BRF S.A.
Publicly-Held Company
CNPJ 01.838.723/0001-27
NIRE 42.300.034.240
SHAREHOLDERS´ MANUAL FOR PARTICIPATION
AT THEEXTRAORDINARY GENERAL SHAREHOLDERS’ MEETING
DECEMBER 12, 2018
CONTENTS
1. MANAGEMENT MESSAGE | 3 |
2. GUIDANCE TO PARTICIPATE IN THE EXTRAORDINARY GENERAL SHAREHOLDERS’MEETING | 5 |
2.1. - PHYSICAL PRESENCE | 5 |
2.1.1. SHAREHOLDERS | 5 |
2.1.1.1. INDIVIDUAL SHAREHOLDERS | 5 |
2.1.1.2. CORPORATE SHAREHOLDERS | 5 |
2.1.1.3. SHAREHOLDERS REPRESENTED BY PROXY | 5 |
2.1.1.4. FOREIGN SHAREHOLDERS | 6 |
2.1.2. HOLDERS OF AMERICAN DEPOSITORY SHARES–ADSs | 6 |
2.2. - PARTICIPATION BY DISTANCE VOTE | 6 |
EXHIBIT 1–MANAGEMENT PROPOSAL AND RESPECTIVE EXHIBITS | 11 |
EXHIBIT 2–DISTANCE VOTING FORM | 109 |
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1. MANAGEMENT MESSAGE
Dear Shareholders,
BRF S.A. (“BRF” or “Company”) is a companywhich is marked by a widespread and diffuse shareholding control, in which shareholders are granted equal rights and protection mechanisms.
Our shares are listed on the Novo Mercado of B3– Brasil, Bolsa, Balcão (“B3”) andon theNew York Stock Exchange (“NYSE”), with level III ADRs.
In line with the high level of corporate governance adopted by the Company and reflecting the principles of transparency, uniformity, and equality that support our relationship with investors, we hereby invite theShareholders to participate in our Extraordinary General Shareholders’Meeting to be held on December 12, 2018, at 11:00 a.m., at our head office located at Rua Jorge Tzachel, 475, Bairro Fazenda, in the city of Itajaí, State of Santa Catarina.
To reinforce our concern over the information provided, we have made available on the Investor Relations website (http://ri.brf-global.com/), itemGovernança Corporativa) and on the websites of the Brazilian Securities and Exchange Commission–CVM (www.cvm.gov.br), B3 (www.b3.com.br) and the Securities and Exchange Commission–SEC (www.sec.gov) all documents legally required and others deemed necessary to endorse the understanding and the decisions to be taken by the shareholders that will be subject to resolution at this Meeting, as well as this Manual.
The following subjects will be discussed for approval:
(i) To review, discuss, and approve the terms and conditions of the protocol andjustification of the merger of SHB Comércio e Indústria de Alimentos S.A. (“SHB”)with and intothe Company (“Merger”) executed by themanagement of both the Company and SHB(“Protocol and Justification”);
(ii) To ratify the appointment of the specialized firm KPMG Auditores Independentes, enrolled with CNPJ under No 57.755.217/0001-29), to preparethe appraisal report for SHB’snet equity, at book value(“Appraisal Report”);
(iii)To approve the Appraisal Report;
(iv)To approve the Merger and consequent winding-up of SHB, under the terms andconditions provided for in the Protocol and Justification; and
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(v) To authorize the management of the Company to perform any and all necessary acts to the Merger.
We welcome your participation in our General Meeting, since it will deal with relevant matters to the Company and that reflect on the creation of value for our shareholders.
In order to convene the Meeting, in first call, it will be necessary that shareholders representingfor at least one fourth (1/4) of the Company’scorporate capital be present, as set forth in article 125 of Law No. 6,404/1976. If such quorum is not reached, the Company will publish a new Call Notice with the new date for holding the Meeting on second call, which may be held with any number of shareholders present.
We believe the information presented herein will enable our shareholders to consider their positions in advance and facilitate the decision-making. Our Investor Relations team is prepared and available to answer any questions or guide you.
We are counting on your presence and would like to express our consideration and appreciation.
Sincerely,
Pedro Pullen Parente
Chairman of the Board of Directors and
Global CEO
Elcio Mitsuhiro Ito
Chief Financial and Investor Relations Officer
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2. GUIDANCE TO PARTICIPATE IN THE EXTRAORDINARY GENERALSHAREHOLDERS’ MEETING
2.1. - PHYSICAL PRESENCE
2.1.1. SHAREHOLDERS
As stated in article 15 of the Bylaws, we request the shareholders who intend to attend the Extraordinary General Meeting, personally or through a proxy, to forward a certified copy of the following documents byDecember 7, 2018, five (5) days before the General Meeting, to Avenida das Nações Unidas, 8501, 1stfloor, Pinheiros, Zip Code 05425-070, São Paulo–SP, to the attention of the Corporate Governance area (certified copy of documents which are available at the website of CVM is hereby waived):
2.1.1.1. INDIVIDUAL SHAREHOLDERS
- Identification document with photo; and
- Statement including the respective shareholding stake, issued by the custodianinstitution.
2.1.1.2. CORPORATE SHAREHOLDERS
- Last bylaws or consolidated articles of association and the corporate documentsgranting powers of representation (e.g. minutes of the election of statutory directors);
- Identification document of the legal representative(s) with photo;
- Statement including the respective shareholding stake, issued by the custodianinstitution;
- In case of Investment Funds: (i) the latest consolidated regulations of the fund, (ii)bylaws or articles of association of the administrator or management, as the case maybe, withthe fund’s voting policy and corporate documents that prove the powers ofrepresentation (minutes of the election of statutory directors, term(s) of office, and/orproxy), and (iii) identification document of the legal representative(s) of the fundadministrator or manager with photo.
2.1.1.3. SHAREHOLDERS REPRESENTED BY PROXY
- Besides the documents referred to above, a notarized proxy, which must have beengranted within less than one (1) year to any proxy who is a shareholder, manager ofthe Company, lawyer, or financial institution, being the Investment Fund managerresponsible for representing its joint owners, as set forth in paragraph 1stof article 126of Law No. 6,404/1976. Corporate shareholders may be represented by a proxyappointed, according to their bylaws/articles of association, not being mandatory that
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- the legal representative is a shareholder, manager of the Company, lawyer, or financialinstitution;
- Identification document of the proxy with photo;
- If the shareholders wish, they may use the proxies provided by the Company to voteon matters of interest to the General Meeting, as set forth in the Public Request forProxy made by the Company, as provided for in articles 22 and following of CVM
Instruction No. 481/2009. The documents related to the Public Request for Proxy,including the draft proxy to be granted by the shareholders interested, will be disclosedby the Company on the Investor Relations website (www.brf-global.com/ri, in the itemGovernança Corporativa) and the websites of the Brazilian Securities and ExchangeCommission (www.cvm.gov.br), B3 (www.b3.com.br) and Securities and ExchangeCommission (www.sec.gov).
2.1.1.4. FOREIGN SHAREHOLDERS
Foreign shareholders must present the same documents as the Brazilian shareholders, although the corporate documents of the legal entity and the proxy must have a sworn translation, not being necessary its notarization and consularization.
2.1.2. HOLDERS OF AMERICAN DEPOSITORY SHARES–ADSS
The holders of ADSs will be represented by The Bank of New York Mellon, as a depositoryinstitution of the ADSs, within the terms of the “Deposit Agreement” executed withBRF.
2.2. - PARTICIPATION BY DISTANCE VOTE
As stated in article 21-A and following of CVM Instruction No. 481/2009, the Company’sshareholders may send their voting instructions, from this date, on the matters to be raised at the Meeting, by completing and sending the form allowing them to cast their vote from adistance (“Distance Voting Form”)included in Exhibit 2 of this Manual.
