960.79 |
|
| 230,816,512.82 | ||
LIABILITIES ANDNET WORTH |
|
|
|
| ||
LIABILITIES |
|
|
|
| ||
Non-Current |
|
|
|
| ||
ObligationsExtra.COm | 5,517,241.38 |
|
| 5,517,241.38 | ||
NPC -Brussels(Reimbursement ofExpenses) | 61,215,986.06 |
|
| 61,215,986.06 |
OtherProvisions | 214,298.09 |
|
| 214,298.09 |
ProvisionsforContingencies | 4,415,252.59 |
|
| 4,415,252.59 |
IndemnificationAssets | (4,415,252.59) |
|
| (4,415,252.59) |
LoanAgreement-CBD | 76,144,039.11 | 10,895,645.22 |
| 65,248,393.89 |
LoanAgreement- ViaVarejo | 63,937,417.39 | 8,990,328.61 |
| 54,947,088.78 |
InterestwithoutLoanAgreement-CBD-NPC | 23,734,433.63 |
|
| 23,734,433.63 |
InterestwithoutLoanAgreement-ViaVarejo | 19,929,070.99 |
|
| 19,929,070.99 |
TOTALLIABILITIES | 250,692,486.65 |
|
| 230,806,512.82 |
NETWORTH |
|
|
|
|
Paid-upCapital Stock | 50,741,294.71 |
|
| 50,741,294.71 |
EquityMethod | 165,853.33 |
|
| 165,853.33 |
CapitalReserve | 6,120,324.11 |
|
| 6,120,324.11 |
LegalReserve | 404,762.17 |
|
| 404,762.17 |
Transactionswithnon-controllingshareholdersNPC | 320,613,633.33 |
|
| 320,613,633.33 |
FairValue-Financial Assets | 8,585.88 |
|
| 8,585.88 |
Profit (Loss) intheCorporateInterest | (15,871,321.17) |
|
| (15,871,321.17) |
AccumulatedProfit (Loss) | (295,506,586.68) | 14,327,112.78 | 28,823,638.64 | (281,010,060.82) |
EquityValuationAdjustment (Law11.638/07) | 21,697,831.21 |
|
| 21,697,831.21 |
CNStockOptionReserve | 7,166,617.12 |
|
| 7,166,617.12 |
Discount StockOptionReserve | 5,248,080.01 |
|
| 5,248,080.01 |
SharesHeldinTreasury | (742,846.83) |
|
| (742,846.83) |
PensionPlan-Discount | (1,531,120.81) |
|
| (1,531,120.81) |
AccumulatedConversionAdjustments | (113,001,632.24) |
|
| (113,001,632.24) |
TOTALNET WORTH | (14,486,525.86) |
|
| 10,000.00 |
TOTALLIABILITIES ANDNETWORTH | 236,205,960.79 | 43,150,751.42 | 43,150,751.42 | 230,816,512.82 |
EXHIBIT4
NOVAPONTOCOMCOMÉRCIOELETRÔNICOS.A.
NetAssetsattributedtoRECEIVINGCOMPANIES(amountsinReais)
| Spun-offportions tobeacquiredby | |||
| CBD | ViaVarejo | Holding 1 | Holding 2 |
ASSETS |
|
|
|
|
Current |
|
|
|
|
JudicialDeposits | 3,124,729.26 |
|
|
|
RecoverablePIS | 2,328,667.19 | 1,921,454.20 |
|
|
RecoverableCOFINS | 11,268,902.70 | 9,298,314.72 |
|
|
IncomeTax tobeRefunded/Offset | 778,745.01 | 642,566.22 | 1,864,496.60 | 119,286.38 |
RecoverableINSS | 491,684.76 |
|
|
|
TotalCurrent Assets | 17,992,728.92 | 11,862,335.14 | 1,864,496.60 | 119,286.38 |
Non-current |
|
|
|
|
CreditReceivables -Globex | - | (0.04) | - | - |
CreditReceivables -CBD | 2,406,046.80 | - | - | - |
DeferredIncomeTax-TaxLoss | - | - | - | - |
ProvisionforLoss -DeferredIncomeTax-TaxLoss | - | - | - | - |
DeferredIncomeTax-TemporaryDifferences | 72,861.35 | - | - | - |
PIS | 30,751,198.61 | 16,633,719.61 | - | - |
COFINS | 139,040,230.13 | 75,208,652.27 | - | - |
EquityInterests -CNova | (40,835,126.31) | (34,288,596.34) | (2,217,641.10) | (141,879.78) |
EquityInterests -CDiscount | 27,561.04 | 23,142.56 | 1,496.76 | 95.76 |
EquityInterestat-LuxCo. | 6,480,172.86 | 5,441,296.54 | 351,920.00 | 22,515.07 |
Totalnon-current assets | 137,942,944.48 | 63,018,214.60 | (1,864,224.34) | (119,268.96) |
TOTAL ASSETS | 155,935,673.39 | 74,880,549.74 | 272.26 | 17.42 |
EXHIBIT4(Continued)
NOVAPONTOCOMCOMÉRCIOELETRÔNICOS.A.
NetAssetsattributedtoRECEIVINGCOMPANIES(amountsinReais)
| Spun-offportions tobeacquiredby | |||
| CBD | ViaVarejo | Holding 1 | Holding 2 |
LIABILITIES ANDNET WORTH |
|
|
|
|
LIABILITIES |
|
|
|
|
Non-current |
|
|
|
|
ObligationsExtra.COm | 5,517,241.38 | - | - | - |
NPC -Brussels(Reimbursement ofExpenses) | 61,215,986.06 | - | - | - |
OtherProvisions | 214,298.09 | - | - | - |
ProvisionsforContingencies | 4,415,252.59 | - | - | - |
IndemnificationAssets | (4,415,252.59) | - | - | - |
LoanAgreement-CBD | 65,248,393.89 | - | - | - |
LoanAgreement- ViaVarejo | - | 54,947,088.78 | - | - |
InterestwithoutLoanAgreement-CBD-NPC | 23,734,433.63 | - | - | - |
InterestwithoutLoanAgreement-ViaVarejo | - | 19,929,070.99 | - | - |
TOTALLIABILITIES | 155,930,353.05 | 74,876,159.77 | - | - |
NETWORTH. |
|
|
|
|
Paid-upCapital Stock | 26,996,096.19 | 22,275,294.71 | 1,381,517.43 | 88,386.38 |
EquityMethod | 90,872.05 | 74,981.28 | - | - |
CapitalReserve | 3,353,362.98 | 2,766,961.13 | - | - |
LegalReserve | 221,771.67 | 182,990.50 | - | - |
Transactionswithnon-controllingshareholdersNPC | 175,666,169.08 | 144,947,464.25 | - | - |
FairValue-Financial Assets | 4,704.26 | 3,881.62 | - | - |
Profit (Loss) intheCorporateInterest | (8,695,993.86) | (7,175,327.31) | - | - |
AccumulatedProfit (Loss) | (153,568,929.43) | (126,714,364.10) | (683,066.25) | (43,701.05) |
EquityValuationAdjustment (Law11.638/07) | 11,888,374.32 | 9,809,456.89 | - | - |
CNStockOptionReserve | 3,926,633.32 | 3,239,983.80 | - | - |
Discount StockOptionReserve | 2,875,455.11 | 2,372,624.90 | - | - |
SharesHeldinTreasury | - | - | (698,178.91) | (44,667.92) |
PensionPlan-Discount | (838,910.45) | (692,210.36) | - | - |
AccumulatedConversionAdjustments | (61,914,284.89) | (51,087,347.35) | - | - |
TOTALOF NET WORTH | 5,320.34 | 4,389.97 | 272.27 | 17.42 |
TOTALLIABILITIES ANDNETWORTH | 155,935,673.39 | 74,880,549.74 | 272.27 | 17.42 |
EXHIBIT 4.1.2(vii)
Agreements entered into between Nova Pontocom and Via Varejo and entered into between Nova Pontocom and CBD which will be liquidated by means of equity merger
Agreements entered into between Nova Pontocom and Via Varejo:
1. Loan Agreement dated 18 July 2011, in the amount of R$ 37,212,560.70 (thirty-seven million, two hundred and twelve thousand, five hundred and sixty reais and seventycents), with loan date established as of 6 February 2013, and payment date established as of 6 February 2014, extended to 6 February 2017, secured by promissory note in the same amount; and
2. Loan Agreement dated 18 July 2011, in the amount of R$ 26,724,856.67 (twenty-six million, seven hundred twenty-four thousand, eight hundred fifty-six reais and sixty seven cents), with loan date established as of 25 April 2013, and payment date established as of 6 February 2014, extended to 6 February 2017, secured by promissory note in the same amount.
Agreements entered into between Nova Pontocom and CBD:
3. Loan Agreement dated 18 July 2011, in the amount of R$ 44,317,348.02 (forty-four million, three hundred and seventeen thousand, three hundred forty-eight reais and two cents), with loan date established as of 6 February 2013, and payment date established as of 6 February 2014, extended to 6 February 2017, secured by promissory note in the same amount; and
4. Loan Agreement dated 18 July 2011, in the amount of R$ 31,826,691.09 (thirty-one million, eight hundred twenty-six thousand, six hundred ninety-one reais and nine cents), with loan date established as of 25 April 2013, and payment date established as of 6 February 2014, extended to 6 February 2017, secured by promissory note in the same amount.
| |
November 18, 2015 | |
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO and SÉ SUPERMERCADOS LTDA. | |
MERGER PROTOCOL AND JUSTIFICATION of Sé Supermercados Ltda. into Companhia Brasileira de Distribuição | |
|
|
MERGER PROTOCOL AND JUSTIFICATION OF SÉ SUPERMERCADOS LTDA.INTO COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
By this private instrument:
(1) COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO, a publicly held company, with head offices in the City of São Paulo, State of São Paulo, at Av. Brigadeiro Luis Antônio, No. 3,142, CEP 01402-000, enrolled with the Corporate Taxpayers’ Registry (“CNPJ/MF”) under No. 47.508.411/0001-56, herein representedin accordanceto its By-laws (“Merging Company”); and
(2) SÉ SUPERMERCADOS LTDA., a limited liability company, with head offices in the City of São Paulo, State of São Paulo, at Av. Brigadeiro Luís Antônio, No. 3,172, Jardim Paulista, CEP 01402-002, enrolled with the CNPJ/MF under No. 01.545.828/0001-98, herein representedin accordanceto its Articles of Association (“Merged Company” or “Sé” and, when jointly referred with the Merging Company, the “Parties” and, individually, a “Party”),
DECIDE, pursuant to the provisions of Articles 224, 225 and 227 of Law No. 6,404 dated December 15, 1976, as amended (“Brazilian Corporate Law”) and Articles 1,116 to 1,118 of Law 10,406 dated January 10, 2002, as amended (“Civil Code”), to enter into this Merger Protocol and Justification (“Protocol”), in order to regulate the terms and conditions applicable to the merger of the Merged Company into the Merging Company (“Merger”), subject to to the approvals mentioned in Section 4.2 below.
1 Purpose
The purpose of this Protocol is to set forth the basis of the Merger proposal to be discussed by the shareholders and the quotaholder of the Parties, as applicable. If the proposal subject of this Protocol is approved:
(i) the Merging Company shall succeed the Merged Company in all its rights and obligations and all assets and liabilities of the Merged Company, will be transferred to the Merging Company; and
(ii) the Merged Company will beextinguished and therefore the quotas of the Merged Company’s corporate capital will be extinguished and canceled, and the corporate capital of the Merging Company will remain unchanged, subject to the provisions set forth in Section 4.1.2.
2 Justification and interest of the Parties in carrying out the Merger
The management of the Parties understands that the Merger will offer patrimonial, legal and financial benefits, among which:
(i) the optimization of the corporate structure of the group to which the Parties belong; and
(ii) the reduction of costs in administrative areas and the fulfillment of ancillary obligations, creating synergies to be benefited from.
3 Appraisal
3.1 Appraisal. The Parties agree that, pursuant to the appraisal report attached hereto asExhibit 3.1(“Report”), the value of theMerged Company’s net equity wasappraised byMAGALHÃES ANDRADE S/S AUDITORES INDEPENDENTES,enrolled with theRegional Accounting Council of the State of São Paulo, under No. 2SP000233/O-3 and with the CNPJ/MF under No. 62.657.242/0001-00, with head offices in the City of São Paulo, State of São Paulo, at Av. Brigadeiro Faria Lima, No. 1,893, 6th floor, Jardim Paulistano (“Appraiser”), on the reference date of September 30, 2015, based on the balance sheet prepared by the management of the Merged Company on the same date and for this specific purpose. According to the Report,the value of the Merged Company’s net equityon September 30, 2015 corresponds, reflecting the effect of subsequent events as described in the Report, on the date of the Report, to two billions, seven hundred and thirteen million, thirty thousand, four hundred and six reais and sixty-four cents (R$ 2,713,030,406.64).
3.2 Changes in equity. In case the proposed Merger is approved, the changes in the equity of the Merged Company which occur after the base date of September 30, 2015 shall be absorbed by the Merging Company and duly registered in its financial statements.
3.3 Conflict. The Appraiser declared it has no direct or indirect interest in the companies involved in the Merger or, also, in relation to the Merger itself, which could prevent it from preparing or affect the preparation of the Report required for the purposes of the Merger.
