SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of December, 2014
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
(Free translation into English from the original report previously issued in Portuguese)
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COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO |
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Appraisal report on investees’ net assets at book value for merger purposes |
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11/21/14 |
1 00 065/14 | |
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MagalhãesAndrade S/S Auditores Independentes Av. Brigadeiro Faria Lima, 1893 6º andar 01452-001 São Paulo SP Brasil |
Dear Sirs
Shareholders and Quotaholders of
Companhia Brasileira de Distribuição,
Vancouver Empreendimentos e Participações Ltda.
Duque Conveniências Ltda.
PA Publicidade Ltda.
API SPE 06 Planejamento e Desenvolvimento de Empreendimentos Imobiliários Ltda.
Monte Tardeli Empreendimentos e Participações S.A.
GPA 4 Empreendimentos e Participações S.A.
GPA 5 Empreendimentos e Participações S.A.
ECQD Participações Ltda.
Vedra Empreendimentos e Participações S.A.
MAGALHÃES ANDRADE S/C AUDITORES INDEPENDENTES, an audit and consulting firm registered with the Conselho Regional do Estado de São Paulo under Nº 2SP000233/O-3, and enrolled into Brazilian IRS Registry of Legal Entities (CNPJ/MF) under the Nº 62.657.242/0001-00, with head-office at Av. Brigadeiro Faria Lima, 1893 - 6º andar, Jardim Paulistano, at the Capital of the State of São Paulo, appointed by you as an expert appraiser to carry out the valuation of net assets at book value of Sé Supermercados Ltda., Vancouver Empreendimentos e Participações Ltda., Duque Conveniências Ltda., PA Publicidade Ltda., API SPE 06 Planejamento e Desenvolvimento de Empreendimentos Imobiliários Ltda., Monte Tardeli Empreendimentos e Participações S.A., GPA 4 Empreendimentos e Participações S.A., GPA 5 Empreendimentos e Participações S.A., ECQD Participações Ltda., and Vedra Empreendimentos e Participações S.A., for purposes of merging into Companhia Brasileira de Distribuição’s net assets, upon completing the diligence, verifications and calculations required to complete its work, presents the hereunder
APPRAISAL REPORT
São Paulo, November 21, 2014
MAGALHÃES ANDRADE S/C
Auditores Independentes
CRC2SP000233/Ó-3
GUY ALMEIDA ANDRADE
Partner
Accountant CRC1SP116.758/O-3
APPRAISAL REPORT
2
INTRODUCTION
1. The present operation whereby Companhia Brasileira de Distribuição (CBD) or (Merging Company) merges net assets of investees Vancouver Empreendimentos e Participações Ltda. (VANCOUVER), Duque Conveniências Ltda. (DUQUE), PA Publicidade Ltda. (PAPU), API SPE 06 Planejamento e Desenvolvimento de Empreendimentos Imobiliários Ltda. (SPE), Monte Tardeli Empreendimentos e Participações S.A. (MONTE TARDELI), GPA 4 Empreendimentos e Participações S.A. (GPA 4), GPA 5 Empreendimentos e Participações S.A. (GPA 5), ECQD Participações Ltda. (ECQD) and Vedra Empreendimentos e Participações S.A. (VEDRA), jointly referred as MERGED COMPANIES.
2. As set out in the PROTOCOL OF MERGER AND JUSTIFICATION entered into, the MERGED COMPANIES herein referred to are limited liability companies and privately-held stock corporations whose fully subscribed for and paid-up capital comprises units of quotas and shares, as applicable, that shall be fully held by CBD.
3. Whereas CBD shall be sole quotaholder and shareholder, as the case may be, of the MERGED COMPANIES, their merger into CBD is highly convenient to the company quotas of CBD and MERGED COMPANIES, since the merging activities and management of companies will generate considerable benefits of an administrative, economic and financial nature, mainly through rationalizing and simplifying the shareholding structure of the group, enabling the consolidation and reduction of operating costs and expenses, rendering feasible to capture operating and tax synergies of group companies.