In this regard, the Distance Voting Form must:
- be accessed to be printed and completed in advance in the item“GovernançaCorporativa” of the Company’s Investor Relations website (http://ri.brf-global.com), aswell as the site of the Brazilian Securities and Exchange Commission–CVM; and
- be received by the Company’s Governance Department within a period ofseven (7)days before the date of the General Meeting, i.e. by December 5, 2018. Any DistanceVoting Forms received after this date will not be valid and will be disregarded.
Shareholders who choose to exercise their voting right through the Distance Voting Form should do so through one of the options described below:
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2.2.1. BY COMPLETION INSTRUCTIONS PROVIDED TO THE COMPANY’SBOOKKEEPING AGENT
This option is aimed exclusively at shareholders whose shares are kept by Itaú Corretora deValores S.A. (“Itaú”) andthat are not held in the central depository:
Shareholders whose shares are not held in the central depository and who choose to exercise their voting right from a distance through service providers may hand over their instructions to the bookkeeping agent of the shares issued by BRF, Itaú Corretora de Valores S.A., pursuant to its rules. Itaú created the website Assembleia Digital, a safe solution where distance voting is possible. To vote by the website,it is necessary to register and have a digital certificate. Information on registration and the steps of issuance of the digital certificate are described at the website:
http://www.itau.com.br/securitiesservicos/assembleiadigital.
In case of any doubt, shareholders should contact Itaú Corretora de Valores S.A. and verify the procedures established by it for the issuance of instructions via the Distance Voting Form, along with the necessary documents and information in order to exercise this option. We present below the contact details for Itaú:
• Telephone –Shareholder attendance: 3003-9285 (Brazilian state capitals and metropolitan regions) / 0800 7209285 (other locations).
• Attendance hours: working days, from 09:00 a.m. to 06:00 p.m.
• Email:escrituracaoacoes@itau-unibanco.com.br
• Address:Rua Ururaí, 111, Building B, Ground Floor, São Paulo, SP, Zip Code 03084-010
Under article 21-B of CVM Instruction No. 481/2009, the shareholder must provide the bookkeeping agent with the instructions for completion of the Distance Voting Form in up to 7 days of the date of the Meeting, i.e. by December 5, 2018 (inclusive), unless a different deadline has been set by Itaú Corretora de Valores S.A.
2.2.2. BY COMPLETION INSTRUCTION PROVIDED TO THE RESPECTIVE CUSTODIANAGENTS
This option is aimed exclusively at shareholders whose shares are in the custody of the B3 S.A.–Brasil, Bolsa, Balcão(“B3”).In this case, distance voting will be exercised by the shareholders according to the procedures adopted by their custodian agents.
Shareholders whose shares are deposited in the Central Depository of B3 and who choose to exercise their voting right from a distance through service providers should hand over their
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instructions to the respective custodian agents, pursuant to their rules, which, in turn, will forward these voting instructions to the Central Depository of B3.
To do so, shareholders should contact their custodian agents and verify the procedures established by them for the issuance of instructions via the Distance Voting Form along with the documents and information they require to exercise this option.
Under article 21-B of CVM Instruction No. 481/2009, the shareholder must provide their custodian agents with the instructions for completion of the Distance Voting Form in up to 7 days of the date of the Meeting, i.e. by December 5, 2018 (inclusive), unless a different deadline has been set by the custodian agents.
2.2.3. BY SENDING THE DISTANCE VOTING FORM DIRECTLY TO BRF
Instead of following the procedures described in items 2.2.1 and 2.2.2 above, shareholders may also send their Distance Voting Forms directly to the Company.
To do so, shareholders should print the Distance Voting Form (included in Exhibit 2 of this Manual), complete it, initial all pages, and sign it. Shareholders should then send the Distance Voting Form, duly completed, initialed and signed, to the following postal address: Avenida das Nações Unidas, 8501, 1stfloor, Pinheiros, Zip Code 05425-070, São Paulo–SP, to the attention of the Corporate Governance area, along with the certified copy of the documents described below (dismissed the certification of the documents available at CVM´s website):
Individual shareholders
•identity document with photo of the shareholder.
Corporate shareholders
•last bylaws or consolidated articles of association and the corporate documents granting representation authority (e.g. minutes of the election of directors); and
•identification document of the legal representative(s) with photo;
Investment Funds
•the latest consolidated regulations of the fund;
•bylaws or articles of incorporation of the administrator or management, as the case may be,with the fund’s voting policy and corporate documents that provethe representation authority (minutes of the election of statutory directors, term(s) of office, and/or proxy);
•identification document of the legal representative(s) of the administrator or manager with photo.
The Company does not require the notarization of the signature of the Distance Voting Forms, neither its consularization.
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The corporate documents and those representing corporate shareholders and Investment Funds in a foreign language must have a sworn translation, not being necessary its notarization or consularization.
Should they prefer, shareholders may also send the documents to the Company in advance, sending the Distance Voting Form and the abovementioned documents by digital means to the following electronic address acoes@brf-br.com. Regardless of this, the Company must receive the original Distance Voting Form and notarized copy of the other documents sent previously by email by the shareholder up to seven (7) days before the General Meeting, i.e. by December 5, 2018 (inclusive), at the following address: Avenida das Nações Unidas, 8501,1stfloor, Pinheiros, Zip Code 05425-070, São Paulo–SP, to the attention of the Corporate Governance area.
Within three (3) days of receiving these documents, the Company will inform the shareholder through the electronic address indicated in item 2.1 of the Distance Voting Form, of its receipt and acceptance.
Should the Distance Voting Form not be fully completed or accompanied by the corroborating documents described above, it will be disregarded, and this information will be sent to the shareholders through the electronic address indicated in item 2.1. of the Distance Voting Form, informing the shareholders of the need to rectify or resend the Distance Voting Form or documents attached thereto (since there is enough time), describing the procedures and periods needed to regularize the distance voting.
BRF stresses that:
§ | should there be differences between the Distance Voting Form received directly by the Company and the voting instruction contained in the summary voting statement from the bookkeeping agent for the sameIndividual Taxpayer’s Enrollment Number (CPF)or National Corporate Taxpayers Register Enrollment Number (CNPJ), the voting instruction of the bookkeeping agent will prevail, as stated in Paragraph Two of article 21-W of CVM Instruction No. 481/2009; |
§ | as stated in article 21-S of CVM Instruction No. 481/2009, the Central Depository of B3, upon receipt of the voting instructions of the shareholders through their respective custodian agents, will disregard any different instructions in relation to a same resolution which had been issued by the same CPF or CNPJ registration number; and |
§ | once the deadline for distance voting has ended, i.e. on December 5, 2018, the shareholder may not change the voting instructions already sent, except in person or through a proxy at the General Meeting, upon request, explicitly calling for the voting instructions sent by Distance Voting Form to be disregarded, before it is put to the vote. |
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§ | as provided for in article 21-X of CVM Instruction No. 481/2009, the distance voting instructions shall be taken into account as usual in the event of an eventual postponement of the Meeting or if it is necessary that the Meeting is held on second call, provided that the postponement or second call do not exceed 30 days of the date initially provided for it to be held on first call. |
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EXHIBIT 1–MANAGEMENT PROPOSAL AND RESPECTIVE EXHIBITS
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BRF S.A.