4 General Aspects of the Merger
In case the Merger proposal is approved, the Merger shall be implemented as follows:
4.1 Corporate Capital
4.1.1 Current composition.
(i) The corporate capital of the Merged Company isonebillion, four hundred and forty-four million, one hundred and forty-one thousand, seven hundred and fifty-two reais and nine cents (BRL 1,444,141,752.09), divided into three hundred and sixty-six million, two hundred and sixty-seven thousand and thirty-four (366,267,034) quotas with par value of 3.94286577287 each, totally held by the Merging Company.
(ii) The corporate capital of the Merging Company, fully subscribed and paid for, is six billion, eight hundred and six million, eighty-nine thousand, four hundred and fifty-four reais and eighty-one cents (BRL 6,806,089,454,81), divided into two hundred and sixty-five million, six hundred and ninety-nine thousand and seven hundred and seventy-nine (265,699,779) book entry shares without par value, of which (a) ninety-nine million, six hundred and seventy-nine thousand and eight hundred and fifty-one (99,679,851) common shares; and (b) one hundred and sixty-six million, nineteen thousand and nine hundred and twenty-eight (166,019,928) preferred shares.
4.1.2 Effects of the Merger in the Parties’ corporate capital and provisions related to the quotas held by the Merging Company in the Merged Company. On the date of the Merger:
(i) the Merging Company shall fully absorb the net assets of Sé in exchange of the quotas held by it in Sé’s corporate capital, which will be canceled asa result of the Merger;
(ii) the interest held by the Merging Company in Sé’s corporate capital shall be replaced in the balance sheet of the Merging Company by the assets and liabilities that comprise Sé’s net equity, by their respective book value; and
(iii) the corporate capital of the Merging Company shall remain unchanged. Therefore, it is not necessary to establish any exchange ratio.
4.2 Conditions for the implementation of the Merger. The implementation of the Merger, the Appraiser indication and the approval of its Report and other terms and conditions of the Protocol are subject to the approval or ratification, as the case may be, of the board of directors and of the shareholders of the Merging Company and of the quotaholder of the Merged Company.
4.3 Effects of the Merger.In case the Merger is approved, the Merged Company shall be extinguished and universally succeeded by the Merging Company, withoutany interruption, in all its assets and liabilities, rights and obligations of anynature whatsoever.
4.4 Reimbursement amount. Considering that the Merging Company is the sole quotaholder of the Merged Company, withdrawal rights are not applicable.
4.5 Use of the corporate name. The Merged Company may continue to conduct the transactions, on its behalf, until all the registries are formalized and all authorizations required are obtained under the applicable legislation for the effectiveness of the Merger.
5 MISCELLANEOUS
5.1 Severability. A potential declaration of nullity or unenforceability of any of the provisions of this Protocol by any court shall not affect the validity and enforceability of the other, which shall be fully complied with. The Parties agree to use their best efforts to validly agree to obtain the same effects of the provision declared null or unenforceable.
5.2 Entire agreement, exhibits and amendments. This Protocol and its exhibits constitute the totality of understandings and agreements between the management of the Parties, as applicable, in relation to the matters agreed herein. This Protocol and its exhibits may only be modified or amended by means of a written instrument executed by all the managers of the Parties.
5.3 Filing. Once the Merger is approved by the Merging Company’s shareholders and by the Merged Company’s quotaholder, the management of the Merging Company’s shall file and publish all corporate acts related to the Merger.
5.4 Governing law.This Protocol shall be governed and construed in accordance with the laws of the Federative Republic of Brazil.
5.5 Recommendation. In view of the elements exposed, which include all the requirements of Articles 224 and 225 of the Brazilian Corporate Law, the Merger is deemed to serve the interests of the Parties involved, their shareholders and quotaholder, and therefore its implementation is recommended.
In witness whereof, the Parties execute this Merger Protocol and Justification in six (6) counterparts of the same content and effect in the presence of the two (2) witnesses signed below.
São Paulo, November 18, 2015.
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
_________________________________ | ____________________________________ |
SÉ SUPERMERCADOS LTDA.
_________________________________ Officer | _________________________________ Officer |
Witnesses:
Name: |
| Name: |
SÉSUPERMERCADOSLTDA.
Accounting appraisalreporton bookvalueforthe purpose ofmerger
November10,2015 100082/15
1 |
Tothe
ShareholdersandMembersof thecompaniesCompanhiaBrasileiradeDistribuiçãoandSéSupermercadosLtda.
MAGALHÃESANDRADES/CAUDITORESINDEPENDENTES,aBrazilianauditingandconsultingcompanyregisteredwiththeRegionalAccountants'BoardoftheStateofSãoPauloundernumber2SP000233/O-3,filedwiththeBrazilianCorporateTaxpayers'Rollundernumber62.657.242/0001-00andwithheadofficesatAv.BrigadeiroFariaLima,1893-6thfloor,JardimPaulistanodistrict,cityofSaoPaulo,StateofSaoPaulo,Brazil,appointedbyyoutoactasanexpertappraisertoperformtheaccountingappraisalofthenetassetsofSéSupermercadosLtda.,tobemergedintotheequityofCompanhiaBrasileiradeDistribuição,complyingwiththedueproceduresandverificationsasrequiredtoperformitsduties,herebysubmitstheundersigned.
AP P RAISAL R EP OR T
attachedhereto.
SaoPaulo,November 10,2015.
MAGALHÃESANDRADES/C
External Auditors,accreditationnumberCRC2SP000233/O-3
GUYALMEIDAANDRADE
Partner
Accountant,accreditationnumber:CRC1SP116.758/O-3
2 |
APPRAISAL R EPORT
INTRODUCTION
1. Bymeansofthispresenttransaction,SéSupermercadosLtda.(SÉorMERGEDCOMPANY)ismergedintoCompanhiaBrasileiradeDistribuição(hereby,CBDorMERGING COMPANY).
2. ThepresentmergerispartofarestructuringprojectofGrupoPãodeAçúcar(GPA),towhichbothpartiesabovebelong,andwhichchieflyaimsatachievingconsiderablebenefitsofadministrative,economic,andfinancial nature,primarilybyrationalizingandsimplifyingthecorporatestructureofGPA,enablingoperationaland taxsynergies.
3. Therefore,thepurposeofthisAPPRAISALREPORTistoascertainthebookvalueofthenetassetsofSÉ,takingintoaccountthecompany'sfinancialpositionasofSeptember30,2015.
4. TheAppraisalReportisherebyissuedinconnectionwiththeauditedbalancesheetsoftheMERGEDCOMPANY,preparedforsuchpurposeonSeptember30,2015,as well as thesummaryofthesignificant accountingpolicies.
5. TheManagementofSÉisresponsibleforpreparingandappropriatelypresentingthecompany'sbalancesheetspursuanttotheaccountingpracticesadoptedinBrazilandbytheinternalcontrolsitdeterminedasnecessarysothatsuchbalancesheets contain nosignificantdiscrepancies, whethercausedbyfraudorerror.
6. Ourresponsibilityistoexpressanopiniononthenetassetstobemergedbasedonouraudit,conductedinaccordancewithbothBrazilianandinternationalauditingstandards.Suchstandardsrequirecompliancewithethicalrequirementsbyauditorsandthattheauditbeplannedandperformedtoobtainreasonableassurancethatthefinancial statementsarefreefrom anyrelevantdistortions.
7. Anauditingprocedureinvolvesperformingselectedprocedurestoobtainevidenceontheamountsanddisclosuresmadeinthefinancialstatements.Suchselectedproceduresdependontheauditors'judgment,includingtheassessmentofrisksofmaterialerrorsinthefinancialstatements,whetherduetofraudorerror.Insuchriskassessment,theauditorsconsidertherelevantinternalcontrolstoprepareandpresentappropriatelytheCompany'sfinancialstatementstoplanalltheauditingproceduressuitableunderthesecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessofthoseinternalcontrolsusedbytheCompany.AnauditingprocedurealsoincludesanevaluationoftheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebytheManagement,aswellasanevaluationoftheoverallpresentationofthefinancial statementstakenasawhole.
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8. Webelieve thatthe audit evidenceissufficientandappropriatetobaseouropinion.
FINANCIALPOSITIONOFTHEMERGEDCOMPANY
9. Theappraisalismadeatthebookvalue,pursuanttoarticle226ofLaw6,404/76(theBrazilianCorporationsAct)andCVM(BrazilianSecuritiesandExchangeCommittee)normativeinstructionsnumbers319/99and320/99,basedontheCompany'sfinancialpositionasshowninthebalancesheetsascertainedonSeptember30, 2015preparedforsuchpurpose,assubmittedinANNEX 1andthatissummarized asfollows:
ASSETS | 2,832,551,513.14 |
(-) LIABILITIES | 119,521,106.50 |
NETWORTH | 2,713,030,406.64 |
10. SuchbalancesheetshavebeenpreparedaccordingtothegenerallyacceptedaccountingpracticesadoptedinBrazilandcomplyingwithCVMstandards; inaddition,thesignificantnotestofinancial statementsusedtopreparethisreportareshowninANNEX2.Forappraisalpurposes,thecompany'sactivitieswereconsideredaccording totheconceptofcontinuityofnormal business.
11. ThecapitalstockofSÉisR$1,444,141,752.09(onebillion,fourhundredand forty-fourmillion,onehundredandforty-onethousand, sevenhundredandfifty-tworeaisandninecentsofBrazilianReal),dividedinto366,267,034(threehundredandsixty-sixmilliontwohundredandsixty-seventhousandandthirty-four)shares,withtheparvalueofR$3.94286577287each,fullyownedbytheonlypartnerorshareholder,CBD.
12. Asaresultofthe merger,thesharesformerlyheld bySÉwill becancelled.
EFFECTSONTHEMERGINGCOMPANY
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17. ThebalancesheetsofCBDasofSeptember30,2015areshowninANNEX3anditsfinancial positionasof thatdate issummarizedbelow:
ASSETS | 22,404,631,607.80 |
(-) LIABILITIES | 11,938,459,857.16 |
NETWORTH | 10,466,171,750.64 |
18. CBDisthecontrollingentityofSÉandregisterssuchinvestment onitsnon-currentassets,andevaluates itbythevalueoftheinvestee'snetassets (equitymethod).
19. Asalreadymentioned,CBDisthesoleshareholderofSÉ.
20. Outstandingbalances,bothofassetsandliabilities,heldbetweenCBDandSÉareshown inANNEX 4andwill beeliminateduponthemerger transaction.
21. Asaresultofthemerger,CBD'sinvestmentmadeinSÉisreduced, beingreplacedbytheassetsandliabilitiesoftheMERGEDCOMPANY,asprovidedforinANNEX 5with noeffectonCBD'snet worth.
22. ANNEX5alsoshowsalltheadjustmentsresultingfromthemergerandCBD'Sbalancesheetsaftersuchmerger.
CONCLUSION
23. Inviewoftheaforementionedfindingsandstatements,itisherebyconcludedthatthenetworthofSÉtobemergedintoCompanhiaBrasileiradeDistribuiçãoisthatofR$2,713,030,406.64(twobillion,sevenhundredandthirteenmillion,thirtythousand,fourhundredandsixReal,andsixty-fourcentsofReal).Suchmerger,however,doesnotcauseanychangesinthenetworthoftheMERGINGCOMPANY,asitisSÉ’ssoleshareholder,andsuchamountisrecordedintheMERGINGCOMPANY'sassetsasaninvestment,whichisevaluatedbytheequitymethodinordertoreflectthevalueofthenetworthofSÉ,thesubsidiary.
STATEMENTS
24. Theexpertappraiserherebyexpresslystates,pursuanttosectionI,article5ofCVMnormativeinstructionsNo.319ofDecember3,1999,doesnothaveanyinterest,whetherdirectorindirect,inCompanhiaBrasileiradeDistribuiçãoorinSéSupermercadosLtda.,oreveninthismergertransaction,andthereisnotanyothersituationthatcouldbedeemedasaconflictofinterest.Theappraiseralsoreports,pursuanttosectionII,paragraph5oftheaforementionedCVMnormativeinstructionsNo.319thatallofCBD’sandSÉ’smanagersdidnotrestrict,hinderordoanyactsthatcouldhavecompromisedtheaccess,useorknowledgeofinformation,assets,documentsorworkmethodologiesrelevantforthequalityoftheconclusionsmade.
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ThisAppraisalReportisissuedinten(10)counterpartsofequalcontentsanditiscomposedoffour(4)pagesandfive(5)annexesprintedononesideonlyandinitialedbytheundersignedexpert appraiser.
SaoPaulo(SP, Brazil), November10, 2015.
MAGALHÃESANDRADES/C
External Auditors,accreditationnumberCRC2SP000233/O-3
GUYALMEIDAANDRADE
Partner
AccountantCRC1SP116.758/O-6
| ANNEX1 |
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| SÉSUPERMERCADOSLTDA.