4. This REPORT, therefore, aims to determine the book value of net assets to be merged, in light of the Company’s equity at September 30, 2014.
5. The Appraisal Report was issued in connection with the audit of the balance sheets of the MERGED COMPANIES prepared for this purpose at September 30, 2014, as well as the summary of significant accounting practices.
6. Companies’ Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting practices adopted in Brazil and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
7. Our responsibility is to express an opinion on the investment held by CBD based on our audit. We conducted our audit in accordance with International and Brazilian Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
8. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the MERGED COMPANIES’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.
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9. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
VANCOUVER’s FINANCIAL POSITION
10. The Valuation at book value was accomplished in compliance with the terms of article 226 of Law Nº 6404/76 and with CVM Rules Nºs 319/99 and 320/99, based on the financial position disclosed in the balance sheet of September 30, 2014 prepared for such purpose, presented in ATTACHMENT 1 and summarized as follows:
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ASSETS |
98,418,138.22 |
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(-) LIABILITIES |
33,812,929.87 |
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NET EQUITY |
64,605,208.35 |
11. The aforesaid balance sheet was prepared in accordance with the accounting practices adopted in Brazil. The valuation relied on the company’s ability to continue as a going concern.
12. ATTACHMENT 1 shows the breakdown of VANCOUVER’s net equity and current accounts held with companies of the Group. We highlighted in ATTACHMENT 2 the balances to be eliminated upon merger.
13. VANCOUVER holds investments in group companies, as below, valued under the equity method of accounting, to be transferred to CBD upon merger. These units of quotas comprise nearly 100% of the capital of these companies.
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Posto Ciara Ltda. |
99,999 quotas |
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Auto Posto Império Ltda. |
794,166 quotas |
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Auto Posto Duque Salim Maluf Ltda. |
2,203,356 quotas |
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Auto Posto GPA Santo André Ltda. |
831,669 quotas |
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Auto Posto Duque Lapa Ltda. |
2,152,540 quotas |
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Duque Conveniências Ltda. |
108,859 quotas |
14. ATTACHMENT 3 shows VANCOUVER‘s capital holding and the equity value of the units of quotas, evidencing controlling shareholder position of CBD and a non-controlling quotaholder who, as set forth in the PROTOCOL OF MERGER AND JUSTIFICATION, will sell CBD its equity quotas upon merger.
15. In connection with the merger, the VANCOUVER’s units of quotas will cease to exist.
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DUQUE CONVENIÊNCIAS’s FINANCIAL POSITION
16. The Valuation at book value was accomplished in compliance with the terms of article 226 of Law Nº 6404/76 and with CVM Rules Nºs 319/99 and 320/99, based on the financial position disclosed in the balance sheet of September 30, 2014 prepared for such purpose, presented in ATTACHMENT 4 and summarized as follows:
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ASSETS |
118,521.51 |
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(-) LIABILITIES |
169,713.32 |
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NET EQUITY |
(51,191.81) |
17. The aforesaid balance sheet was prepared in accordance with the accounting practices adopted in Brazil. The valuation relied on the company’s ability to continue as a going concern.
18. ATTACHMENT 4 shows the breakdown of DUQUE CONVENIÊNCIAS’s net equity and current accounts held companies of the Group. We highlighted in ATTACHMENT 5 the balances to be eliminated upon merger.
19. ATTACHMENT 6 shows DUQUE CONVENIÊNCIAS’s capital and equity value of units of quotas, evidencing controlling shareholder position of CBD and a non-controlling member who, as set forth in the PROTOCOL OF MERGER AND JUSTIFICATION, will sell CBD its equity quotas upon merger.