Publicly Held Company
CNPJ 01.838.723/0001-27
NIRE 42.300.034.240
MANAGEMENT PROPOSAL FOR THE EXTRAORDINARY GENERAL
SHAREHOLDERS’ MEETING TO BE HELD ON DECEMBER12, 2018
Dear Shareholders,
In view of Instruction Nº 481/2009 of the Brazilian Securities and Exchange Commission–CVM of December 17, 2009 (“CVM Instruction No. 481/09”), we hereby presentthefollowing management proposal (“Proposal”) ofBRF S.A.(“Company” or “BRF”),containing the information and documents related to the subjects to be decided at the
Extraordinary General Shareholders’ Meeting of the Company, as described below, to beheld on December 12, 2018 at 11:00a.m. (“General Meeting”),at the head office of the Company, located at Rua Jorge Tzachel, 475, Bairro Fazenda, in the city of Itajaí, State of Santa Catarina:
I. To review, discuss, and approve the terms and conditions of the protocol and justification of the merger of SHB Comércio e Indústria deAlimentos S.A. (“SHB”)with and into theCompany (“Merger”), executed by themanagement of the Company and ofSHB (“Protocol and Justification”);
II. To ratify the appointment of the specialized company KPMG Auditores Independentes, enrolled with CNPJ under No. 57.755.217/0001-29, to prepare the appraisal report ofSHB’snet equity, at bookvalue (“Appraisal Report”);
III.To approve the Appraisal Report;
IV.To approve the Merger, with the consequent winding-up of SHB, under the terms andconditions provided for in the Protocol and Justification;
V. To authorize the management of the Company to perform any and all necessary acts to the Merger.
Management Proposal: The Board of Directors proposes that the Shareholders approveallmatters that will be submitted to the General Meeting, which exclusively intend for SHB to be incorporated into its sole shareholder, the Company, with the aim to unify and centralize the business activities of the BRF group related to halal product business, in order to streamline operations, optimize the corporate and management structure, and
reduce the group’s operating costs, through economies of scale, which consequentlyresults in benefits to the Companies’ shareholders.The main terms of the Merger are described inExhbit Iattached to this Proposal according to article 20-A of CVM Instruction No. 481/09.
We request that the Merger be carried out so that the Company receives, by its corresponding book amounts,all SHB’s properties, rights, and obligations (including thereal estate properties indicated in the Appraisal Report described below), which shall be winded-up, and the Company shall succeed SHB, as set forth by law, based on the elements included in the balance sheet of SHB, obtained in September 30, 2018(“Reference Date”).
The changes in equity assessed as of the Reference Date and until the date on which the Merger is consummated shall be appropriated by the Company.
The Company’s management engaged KPMG Auditores Independentes (CNPJ under No. 57.755.217/0001-29) (“Specialized Firm”) toprepare with the valuationof SHB’snet equity to be transferred to the Company due tothe Merger (“Appraisal Report”).The information required by article 21 of CVM Instruction No. 481/09 can be found attached hereto asExhibit II.
The Merger will not result in an increase or reduction in BRF’snet equity or corporate capital, since all shares ofSHB’scorporatecapital are held by BRF, and SHB’snet equity is already fully reflected on the net equity of BRF, as a result of the equity equivalence method. Therefore, according to article 10 of the Brazilian Securities and Exchange Commission– CVM Instruction No. 565/2015 (“ICVM 565”), the obligations provided for in Chapter III of ICVM 565 are not applicable.
Furthermore, considering that BRF is the sole shareholder of SHB, there will be no dissident shareholder or right to withdrawal in view of the Merger, pursuant to article 137 of Law No. 6,404/76.
In accordance withthe decision rendered by CVM’sResolution, on February 15, 2018 in the Electronic Information System (SEI) process 19957.011351/2017-21, the obligation provided in article 264 of Law No. 6,404/1976 shall be dismissed for the purposes of this Merger, since it is a merger of a wholly owned subsidiary, and there are no non-controlling shareholders in SHB.
This is what the Board of Directors had to propose and hopes to be evaluated and approved by the shareholders.
* * *
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The Company’sshareholders that are interested in accessing information or solving any doubts related to the proposals described above shall contact the Company's Investor Relations or Corporate Governance through the phones +55 (11) 2322-5991/5011/5951/4438/5355 or by email: acoes@brf-br.com. All documents related to this General Meeting are available to the shareholders at the websites http://ri.brf-global.com;www.b3.com.br; and www.cvm.gov.br.
São Paulo, November 9, 2018.
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EXHIBITI–INFORMATIONABOUT THEMERGER
(according to Exhibit 20-A of CVM Instruction No. 481/09)
In compliance with the provisions of article 20-A of CVM Instruction No. 481/09, BRF provides the following information to hold the General Meeting:
1.Protocol and justification of the transaction pursuant to articles 224 and225of Law No. 6,404 of 1976.
The protocol and justification of the merger of SHB Comércio e Indústria de AlimentosS.A. (“SHB”) by BRF S.A. (“BRF” or “Company”) can be found inExhibit I.1.of thisProposal (“Protocol and Justification”).
2. Other agreements, contracts, and pre-contracts governing the exercise of the voting right or the transfer of shares issued by the surviving companies orresulting from the transaction are to be filed at the company’s head office.
There are no other agreements, contracts, and pre-contracts.
3.The description of the transaction includes:
(a)Terms and conditions:
The transaction comprises the merger of SHB with and intoBRF, for SHB’s net equity,at book value, based on the elements included in the balance sheet of SHB, obtained in September 30, 2018, with the consequent winding up of SHB and succession, by BRF,of all its properties, rights, and obligations (“Merger”).
All shares representing SHB’s corporate capital, held by BRF, shall be extinguished asset forth in article 226, paragraph 1stof Law No. 6,404/76.
The Merger shall not result in increase or reduction of BRF’s net equity, as all shares representing SHB’scorporate capital are held by BRF and it already holds the consolidated registrations of SHB in its consolidated financial statements. Additionally,to replace the shares currently recorded in BRF’s consolidated financial statements, SHB’s assets, after the Merger, shall be directly accounted for as the Company’s assets.
Thus, as a result of the intended Merger, the investment account regarding theownership interest in SHB’s corporate capital shall be replaced, in BRF’s accountingrecords, for the assets and liabilities included in SHB’s balance sheet, without changing the Company’s corporate capital.
(b)Obligations to indemnify: (i) the managers of any of the companies involved; (ii) if the transaction is not conducted.
There are no obligations to indemnify.
(c)Table comparing the rights, advantages, and restrictions on the shares of the
companies involved or resulting therefrom, before and after the transaction.
There will be, before and after the Merger, only common shares issued by BRF, which shall have the same rights and advantages listed below. The shares representing SHB’scorporate capital shall be extinguished as a result of the Merger.
BRF: |
| |
Right to dividends: | Right to the minimum mandatory dividend, in each fiscal year, equivalent to 25% of the net profit adjusted pursuant to article 202 of the Brazilian Corporation Law. | |
Voting right: | Full | |
Description of the restricted vote: | Not applicable. | |
Convertibility: | No. | |
Convertibility condition and effects on the corporate capital: | Not applicable. | |
Right to capitalreimbursement: | Yes. | |
Description of the capital reimbursementcharacteristics: | In case the withdrawal right is exercised, the shareholders shall be entitled to receive the book value of their shares, based on the last balance sheet approved by the General Meeting. If the resolution giving rise to the withdrawal right has, however, occurred more than 60 days of the date of the last balance sheet approved, the dissentingshareholder may request assessment of a special balance sheet verified on a date not earlier than 60 days prior the resolution, to assess the value of their shares. In this case, the Company shall immediately pay 80% of the reimbursement amount calculated by reference to the last balance sheet approved by its shareholders and the remaining balance within 120 days of the date of the resolution issued by the General Meeting giving rise to the withdrawal right based on the new balance sheet. | |
Restriction on circulation: | No. | |
Description ofthe restriction: | Not applicable. | |
Redeemable: | No. |
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Conditions to amend the rights ensured by such securities: | The rights ensured to the shares may only be changed upon approvalin a general shareholders’ meeting. | |
Other relevantcharacteristics: | See item 18.2 for the events where there a public offering is required to purchase shares issued by the Company. |
(d)Possible need for approval of debenture holders or other creditors.
It is not required the previous approval by the creditors.
(e)Assets and liabilities, which will form each component of the equity, in case of spin-off.
Not applicable, since BRF will keep its registration as a publicly held company in Category A.
(f)Intention of the resulting companies to obtain registration as issuer of securities.
Not applicable, as BRF will hold its registration as a publicly-held company under Category A.
4. Plans to conduct the corporate business, especially with respect to specific corporate events intended to be held.
BRF will continue to focus on general food production and trade. BRF’s corporatepurpose will not be changed, as the companies have similar corporate purposes and SHB does not develop any activity different than those already included in theCompany’s,corporate purpose. Given the provisions above, there is no need to changeBRF’s Bylaws.