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| Balancesheets preparedon September30,2015 |
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(amounts statedinBrazilian Real)
ASSETS
CurrentAssets Cash |
1,696,624.80 |
Investmentswithimmediateliquidity | 76,934,188.01 |
Customers | 4,771,512.70 |
Accounts receivablefrom relatedparties | 1,640,848.03 |
Third-partycredit claims | 10,785,312.04 |
Employees'credits | 910,030.38 |
Recoverabletaxes | 10,890,587.13 |
Dividendsreceivable | 34,195,396.15 |
Credit fromsuppliers | 587,946.89 |
Inventories | 56,814,111.76 |
Anticipatedexpenses | 2,366,454.29 |
Totalcurrentassets |
201,593,012.18 |
NoncurrentAssets | |
Subsidiaries'credit | 2,391,766,560.47 |
People'scredit | 11,954.81 |
Recoverabletaxes | 1,585,839.34 |
Escrowdepositswithcourts oflaw | 2,361,338.98 |
Otherlong-term credits | 134,094.69 |
Investments | (0.01) |
Net fixedassets | 232,118,712.68 |
Intangibleassets | 2,980,000.00 |
Totalnoncurrentassets |
2,630,958,500.96 |
TOTALASSETS |
2,832,551,513.14 |
| ANNEX1 (continued) |
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| SÉSUPERMERCADOSLTDA.
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| Balancesheets preparedon September30,2015 |
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LIABILITIESANDNETWORTH
CurrentAssets
Loansandfinancing | 7,088,171.75 |
Suppliers | 64,425,683.99 |
Taxobligations | 8,861,662.48 |
Labor-relatedobligations | 8,492,667.53 |
Obligationswithrelatedparties | 235,347.58 |
Otherliabilities | 3,120,306.09 |
Totalcurrent liabilities |
92,223,839.42 |
NoncurrentAssets | |
Loansandfinancing | 21,432,466.05 |
Contingencies | 5,565,981.45 |
Financial instruments | 298,819.58 |
Totalnoncurrent liabilities |
27,297,267.08 |
TOTALLIABILITIES |
119,521,106.50 |
NETWORTH | |
Capital Stock | 1,444,141,752.09 |
Capital reserves | 319,250,542.37 |
Profitsreserve | 949,638,112.18 |
TOTALNETWORTH |
2,713,030,406.64 |
TOTALLIABILITIESANDNETWORTH |
2,832,551,513.14 |
| ANNEX2 |
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| SÉSUPERMERCADOSLTDA.
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| Notes to the financial statements prepared on September 30, 2015 |
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1. Basis topreparethefinancialstatements
Theindividualmid-periodfinancial statementshave been preparedpursuantto IAS34
-"InterimFinancialReporting"issuedbytheInternationalAccounting StandardsBoard("IASB")andaccordingtotheaccountingTechnicalPronouncementCPC21-"InterimFinancialReporting",andpresentedinaccordancewiththestandardsapprovedandissuedbytheBrazilianSecuritiesandExchangeCommittee("CVM"),applicabletothepreparationofQuarterlyFinancialStatements("ITR").Thefinancialstatementsarebasedonthehistoricalcost,exceptforcertainfinancialinstrumentsmeasuredatfairvalue.ThesefinancialstatementsarestatedinReal,theBrazilianlegaltender.ThevalidcurrencyfortheMERGEDCOMPANYistheBrazilianReal.Theinterimfinancialstatementsforthethree-monthperiodendedonMarch31,2015wereapproved bytheBoardofDirectorsonOctober29,2015.
2. Significant accountingpolicies
2.1. Financial instruments
FinancialassetsareinitiallyrecognizedatfairvaluewhentheMERGEDCOMPANYassumescontractualrightstoreceivecashorotherfinancialassetsfromcontractsinwhichitispart.Financialassetsarederecognizedwhentherightstoreceivecashflowsconnectedtothefinancial assetsexpire orwhen all therisksandbenefitshavebeensubstantiallytransferredtothirdparties.AssetsandliabilitiesarerecognizedwhenrightsorobligationsareretainedinthetransferbytheMERGEDCOMPANY.FinancialliabilitiesarerecognizedwhentheMERGEDCOMPANYundertakescontractualobligationstosettleincashorwhenitundertakesthird-parties'liabilitiesthrough acontractinwhich itispart.Financial liabilities areinitiallyrecognized atfairvalueandarederecognizedwhentheyaresettled,ceasetoexist,orexpire.Financialinstrumentsmeasuredatamortizedcostaremeasuredsubsequentlytotheirinitialrecognitionattheeffectiveinterestrate.Incomeandexpensesfrominterestsdue,monetaryandexchangevariation,netofestimatedlossesfornotreceivingfinancialassets,arerecognizedwhenincurredinthestatementofincomeasfinancialincomeandexpenses.THEMERGEDCOMPANYascertainseverymonththelossestimatesfornotreceivingfinancialassets.AnestimateforlossisrecognizedwhenthereisobjectiveevidencethattheMERGEDCOMPANYfailedtoreceiveallamountspayableontheirduedates.Tomakesuchcalculation,theMERGEDCOMPANYconsidershistoricallosses,historicalstatisticalinformation,agingofreceivablesand assessmentofthe likelihood offurtherportfoliodeterioration,takingintoaccountmacroeconomicandmarketfactors.Whenthecollectionofaccountsreceivableisunlikely,itsbookvalueanditscorrespondinglossestimatearerecognizedintheincomestatementfortheperiod.Subsequentrecoveriesarerecognized,ifany,underthecaptionsellingexpensesintheincomestatementfortheyear.
| ANNEX2 (continued) |
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| SÉSUPERMERCADOSLTDA.
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| Notes to the financial statements prepared on September 30, 2015 |
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2. Significant accountingpolicies(continued)
2.1. Financial instruments(continued)
(i) Financial assets
Initial recognitionandmeasurement
ThefinancialassetsheldbytheMERGEDCOMPANYareclassifiedaccordingtothepurposeforwhichtheywereacquiredorcontracted,inthefollowingcategories:(i)financialassetsatfairvaluethroughprofitorloss;(ii)loansandreceivables,and(iii)investmentsheldtomaturity.TheMERGEDCOMPANYdeterminestheclassificationofitsfinancial assetsat initial recognition.
Financialassetsareinitiallyrecognizedandmeasuredatfairvaluethroughincomeandtransactioncosts,chargedtotheincomestatement.Loansandreceivables arecarriedatamortizedcost.Purchases orsalesof financialassetsthatrequiredeliveryofassetswithinatimeframeestablishedbyregulationorconventioninthemarketplace(negotiationsundernormalconditions)arerecognizedonthetradedate,i.e.,thedateonwhichtheMERGEDCOMPANYundertakestopurchaseorsellsuchassets.TheMERGEDCOMPANY'Sfinancialassetsincludecashandcashequivalents,accountsreceivablefromcustomers,accountsreceivablefromrelatedparties,andderivativefinancialinstruments.
SubsequentMeasurement
· Financialassetsatfairvaluethroughprofitorloss:theyrepresentassetsacquiredforpurposesofrealizationintheshorttermandaremeasuredatfairvalueonthedateofeachbalancesheets.Interestrates,monetaryvariation,exchangevariationandvariationsderivingfromthevaluationatfairvaluearerecognizedintheincomestatementasfinancialincomeorexpenses,ifany.
· Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.Afterinitialrecognition,theyaremeasuredusingtheamortizedcostmethodofeffectiveinterestrate.Incomefrominterests,indexation,andexchangeratevariation,lessimpairmentlosses,asapplicable,arerecognizedintheincomestatement whetherasfinancial income or expenses,asincurred; and
· Financialassetsheldtomaturity:financialassetsandliabilitiesthatcannotbeclassifiedasloansandreceivablesbecausetheyarequotedinanactivemarket.Inthiscase,suchfinancialassetsareacquiredwiththeintentandabilitytobeheldinportfoliountilmaturity.Theyarevaluedatmergercost,plusincomeearnedagainsttheincomestatement,byusingthemethodofeffectiveinterestrate.
| ANNEX2 (continued) |
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| SÉSUPERMERCADOSLTDA.
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| Notes to the financial statements prepared on September 30, 2015 |
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2. Significant accountingpolicies(continued)
2.1. Financial instruments (continued)
(i) Financial assets(continued)
Derecognition of financial assets
Afinancialasset(or,whereapplicable,partofafinancialassetorpartofagroupofsimilar financialassets)isderecognizedupon:
· Therightsto receive cashflowsexpire;and
· TheMERGEDCOMPANYtransfersitsrightstoreceivecashflowsfromtheassetsorassumesanobligationtopayinfulltoathirdpartythecashflowsreceivedunderapass-througharrangement;and(a)theMERGEDCOMPANYhastransferredsubstantiallyalltherisksandrewardsconnectedtotheassets; or(b)theMERGEDCOMPANYhavenot transferrednorretainedsubstantiallyalltherisksandconnectedtotheassets,butithastransferredthecontrol thereof.
IncasetheMERGEDCOMPANYassignsitsrightstoreceivecashflowsfromanassetorentersintoapass-througharrangement,withouthavingeithertransferredorretainedsubstantiallyalltherisksandrewardsoftheassetnortransferredcontrollingrightsontheasset,suchassetisheldandrecognizesacorrespondingliability.TheassignedassetandthecorrespondingliabilityaremeasuredinawaysoastoreflecttherightsandobligationsretainedbytheMERGEDCOMPANYand its subsidiaries.
Impairment lossesof financial assets
Onthebalancesheetdates,theMERGEDCOMPANYchecksfortracesofimpairmentlossesofanyassetorgroupoffinancial assets.Theimpairmentlossofanyassetorgroupoffinancialassetsisonly(andexclusively)consideredifthereisobjectiveevidenceresultingfromoneormoreeventsthatoccurredaftertheinitialrecognitionoftheasset(a'lossevent'),andincasesucheventmayimpacttheestimatedfuturecashflowsoftheassetorgroupoffinancialassets,whichcanbereliablyestimated.Evidenceofimpairmentlossmayincludesignsthatdebtors(oragroupofdebtors)areexperiencingsignificantfinancialdifficulties,moratoriumordefaultonrepaymentofinterestsorprincipal,probabilityofenteringinbankruptcyorotherfinancialreorganizationandwhensuchdataindicateameasurabledecreaseinfuturecashflows,suchaschangesininterestratesonarrearsoreconomicconditionsthatcorrelatewithdefaults.
Particularlyinrelationtofinancialassetsheldtomaturity,theMERGEDCOMPANYwill,firstofall,checkforobjectiveevidenceofimpairmentlossesforindividual financial assets
| ANNEX2 (continued) |
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| SÉSUPERMERCADOSLTDA.
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| Notes to the financial statements prepared on September 30, 2015 |
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2. Significant accountingpolicies(continued)
2.1. Financial instruments(continued)
(i) Financial assets (continued)
Impairment lossesof financial assets(Continued)
thatareindividuallysignificant,orcollectivelyforassetsthatarenotindividuallysignificant.IftheMERGEDCOMPANYdeterminesthatthereisnoobjectiveevidenceofimpairmentlossofafinancialassetassessedindividually-besuchlosssignificantornot-theMERGEDCOMPANYthenranksitinagroupoffinancialassetswithsimilarcreditriskcharacteristics,whichareevaluatedcollectively.Assetsindividuallyassessedforimpairmentloss,orforwhichtheimpairmentlossis(orkeepsbeing)recognizedarenotincludedinthecollectiveassessmentofloss.
Thelossamountismeasuredasthedifferencebetweentheasset'scarryingamountandthepresentvalueofestimatedfuturecashflows(excludingfuturecreditlossesnotincurred)discountedattheoriginaleffectiveinterestrateofthefinancial asset.Thecarryingvalueoftheasset isreduced byusing anallowanceaccount,andtheamountoflossisrecognizedintheincomestatementofthefiscalyear.Incomefrominterestsisrecordedinthefinancialstatementsaspartoffinancialincome.Inthecaseofloansorinvestmentsheldtomaturitywithvariableinterestrate,theMERGEDCOMPANYanditssubsidiariesmeasurethenon-recoverybasedonthefairvalueoftheinstrumentadoptinganobservablemarketprice.
If,inasubsequentperiod,theamountofimpairmentlossisreducedandsuchreduction can be relatedobjectivelyto aneventoccurringaftertherecognitionofprovision(suchasanimprovementinthedebtor'screditrating),thereversalofimpairmentlosspreviouslyrecognizedisrecognizedintheincomestatement.Incasealowissubsequentlyrecovered,therecoveryisalsorecognizedintheincomestatement.
(ii) Financial liabilities
Financialliabilitiesinthescopeoftheso-calledCPC38(IAS39)standardareclassifiedasloans,financingandderivativefinancialinstrumentsdesignatedashedginginstrumentsinaneffectivehedgerelationship,asappropriate.TheMERGEDCOMPANYdeterminestheclassificationof itsfinancialassetsatinitialrecognition.Allfinancialliabilitiesareinitiallyrecognizedatfairvalueand,inthecaseofloansandfinancing,plusdirectlyattributabletransactioncosts.FinancialliabilitiesoftheMERGEDCOMPANYincludesuppliers,loansandfinancing,debentures,financingforpurchaseofassetsandderivativefinancialinstruments.
| ANNEX2 (continued) |
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| SÉSUPERMERCADOSLTDA.
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| Notes to the financial statements prepared on September 30, 2015 |
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2. Significant accountingpolicies(continued)
2.1. Financial instruments(continued)
(ii)Financialliabilities(continued)
SubsequentMeasurement
Afterinitialrecognition,loansandborrowingsaresubsequentlymeasuredatamortizedcostadoptingthemethodofeffectiveinterestrate.Gainsandlossesarerecognizedin theincomestatementwhen theliabilities arederecognized,aswell as bytheamortizationprocessusing themethodofeffectiveinterest rate.
Derecognition of financial liabilities
Afinancialliabilityisderecognizedwhentheobligationundertheliabilityisdischarged, cancelled orexpired.