20. In connection with the merger, the DUQUE CONVENIÊNCIAS’s units of quotas will cease to exist.
PAPU’s FINANCIAL POSITION
21. The Valuation at book value was accomplished in compliance with the terms of article 226 of Law Nº 6404/76 and with CVM Rules Nºs 319/99 and 320/99, based on the financial position disclosed in the balance sheet of September 30, 2014 prepared for such purpose, presented in ATTACHMENT 7 and summarized as follows:
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ASSETS |
27,364,046.71 |
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(-) LIABILITIES |
772,143.28 |
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NET EQUITY |
26,591,903.43 |
22. The aforesaid balance sheet was prepared in accordance with the accounting practices adopted in Brazil. The valuation relied on the company’s ability to continue as a going concern.
23. ATTACHMENT 7 shows the breakdown of PAPU’s net equity and current accounts held with group companies of the Group. We highlighted in ATTACHMENT 8 the balances to be eliminated upon merger.
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24. ATTACHMENT 9 shows PAPU’s capital and equity value of units of quotas, evidencing controlling shareholder position of CBD and a non-controlling member who, as set forth in the PROTOCOL OF MERGER AND JUSTIFICATION, will sell CBD its equity quotas upon merger.
25. In connection with the merger, the PAPU’s units of quotas will cease to exist.
API SPE 06’s FINANCIAL POSITION
26. The Valuation at book value was accomplished in compliance with the terms of article 226 of Law Nº 6404/76 and with CVM Rules Nºs 319/99 and 320/99, based on the financial position disclosed in the balance sheet of September 30, 2014 prepared for such purpose, presented in ATTACHMENT 10 and summarized as follows:
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ASSETS |
16,211,318.20 |
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(-) LIABILITIES |
45,000.00 |
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NET EQUITY |
16,166,318.20 |
27. The aforesaid balance sheet was prepared in accordance with the accounting practices adopted in Brazil. The valuation relied on the company’s ability to continue as a going concern.
28. ATTACHMENT 11 shows API SPE’s capital and equity value of units of quotas, evidencing controlling shareholder position of CBD and a non-controlling member who, as set forth in the PROTOCOL OF MERGER AND JUSTIFICATION, will sell CBD its equity quotas upon merger.
29. In connection with the merger, the API SPE’s units of quotas will cease to exist.
MONTE TARDELI’s FINANCIAL POSITION
30. The Valuation at book value was accomplished in compliance with the terms of article 226 of Law Nº 6404/76 and with CVM Rules Nºs 319/99 and 320/99, based on the financial position disclosed in the balance sheet of September 30, 2014 prepared for such purpose, presented in ATTACHMENT 12 and summarized as follows:
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ASSETS |
4,073.90 |
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(-) LIABILITIES |
1,495.00 |
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NET EQUITY |
2,578.90 |
31. The aforesaid balance sheet was prepared in accordance with the accounting practices adopted in Brazil. The valuation relied on the company’s ability to continue as a going concern.
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32. ATTACHMENT 12 shows the breakdown of MONTE TARDELLI’s net equity and current accounts held with group companies. We outlined in ATTACHMENT 13 the balances to be eliminated upon merger.
33. ATTACHMENT 14 shows MONTE TARDELLI’s capital and equity value of units of quotas, evidencing controlling shareholder position of CBD and a non-controlling member who, as set forth in the PROTOCOL OF MERGER AND JUSTIFICATION, will sell CBD its equity quotas upon merger.
34. In connection with the merger, the MONTE TARDELLI’s units of quotas will cease to exist.
GPA 4’s FINANCIAL POSITION
35. The Valuation at book value was accomplished in compliance with the terms of article 226 of Law Nº 6404/76 and with CVM Rules Nºs 319/99 and 320/99, based on the financial position disclosed in the balance sheet of September 30, 2014 prepared for such purpose, presented in ATTACHMENT 15 and summarized as follows:
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ASSETS |
5,640.90 |
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(-) LIABILITIES |
1,795.00 |
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NET EQUITY |
3,845.90 |
36. The aforesaid balance sheet was prepared in accordance with the accounting practices adopted in Brazil. The valuation relied on the company’s ability to continue as a going concern.