5.Analysis of the following aspects of the transaction:
(a)Description of the main benefits expected, including: (i) synergies, (ii) taxbenefits, and (iii) strategic advantages.
With the Merger, they seek to consolidate and centralize the business activities developed by BRF group, related to the halal-product business, as to streamlinetransactions, optimize the corporate and administrative structure, and reduce the group’soperating costs through economies of scale. We understand that the Merger will benefit both BRF and SHB and, consequently, their shareholders, taking into account the increasingly costs to maintain different corporate structures.
(b)Costs.
It is estimated that the costs for the Merger are of approximately R$2,500,000.00 (two million and fifty hundred thousand reais), including the expenses of publicity, appraisers,
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attorneys, and other professionals hired to advise on the transaction.
(c)Risk factors.
They seek, with the Merger, to consolidate the corporates’ businesses and use thesynergies from this consolidation. This integration process may result in operating, regulatory, commercial, financial, and contractual difficulties, which may cause the expected synergies not to be used or imply not expected losses or expenses. The management of BRF may, therefore, not to be able to successfully implement the intended consolidation or obtain the investment returns regarding this Merger.
(d)If it is a transaction with a related party, any alternatives that could have been used to reach the same goals, indicating the reasons why these alternatives were rejected.
They seek to wind up SHB for the abovementioned reasons, with succession, by BRF, of all its properties, rights, and obligations. Accordingly, there are no reasons to adopt another corporate structure, other than the Merger, to conduct the intended transaction.
(e)Exchange ratio.
Not applicable, since, as a result of the Merger, no new Company’s shares shall be issued and the shares representing SHB’scorporate capital shall be extinguished according to article 226, paragraph 1 of Law No. 6,404/76. Additionally, considering thatBRF holds all SHB’s shares, the Merger shall not result in increase or reduction ofthenet equity or BRF’s corporate capital, to the extent that SHB’s net equity is already fully reflected on BRF’s net equity, as a result of the application of the equity method ofaccounting.
(f)Transactions involving controlling and controlled companies or companies under common control:
(i)Share exchange ratio calculated, according to art. 264 of Law No. 6,404 of 1976.
Not applicable, since no new shares will be issued to exchange SHB’s shares, which willbe extinguished as a result of the Merger.
Additionally, considering the decision rendered by CVM’s Resolution, on February 15,2018, in proceeding SEI 19957.011351/2017-21, the appraisal provided in article 264 of Law No. 6,404/1976 shall be dismissed, since it is a merger of a wholly-owned subsidiary, and SHB has no non-controlling shareholders.
(ii)Detailed description of the exchange ratio trading process and other terms and conditions of the transaction.
Not applicable.
(iii)If the transaction has been preceded, in the last twelve (12) months, by
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an acquisition of control or acquisition of interest in a control block: (a) comparative analysis of the exchange ratio and price paid in the acquisition of control; and (b) reasons supporting any assessment differences in the different transactions.
All shares representing SHB’scorporate capital were acquired by the Company on September 1, 2018, pursuant to the Share Purchase Agreement entered into by and between the Company, as purchaser, and BRF Foods GMBH and One Foods Holdings Limited (subsidiaries of the Company), as sellers.
Nevertheless, we understand that this item is not applicable, as no new shares shall beissued to exchange SHB’s shares,which shall be extinguished as a result of the Merger, as mentioned above.
(iv)A supporting document explaining why the exchange ratio is commutative, describing the procedures and criteria used to ensure the transaction commutativity or, if the exchange ratio is not commutative, payment breakdown or measures equivalent to ensure proper compensation.
Not applicable.
6. A copy of the minutes of all meetings of the board of directors, audit committee, and special committees where the transaction was discussed, including any dissenting votes.
The minutes discussing the Merger can be found inExhibit I.6.to this Proposal.
7. A copy of the studies, presentations, reports, opinions, or appraisal reports of the companies involved in the transaction, made available to controlling shareholder in any stage of the transaction.
The Appraisal Report can be found onExhibit I.7.to this Proposal.
7.1.Identification of any conflicts of interest between the financial institutions, companies, and professionals that prepared the documents referred to in item 7 and the companies involved in the transaction.
None.
8. Bylaws projects or statutory changes in the companies resulting from the transaction.
None, BRF’s Bylaws will not be amended because of the Merger.
9. Financial statements used for purposes of the transaction, pursuant to the specific rule.
SHB’s financial statements of September 30, 2018 can be found onExhibit Iof the Appraisal Report.
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10.Pro-formafinancial statements prepared for purposes of the transaction, pursuant to the specific rule.
Not applicable, considering that the Merger shall be made with no dilution of the current shareholders of BRF, applying, therefore, the exception provided for in article 10 of CVM Instruction 565/15.
11. Document containing information on the companies directly involved and that are not publicly-held companies.
(a)Risk factors pursuant to items 4.1 and 4.2 of the reference form.
SHB’s risk factors are already reflected in items 4.1 and 4.2 of BRF’s Reference Form.
(b)Description of the main changes to the risk factors during the previous year and the expectations regarding the reduction or increase in the risk exposure as a result of the transaction, pursuant to item 5.4 of the reference form.
Not applicable, considering that after the Merger, SHB will be winded up.
(c)Description of its activities, pursuant to items 7.1, 7.2, 7.3, and 7.4 of the reference form.
7.1 Briefly describe the activities developed by the issuer and its subsidiaries.
SHB has as its main corporate purpose the following activities, developed in Brazil and abroad:
- General food industrialization, trading, in retail and wholesale, and exploitation;
- The industrialization and commercialization of animal feed, nutrients and animal feed
supplements;
- The provision of food services in general;
- The industrialization, refining and commercialization of vegetable oils;
- The exploitation, conservation, storage, ensilage and commercialization of grains,their derivatives and by-products.
7.2 Regarding each operating segment that has been disclosed in the last financial statements for the fiscal year or, if it is the case, in the consolidated financial statements, to provide the following information:
(a)products and services offered.
Production and commercialization of whole birds and cutsin natura.
(b)revenue from the segment and its interest in the issuer’s net revenue and profit or loss from the segment and its interest in the issuer’s net profit.
SHB’s net revenue on 2017 was of R$6.515.681 thousand (19,47% - percentage with regards to the consolidation).
SHB’s net profit on2017 was of R$44.055 thousand (4,01% - percentage with regards
9
to the consolidation).
7.3 Regarding the products and services corresponding to the operating segments provided for in item 7.2, to provide:
(a)the characteristics of the manufacturing process.
SHB sells halal food, prepared according to Muslim culture. In order to meet the halal market, the products marketed by SHB must undergo a specific religious/technical procedure of slaughter and processing, ensuring that they were produced according to the law of Islam and that they had no contact with food and forbidden ingredients. Additional information on the distribution process is reflected in item 7.3 (a) of the BRF Reference Form.
(b)the characteristics of the distribution process.
Not applicable, since all the products marketed by SHB are sold directly to BRF and BRF Foods GmbH, which are responsible for the distribution of the products. Additional information on the distribution process is reflected in item 7.3 (b) of the BRF Reference Form.
(c)the characteristics of the target markets, especially (i) interest in each one of the markets; and (ii) competition conditions in the markets.
SHB basically sells to the group companies, whether BRF, to resell in the markets in which it operates, or to BRF Foods to sell in the Halal market. Additional information on the distribution process is reflected in item 7.3 (c) of the BRF Reference Form.
(d)any seasonality.
SHB is impacted by seasonality due to Ramadan, which is the sacred month of the Muslim Calendar. The beginning of Ramadan depends on the beginning of the lunar cycle and therefore may vary each year.
(e)main inputs and raw materials, providing: (i) a description of the relationships kept with suppliers, including if they are subject to governmental control or regulation, indicating the bodies and relevant applicable laws and regulations; (ii) any dependence of few suppliers; and (iii) any volatility in their prices.