Whenanexistingfinancialliabilityisreplacedbyanotherfromthesamelenderontermssubstantiallydifferent,orthetermsofanexistingliabilityaresubstantiallymodified,suchareplacementormodificationistreatedasderecognitionoftheoriginalliabilityand therecognitionofanewliability,and thedifferencebetween therespectivecarryingamountsisrecognizedinincome.
Compensationof financial instruments
Financialassetsandliabilitiesareoffsetandpresentednetinthefinancialstatementsif,andonlyif,thereistherighttooffsettherecognizedamountsandalsotheintentiontosettlethemonanetbasisortorealizetheassetsandsettletheliabilitiessimultaneously.
2.2. Transactions inforeigncurrency
Transactionsinforeigncurrenciesareinitiallyrecognizedatfairvalueofthecorrespondingcurrenciesonthedatethatthetransactionqualifiesforrecognition.MonetaryassetsandliabilitiesstatedinforeigncurrenciesaretranslatedintoBrazilianRealaccordingtothemarketpriceeffectiveonthedateofthebalancesheets.Differencesarisingfrompaymentorthetranslationofmonetaryitemsarerecognizedin thefinancial income.
2.3. Hedgeaccounting
TheMERGEDCOMPANYusesderivativefinancial instrumentssuch asinterestrateswapsandforeignexchangeswaps.Suchderivativefinancialinstrumentsareinitiallyrecognizedatfairvalueonthedatethederivativecontractisenteredintoandsubsequentlyremeasuredatfairvalueateachbalancesheetdate.Derivativesareaccountedforasfinancialassetswhenfairvalueispositiveandasliabilitieswhennegative.Anygainsorlossesresultingfromchangesinthefairvalueofderivatives arerecordeddirectlyin theincomestatement.
| ANNEX2 (continued) |
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| SÉSUPERMERCADOSLTDA.
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| Notes to the financial statements prepared on September 30, 2015 |
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2. Significant accountingpolicies(continued)
2.3. Hedgeaccounting(continued)
Atthebeginningofthehedgingrelationship,theMERGEDCOMPANYformallyallotsandregistersthehedgerelationshiptowhichitwantstoapplythehedgeaccounting,aswellasitstargetandtheriskmanagementstrategytosignit.Thedocumentationincludesidentificationofthehedginginstrument,theprotecteditemortransaction,thenatureofthehedgedriskandhowtheMERGEDCOMPANYshouldassesstheeffectivenessofchangesinthefairvalueofthehedginginstrumentinneutralizingtheexposuretochangesinfairvalueofhedgeditemorcashflowsattributabletothehedgedrisk.Itisexpectedthatsuchhedgesarehighlyeffectiveinoffsettingchangesinfairvalueorcashflows,andtheyarecontinuouslyassessedtodeterminewhethertheyactuallyhavebeenhighlyeffectiveoverallyearsoffinancial reportsforwhich theywereintended.
Forhedgeaccountingpurposes,theseareclassifiedasfairvaluehedgeswhenhedgingexposuretochangesinfairvalueofarecognizedassetorliability.
Theyareaccountedforasfair valuehedges, adopting thefollowingprocedures:
· Thechangeinfairvalueofaderivativefinancialinstrumentclassifiedashedgeinterestrateisrecognizedasfinancialincome.Thechangeinfairvalueofthehedgeditemisrecordedaspartofthecarryingvalueofthehedgeditemandisrecognizedin theincomestatement;
· Asregardsfairvaluehedgesconnectedtoitemscarriedatamortizedcost,theadjustmenttocarryingvalueisamortizedintheincomestatementovertheremainingyearuntilmaturity.Theamortizationoftheeffectiveinterestratemaybeginassoonasanadjustmentexistsandshalloccuratmostatthetimewhenthehedgeditem ceasesto beadjustedfor changesinfair valueattributable tothehedgedrisk;
· Ifthehedgeditemisderecognized,theunamortizedfairvalueisrecognizedimmediatelyinprofitorloss;and
· Tocalculatefairvalue,debtsandswapsaremeasuredusingratespublishedinthefinancialmarketandprojectedtothedateofmaturity.ThediscountrateusedtocalculatetheinterpolationmethodofforeigncurrencyloansisdevelopedthroughthecurvesofDDI,cleanCouponandDIratesusedandpublishedbytheBrazilianstockexchangeknownasBM&FBovespa,andforloansintheBrazilianlegalcurrencytheDIcurveisused,whichisanindexdisclosedbyCETIPandcalculated bythemethod ofexponentialinterpolation.
2.4. CashandCashEquivalents
Includecash,bankaccountsandshort-term,highly-liquidinvestments,readilyconvertible toknownamountsofcashandsubjectto
| ANNEX2 (continued) |
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| SÉSUPERMERCADOSLTDA.
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| Notes to the financial statements prepared on September 30, 2015 |
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2. Significant accountingpolicies(continued)
2.4. Cash andcashequivalents (continued)
aninsignificantriskofchangeinvalue,withintentionandpossibilityofbeingredeemedin theshort termwithin 90daysfrom theapplicationdate.
2.5. Accountsreceivable
Theyareregisteredandkeptinthebalancesheetsattheirsalesfiguresandnetofestimatedlossesfromdoubtfulaccounts,whichisrecognizedbasedonthehistoryoflossesand riskanalysisoftheentireclient portfolio andprobability ofreceipt.
Accountsreceivables arenon-derivativefinancial assetswithfixed paymentswithoutquotationinanactivemarket.Afterinitialmeasurement,thesefinancialassetsaresubsequentlymeasured atamortizedcostusingthemethodofeffectiveinterestrate("EIR"),bydeductingtheimpairmentloss.AmortizedcostiscalculatedtakingintoaccountanydiscountsorpremiumsonmergerandfeesorcoststhatcomposetheEIR.TheEIRamortizationisincludedinnetfinancialincome,intheincomestatementofthefiscalyear.Expensesarisingfromtheimpairmentlossarerecognizedintheincomestatementofthefiscalyear.
AteveryclosingofthebalancesheetstheMERGEDCOMPANYassesseswhethertheassetsorgroups of financial assetshad animpairment loss.
Estimatedlosseswithdoubtfulaccountsofcustomersisbasedonahistoryofeffectivelossesoverthelast24months,besidestheevaluationofmacroeconomiceventssuchasunemploymentandconsumerconfidenceindex,aswellasthevolumeofoverdueloans ofportfolioofaccountsreceivable.
Thereceivablesaredeemedirrecoverableandthustheyarewrittenofftheportfolioofreceivableswhen thepaymentisnot madeafter180daysfromtheduedate.
2.6. Inventories
Theyarecarriedatcostoratthenetrealizablevalue,whicheverisless.Acquiredinventoriesarerecordedataveragecost,includingstorageandhandlingcosts,totheextentthatsuchcostsarenecessary tobringthestocksinitsconditionofsaleinstores,netofrebatesreceivedfromsuppliers.Thenetrealizablevalueisthesellingpricein theordinarycourseofbusiness,lessestimatedcostsnecessaryto makethesale.Inventoriesarereducedbyanallowanceforlossesandbreakage,whichareperiodicallyreviewedand assessedforadequacy.
| ANNEX2 (continued) |
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| SÉSUPERMERCADOSLTDA.
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| Notes to the financial statements prepared on September 30, 2015 |
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2. Significant accountingpolicies (continued)
2.7. Bonuses
Bonusesreceivedfromsuppliersaremeasuredandrecognizedbasedoncontractsandagreementsexecuted,whicharerecordedinincometotheextentthatthecorrespondinginventoriesaresold.Theyincludeagreementsforvolumepurchasing,logisticsandtimelynegotiationsformarginrestoration,reimbursementofexpensesamongothersandarerecordedasareductionofaccountspayabletotheirsuppliers,sinceunderagreementtermstheMERGEDCOMPANYisentitledtoliquidateliabilitieswithsuppliersnetofbonusesreceivable.
2.8. Presentvalueadjustmentof assets andliabilities
Thecurrent monetaryassetsandliabilities,whenrelevant,andlong-termassetsandliabilities,areadjustedtopresentvalue.Theadjustmenttopresentvalueiscalculatedtakingintoaccountcontractualcashflowsandthecorrespondinginterestrate,whetherexplicitorimplicit.Interestsincludedinrevenues,expensesandcostsrelatedtothoseassetsandliabilitiesareadjustedtotheappropriaterecognitioninaccordancewiththeaccrualbasis.Theadjustmenttopresentvalueofsalesininstallmentsisrecordedagainstthecaption"Accountsreceivable"anditsrealizationisrecordedinthe"Netoperatingincome"account,accordingtomaturity.Otheritemsinthebalancesheetwhoseapplicationofpresentvalueadjustmentbecomesnecessary,hasitscounterpartinthe"Financial income" section.
2.9. Reductiontoimpairmentof non-financialassets
Therecoverytest(impairmenttest)aimsatpresentinginaprudentwaytheactualnetrealizablevalueof anasset.Suchrealizationcanbeperformeddirectlyorindirectly,respectively,throughsaleorthecashflowsgenerationon useofassetsintheMERGEDCOMPANY'Sactivities.
EveryyeartheMERGEDCOMPANYperformstheimpairmenttestofitstangibleorintangibleassetsorwheneverthereisanyinternalorexternalevidencethattheassetmayhave animpairmentloss.
Theimpairmentofanassetisdefinedasthehigheroffairvalueoftheassetorthevalueinuseofitscashgeneratingunit(CGU),unlesstheassetdoesnotgeneratecashinflowsthatarelargelyindependentoftheinputsboxofotherassetsorgroupsofassets.
IfthecarryingamountofanassetorCGUexceedsitsimpairment,suchassetisdeemedasnonrecoverableandaprovisionfordevaluationiscreatedtoadjustthecarryingvaluetoitsimpairment.Inassessingtheimpairment,theestimatedfuturecashflowsarediscountedtopresentvalue,adoptingadiscountrate,whichisthecapitalcostoftheCBD("WACC"),beforetaxes,thatreflectscurrentassessmentsmarketaboutthevalue of moneyovertimeandspecificrisks oftheasset.
| ANNEX2 (continued) |
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| SÉSUPERMERCADOSLTDA.
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| Notes to the financial statements prepared on September 30, 2015 |
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2. Significant accountingpolicies(continued)
2.9. Impairmentofnon-financial assets (continued)
Impairmentlossesarerecognizedintheincomestatementinthoseexpensecategoriesconsistentwiththefunctionoftheimpairedasset.Theimpairmentlosspreviouslyrecognizedisreversedonlyiftherearechangesintheassumptionsusedtodeterminetherecoverableamountoftheassetoninitialrecognitionorlater,exceptin thecase ofgoodwillthatcannotbereversedinfutureyears.
2.10. FixedAssets
Fixedassetsarestatedatcost,netofaccumulateddepreciationand/orimpairmentlosses,ifany.Thecostincludestheamountforthemergerofequipmentandtheborrowingcostsforlong-termconstructionprojectsiftherecognitioncriteriaaremet.Whensignificantcomponentsofpropertyandequipmentarereplaced,suchcomponentsarerecognizedasindividualassetswithparticularshelflivesanddepreciations.Likewise,whenasignificantreplacementisperformed,itscostisrecognizedin thecarryingamountoftheequipmentas areplacement,provided theymeettherecognitioncriteria.Allotherrepairandmaintenancecostsarerecognizedinprofitor lossasincurredin theincome ofthefiscal year.
Assetcategory | Averageannualdepreciationrate |
Buildings | 2.50% |
Leaseholdimprovements | 4.41% |
Machinesandequipment | 9.17% |
ITequipment | 20.93% |
Software | 11.81% |
Facilities | 7.88% |
Furnitureandequipment | 10.21% |
Vehicles | 21.52% |
Decoration | 20.0% |
Itemsoffixedassets,andanysignificantpartsarewrittenoffuponthey areassignedorwhenthereisnotanyexpectedfutureeconomicbenefitsderivedfromitsuseorassignment.Anygainsorlossesresultingfromthedisposalofassetsareincludedin theincomestatement.
Residualvalues,shelflifeofassetsanddepreciationmethodsarereviewedattheendofeveryyear,andadjustedprospectively,ifapplicable.TheMERGEDCOMPANYrevisedtheshelflifeoffixedandintangibleassetsinyear2014andconcludedthat therearenochangestobecarriedout thisfiscal year.
2.11. Capitalizedinterests
Interestsfromloansdirectlyattributabletothemerger,constructionormanufacturingofanassetthatrequires asubstantialperiod oftime to befinishedfortheintendeduseorsale(qualifyingassets)arecapitalizedaspartofthecostoftheunderlyingassetsduringtheconstructionphase.
| ANNEX2 (continued) |
|
| SÉSUPERMERCADOSLTDA.
|
|
| Notes to the financial statements prepared on September 30, 2015 |
|
2. Significant accountingpolicies(continued)
2.11. Capitalizedinterests(continued)
Fromthedatethecorrespondingassetbecomeseffective,capitalizedcostsaredepreciatedovertheestimatedshelflife ofsuchasset.
2.12. Propertyinvestment
Investmentpropertiesaremeasuredathistoricalcost(includingtransactioncosts),netofaccumulateddepreciation andorimpairmentlosses,ifany.