37. ATTACHMENT 15 shows the breakdown of GPA 4’s net equity and current accounts held with group companies. We outlined in ATTACHMENT 16 the balances to be eliminated upon merger.
38. ATTACHMENT 17 shows GPA 4’s capital and equity value of units of quotas, evidencing controlling shareholder position of CBD and a non-controlling member who, as set forth in the PROTOCOL OF MERGER AND JUSTIFICATION, will sell CBD its equity quotas upon merger.
39. In connection with the merger, the GPA 4’s units of quotas will cease to exist.
GPA 5’s FINANCIAL POSITION
40. The Valuation at book value was accomplished in compliance with the terms of article 226 of Law Nº 6404/76 and with CVM Rules Nºs 319/99 and 320/99, based on the financial position disclosed in the balance sheet of September 30, 2014 prepared for such purpose, presented in ATTACHMENT 18 and summarized as follows:
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ASSETS |
6,141.20 |
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(-) LIABILITIES |
1,980.00 |
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NET EQUITY |
4,161.20 |
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41. The aforesaid balance sheet was prepared in accordance with the accounting practices adopted in Brazil. The valuation relied on the company’s ability to continue as a going concern.
42. ATTACHMENT 18 shows the breakdown of GPA 5’s net equity and current accounts held with group companies. We outlined in ATTACHMENT 19 the balances to be eliminated upon merger.
43. ATTACHMENT 20 shows GPA 5’s capital and equity value of units of quotas, evidencing controlling shareholder position of CBD and a non-controlling member who, as set forth in the PROTOCOL OF MERGER AND JUSTIFICATION, will sell CBD its equity quotas upon merger.
44. In connection with the merger, the GPA 5’s units of quotas will cease to exist.
ECQD’s FINANCIAL POSITION
45. The Valuation at book value was accomplished in compliance with the terms of article 226 of Law Nº 6404/76 and with CVM Rules Nºs 319/99 and 320/99, based on the financial position disclosed in the balance sheet of September 30, 2014 prepared for such purpose, presented in ATTACHMENT 21 and summarized as follows:
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ASSETS |
6,655.55 |
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(-) LIABILITIES |
789,556.62 |
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NET EQUITY |
(782,901.07) |
46. The aforesaid balance sheet was prepared in accordance with the accounting practices adopted in Brazil. The valuation relied on the company’s ability to continue as a going concern.
47. ATTACHMENT 21 shows the breakdown of ECQD’s net equity and current accounts held with group companies. We outlined in ATTACHMENT 22 the balances to be eliminated upon merger.
48. ECQD is a shareholder of Nova Pontocom Comércio Eletrônico S.A., whose investment is valued by the equity method of accounting, which will be transferred to CBD upon merger. The investment comprising 2,942,875 shares represents 4.85% of that company’s capital.
49. ATTACHMENT 23 shows ECQD’s capital and equity value of units of quotas, evidencing controlling shareholder position of CBD and a non-controlling member who, as set forth in the PROTOCOL OF MERGER AND JUSTIFICATION, will sell CBD its equity quotas upon merger.
50. In connection with the merger, the ECQD’s units of quotas will cease to exist.
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VEDRA’s FINANCIAL POSITION
51. The Valuation at book value was accomplished in compliance with the terms of article 226 of Law Nº 6404/76 and with CVM Rules Nºs 319/99 and 320/99, based on the financial position disclosed in the balance sheet of September 30, 2014 prepared for such purpose, presented in ATTACHMENT 24 and summarized as follows:
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ASSETS |
7,735.90 |
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(-) LIABILITIES |
20,414.82 |
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NET EQUITY |
(12,678.92) |
52. The aforesaid balance sheet was prepared in accordance with the accounting practices adopted in Brazil. The valuation relied on the company’s ability to continue as a going concern.