SHB follows BRF's strategy regarding to supplier relationships and is subject to the same controls, in this sense, information related to this item is available in item 7.3 (e) of the BRF Reference Form.
7.4 To identify if there are clients responsible for more than 10% of the Company’s totalnet revenue, providing:
Yes, SHB sells only to BRF and BRF Foods GmbH.
10
(d)A description of the economic group, pursuant to item 15 of the reference form.
Items 15.1 and 15.2 of the reference form.
SHB Comércio e Indústria de Alimentos S.A.
BRF S.A.
See information in item 12 below.
11
Item 15.3 of the reference form.
SHB
Date of the last change | 01/09/18 |
Number of individual shareholders (Units) | 0 |
Number of corporate shareholders (Units) | 1 |
Number of institutional investors (Units) | 0 |
There are no outstanding shares.
Item 15.4 of the reference form.
Item 15.5 of the reference form.
There is no shareholders’ agreement filed at SHB’s head office.
Item 15.6 of the reference form.
Not applicable.
12
Item 15.7 of the reference form.
None.
Item 15.8 of the reference form.
There is no other material information on SHB.
(e)Description of thecorporatecapital, pursuant to item 17.1 of the reference form.
SHB’scorporate capital is R$1,479,049,565.00, fully subscribed and paid up, represented by 1,479,049,565 registered shares, with no par value, fully held by the Company.
13
12. Description of the capital and control structure after the transaction, pursuant to item 15 of the reference form.
Items 15.1 and 15.2 of the reference form.
BRF S.A.
14
Item 15.5 of the reference form.
The Company has no shareholders’ agreement filed at its head office.
Item 15.6 of the reference form.
There are no material changes in the interests of the members of the control group and management of the Company.
Item 15.7 of the reference form.
Item 15.8 of the reference form.
There is no other material information on the Company.
13. Number, class, and type of the securities of each company involved in the transaction, held by any other companies involved in the transaction or by persons related to these companies, as defined by the rules addressing the public offering for purchasing shares.
The Company holds, on the date hereof, 1,479,049,565 registered shares, with no par value, issued by SHB, representing 100% its capital stock.
14. Exposure of any of the companies involved in the transaction or persons bound thereto, as defined by the rules addressing the public offering for purchasing shares, in derivatives referred to as securities issued by the other companies involved in the transaction.
Not applicable.
15. Report including all businesses conducted in the last six (6) months by the persons indicated below, with securities issued by the companies involved in the transaction:
(a)Companies involved in the transaction:
(i) Private purchase transactions:
Acquisition, by the Company, of SHB’s shares held by BRF Foods GmbH
Acquisition by the Company of SHB’s shares held by OneFoods Holdings Limited
(ii) Private sale transactions; (iii) Purchase transactions in regulated markets; and (iv) Sale transactions in regulated markets:
Not applicable.
(b)Parties related to companies involved in the transaction: (i) Private purchase transactions; (ii) Private sale transactions; (iii) Purchase transactions in regulated markets; (iv) Sale transactions in regulated markets:
Not applicable.
16. Document through which the Special Independent Committee submitted its recommendations to the Board of Directors, if the transaction has been negotiated under CVM Opinion No. 35 of 2008.
Not applicable.
** ** **
Exhibit I.1. Protocol and justification of the transaction pursuant to articles 224 and 225 of Law No. 6,404 of 1976.
PROTOCOL AND JUSTIFICATION OF THE MERGER OF SHB COMÉRCIO E
INDÚSTRIA DE ALIMENTOS S.A. BY BRF S.A.
A.The management ofSHB COMÉRCIO E INDÚSTRIA DE ALIMENTOS S.A., a closely-held company with head office in the city of Itajaí, State of Santa Catarina, at Rua Jorge Tzachel, No. 475, 1stfloor, suite 02, Zip Code (CEP) 88301-600, enrolled with CNPJ/MF under No. 26.176.436/0001-20 (“SHB”); and
B.The management ofBRF S.A., a publicly-held company with head office in the city of Itajaí, State of Santa Catarina, at Rua Jorge Tzachel, No. 475, Zip Code (CEP) 88301-600, enrolled with the CNPJ/MF under No. 01.838.723/0001-27 (“BRF” and,jointly with SHB, the“Companies”).
Due to the reasons and for the purposes detailed hereinafter, the parties agree to enter intothis protocol and justification of SHB’s merger into BRF (“Merger” and “Protocol and Justification”, respectively), which shall be submittedfor the approval of (i) BRF, as the sole shareholder of SHB; and (ii) the shareholders of BRF, at an Extraordinary General Meeting, pursuant to the following terms and conditions:
1.Justification of the Merger.
1.1.The Merger aims at unifying and centralizing the business activities of the group BRF related to halal products business, in order to induce simplification, efficiency, andtransparency of the group’s organizational structure.The Merger shall benefit the Companies and, consequently, its shareholders, taking into account the increasing costs of maintaining distinct corporate structures.
1.2.The Companies’ intention is for the Merger to be carried out so that BRF receives, by itscorresponding bookamounts, all SHB’s properties, rights, and obligations (including the realestate properties appointed and reproduced in the Appraisal Report defined below)considering the elements set forth in SHB’s balance sheet, prepared on September 30, 2018 (“Reference Date”).
1.3.After the Merger, BRF shall continue to be dedicated to the production and trade of general food, keeping its enrollment as a publicly-held company.
2.Merger.
2.1.BRF’s managementengaged KPMG Auditores Independentes (CNPJ under No. 57.755.217/0001-29) (“Specialized Firm”) toprepare the valuation and determine the book valueof SHB’snet equity to be transferred to BRF due to the Merger, whose result is the purpose of the appraisal report attached hereto asSchedule I(“Appraisal Report”).
2.1.1. The appointment of the Specialized Firm shall be submitted to the ratification by the Shareholders Meeting of BRF that will analyze this Protocol and Justification, in accordance with article 227, paragraph 1 of Law No. 6,404/76.
2.1.2. The Specialized Firm represented that (i) there is no conflict or community of interests, current of potential,with BRF, with BRF’s shareholders, or, in addition, with regards to the Merger; and (ii) BRF, its shareholders, and/or the Companies' managers did not direct, limit, cause difficulties or perform any acts that have or may have impaired the access, use, or knowledge of information, assets, documents or methodology of the work relevant to the quality of its conclusions.
2.2.The Merger will not result in anincrease or reduction in BRF’snet equity or corporate capital, since all shares ofSHB’scorporatecapital are held by BRF, and that SHB’snet equityis already completely reflected on BRF’s net equity as a result of the equity equivalencemethod. Therefore, according to article 10 of the Brazilian Securities and Exchange Commission–CVM Instruction No. 565/2015 (“ICVM 565”), the obligations provided for in
Chapter III of ICVM 565 are not applicable.
2.2.1. The totality of the shares representing the corporate capital of SHB, owned by BRF, will be cancelled, pursuant to article 226, paragraph 1stof Law No. 6,404/76.
2.2.2. In view of the provision above, BRF’scorporate capital will not be amended and no shares will be issued.
2.2.3.BRF’s corporate purposewill also remain the same, considering that the Companies have similar corporate purposes and since SHB does not develop any different activity from those listedin BRF’s corporate purpose.Therefore, there will be no need toamend BRF’s Bylaws.
2.3.The equity variations that follow the Reference Date shall be entered in BRF by virtue of the Merger, and the entries shall be registered in the accounting and tax books.
2.4.Furthermore, considering that BRF is the sole shareholder of SHB, there will be no dissident shareholder or right to withdrawal in view of the Merger, pursuant to article 137 of Law No. 6,404/76.
2.5.In accordance withCVM’sResolution, on February 15, 2018 in the Electronic Information System (SEI) process 19957.011351/2017-21, the appraisal provided in article 264 of Law No. 6,404/1976 shall be dismissed, since it is a merger of a wholly-owned subsidiary and there are no non-controlling shareholders in SHB.
3.Corporate Approvals.