Investmentpropertiesarewrittenoffwhensoldorwhentheyceasetobeusedpermanentlyandisnotexpectedanyfutureeconomicbenefitfromtheirsale.Aninvestmentpropertyisalsotransferredwhenthereisintenttosellandthiscaseisconsideredasnon-currentassetsavailableforsale.Thedifferencebetweenthenetsalesvalueandthecarryingamountoftheassetisrecognizedintheincomestatement intheperiodofderecognition.
2.13. Intangibleassets
Theseparatelyacquiredintangibleassetsaremeasuredatcostbeingupontheirinitialrecognition,beingdeductedbyamortizationandanyimpairmentlosses.Theinternallygeneratedintangibleassets,excludingcapitalizedsoftwaredevelopmentcosts,arereflectedintheincomestatement that wereincurred.
Intangibleassetsconsistmainlyofsoftwarepurchasedfromthirdparties,softwaredevelopedforinternaluse,goodwill(righttousethestores),customerlists,advantageousleaseagreements,profitablecontractstosupplyfurnitureandbrands.
Intangibleassetswithadefinedshelflifeareamortizedusingthestraight linemethod.Theperiodandtheamortizationmethodarereviewedatleastintheendofeveryfiscalyear.Changesintheexpectedshelflifeorintheexpectedpatternofconsumptionoffutureeconomicbenefitsembodiedinassetsareaccountedforbychangingtheamortizationperiodormethod,asappropriate,andtreatedaschangesinaccountingassumptions.
Softwaredevelopmentcostsrecognizedasassetsareamortizedovertheirestimatedshelflives,which is 10years.
Intangibleassetswithindefiniteshelflivesarenotamortized;theyarerathertestedforimpairmentintheendofeachfiscalyearorwhenevertherearesignsthattheircarryingamountmaynotberecoverable,whetherindividuallyoratthelevelofcashgeneratingunit.Theassessmentisreviewedannuallytodeterminewhethersuchindefiniteshelflifeisstillvalid.Otherwise,theestimatedshelflifeisprospectivelychangedfrom indefinitetodefinite.
Gainsorlosses,whereapplicable,resultingfromderecognitionofanintangibleassetaremeasuredasthedifferencebetweenthe net proceedsfromthesale and
| ANNEX2 (continued) |
|
| SÉSUPERMERCADOSLTDA.
|
|
| Notes to the financial statements prepared on September 30, 2015 |
|
2. Significant accountingpolicies(continued)
2.13. Intangibleassets(continued)
thecarryingamountoftheasset,beingrecognizedintheincomestatementofthefiscal yearwhen theassetiswrittenoff.
2.14. Classificationofassetsandliabilities ascurrentandnoncurrent
Assets(exceptfordeferredincometaxandsocialcontribution)withintenttoberealizedorintendedtobesoldorconsumedwithintwelvemonthsfromthebalancesheetsdate,areclassifiedascurrentassets.Liabilities(excludingdeferredincometaxandsocialcontribution)withsettlementexpectedwithintwelvemonthsfromthebalancesheetsdate areclassifiedascurrentliabilities.Allotherassetsandliabilities(includingdeferredtaxes)areclassifiedas"non-current" assetsandliabilities.
Deferred tax assetsandliabilitiesareclassifiedas"non-current",netperlegalentity,asrequiredbythecorrespondingaccountingpronouncement.
2.15. Leasing
Thedefinitionofanagreementasaleaseisbasedonthetermsofsucharrangementonitsinceptiondate,thatis,ifcompliancewithsuchagreementdependsontheuseofoneormorespecificassetsorifsucharrangementconveysarighttousetheasset.
TheMERGEDCOMPANYleasesequipmentandcommercialspacesunderbothcancelableandnon-cancelableleases.Thetermsofsuchleasesvarybetween5and 20years.
The MERGED COMPANYaslessee
LeasingagreementsthattransfertotheMERGEDCOMPANYsubstantiallyalltherisksandbenefitsincidentaltoownershipoftheleaseditemarecapitalizedattheinceptionoftheleasingatfairvalueoftheleasedpropertyorthepresentvalueofminimumleasepayments,whicheverisless.Leasingpaymentsareapportionedbetweenfinancechargesandreductionoftheleasingliabilitysoastoachieveaconstantinterestrateonthebalanceoftheliability.Financialcostsarerecognizedasexpensesinthefiscal year.
Leasedassetsaredepreciatedovertheirshelflife. However,ifthereisnotareasonablecertaintythattheMERGEDCOMPANYwillobtainownershipbytheendoftheleasingterm,theassetisdepreciatedoveritsestimatedshelflifeortheleasingterm,whicheverisless;capitalizationof improvementsandrenovationscarriedoutinstoresarealsoconsidered.
| ANNEX2 (continued) |
|
| SÉSUPERMERCADOSLTDA.
|
|
| Notes to the financial statements prepared on September 30, 2015 |
|
2. Significant accountingpolicies(continued)
2.15. Leasingagreements(continued)
The MERGED COMPANYand its subsidiaries aslessees(continued)
Theleasingagreementsareclassifiedasoperatingleasingwhenthereisnotanytransferofriskandbenefitsderivedfrom ownershipoftheleaseditem.
Paymentsofleasinginstallments(excludingcostsforservicessuchasinsuranceandmaintenance)classifiedasoperatingleasesarerecognizedasexpenses,according totheircompetence, during thetermofthelease.
Contingent rentsarerecognized asexpensesinthefiscal yearsinwhich theyincur. The MERGED COMPANYaslessor
LeasingagreementsinwhichtheMERGEDCOMPANYdoesnottransfersubstantiallyalltherisksandrewardsofownershipontheassetareclassifiedasoperatingleasingagreements.Initialdirectcostsincurredinnegotiatingoperatingleasingagreementsareaddedtothecarryingvalueoftheleasedassetandrecognizedovertheleasetermonthesamebasisasrentalincome.
Contingentrentsarerecognizedasrevenueinthefiscalyearsinwhichtheyareearned.
2.16. Allowances
Allowances arerecognizedwhen theMERGEDCOMPANYhave apresent(whetherlegalornotformalized)obligationasaresultofapastevent,anditisprobablethatanoutflowofresourceswillberequiredtosettlesuchobligation,andareliableestimateoftheobligationcanbemade.IncasesinwhichtheMERGEDCOMPANYand itssubsidiarieshave theexpectationof repaymentofall orpartoftheprovision-forexample,underaninsurancecontract-thereimbursementisrecognizedasaseparateassetbutonlywhenitisvirtuallycertain.Anexpenseconnectedtoanyprovisionisrecordedintheincomestatementofthefiscalyear,netofanyreimbursement.Incases oflawyers'feesonsuccess,theMERGEDCOMPANYhasaspolicytomakeanallowanceatthetimesuchfeesareactuallyincurred,i.e.,whenthelawsuitsarefinallyjudged,andthoseamountscorrespondingtolawsuitsnotyet finished aredisclosed in thenotestothefinancial statements.
2.17. Dividenddistribution
ThedistributionofdividendstotheMERGEDCOMPANY'Sshareholdersisrecognizedasaliabilityintheendofthefiscalyear,basedontheminimummandatorydividendsas setforth inthe bylaws.Anyamounts exceedingsuch
| ANNEX2 (continued) |
|
| SÉSUPERMERCADOSLTDA.
|
|
| Notes to the financial statements prepared on September 30, 2015 |
|
2. Significant accountingpolicies(continued)
2.17. Dividenddistribution(continued)
minimumamountareonlyrecordedonthedateonwhichsuchincrementaldividendsareapproved bytheMERGEDCOMPANY'Sshareholders.
2.18. Revenues to berecognized
AnticipatedrevenuesarerecordedbytheMERGEDCOMPANYasaliabilitybytheanticipationofamountsreceivedfromtradingpartnersforexclusivityinprovidingintermediaryservicesofsupplementaryorextendedwarrantiesandrecognizedinincome bysubmittingaproofofservice thatsuchwarrantieshavebeenactuallysoldtowithcommercial partners.
2.19. NetWorth
Equitysharesareclassifiedunder net worth.
IncaseequitysharesareacquiredfromtheMERGEDCOMPANYitself(treasuryshares),thepayablecompensation,includinganydirectlyattributableincrementalcosts,isdeductedfromnetworth,and remainregisteredastreasurysharesuntilthesharesarecanceled or relocatedin themarket.Whensuchsharesaresubsequentlyrelocated,anyconsiderationreceived,netofanydirectlyattributableincrementaltransactioncosts,isincludedinnetworth.Lossesorgainsresultingfromthepurchase,sale,issueorcancellationofinstrumentsrepresentingtheMERGEDCOMPANY'Sowncapitalarenot recognized.
2.20. Calculationofthenetprofit
RevenuesarerecognizedtotheextentthatitisprobablethattheMERGEDCOMPANYwillhaveeconomicbenefitsanditispossibletomeasurerevenuesreliably.Revenuesaremeasuredatfairvalueoftheconsiderationreceived,excludingdiscounts,rebatesandtaxesorchargesonsales.TheMERGEDCOMPANYassessesitsrevenue-generatingagreementsaccordingtospecificcriteriatodeterminewhetheritwillactasprincipaloragent.TheMERGEDCOMPANYconcludedthatitwillactasprincipalinallitsrevenue-generatingagreements,exceptthoseconnected tosalesofextendedwarrantiesbrokerageandsaleofinsurancepolicybrokerage.ParticularlyinthiscasetheMERGEDCOMPANYactsasagent,andtherevenueisrecognizedonanetbasis,whichreflectsthecommissionreceived from insurancecompanies.
| ANNEX2 (continued) |
|
| SÉSUPERMERCADOSLTDA.
|
|
| Notes to the financial statements prepared on September 30, 2015 |
|
3. Relatedparties
3.1. BalanceswithCompanhiaBrasileiradeDistribuição:
Assets |
2015 |
Customers | 1,637,320.89 |
Accounts receivablefrom relatedparties | 1,460,381,682.37 |
1,462,019,003.26 | |
Liabilities | |
Suppliers | 40,626,099.80 |
Transactions | |
Sales | 348,392,013 |
Purchases | 4,155,184 |
Revenues(Expenses) | 17,862,860 |
4. FixedAssets
4.1. Impairment lossoffixedassets
Inviewofthenegativeexternal indicatorsduetotheeconomicdownturn,theMERGEDCOMPANYreviewedtheimpairmenttestsperformedasofDecember31,2014withthecurrentassumptionsforthebasedateofSeptember30,2015.TheMERGEDCOMPANYconcludednotbenecessarytorecognizelossfornon-performance.
5. Intangibleassets
5.1. Goodwill andintangibleasset impairment tests
GoodwillandintangibleassetsweresubjectedtoimpairmenttestingonDecember31,2014,bythemethoddescribedinNoteNo.4-Significantaccountingpoliciesofthefinancial statementsasofDecember31, 2014released onFebruary12,2015.
Inviewofthenegativeexternal indicatorsduetotheeconomicdownturn,theMERGEDCOMPANYreviewedtheimpairmenttestsperformedasofDecember31,2014withthecurrentassumptionsforthebasedateofSeptember30,2015.TheMERGEDCOMPANYconcludednotbenecessarytorecognizelossfornon-performance.
| ANNEX 3 |
|
| COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
|
|
| Balance Sheets as of September 30, 2015 |
|
ASSETS
CurrentAssets Cashavailable |
67,957,290.90 |
Investmentswithimmediateliquidity | 1,676,411,784.84 |
Customers | 97,414,247.25 |
Accounts receivablefrom relatedparties | 83,196,327.41 |
Third-partycredit claims | 147,892,222.26 |
Employees'credits | 28,439,143.50 |
Recoverabletaxes | 124,822,407.39 |
Dividendsreceivable | 57,582,053.28 |
Credit fromsuppliers | 287,029,815.74 |
Available forsale | 2,418,183.40 |
Inventories | 2,383,996,563.06 |
Anticipatedexpenses | 77,862,250.67 |
Financial instruments | 109,394,218.14 |
Totalcurrentassets |
5,144,416,507.84 |
NoncurrentAssets | |
Creditsfrom subsidiaries | 252,414,525.38 |
People'scredit | 53,303,762.01 |
Recoverabletaxes | 587,751,585.24 |
Escrowdepositswithcourts oflaw | 435,747,241.32 |
Anticipatedexpenses | 20,132,785.04 |
Otherlong-term credits | 110,725,927.83 |
Financial instruments | 365,899,656.93 |
Investments | 7,810,349,746.76 |
Net fixedassets | 6,897,390,433.21 |
Intangibleassets | 726,499,436.24 |
Totalnoncurrentassets |
17,260,215,099.96 |
TOTALASSETS |
22,404,631,607.80 |
| ANNEX 3 (continued) |
|
| COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
|
|
| Balance Sheets as of September 30, 2015 |
|
LIABILITIESANDNETWORTH
CurrentAssets
Loansandfinancing | 1,816,322,553.34 |
Suppliers | 2,626,209,287.51 |
Taxobligations | 102,525,235.77 |
Labor-relatedobligations | 367,956,862.32 |
Obligationswithrelatedparties | 1,764,607,944.26 |
Dividendspayable | 952,360.77 |
Otherliabilities | 474,630,022.86 |
Totalcurrent liabilities |
7,153,204,266.83 |
NoncurrentAssets | |
Loansandfinancing | 3,606,681,123.79 |
Taxespayable ininstallments | 580,065,666.16 |
Contingencies | 498,957,763.46 |
Taxobligations | 55,095,792.09 |
Anticipatedrevenues | 33,935,470.64 |
Financial instruments | 10,519,774.19 |
Totalnoncurrent liabilities |
4,785,255,590.33 |
TOTALLIABILITIES |
11,938,459,857.16 |
NETWORTH | |
Capital Stock | 6,799,129,214.63 |
Capital reserves | 244,446,747.17 |
Profitsreserve | 3,500,740,207.10 |
Adjustment reserves | (78,144,418.26) |
TOTALNETWORTH |
10,466,171,750.64 |
TOTALLIABILITIESANDNETWORTH |
22,404,631,607.80 |
| ANNEX4 |
|
| SÉ SUPERMERCADOS LTDA.