53. ATTACHMENT 24 shows the breakdown of VEDRA’s net equity and current accounts held with group companies. We outlined in ATTACHMENT 25 the balances to be eliminated upon merger.
54. ATTACHMENT 26 shows VEDRA’s capital and equity value of units of quotas, evidencing controlling shareholder position of CBD and a non-controlling member who, as set forth in the PROTOCOL OF MERGER AND JUSTIFICATION, will sell CBD its equity quotas upon merger.
55. In connection with the merger, the VEDRA’s units of quotas will cease to exist.
EFFECTS ON THE MERGER COMPANY
56. The CBD balance sheet of September 30, 2014 is shown in ATTACHMENT 27 and its financial position at that date is as follows:
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ASSETS |
22,370,377,870.13 |
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(-) LIABILITIES |
12,135,101,275.89 |
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NET EQUITY |
10,235,276,594.24 |
57. COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO holds investment in some companies hereon merged, recorded in its non-current assets and valued at the investee’s net assets value (equity pickup).
58. The investments and the number of shares or units of quotas held by CBD are as follows:
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Quantity of shares or units of quotas |
Equity holding |
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Sé Supermercados Ltda. |
366,267,024 |
99.999999% |
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PA Publicidade Ltda. |
99,999 |
99.999000% |
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Vancouver Empreendimentos e Participações Ltda. |
71,359,990 |
99.999986% |
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Duque Conveniências Ltda. |
1 |
0.000919% |
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ECQD Participações Ltda. |
2,555,722 |
99.999608% |
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Vedra Empreendimentos e Participações S.A. |
19,999 |
99.995000% |
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API SPE 06 Planejamento e Desenvolvimento de Empreendimentos Imobiliários |
16,676,670 |
99.999999% |
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Monte Tardeli Empreendimentos e Participações S.A. |
10,999 |
99.990909% |
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GPA 4 Empreendimentos e Participações S.A. |
10,990 |
99.909091% |
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GPA 5 Empreendimentos e Participações S.A. |
10,990 |
99.909091% |
59. Due to the agreement for sale of non-controlling equity quotas that CBD holds between quotaholders of the MERGED COMPANIES, mentioned in this REPORT, CBD is herein deemed to be the sole member of the MERGED COMPANIES.
60. In connection with the merger, the aforesaid investments in CBD cease to exist, which are replaced by the MERGED COMPANIES net assets, as shown in the balance sheets presented in ATTACHMENTS 1, 4, 7, 10, 12, 15, 18, 21 and 24, without any effect on CBD’s net equity.
61. Whereas the MERGED COMPANIES’ non-controlling members commitment mentioned in this Report, there is no need to calculate the ratios of units of quotas and shares substituted, with no impairment of equitable effects.
62. CBD current accounts with related parties are shown in ATTACHMENT 28, including those with MERGED COMPANIES to be eliminated upon merger.
CONCLUSION
63. In view of the evidence and assertions herein set out, we conclude that net assets to be merged by Companhia Brasileira de Distribuição amount to R$ 106,527,244.18 and do not change the MERGER COMPANY’S net equity, since such amount has been recorded in its assets as investments and valued under the equity method of accounting, so as to reflect the net equity value of ACQUIRED subsidiaries.
64. ATTACHMENT 29 shows CBD’s post-merger balance sheet and all related adjustments.
65. ATTACHMENT 30 shows the notes to financial statements addressing the significant accounting practices adopted by the MERGED COMPANIES. Only notes significant for the interpretation of this Appraisal Report are presented herein.
STATEMENTS
66. The appraisal expert expressly declares, pursuant to item I of article 5 of CVM Rule Nº 319, of December 3, 1999, that it does not have any direct or indirect interest in Companhia Brasileira de Distribuição or on the MERGED COMPANIES nor in the operation itself, and that there is no further circumstance that could be considered a conflict of interest. The appraisal expert also informs, pursuant to item II of paragraph 5 of the aforesaid CVM Rule Nº 319, that management of CBD and of the MERGED COMPANIES did not restrict, hamper or engage in any acts which might undermine the access, use or knowledge of information, properties, documents or work methodologies relevant to the quality of the respective conclusions.