3.1.The consummation of the Merge shall be subject to the performance of the following acts, all interdependent:
(i)Extraordinary general meeting of SHB to (a) approve this Protocol and Justification; (b) approve the Merger; and (c) authorize the performance, by its management, of the acts necessary to the Merger; and
(ii)Extraordinary general meeting of BRF to (a) approve this Protocol and Justification; (b) ratify the appointment of the Specialized Firm; (c) approve the Appraisal Report; (d) approve the Merger, with the consequent cancellation of SHB; and (e) approve the performance, by its management, of all acts necessary to the Merger.
4.Miscellaneous.
4.1.The consummation of the Merger shall result in the cancellation of SHB, which shall besucceeded by BRF in all of their assets, rights, obligations, liabilities and responsibilities, pursuant to the applicable provisions of Law No. 6,404/76.
4.2.The management of BRF shall be responsible to perform all necessary acts to implement the Merger, including to carry out the filing and publication of all acts related to the Merger and conduct the cancelation ofSHB’sregistrations before the federal, state, and municipal agencies, as well as the maintenance of the accounting books during the legal term.
4.3.This Protocol and Justification may only be amended through written instrument and shall be governed by the laws of the, with the waiver of any other court, regardless of being more privileged.
4.4.All documents referred to in this Protocol and Justification shall be available for BRF’s shareholders in its head office as of the date hereof and in BRF’s Investor Relations website(ri.brf-global.com), as well as in the websites of the Brazilian Securities and Exchange Commission–CVM and B3 S.A.–Brasil, Bolsa, Balcão.
IN WITNESS WHEREOF, the Companies execute this Protocol and Justification in 6 originals of identical form and content, with the same effect, in the presence of 2 witnesses identified below.
São Paulo, October 26, 2018.
(Remainder of the page intentionally left blank.Signature page below).
[signature page of the Protocol and Justification of the Merger of SHB Comércio e Indústria de Alimentos S.A. by BRF S.A.]
Management of SHB Comércio e Indústria de Alimentos S.A.
Vinicius Guimarães Barbosa | Elcio Mitsuhiro Ito | |
Chief Executive Officer | Officer | |
Marcelo Schmeider | ||
Officer |
Management of BRF S.A.
Pedro Pullen Parente | Vinícius Guimarães Barbosa | |
Global Chief Executive Officer and Chairman | Officer | |
of the Board of Directors | ||
Lorival Nogueira Luz Junior | Elcio Mitsuhiro Ito | |
Officer | Chief Financial Officer and Investor Relations | |
Officer | ||
Francisco Petros Oliveira Lima | Luiz Fernando Furlan | |
Papathanasiadis | Member of the Board of Directors | |
Member of the Board of Directors |
[signature page of the Protocol and Justification of the Merger of SHB Comércio e Indústria de Alimentos S.A by BRF S.A.]
Flávia Buarque de Almeida | Augusto Marques da Cruz Filho | |
Member of the Board of Directors | Vice-Chairman of the Board of Directors | |
Dan Ioschpe | Walter Malieni Júnior | |
Member of the Board of Directors | Member of the Board of Directors | |
José Luiz Osório de Almeida Filho | Roberto Antônio Mendes | |
Member of the Board of Directors | Member of the Board of Directors | |
Roberto Rodrigues | ||
Member of the Board of Directors |
Witnesses:
1. | 2. | |||
Name: | Name: | |||
RG (ID): | RG (ID): | |||
Individual | Taxpayer’sEnrollmentNumber | Individual | Taxpayer’sEnrollmentNumber | |
(CPF): | (CPF): |
SCHEDULE I
APPRAISAL REPORT
See Exhibit I.7. of the present Proposal
Anexo I.6. A copy of the minutes of all meetings of the board of directors, audit committee, and special committees where the transaction was discussed, including any dissenting votes.
BRF S.A.
Publicly Held Company
CNPJ 01.838.723/0001-27
NIRE 42.300.034.240
CVM 1629-2
MINUTES OF THE ORDINARY MEETING OF THE BOARD OF DIRECTORS
HELD ON OCTOBER 26, 2018
1. Date, Time and Place: Meeting held on October 26, 2018, at 09:00 a.m., in São PauloCity, São Paulo State, at the BRF S.A. (“Company”) office located at Avenida das Nações Unidas8501, 1stfloor, Pinheiros, Zip Code 05425-000.
2. Summons and Presence:Summons duly held pursuant to Article 21 of the Company’sBylaws considering the presence of the majority of members of the Board of Directors: Mr. PedroPullen Parente (“Mr. Pedro Parente”), Mr. Augusto Marques da Cruz Filho (“Mr. Augusto Cruz”),Mr.Dan Ioschpe (“Mr. Dan Ioschpe”), Mrs. Flávia Buarque de Almeida (“Mrs. Flávia Almeida”),Mr. Francisco Petros Oliveira Lima Papathanasiadis,(“Mr. Francisco Petros”), Mr.José Luiz Osório(“Mr. José Osório”), Mr. Luiz Fernando Furlan (“Mr. Luiz Furlan”), Mr.Roberto Antonio Mendes(“Mr. Roberto Mendes”) and Mr.Walter Malieni Jr.(“Mr. Walter Malieni”).
3. Presiding Board:Chairman: Pedro Pullen Parente.Secretary: Cristiana Rebelo Wiener.4. Agenda:(i)Approval and Execution of the Protocol and Justification of Merger of SHB/Call Notice of an Extraordinary GeneralShareholders’ Meetingto resolve on the Merger of SHB; and(ii)Approval of the Policy of Competence.
5. Resolutions: The members approved, by unanimous votes and with no restrictions, the drawing up of the present minutes in summary form. Once the agenda had been examined, the following matters were discussed and the following resolutions were taken:
5.1.Approval and Execution of the Protocol and Justification of Merger of SHB/Call Notice of anExtraordinary General Shareholders’ Meeting to resolve on the Merger of SHB. The totality of the members of the Board of Directors present at the meeting approved and executed the Protocol and Justification of Merger of the wholly-owned subsidiary SHB Comércio e Indústria de AlimentosS.A. (“SHB”) by the Company (“Protocol and Justification” and “Merger”, respectively) as well as approved, subsequently, the call notice of an Extraordinary General Shareholders’ Meeting of theCompany to: (i) review, discuss, and approve the terms and conditions of the Protocol and Justification; (ii) ratify the appointment of the specialized firm KPMG Auditores Independentes to
prepare the appraisal report for SHB’s net equity, at book value (“Appraisal Report”); (iii) approvethe Appraisal Report; (iv) approve the Merger, with the consequent winding-up of SHB, under the terms and conditions provided for in the Protocol and Justification; and (v) authorize the management of the Company to perform any and all necessary acts to the Merger.
5.2.Approval of the Policy of Competence. The totality of the members of the Board of Directors present at the meeting, under the terms of article 23, item (xxiii) of the Bylaws, approved, byunanimous votes, the proposed minutes for the Company’s Policy of Competence, which shall enterinto forceimmediately after the Extraordinary General Shareholders’ Meeting to be held onNovember 5th, 2018, in case the proposal of revision of the financial competences of the Company’sBoard of Directors and of the Board of Officers is approved, by means: (i) of the amendment to article 23, current items xvi, xxiv, xxvii, xxviii, xxix, xxx, xxxii, xxxiii, xxxvi and xxxvii; and to article 25, item iv; and (ii) of the exclusion of paragraphs 1 and 2 of article 23; and of current items vii and viii of article 25, with the purpose of allowing the Board of Directors itself to establish the Company's Competence Policy.
6. Documents Filed at the Company: The documents related to the agenda that supported the resolutions taken by the members of the Board of Directors or information presented during the meeting were filed at the Company’s head office.
7. Closure: There being no other matters to be discussed, the Chairman declared the meeting closed, during which time the present minutes were drawn up in summary form by electronic processing and, having been read and found correct by all those present, were signed.
I certify that the above text is a faithful copy of the minutes which are filed in Book No. 6, pages 72 to 74, of the Minutes of the Ordinary and Extraordinary Meetings of the Company´s Board of Directors.