|
|
| Balances held with the MERGED COMPANY as of September 30, 2015 |
|
(amounts statedinBrazilianReal-R$)
Assets | Liabilities | ||
Current Assets | Noncurrent | Current | |
Assets | Assets | ||
Accounts receivable | 1,637,320.89 | ||
Receivables from parent company | - | 1,460,438,332.04 | - |
Suppliers | - | - | - |
Obligations with related parties | - | - | 40,727,466.37 |
1,637,320.89 | 1,460,438,332.04 | 40,727,466.37 |
| ANNEX5 |
|
| COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
|
|
| Financial position after the merger |
|
(amounts statedinBrazilianReal–R$)
Adjust | |||||
CBD | Sé Supermercado | Debts | Credits | Balance after merger | |
ASSETS | |||||
Current Assets | |||||
Cash available | 67,957,290.90 | 1,696,624.80 | 69,653,915.70 | ||
Investments with immediate liquidity | 1,676,411,784.84 | 76,934,188.01 | 1,753,345,972.85 | ||
Customers | 97,414,247.25 | 4,771,512.70 | 102,185,759.95 | ||
Accounts receivable from related parties | 83,196,327.41 | 1,640,848.03 | 42,364,787.26 | 42,472,388.18 | |
Third-party credit claims | 147,892,222.26 | 10,785,312.04 | 158,677,534.30 | ||
Employees' credits | 28,439,143.50 | 910,030.38 | 29,349,173.88 | ||
Recoverable taxes | 124,822,407.39 | 10,890,587.13 | 135,712,994.52 | ||
Dividends receivable | 57,582,053.28 | 34,195,396.15 | 91,777,449.43 | ||
Credit from suppliers | 287,029,815.74 | 587,946.89 | 287,617,762.63 | ||
Available for sale | 2,418,183.40 | - | 2,418,183.40 | ||
Inventories | 2,383,996,563.06 | 56,814,111.76 | 2,440,810,674.82 | ||
Anticipated expenses | 77,862,250.67 | 2,366,454.29 | 80,228,704.96 | ||
Financial instruments | 109,394,218.14 | - | 109,394,218.14 | ||
Total current assets | 5,144,416,507.84 | 201,593,012.18 | 5,303,644,732.76 | ||
Noncurrent Assets | |||||
Subsidiaries' credit | 252,414,525.38 | 2,391,766,560.47 | 1,460,606,126.03 | 1,183,574,959.82 | |
People's credit | 53,303,762.01 | 11,954.81 | 53,315,716.82 | ||
Recoverable taxes | 587,751,585.24 | 1,585,839.34 | 589,337,424.58 | ||
Escrow deposits with courts of law | 435,747,241.32 | 2,361,338.98 | 438,108,580.30 | ||
Anticipated expenses | 20,132,785.04 | - | 20,132,785.04 | ||
Other long-term credits | 110,725,927.83 | 134,094.69 | 110,860,022.52 | ||
Financial instruments | 365,899,656.93 | - | 365,899,656.93 | ||
Investments | 7,810,349,746.76 | (0.01) | 2,713,030,406.64 | 5,097,319,340.11 | |
Net fixed assets | 6,897,390,433.21 | 232,118,712.68 | 7,129,509,145.89 | ||
Intangible assets | 726,499,436.24 | 2,980,000.00 | 729,479,436.24 | ||
Total noncurrent assets | 17,260,215,099.96 | 2,630,958,500.96 | 15,717,537,068.25 | ||
TOTAL ASSETS | 22,404,631,607.80 | 2,832,551,513.14 | 21,021,181,801.01 |
| ANNEX5 (continued) |
|
| COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
|
|
| Financial position after the merger |
|
(amountsstatedinBrazilianReal–R$)
Adjust | |||||
CBD | Sé | Debts | Credits | Balance after merger | |
LIABILITIES AND NET WORTH | |||||
LIABILITIES | |||||
Current Assets | |||||
Loans and financing | 1,816,322,553.34 | 7,088,171.75 | 1,823,410,725.09 | ||
Suppliers | 2,626,209,287.51 | 64,425,683.99 | 42,364,787.26 | 2,648,270,184.24 | |
Tax obligations | 102,525,235.77 | 8,861,662.48 | 111,386,898.25 | ||
Labor-related obligations | 367,956,862.32 | 8,492,667.53 | 376,449,529.85 | ||
Obligations with related parties | 1,764,607,944.26 | 235,347.58 | 1,460,606,126.03 | 304,237,165.81 | |
Dividends payable | 952,360.77 | - | 952,360.77 | ||
Other liabilities | 474,630,022.86 | 3,120,306.09 | 477,750,328.95 | ||
Total current liabilities | 7,153,204,266.83 | 92,223,839.42 | 5,742,457,192.96 | ||
Noncurrent Assets | |||||
Loans and financing | 3,606,681,123.79 | 21,432,466.05 | 3,628,113,589.84 | ||
Taxes payable in installments | 580,065,666.16 | - | 580,065,666.16 | ||
Contingencies | 498,957,763.46 | 5,565,981.45 | 504,523,744.91 | ||
Tax obligations | 55,095,792.09 | - | 55,095,792.09 | ||
Anticipated revenues | 33,935,470.64 | - | 33,935,470.64 | ||
Financial instruments | 10,519,774.19 | 298,819.58 | 10,818,593.77 | ||
Total non-current liabilities | 4,785,255,590.33 | 27,297,267.08 | 4,812,552,857.41 | ||
TOTAL LIABILITIES | 11,938,459,857.16 | 119,521,106.50 | 10,555,010,050.37 | ||
NET WORTH | |||||
Capital Stock | 6,799,129,214.63 | 1,444,141,752.09 | 1,444,141,752.09 | 6,799,129,214.63 | |
Capital reserves | 244,446,747.17 | 319,250,542.37 | 319,250,542.37 | 244,446,747.17 | |
Profits reserve | 3,500,740,207.10 | 949,638,112.18 | 949,638,112.18 | 3,500,740,207.10 | |
Adjustment reserves | (78,144,418.26) | - | (78,144,418.26) | ||
TOTAL NET WORTH | 10,466,171,750.64 | 2,713,030,406.64 | 10,466,171,750.64 | ||
TOTAL LIABILITIES AND NET WORTH | 22,404,631,607.80 | 2,832,551,513.14 | 4,216,001,319.93 | 4,216,001,319.93 | 21,021,181,801.01 |
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
CNPJ/MF (Corporate Taxpayers’ Registry with the Treasury Department) No. 47.508.411/000156
NIRE (Company Registration with the State Registry of Commerce) No. 35.300.089.901
Authorized-Capital Publicly-Held Company
CHAPTER I
NAME, HEAD OFFICE, PURPOSE AND DURATION
ARTICLE 1 - COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO (“Company”) is a publicly held company with head offices and jurisdiction at Av. Brigadeiro Luís Antonio, 3142, in the City of São Paulo, Federative Republic of Brazil, hereinafter governed by these By-laws, by Law 6404 dated December 15th, 1976, as amended, and other applicable legal provisions.
Sole Paragraph – Upon the Company’s admission to the special listing segment named Level 1 of Corporate Governance of the BM&FBOVESPA S.A. – the BM&F BOVESPA Commodities and Futures Exchange (“BM&FBOVESPA”), the Company, its shareholders, Managers and members of the Fiscal Council, when installed, subject themselves to the provisions of the Level 1 Listing Rules on Corporate Governance issued by BM&FBOVESPA (“Level 1 Rules”).
ARTICLE 2 - The corporate purpose of the Company is the sale of manufactured, semi- manufactured or raw products, both Brazilian and foreign, of any type or species, nature or quality, provided that the sale of such products is not prohibited by law.
First Paragraph - The Company may also engage in the following activities:
a) manufacture, processing, handling, transformation, exportation, importation and representation of food or non-food products either on its own or through third parties;
b) international trade, including that involving coffee;
c) importation, distribution and sale of cosmetic products for hygienic or make-up purposes, toiletries, sanitary and related products and food supplements;
d) sale of drugs and medicines, pharmaceutical and homeopathic specialties, chemical products, accessories, dental care equipment, tools and equipment for surgery, production of chemical products and pharmaceutical specialties, with the possibility that such activities of the Company are specialized as Drugstore, Allopathic Drugstore, Homeopathic Drugstore or Manipulation Drugstore of each specialty;
e) sale of oil products, filling up of fuels of any kind, rendering of technical assistance services, garage, repair, washing, lubrication, sale of accessories and other similar services, of any vehicles;
f) sale of products, drugs and general veterinary medicines; veterinary consultation, clinic and hospital and pet shop with bath and shearing service;
g) rental of any recorded media;
h) provision of photo, film and similar studio services;
i) execution and administration of real estate transactions, purchasing, promoting subdivisions and incorporations, leasing and selling real estate properties on the Company’s own behalf as well as for third parties;
j) acting as distributor, agent and representative of merchants and industrial concerns established in Brazil or abroad and, in such capacity, for consignors or on its own behalf acquiring, retaining, possessing and carrying out any operations and transactions in its own interests or on behalf of such consignors;
k) provision of data processing services;
l) building and construction services of all kinds, either on its own behalf or for third parties, purchase and sale of construction materials and installation and maintenance of air conditioning systems, cargo loaders and freight elevators;
m) use of sanitary products and related products;
n) general municipal, state and interstate ground freight transportation for its own products and those of third parties, including warehousing, depositing, loading, unloading, packaging and guarding any such products, and subcontracting the services contemplated in this item;
o) communication services, general advertising and marketing, including for bars, cafes and restaurants, which may extend to other compatible or connected areas, subject to any legal restrictions;
p) purchase, sale and distribution of books, magazines, newspapers, periodicals and similar products;
q) performance of studies, analysis, planning and markets research;
r) performance of market test for the launching of new products, packing and labels;
s) creation of strategies and analysis of “sales behavior in specific sectors”, of special promotions and advertising;
t) provision of management services of food, meal, drugstore, fuel and transportation vouchers/cards and other cards resulting from the activities related to its corporate purpose; and
u) lease and sublease of its own or third-party furnishings;
v) provision of management services;
w) representation of other companies, both Brazilian and foreign, and participation as a partner or shareholder in the capital stock of other companies irrespective of their form or object of same, and in commercial enterprises of any nature;
x) Agency, brokerage or intermediation of coupons and tickets;
y) Services related to billing, receipts or payments, of coupons, bills or booklets, rates, taxes and for third parties, including those made by electronic means or by automatic teller machines; supply of charging position, receipt or payment; issuing of booklets, forms of compensation, printed and documents in general;
z) Provision of services in connection with parking lot, stay and the safeguard of vehicles; and
aa) Import of Wines, Beverages and Vinegars.
Second Paragraph - The Company may provide guarantees or collateral for business transactions of its interest, although it must not do so merely as a favor.
ARTICLE 3 - The Company’s term of duration shall be indefinite.
CHAPTER II
CAPITAL STOCK AND SHARES
ARTICLE 4 The Company Capital is six billion seven hundred and eighty-six million, hundred and seventy thousand, eight hundred and sixty-eight Reais and sixty-nine cents (R$ 6.786.170.868,69), fully paid in and divided into two hundred sixty-five million one hundred thirty-seven thousand, seven hundred ninety-one (265.137.791) shares with no par value, of which ninety-nine million, six hundred seventy-nine thousand and eight hundred fifty-one (99,679,851) are common shares and one hundred sixty-five million four hundred fifty-seven thousand, nine hundred and forty (165.457.940) are preferred shares.
First Paragraph - The shares of capital stock are indivisible in relation to the Company and each common shares entitles its holder to one vote at the General Shareholders' Meetings.
Second Paragraph - The shares shall be recorded in book-entry systems and be kept in deposit accounts on behalf of their holders with the authorized financial institution designated by the Company, without issuance of share certificates.
Third Paragraph – Shareholders can, at any time, convert common shares into preferred shares, since they are paid-up and observing the limit of article 5 below. Conversion requests should be sent in writing to the Executive Board. Conversion requests received by the Executive Board should be ratified on the first Board of Directors’ meeting, since the conditions above are complied with.
Fourth Paragraph – The cost of the service of transferring the ownership of the book-entry shares charged by the depositary financial institution may be passed on to the shareholder, pursuant to the third paragraph of Article 35 of Law No. 6,404 dated 12/15/76, subject to the maximum limits established by the Brazilian Securities Exchange Commission ("Comissão de Valores Mobiliários", or “CVM”).
ARTICLE 5 - The Company is entitled to issue new shares without maintaining proportion between types and/or classes of the existing shares, provided that the number of preferred shares shall not exceed the limit of two thirds (2/3) of the total issued shares.