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This Appraisal Report has been issued in 30 (thirty) copies and contains 10 (ten) pages and 30 (thirty) attachments, printed one side only and initialed by the undersigned appraisal expert.
São Paulo, November 21, 2014
MAGALHÃES ANDRADE S/C
Auditores Independentes
CRC2SP000233/O-3
GUY ALMEIDA ANDRADE
Partner
Accountant CRC1SP116758/O-6
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ATTACHMENT 1
VANCOUVER EMPREENDIMENTOS E PARTICIPAÇÕES LTDA.
Balance Sheet as at September 30, 2014
(amounts in Brazilian reais)
| ASSETS | |
| Current | |
| Cash and cash equivalents | 18,353.34 |
| Tax credits | 914,874.44 |
| Prepaid expense | 25,608.60 |
| Total current assets | 958,836.38 |
| Non current | |
| Related parties | 600.00 |
| Tax credit | 2,516,473.14 |
| Other receivables | 53,000,853.91 |
| Advance for future capital increase | 5,646,000.00 |
| Investments | (2,484,856.42) |
| Property and equipment, net | 3,156.48 |
| Intangible assets | 38,777,074.73 |
| Total non current assets | 97,459,301.84 |
| TOTAL ASSETS | 98,418,138.22 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |
| LIABILITIES | |
| Current | |
| Taxes and contributions payable | 1,722,409.55 |
| Payroll and related charges | 16,033.02 |
| Related parties | 23,854,487.30 |
| Other accounts payables | 8,220,000.00 |
| TOTAL LIABILITIES | 33,812,929.87 |
| SHAREHOLDERS' EQUITY | |
| Share capital | 71,360,000.00 |
| Accumulated profit (loss) | (6,754,791.65) |
| SHAREHOLDERS' EQUITY | 64,605,208.35 |
| TOTAL OF LIABILITIES AND SHAREHOLDERS' EQUITY | 98,418,138.22 |
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ATTACHMENT 2
VANCOUVER EMPREENDIMENTOS E PARTICIPAÇÕES LTDA.
Related Parties balance composition in 30/09/2014
(amounts in Brazilian reais)
| ASSETS | |
| Non current | |
| Credit with related parties | |
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Se |
300.00 |
| Posto Dq Lj Conven | 300.00 |
| 600.00 | |
| LIABILITIES | |
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Current |
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Related parties - other |
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| CBD | (23,714,034.22) |
| Sendas | (36,202.70) |
| Se | (259.09) |
| PAPU | (39,453.04) |
| Posto Duque S Maluf | (1,680.33) |
| Posto Duque S Andre | (13.40) |
| Posto Duque Imperio | (40,804.20) |
| Posto Duque Lapa | (12,429.87) |
| Posto Duque Ciara | (9,610.45) |
| (23,854,487.30) | |
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ATTACHMENT 3
VANCOUVER EMPREENDIMENTOS E PARTICIPAÇÕES LTDA.
Distribution of share capital and equity value of the shares on 30/09/14
(amounts in Brazilian reais)
| Share capital | |||
| Quotaholders | In quotas | In BRL | Participation |
| Companhia Brasileira de Distribuição | 71,359,990 | 71,359,990.00 | 99.999986% |
| GPA 2 Empreendimentos e Participações Ltda. | 10 | 10.00 | 0.000014% |
| 71,360,000 | 71,360,000.00 | 100.000000% | |
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Book value of Capital Shares
| ||||
| Quotaholders | In % | In BRL | ||
| Companhia Brasileira de Distribuição | 99.999986% | 64,605,199.30 | ||
| GPA 2 Empreendimentos e Participações Ltda. | 0.000014% | 9.05 | ||
| 100.000000% | 64,605,208.35 | |||
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ATTACHMENT 4
DUQUE CONVENIÊNCIAS LTDA.