São Paulo, October 26, 2018.
______________________________
Cristiana Rebelo Wiener
Secretary
BRF S.A.
Publicly Held Company
CNPJ 01.838.723/0001-27
NIRE 42.300.034.240
CVM 1629-2
MINUTES OF THE ORDINARY MEETING OF THE FISCAL COUNCIL
HELD ON NOVEMBER 06, 2018
1. Date, Time and Place: Meeting held on November 06th, 2018, at 11:00 a.m., in São Paulo City, São Paulo State, at the office ofBRF S.A. (“Company”) located at Avenida das NaçõesUnidas 8501, 1stfloor, Pinheiros, Zip Code 05425-000.
2. Summons and Presence: Summons duly held pursuant to the Bylaws of the Fiscal Council, with the presence of the majority of members of the Fiscal Council: Messrs. Attílio Guaspari(“Mr. Attílio Guaspari”)andMarcus Vinicius Dias Severini (“Mr. Marcus Severini”).
3. Presiding Board:Chairman: Attílio Guaspari.Secretary: Cristiana Rebelo Wiener.
4. Agenda:(i)Opinion on the Proceeding of Merger of SHB with and into the Company.
5. Resolutions: Once the agenda had been examined, the following matter was discussed:
5.1.Opinion on the Proceeding of Merger of SHB with and into the Company. The members of the Fiscal Council appreciated the proposal of merger of SHB Comércio e Indústria de Alimentos S.A. with and into the Company and did not present any objection to it.
6. Documents Filed at the Company: The documents related to the agenda that supported the resolutions taken by the members of the Fiscal Council or information presented during the meeting were filed at the Company’s head office, which were previously provided at theCorporate Governance Portal.
7. Closure: There being no other matters to be discussed, the Chairman declared the meeting closed, during which time the present minutes were drawn up and, having been read and found correct by all those present, were signed.
São Paulo, November 06, 2018.
______________________________
Cristiana Rebelo Wiener
Secretary
Exhibit I.7. A copy of the studies, presentations, reports, opinions, or appraisal reports of the companies involved in the transaction, made available to controlling shareholder in any stage of the transaction
ANEXO I - Balanço Patrimonial da SHB Comércio e Indústria de Alimentos S.A. em 30 de setembro de 2018
1. BASE DE ELABORAÇÃO E PRÁTICAS CONTÁBEIS
Os saldos constantes no laudo de acervo líquido foram elaboradas de acordo com as práticas contábeis adotadas no Brasil.
Os valores estão expressos em Reais (“R$”).
O referido laudo tem por objetivo atender requisitos societários necessários ao processo incorporação do patrimônio líquido da SHB Comércio e Indústria de Alimentos S.A. por sua acionista controladora BRF S.A.
As principais práticas contábeis estão descritas abaixo.
Caixa e equivalentes de caixa: compreende os saldos de caixa, bancos e aplicações financeiras de liquidez imediata em títulos cujos vencimentos, quando de sua aquisição, eram iguais ou inferiores a 90 dias, prontamente conversíveis em um montante conhecido de caixa e que estão sujeitos a um risco insignificante de mudança de valor. As aplicações financeiras classificadas nesse grupo, por sua própria natureza, estão mensuradas a valor justo por meio do resultado.
Instrumentos financeiros: os ativos e os passivos financeiros são reconhecidos inicialmente pelo valor justo deduzidos ou somados de quaisquer custos de transação diretamente atribuíveis, quando aplicável.
Ativos financeiros serão subsequentemente mensurados ao custo amortizado, ou valor pelo resultado de acordo com o modelo de negócio da Companhia assim como por suas características de fluxo de caixa contratos. Ativos financeiros mantidos ao custo amortizado são ajustados ao seu valor recuperável quando necessário.
Após o reconhecimento inicial os passivos financeiros são mensurados pelo custo amortizado.
Os instrumentos financeiros denominados em moeda estrangeira serão ajustado para refletir as variações câmbio até o período de reporte.
Estoques: são avaliados ao custo médio de aquisição ou formação e inferiores aos valores de mercado. O custo dos produtos acabados inclui matérias-primas adquiridas, mão-de-obra, custo de produção, transporte e armazenagem, que estão relacionados a todos os processos necessários para a colocação dos produtos em condições de venda. Provisões para obsolescência, ajustes a valor líquido de realização, itens deteriorados e estoques de baixa movimentação são registrados quando necessário.
Ativos biológicos: Os ativos biológicos consumíveis e para produção (animais vivos) e as florestas estão avaliados pelo seu valor justo, sendo aplicada a técnica de abordagem de custo aos animais vivos e abordagem de receita para as florestas. Na apuração do valor justo dos animais vivos já estão computadas todas as perdas inerentes ao processo de criação.
Ativo imobilizado: apresentado pelo custo de aquisição, formação, construção ou desmontagem, deduzido da depreciação acumulada e perda por redução ao valor recuperável, quando aplicável, que é o maior valor entre o de uso e o de venda menos os custos de vender. Os custos de empréstimos e financiamentos são registrados como parte dos custos do imobilizado em andamento de acordo com a Deliberação CVM nº 672/11, considerando a taxa média ponderada de empréstimos e financiamentos vigente na data da capitalização.
A depreciação é reconhecida com base na vida útil econômica estimada de cada ativo pelo método linear. A vida útil estimada, os valores residuais e os métodos de depreciação são revisados anualmente e os efeitos de quaisquer mudanças nas estimativas são contabilizados prospectivamente. Os terrenos não sofrem depreciação.
A Companhia realiza anualmente a análise de indícios de perda no valor recuperável do ativo imobilizado, a qual envolve a adoção de premissas e julgamentos.
A Companhia apresenta anexo a este laudo a composição do saldo de terrenos (Anexo II).
Ativo intangível: os ativos intangíveis adquiridos são mensurados ao custo no momento do seu reconhecimento inicial. O custo de ativos intangíveis adquiridos em uma combinação de negócios corresponde ao valor justo na data de aquisição. Após o reconhecimento inicial, os ativos intangíveis são apresentados ao custo, menos amortização acumulada e perdas por redução do valor recuperável, quando aplicável. Ativos intangíveis gerados internamente, excluindo custo de desenvolvimento, não são capitalizados e o gasto é refletido na demonstração do resultado no exercício em que foi incorrido.
Ativos intangíveis com vida definida são amortizados ao longo da vida útil econômica e avaliados em relação à perda por redução ao valor recuperável sempre que houver indício de perda de seu valor econômico. O período e o método de amortização para um ativo intangível com vida definida são revisados no mínimo ao final de cada exercício social.
Ativos intangíveis com vida útil indefinida não são amortizados, mas são testados anualmente em relação a perdas por redução ao valor recuperável, individualmente ou no nível da unidade geradora de caixa.
A recuperação dos ágios foi testada em 2018 não sendo identificados ajustes para refletir perda no valor recuperável. A realização do teste envolveu a adoção de premissas e julgamentos.
Impostos e contribuições sobre o lucro: compreende o imposto de renda (“IRPJ”) e a contribuição social sobre o lucro (“CSLL”), que são calculados mensalmente com base no lucro tributável, após compensação de prejuízos fiscais e base negativa de contribuição social, limitada a 30% do lucro real, aplicando-se a essa base a alíquota de 15% acrescida do adicional de 10% para o IRPJ e 9% para a
CSLL.
Impostos diferidos representam diferenças temporárias entre a base fiscal e a contábil. Os ativos e passivos de impostos e contribuições diferidos são classificados como não circulante conforme requerido pela Deliberação CVM nº 676/11. Quando os estudos internos da Companhia indicarem que a utilização futura desses créditos não é provável a Companhia irá baixar os respectivos ativos.
Os impostos diferidos ativos e passivos são apresentados líquidos se existir um direito legal exequível de compensar os passivos fiscais com os ativos fiscais, e se estiverem relacionados aos impostos lançados pela mesma autoridade fiscal sob a mesma entidade tributável.