First Paragraph - The preferred shares shall be entitled to the following privileges and preferences:
a) priority in the reimbursement of capital, in an amount calculated by dividing the Capital Stock by the number of outstanding shares, without premium, in the event of liquidation of the Company;
b) priority in the receipt of a minimum annual dividend in the amount of eight cents of Real (R$ 0.08) per one (1) preferred share, on a non-cumulative basis;
c) participation under equal conditions as the common shares in the distribution of bonus shares resulting from capitalization of reserves or retained earnings; and
d) participation in the receipt of dividend as set forth in Article 36, IV, item "c" of these By-laws, which shall be distributed for the common and preferred shares so as to for each preferred share shall be ascribed a dividend ten percent (10%) higher than the dividend assigned to each common share, pursuant to the provisions of Article 17, first paragraph, of Law No. 6,404/76, as amended by Law No. 10,303/01, including, for purposes of such calculation, in the sum of the total amount of dividends paid to the preferred shares, the amount paid as minimum dividend set forth in item "b" of this First Paragraph.
Second Paragraph - The preferred shares shall have no voting rights.
Third Paragraph - The preferred shares shall acquire voting rights in the event that the Company fails to pay the minimum or fixed dividends to which they are entitled according to these By-laws for a period of three (3) consecutive fiscal years, according to the provisions of first paragraph of Article 111 of Law No. 6,404/76. These voting rights will cease upon the payment of such minimum or fixed dividends.
ARTICLE 6 - The Company is authorized to increase its Capital Stock by resolution of the Board of Directors without the need to amendment the Company by-laws, up to the limit of four hundred million (400,000,000) shares, through issuance of new common or preferred shares, with due regard to the limit established in article 5 above.
First Paragraph - The limit of the Company’s authorized capital shall only be modified by decision of a General Shareholders Meeting.
Second Paragraph - Within the limit of the authorized capital and in accordance with the plan approved by the General Shareholders Meeting, the Company may grant stock options to the members of its management bodies or employees, or to individuals providing services to the Company.
ARTICLE 7 - The issuance of shares, subscription bonuses or debentures convertible into shares, may be approved by the Board of Directors, with the exclusion or reduction of the term for the exercise of preemptive rights, as provided in Article 172 of Law No. 6,404/76.
Sole Paragraph - Except for the provision set out in the heading of this article, the shareholders shall be entitled to preemptive rights, in proportion to their respective equity interests, in the subscription of any Company’s capital increases, with the exercise of such right being governed by the legislation applicable thereto.
CHAPTER III
GENERAL SHAREHOLDERS’ MEETING
ARTICLE 8 -The General Meeting is the meeting of the shareholders, which shareholders may attend in person or appoint and constitute their representatives under the provisions of the Law, in order to resolve on matters of the interest of the Company
ARTICLE 9 – The General Shareholders' Meeting shall be called, incepted and chaired by the Board of Directors Chairman, in his absence, by the Board of Directors Vice-Chairman or, in his absence, by an Officer appointed by the Board of Directors Chairman and shall have the following attributions:
I. the amendment to the Company's By-laws;
II. the appointment and removal of members of the Company's Board of Directors at any time;
III. the appointment and removal of the Chairman and the Vice-Chairman of the Company's Board of Directors;
IV. the approval, annually, of the accounts and financial statements of the Company´s management, prepared by them;
V. the approval of any issuance of common or preferred shares up to the limit of the authorized capital, as provided in Article 6 above and any bonuses, debentures convertible into its shares or with secured guarantee or securities or other rights or interests which are convertible or exchangeable into or exercisable for its shares, or any other options, warrants, rights, contracts or commitments of any character pursuant to which the Company is or may be bound to issue, transfer, sell, repurchase or otherwise acquire any shares and the terms and conditions of subscription and payment;
VI. the approval of any appraisals of assets, which the shareholders may contribute for the formation of the Company's capital;
VII. the approval of any proposal for change the corporate form, amalgamation, merger (including absorption of shares), spin-off or split of the Company, or any other form of restructuring of the Company;
VIII. the approval of any proposal for dissolution or liquidation of the Company, appointing or replacement of its liquidator(s);
IX. the approval of the accounts of the liquidator(s);
X. the establishment of the global annual compensation of the members of any management body of the Company, including fringe benefits;
XI. the approval or the amendment of the annual operating plan; and
XII. the approval of any delisting of shares of the Company for trading on stock exchanges.
ARTICLE 10 - Any resolution of the General Shareholders’ Meeting shall be taken by the approval of shareholders representing at least the absolute majority of the present shareholders entitled to vote, except if qualified quorum is required by law.
ARTICLE 11 – The Annual Shareholders’ Meeting shall have the attributions set forth in the law and shall take place during the first four months following the end of each fiscal year. Sole Paragraph - Whenever necessary, the General Shareholders’ Meeting may be installed extraordinarily, and may be carried out subsequently with the Annual Shareholders’ Meeting.
CHAPTER IV
MANAGEMENT
ARTICLE 12 - The Company shall be managed by a Board of Directors and an Executive Board.
First Paragraph - The term of office of the members of the Board of Directors and the Executive Board shall be up to two (2) years, reelection being permitted.
Second Paragraph - The Directors and the Executive Board shall take office by signing their oaths in the Minutes Book of the Board of Directors or of the Executive Board, as the case may be. The investiture of the members of the Board of Directors and the Board shall be conditioned on prior execution of the Statement of Consent of the Managers under the terms of the provision in the Level 1 Rules, as well as compliance with the applicable legal requirements.
Third Paragraph - The term of office of the Directors and Executive Officers shall be extended until their respective successors take office.
Fourth Paragraph - The minutes of the meetings of the Board of Directors and of the Executive Board shall be record in the proper book, which shall be signed by the present Directors and Executive Officers, as the case may be.
Section I
Board of Directors
ARTICLE 13-The Board of Directors shall consist of at least three (3) and no more than twelve (12) members, elected and removed by the General Shareholders' Meeting.
Sole Paragraph - In the event of permanent vacancy of a Director´s office, the Board of Directors shall elect a substitute to fulfill such position permanently, until the end of the relevant term in office. In the event of simultaneous vacancy of the majority of the positions, General Shareholders’ Meeting shall be called in order to proceed with a new election.
ARTICLE 14 - The Board of Directors shall have a Chairman and a Vice-Chairman, both appointed by the Shareholders' Meeting.
First Paragraph – The positions of Chairman of the Board of Director and of President-Director or Chief Executive Officer of the Company cannot be accumulated by one and the same person.
Second Paragraph - In the event of absence or impediment of the Chairman of the Board of Directors, he shall be replaced by the Vice-Chairman of the Board of Directors. In the event of vacancy of the Chairman position, the Vice-Chairman shall automatically take such position and call a Shareholders’ Meeting within fifteen (15) days from the date of said vacancy, for the appointment of a new Chairman of the Board of Directors on a permanent basis, until the end of the relevant term of office.
ARTICLE 15 - The Board of Directors shall ordinarily meet at least six times every year, to review the financial and other results of the Company and to review and follow-up of the annual operating plan, and shall extraordinarily meet whenever necessary.
First Paragraph - The Chairman shall call the meetings of the Board of Directors, by his or her initiative or at the written request of any Director.
Second Paragraph – The calls for the meetings of the Board of Directors shall be made by electronic means, facsimile or letter, with at least seven (7) days in advance, including the agenda of the meeting and specifying the place and date to be held on first call and, as the case may be, on second call. Any proposal of resolutions and all necessary documentation related thereto shall be at the Board of Directors disposal. The meetings shall be held regardless the respective call notice in case of attendance of all Directors in office at such time, or by the prior written consent of the absents Directors.
Third Paragraph – The presence of at least half of the Board of Directors members shall be required for the installation of a meeting of the Board of Directors on first call, and the presence of any number of the members of the Board of Directors shall be required for the installation of a meeting on second call. For purposes of the quorum required in this Paragraph, it shall include the members represented as authorized by these By-laws.
ARTICLE 16 - The Board of Directors meetings shall be presided by its Chairman, or in his absence, he shall be replaced by the Vice-Chairman of the Board of Directors.
First Paragraph – The resolutions of the Board of Directors shall be taken by majority of votes cast by its members. Board members may partake of the meetings of the Board of Directors through e-conferencing, through video-conferencing or through any other means of electronic communications allowing the identification of the director and simultaneous communication with all the other ones attending the meeting. In this case, directors will be considered as present to the meeting and shall execute the corresponding minutes of such meeting afterwards.
Second Paragraph – In case of absence or temporary impediment of any member of the Board of Directors, the absent member may appoint, in writing, from among the other members of the Board of Directors, his or her substitute. In this case, the member who is replacing the temporarily absent or impeded member, in addition to his own vote, shall cast the vote of the replaced member.
ARTICLE 17 - The Board of Directors shall approve its Internal Regulations and appoint an Executive Secretary, who shall perform the duties defined in the Internal Regulations, as well as issue certificates and confirm, to third parties, the authenticity of resolutions taken by the Board of Directors.
ARTICLE 18 - In addition to the powers provided for in the applicable law, the Board of Directors shall have the powers to:
a) set forth the general guidelines of the Company's business;
b) appoint and remove the Executive Officers of the Company, establishing their duties and titles;
c) supervise action of the Executive Officers of the Company, examine, at any time, the records and books of the Company, request information on agreements executed or to be executed and on any other acts or matters;
d) call the General Shareholders' Meeting;
e) issue an opinion on the report of the management, the accounts of the Executive Board and the financial statements of the Company;
f) approve the issuance of shares of any type or class up to the limit of the authorized capital and establish the respective price and payment conditions;
g) appoint and remove the independent public accountants, observed the Audit Committee’s recommendation;
h) issue an opinion on any and all proposals of the Executive Board to be submitted to the General Shareholders’ Meetings;
i) authorize the acquisition of shares of the Company for purposes of cancellation or maintenance in treasury;
j) develop, jointly with the Executive Board, and approve a profit sharing and additional benefits program for the members of the management bodies and for the employees of the Company (Profit Sharing Program);
k) define the share of Company's profits to be allocated to the Profit Sharing Program in due compliance with the applicable legal provisions, these By-laws and the Profit Sharing Program in effect at such time. The amounts expensed or accrued in each fiscal year by way of profit sharing in addition to granting option to purchase Company’s stock shall be limited up to fifteen per cent (15%) of the profit recorded in each fiscal year after the pertinent deductions have been effected in accordance with Article 189 of Law No. 6404/76;
l) set forth the number of shares to be issued under the stock option plan previously approved by the General Shareholders Meeting, provided that the limit established in item "l" above is duly observed;
m) set up Committees, that shall be responsible for making proposals or recommendations and giving their opinions to the Board of Directors and set forth its respective attributions, in accordance with the provisions of these By-laws ;
n) approve the acquisition, sale, disposal or creation of any lien on any asset, including any real estate, of the Company or any other investments made by the Company in an individual amount or cumulated over a fiscal year in excess of the amount in Reais equivalent to twenty million U.S. Dollars (US$20,000,000.00) or in excess of an amount equal to one percent (1%) of the net equity of the Company as determined in its latest annual balance sheet or quarterly financial statements, whichever is greater;
o) approve any financial arrangement involving the Company, including the lending or borrowing of funds and the issuance of non-convertible and unsecured debentures, in excess of an individual amount equivalent to one half (0.5) of EBITDA of the preceding twelve (12) months; and
p) approve the joint venture of the Company with third parties involving an individual investment or cumulated over a fiscal year. in excess of the amount in Reais equivalent to US$20,000,000.00 (twenty million U.S. Dollars) or in excess of an amount equal to one percent (1%) of the net equity of the Company as determined in its latest annual balance sheet or quarterly financial statements, whichever is greater; and
q) the approval of any change in the Company's dividend policy.
First Paragraph - In case a resolution to be taken by the corporate bodies of companies controlled by the Company or companies of which the Company elect its directors or executive officers, the Board of Directors shall instruct the vote to be cast by the members elected or appointed by the Company to those corporate bodies if the matter of such resolution refers to the items (n), (o) and (p) of this Article, being the parameters referred therein calculated in accordance with the latest annual balance sheet or quarterly financial statements of such controlled or invested companies.
Second Paragraph - The Board of Directors shall approve a policy for related party transactions and may establish limits, authority and specific procedures for the approval of such transactions.
Section II
Management’s Auxiliary Bodies
ARTICLE 19 – The Company shall have as support body to the Board of Directors an Audit Committee composed of at least three (3) and no more than five (5) members, of which two (2), at least, shall be external and independent members (“External Members”), subject to the provisions of Article 21 and the Chapter V of these By-laws.
First Paragraph - The members of the Audit Committee shall be elected by the Board of Directors and meet all the applicable independency requirements as set forth in the rules of the Securities and Exchange Commission.
Second Paragraph - The External Members of the Audit Committee shall fulfill the following prerequisites:
a) not be a member of the Board of Directors of the Company or of its controlled companies; and
b) have knowledge or experience in auditing, controls, accounting, taxation or the rules applicable to publicly-held companies, as concerns the adequate preparation of their financial statements.
ARTICLE 20 – The members of the Audit Committee shall be elected by the Board of Directors for a term of office of two (2) years, with reelection being permitted for successive terms.
First Paragraph - During their term of office, the members of the Audit Committee may not be replaced except for the following reasons:
a) death or resignation;
b) unjustified absence from three (3) consecutive meetings or six (6) alternate meetings per year; or
c) a substantiated decision of the Board of Directors.
Second Paragraph - In the event of a vacancy in the Audit Committee, the Board of Directors shall elect a person to complete the term of office of the replaced member.