Balance Sheet as at September 30, 2014
(amounts in Brazilian reais)
| ASSETS | |
| Current | |
| Cash and cash equivalents | 2,813.72 |
| Trade accounts receivable | 14,124.01 |
| Employee advances | 12,448.38 |
| Tax credits | 24,241.69 |
| Total current assets | 53,627.80 |
| Non current | |
| Related parties | 20,756.17 |
| Tax credit | 31,411.47 |
| Restricted deposits for legal proceedings | 12,726.07 |
| Total non current assets | 64,893.71 |
| TOTAL ASSETS | 118,521.51 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |
| LIABILITIES | |
| Current | |
| Taxes and contributions payable | 66,277.57 |
| Payroll and related charges | 12,374.11 |
| Related parties | 56,208.63 |
| Other accounts payables | 31,124.10 |
| Total current liabilities | 165,984.41 |
| Non current | |
| Provision form contingencies | 3,728.91 |
| Total non current liabilities | 3,728.91 |
| TOTAL LIABILITIES | 169,713.32 |
| SHAREHOLDERS' EQUITY | |
| Share capital | 108,860.00 |
| Capital reserves | 256,071.04 |
| Accumulated profit (loss) | (416,122.85) |
| SHAREHOLDERS' EQUITY | (51,191.81) |
| TOTAL OF LIABILITIES AND SHAREHOLDERS' EQUITY | 118,521.51 |
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ATTACHMENT 5
DUQUE CONVENIÊNCIAS LTDA.
Related Parties balance composition in 30/09/2014
(amounts in Brazilian reais)
| ASSETS | |
| Non current | |
| Credit with related parties | |
| Se | 564.84 |
| Posto Dq Salim Maluf | 956.42 |
| 1,521.26 | |
| LIABILITIES | |
| Current | |
| Related parties - other | |
| Vancouver | (300.00) |
| Posto Duque S Maluf | (7,458.13) |
| Posto Duque Imperio | (3.78) |
| Posto Duque Lapa | (47,889.64) |
| Posto Duque Ciara | (557.08) |
| (56,208.63) | |
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ATTACHMENT 6
DUQUE CONVENIÊNCIAS LTDA.
Distribution of share capital and equity value of the shares on 30/09/14
(amounts in Brazilian reais)
| Share capital | ||||||
| Quotaholders | In quotas | In BRL | Participation | |||
| Vancouver Empreendimentos e Participações Ltd | 108,859 | 108,859.00 | 99.9991% | |||
| Companhia Brasileira de Distribuição | 1 | 1.00 | 0.0009% | |||
| 108,860 | 108,860.00 | 100.0000% | ||||
|
Book value of Capital Shares
| ||||
| Quotaholders | In % | In BRL | ||
| Vancouver Empreendimentos e Participações Ltda. | 99.9991% | (51,191.34) | ||
| Companhia Brasileira de Distribuição | 0.0009% | (0.47) | ||
| 100.0000% | (51,191.81) | |||
17
ATTACHMENT 7
PA PUBLICIDADE LTDA.