Os ativos e passivos fiscais diferidos devem ser mensurados pelas alíquotas que se espera que sejam aplicáveis no período em que o ativo for realizado ou o passivo liquidado, com base nas alíquotas (e legislação fiscal) que estejam em vigor na data do balanço.
Provisão para riscos tributários, cíveis e trabalhistas e passivos contingentes: as provisões são reconhecidas quando a Companhia tem uma obrigação presente, formalizada ou não, em consequência de um evento passado e é provável que benefícios econômicos sejam requeridos para liquidar a obrigação e uma estimativa confiável do valor desta possa ser feita.
A Companhia é parte de diversos processos judiciais e administrativos. As avaliações das probabilidades de perdas destes processos incluem a análise das evidências disponíveis, a hierarquia das leis, as jurisprudências disponíveis, as decisões mais recentes nos tribunais e sua relevância no ordenamento jurídico, bem como a avaliação dos advogados externos. As provisões são revisadas e ajustadas para refletir alterações nas circunstâncias, tais como prazo de prescrição aplicável, conclusões de inspeções fiscais ou exposições adicionais identificadas com base em novos assuntos ou decisões de tribunais.
Julgamentos, estimativas e premissas contábeis: a Administração fez os seguintes julgamentos que têm efeito significativo sobre os valores reconhecidos no laudo de acervo liquido:
- análise anual do valor recuperável de ativos não financeiros;
- perdas esperadas em créditos de liquidação duvidosa;
- provisão para ajuste a valor realizável dos estoques;
- valor justo dos ativos biológicos;
- análise anual do valor recuperável de impostos;
- vida útil dos bens do ativo imobilizado e intangíveis com vida útil definida;
- provisão para riscos tributários, cíveis e trabalhistas; e
- transferência do controle dos produtos para reconhecimento da receita.
- Companhia revisa anualmente as premissas utilizadas em suas estimativas
contábeis. O efeito das revisões das estimativas contábeis é reconhecido nos saldos contábeis no período em que tais revisões são efetuadas.
•EXHBITII–INFORMATIONABOUT THEAPPRAISERS
(according to article 21 of CVM Instruction No. 481/09)
1.List the appraisers recommended by the management. |
KPMG Auditores Independentes (CNPJ/MF sob o nº 57.755.217/0001-29). |
2.Describe the qualification of the recommended appraisers. |
The rendering of independent audit services, aimed at strengthening the accuracy ofinformation prepared by clients for its use by investors, creditors and other stakeholders, isbased on a methodology developed to comply with international and local auditing standards—International Financial Reporting Standards (IFRS)—, including exclusive computerizedtechniques of KPMG International and tools which assist the teams in accessing knowledgefor them to suitably perform their duties, in an effective and efficient manner. |
3.Provide a copy of the work and compensation proposals of the recommended appraisers. |
Refer to the proposal which is attached hereto asExhibit II.3. |
4.Describe any relevant relation in the last three (3) years between the recommendedappraisers and the parties related to the company, as defined by the accounting rulesaddressing this subject. |
Not applicable. |
* * *
Exhbit II.3. Proposta KPMG
EXHIBIT 2–DISTANCE VOTING FORM
BRF S.A.
Publicly-Held Company
CNPJ 01.838.723/0001-27
NIRE 42.300.034.240
Extraordinary General Shareholders’ Meeting to be held on 12.12.2018
DISTANCE VOTING FORM
1. Name or corporate designation of the shareholder (without abbreviations)
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2. Corporate (CNPJ) or individual(CPF)taxnumberoftheshareholder
| 2.1. Email address of the shareholder forcommunication with the Company related tothe Voting Form |
3. Guidance for completing the Distance Voting Form Should you, as a shareholder, choose to exercise your right to vote from a distance, withinthe terms of articles 21-A and according to CVM Instruction nº 481/2009, you must completethe DistanceVoting Form (“Distance Voting Form”), that will only be regarded as valid, andthe votes presented here counted in the quorum of the General Meeting, if the followinginstructions are observed: (i) all the fields must be duly completed; (ii) all the pages must beinitialed; and (iii) the last page must be signed by the shareholder or his/her (s) legalrepresentative(s), as the case may be, and within the terms of the effective law. The Company does not require the certification of the signature on the Distance VotingForm, neither its consularization. On 12.5.2018 (including) expires the deadline for the receipt of the Distance Voting Formduly completed according to instructions below. It should be stressed that, in order for the Voting Form to have an effect, the date of12.5.2018 will be the last day for its RECEIPT, in one of the 3 forms that are listedbelow and not the last day for it to be mailed. If the Voting Form is received after12.5.2018, the votes will not be counted.
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4. Guidance for delivering the Distance Voting Form The shareholder that chooses to exercise its remote voting rights by means of this DistanceVoting Form may complete it observing the aforementioned guidance and send it: (i) to theCompany or (ii) to the Custodian (iii) or to the Bookkeeper, following the instructions below: | |
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(i) | To the Company: in addition to the Distance Voting Form, the shareholder must submit a certified copy of the following documents (the authentication is waivedfor those available at CVM’s website): Individual–photo ID of the shareholder orits legal representative: Brazilian national’s ID (RG), Identity Card for Foreigners (RNE), Brazilian Driver’s License (CNH), passport, and professional ID. LegalEntity and Investment Funds–a) photo ID of the shareholder or its legal representative: Brazilian identity card (RG), Identity Card for Foreigners (RNE),Brazilian Driver’s License (CNH), passport, and professional ID; b) Articles ofAssociation or Bylaws, consolidated and updated (in the case of a Legal Entity),or the latest consolidated version of the fund’s regulations, and Bylaws or Articlesof Association, consolidated and updated, of its management or fund manager, as the case may be (in the case of Investment Funds); and c) a document proving representation authority.
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(ii) | To the Custodian: to this end, the shareholder shall contact their Custodians and verify the procedures established by them for issuance of the voting instructions by means of a Distance Voting Form, as well as the documents and information required by them to this end.
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(iii) | To the Bookkeeper: this option is exclusively for the holders of shares deposited to ItauCorretora de Valores S.A.(“Itaú”),bookkeeper of shares issued by the Company. Itauhas set up a Digital Meeting website, a secure solution where it is possible to execute remote voting. In order to vote through the website, the shareholder must register and have a digital certificate. Information on registering and the step-by-step process for issuing the digital certificate are described in the website: http://www.itau.com.br/securitiesservices/assembleiadigital/
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5. Postal and electronic address to send the Distance Voting Form, should the shareholder decide to deliver the document directly to the company: BRF S.A. | |
6. Indication of the institution engaged by the company to provide bookkeeping services for the shares, with name, physical and electronic addresses, telephone and contact person: Itaú Corretora de Valores S.A. |
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Telephone: (11) 3003-9285 (state capitals and metropolitan regions) / 0800 7209285 | ||
Resolutions Subject Matter of the Extraordinary GeneralShareholders’Meeting | ||
I. To approve the terms and conditions of the protocol and justification of the merger of SHBComércio e Indústria de Alimentos S.A. (“SHB”) by the Company (“Merger”), executed bythe managements of theCompany and of SHB (“Protocol and Justification”); | ||
[ ] Approve | [ ] Reject | [ ] Abstain |
II. To ratify the appointment of the specialized company KPMG Auditores Independentes,enrolled with CNPJ under No. 57.755.217/0001-29, to prepare the appraisal report of SHB’snet equity, at book value (“Appraisal Report”); | ||
[ ] Approve | [ ] Reject | [ ] Abstain |
III. To approve the Appraisal Report; | ||
[ ] Approve | [ ] Reject | [ ] Abstain |
IV. To approve the Merger, with the consequent winding-up of SHB, under the terms andconditions provided for in the Protocol and Justification; and | ||
[ ] Approve | [ ] Reject | [ ] Abstain |
V. To authorize the management of the Company to perform any and all necessary acts tothe Merger. | ||
[ ] Approve | [ ] Reject | [ ] Abstain |
[City], [date]
__________________________________________
Name and signature of Shareholder
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