Third Paragraph -The Audit Committee shall:
a) propose to the Board of Directors the nomination of the independent auditors as well as their replacement;
b) review the management report and the financial statements of the Company and of its controlled companies, and provide the recommendations it deems necessary to the Board of Directors;
c) Review the quarterly financial information and the periodic financial statements prepared by the Company;
d) assess the effectiveness and sufficiency of the internal control structure and of the internal and independent audit processes of the Company and of its controlled companies, including in relation to the provisions set forth in the Sarbanes-Oxley Act, submitting the recommendations it deems necessary for the improvement of policies, practices and procedures;
e) provide its opinion, upon request of the Board of Directors, with respect to the proposals of the management bodies, to be submitted to the Shareholders’ Meetings, relating to changes to the capital stock, issuance of debentures or warrants, capital budgets, dividend distribution, transformation, merger, amalgamation or spin-off; and
f) provide its opinion on the matters submitted to it by the Board of Directors, as well as on those matters it determines to be relevant.
ARTICLE 21 – In the event the Fiscal Council is established as set forth in Law 6,404/76 and in Chapter V below, the Audit Committee shall maintain its functions, subject to the powers granted to the Fiscal Council by law.
ARTICLE 22 – The Board of Directors may constitute other Committees and decides their composition, which shall have the function of receiving and analyzing information, elaborating proposals or making recommendations to the Board of Directors, in their specific areas, in accordance with their internal regulations to be approved by the Board of Directors.
Sole Paragraph - The members of the Committees created by the Board of Directors shall have the same duties and liabilities as the managers.
Section III
Executive Board
ARTICLE 23 - The Executive Board shall be composed of at least two (2) and no more than fourteen (14) members, shareholders or not, resident in Brazil, appointed and removed by the Board of Directors, being necessarily appointed one (1) as the Chief Executive Officer, one (1) Investor Relations Executive Officer and the others Vice Chief Executive Officers and Officers.
ARTICLE 24 - The Executive Officers shall be in charge of the general duties set forth in these by-laws and those establish by the Board of Directors and shall keep mutual cooperation among themselves and assist each other in the performance of their duties and functions.
First Paragraph – The duties and titles of each Executive Officer shall be established by the Board of Directors.
Second Paragraph - In the event of absences, occasional impairments and vacancy, the Executive Officers shall be replaced in the following manner:
a) in the event of absences and occasional impairments of the CEO, he shall be replaced by other Executive Officer indicated by him and in the event of permanent vacancy, the Board of Directors shall appoint the CEO’s substitute within thirty (30) days, who shall complete the term of office of the CEO;
b) in the event of absences and occasional impairments of the remaining Executive Officers, they shall be replaced by the CEO and, in the event of permanent vacancy, the Board of Directors shall appoint the Executive Officer’s substitute within fifteen (15) days, who shall complete the term of office of the substituted Executive Officer.
ARTICLE 25 - The Executive Board shall meet upon call of its CEO or of half of its Executive Officers in office.
Sole Paragraph - The minimum quorum required for the installation of a meeting of the Executive Board is the presence of at least one-third (1/3) of the Executive Officers in office at such time. The resolutions of the Executive Board shall be approved by the majority of the votes. In the event of a tie in connection of any matter subject to the Executive Officers approval, such matter shall be submitted to the Board of Directors.
ARTICLE 26 - In addition to the duties that may be attributed to the Executive Board by the General Shareholders’ Meeting and by the Board of Directors, and without prejudice to the other legal duties, the Executive Board shall have the power to:
I - manage the Company’s business and ensure compliance with these by-laws;
II – ensure that the Company’s purpose is duly performed;
III - approve all plans, programs and general rules of operation, management and control for the development of the Company, in accordance with the guidelines determined by the Board of Directors;
IV - prepare and submit to the Annual Shareholders’ Meeting a report on the corporate business activities, including the balance sheet and financial statements required by law for each fiscal year, as well as the respective opinions of the Fiscal Council, as the case may be;
V – guide all Company's activities under the guidelines set forth by the Board of Directors and appropriate to the fulfillment of its purposes;
VI – suggest investment and operating plans or programs to the Board of Directors;
VII - authorize the opening and closing of branches, agencies or depots and/or institute delegations, offices and representations in any location of the national territory or abroad;
VIII – render an opinion on any matter to be submitted to the Board of Directors approval; and
IX - develop and carry out, jointly with the Board of Directors, the Employee Profit Sharing Program.
ARTICLE 27 – The Chief Executive Officer, in particular, is entitled to:
a) plan, coordinate, conduct and manage all Company’s activities, as well as perform all executive and decision-making functions;
b) carry out the overall supervision of all Company’s activities, coordinating and guiding the other Executive Officers’ activities;
c) call and install the meetings of the Executive Board;
d) coordinate and conduct the process of approval of the annual/multi-annual budget and of the investment and expansion plans together with the Board of Directors; and
e) suggest functions and respective candidates for the Executive Officers positions of the Company and submit such suggestion to the Board of Directors approval.
ARTICLE 28 - It is incumbent upon the Executive Officers to assist and support the CEO in the administration of the Company, in accordance with duties determined by the Board of Directors and perform all acts necessary for the regular Company’s activities, as long as these acts have been duly authorized by the Board of Directors.
ARTICLE 29 - The Executive Officers shall represent the Company actively and passively, in court and outside courts and before third parties, performing and signing all acts that result in obligations to the Company.
First Paragraph – For the granting of powers-of-attorney, the Company shall be represented by two (2) Executive Officers, acting jointly, and all powers-of-attorney shall a validity term, except for powers-ofattorney granted for judicial purposes, in addition to the description of the powers granted which may cover any and all acts, including those related to banking operations;
Second Paragraph - In case of acts that entail any kind of acquisition, sale, disposal or creation of any lien on any Company’s asset, including any real estate, as well as, for the granting of powers-of-attorney for the practice of such acts, the Company is required to be represented jointly by three (3) Executive Officers of whom one must always be the CEO and the others Executive Officers to be appointed by the Board of Directors.
Third Paragraph - The Company shall be considered duly represented:
a) jointly by two Executive Officers;
b) jointly by one Executive Officer to be appointed by the Board of Directors, and an attorney-in-fact, when so determined by the respective power-of-attorney and in accordance with the powers contained therein;
c) jointly by two attorneys-in-fact, when so determined by the respective power of attorney and in accordance with the powers contained therein;
d) solely by an attorney-in-fact or Executive Officer, in specific cases, when so determined by the respective power of attorney and in accordance with the powers contained therein.
CHAPTER V
FISCAL COUNCIL
ARTICLE 30 – The Company shall have a Fiscal Council that shall operate on a non-permanent basis, being installed by the General Meeting, as provided for by law.
First Paragraph - The members of the Fiscal Council and their alternates shall occupy their positions up to the first Annual Shareholders' Meeting held after their respective appointments, reelection permitted.
Second Paragraph – At their first meeting, the members of the Fiscal Council shall elect its Chairman, who shall be responsible for enforcing the committee’s resolutions.
Third Paragraph - The Fiscal Council may request the Company to appoint qualified personnel to provide administrative and technical support.
ARTICLE 31 - The Fiscal Council shall be composed of no less than three (3) and up to five (5) effective members and the same number of alternates, residents in the country, shareholders or not, all of them qualified in accordance with the legal provisions.
First Paragraph – In the case of absence of impediment, the members of the Fiscal Council shall be replaced by their respective alternates.
Second Paragraph - In addition to cases of death, resignation, dismissal and other cases provided for by law, the position of the member shall be considered vacant when the member of the Fiscal Council is absent, without just cause, at two (2) consecutive meetings or three (3) non-consecutive meetings in the course of the year.
Third Paragraph - In the event of vacancy of the position of Fiscal Council member, if there is no alternate member, a General Meeting will be called to elect a member for the vacant position.
ARTICLE 32 - The Fiscal Council shall have the powers and duties conferred upon it by law and the Internal Regulation of the Fiscal Council.
First Paragraph - The Fiscal Council holds quarterly general meetings and extraordinary meetings whenever necessary.
Second Paragraph - Meetings are called by the Chairman of the Fiscal Council on his own initiative or per written request of any of its members.
Third Paragraph - The resolutions of the Fiscal Council shall be made by absolute majority vote of those in attendance. In order for a meeting to be instituted, the majority of the members must be present.
Fourth Paragraph - The members of the Fiscal Council shall participate in the committee’s meetings by telephone or video conference call, or any other electronic means of communication, and shall be considered present at the meeting. Immediately after the meeting is over, the members must confirm their votes through a written declaration sent to the Chairman of the Fiscal Council by conventional mail, fax, or electronic mail. Upon receipt, the Chairman of the Fiscal Council shall be empowered to sign the minutes of the meeting on behalf of its members.
ARTICLE 33 - The compensation of the members of the Fiscal Council shall be fixed by the General Shareholders' Meeting in which they are appointed, with due observance of the legal limit.
CHAPTER VI
CORPORATE YEAR AND FINANCIAL STATEMENTS
ARTICLE 34 - The fiscal year ends on December 31 of each year, when the balance sheet and financial statements required by applicable law shall be prepared.
ARTICLE 35 - The Company may, at the discretion of the Executive Board, prepare quarterly or semiannual balance sheets.
CHAPTER VII
PROFIT DESTINATION
ARTICLE 36 – Upon the preparation of the balance sheet, the following rules shall be observed with respect to the distribution of the profits:
I - from the profits of the fiscal year shall be deducted, before any allocation of net income, the accumulated losses and the provision of the income tax;
II - After deducting the portions described in item I above, the portion to be distributed in the form of employee profit sharing shall be deducted, as determined by the Board of Directors, in compliance with the Profit Sharing Program and under the terms and according to the limits provided in items "j" and "k" of Article 18 herein;
III - in due compliance with the terms and limits established in paragraphs of Article 152 of Law No. 6,404/76 and the limit established in item “k” of Article 18 herein, the amount corresponding to the managers in the Company’s profits shall be deducted, as determined by the Board of Directors, in compliance with the Profit Sharing Program;
IV - the remaining net profits shall have the following destination:
a) 5% (five per cent) shall be allocated to the legal reserve fund until such reserve reaches the limit of 20% (twenty per cent) of the Capital Stock;
b) amounts to the formation of the reserve for contingencies reserve, if so decided by the General Shareholders’ Meeting;
c) 25% (twenty five per cent) shall be allocated to the payment of the mandatory dividends pursuant to First Paragraph below, in accordance with the provisions contained in first and second paragraphs of Article 5 herein;
d) the profit not provisioned in the reserve described in Second Paragraph below and not allocated in accordance with the provisions of Article 196 of Law No. 6404/76 shall be distributed as additional dividends.
First Paragraph –The mandatory dividends shall be calculated and paid in accordance with the following rules:
a) the basis for calculation of the dividends payable shall be the net profit of the fiscal year, less the amounts allocated to the legal reserve and the contingency reserves and plus the amount obtained from the reversion of the reserves of contingencies formed in the previous fiscal year;
b) the payment of the dividend calculated in accordance with the provisions of the previous item may be limited to the amount of the net profit effectively realized of the fiscal year for that has ended pursuant to the law, provided that the difference is registered as reserve for profits to be realized;
c) the profits registered in the reserve for profits to be realized, when accrued and if such profits have not been absorbed by the losses in the subsequent fiscal years, shall be increased to the first declared dividends after such realization.
Second Paragraph – It is hereby created, the Reserve for Expansion, which purpose shall ensure resources for financing additional investments in fixed assets and working capital and to which shall be allocated up to 100% of the remaining profits after the deductions and destinations established in items "a", "b" and "c" of item IV above. The total amount provisioned in such reserve shall nor exceed the total amount of the Company’s Capital Stock.
Third Paragraph - If duly authorized by the Board of Directors, the Company may elect to distribute interim dividends, ad referendum by the General Shareholders’ Meeting.
Fourth Paragraph - The Company may elect to pay or credit interests as remuneration of its own capital calculated on the accounts of the net equity, in due observance of the rate and limits determined by law
ARTICLE 37 – The amount of dividends shall be placed at the shareholders disposition within a maximum term of sixty (60) days as from the date of their allotment, and may be monetarily adjusted, if so determined by the Board of Directors, subject to the applicable legal provisions.
ARTICLE 38 - The financial statements and accounts of the Company shall be audited on an annual basis by internationally recognized independent accountants.
CHAPTER VIII
LIQUIDATION
ARTICLE 39 – The Company shall be liquidated in the cases provided by law, and the General Shareholders’ Meeting shall determine the form of liquidation, appoint the liquidator and the members of the Fiscal Council, which shall operate during the liquidation, and establish their compensation.
CHAPTER IX
FINAL PROVISIONS
ARTICLE 40 – The values in U.S. Dollars mentioned herein shall be exclusively used as reference for monetary update and shall be converted into Reals using the average exchange rate for the U.S. Dollar published by the Central Bank of Brazil.
ARTICLE 41 - The cases not regulated in these by-laws shall be solved in conformity with current applicable legislation.
ARTICLE 42 - The present by-laws shall come into effect as of the date of its approval by the General Shareholders Meeting.
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO | ||
Date: December 22, 2015 | By: /s/ Ronaldo Iabrudi Name: Ronaldo Iabrudi Title: Chief Executive Officer | |
By: /s/ Daniela Sabbag Name: Daniela Sabbag Title: Investor Relations Officer |
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.