Balance Sheet as at September 30, 2014
(amounts in Brazilian reais)
| ASSETS | |
| Current | |
| Cash and cash equivalents | 8,177.59 |
| Other accounts receivable | 2,358,970.65 |
| Tax credits | 1,024,110.18 |
| Total current assets | 3,391,258.42 |
| Non current | |
| Related parties | 23,668,038.23 |
| Other accounts receivable | 1,251.44 |
| Restricted deposits for legal proceedings | 303,498.62 |
| Property and equipment, net | - |
| Total non current assets | 23,972,788.29 |
| TOTAL ASSETS | 27,364,046.71 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |
| LIABILITIES | |
| Current | |
| Taxes and contributions payable | 132,057.19 |
| Related parties | 308,890.01 |
| Other accounts payables | 126,717.34 |
| Total current liabilities | 567,664.54 |
| Non current | |
| Provision form contingencies | 204,478.74 |
| Total non current liabilities | 204,478.74 |
| TOTAL LIABILITIES | 772,143.28 |
| SHAREHOLDERS' EQUITY | |
| Share capital | 100,000.00 |
| Profit reserve | 9,321,153.71 |
| Accumulated profit (loss) | 17,170,749.72 |
| SHAREHOLDERS' EQUITY | 26,591,903.43 |
| TOTAL OF LIABILITIES AND SHAREHOLDERS' EQUITY | 27,364,046.71 |
18
ATTACHMENT 8
PA PUBLICIDADE LTDA.
Related Parties balance composition in 30/09/2014
(amounts in Brazilian reais)
| ASSETS | |
| Non current | |
| Credit with related parties | |
| Barcelona | 374.05 |
| Via Varejo S/A | 39,453.04 |
| 39,827.09 | |
| LIABILITIES | |
| Current | |
| Related parties - other | |
| CBD | (120,879.60) |
| Sendas | (46,689.72) |
| Se | (124,647.06) |
| Novasoc | (16,673.63) |
| (308,890.01) | |
19
ATTACHMENT 9
PA PUBLICIDADE LTDA.
Distribution of share capital and equity value of the shares on 30/09/14
(amounts in Brazilian reais)
| Share capital | ||||||
| Quotaholders | In quotas | In BRL | Participation | |||
| Companhia Brasileira de Distribuição | 99,999 | 99,999.00 | 99.999% | |||
| GPA 2 Empreendimentos e Participações Ltda. | 1 | 1.00 | 0.001% | |||
| 100,000 | 100,000.00 | 100.000% | ||||
|
Book value of Capital Shares
| ||||
| Quotaholders | In % | In BRL | ||
| Companhia Brasileira de Distribuição | 99.999% | 26,591,637.51 | ||
| GPA 2 Empreendimentos e Participações Ltda. | 0.001% | 265.92 | ||
| 100.000% | 26,591,903.43 | |||
20
ATTACHMENT 10
API SPE 06 EMPREENDIMENTOS IMOBILIÁRIOS LTDA.
Balance Sheet as at September 30, 2014
(amounts in Brazilian reais)
| ASSETS | |
| Current | |
| Cash and cash equivalents | 7,570.20 |
| Non current | |
| Property and equipment, net | 16,203,748.00 |
| TOTAL ASSETS | 16,211,318.20 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |
| LIABILITIES | |
| Current | |
|
Other accounts payables |
45,000.00 |
| SHAREHOLDERS' EQUITY | |
| Share capital | 16,676,671.00 |
| Expansion reserve | 402,389.11 |
| Accumulated profit (loss) | (912,741.91) |
| SHAREHOLDERS' EQUITY | 16,166,318.20 |
| TOTAL OF LIABILITIES AND SHAREHOLDERS' EQUITY | 16,211,318.20 |
21
ATTACHMENT 11
API SPE 06 EMPREENDIMENTOS IMOBILIÁRIOS LTDA.
Distribution of share capital and equity value of the shares on 30/09/14
(amounts in Brazilian reais)
| Share capital | ||||||
| Quotaholders | In quotas | In BRL | Participation | |||
| Companhia Brasileira de Distribuição | 16,676,670 | 16,676,670.00 | 99.999994% | |||
| Sé Supermercados Ltda. | 1 | 1.00 | 0.000006% | |||
| 16,676,671 | 16,676,671.00 | 100.000000% | ||||
|
Book value of Capital Shares
| ||||
| Quotaholders | In % | In BRL | ||
| Companhia Brasileira de Distribuição | 99.999994% | 16,166,317.23 | ||
| Sé Supermercados Ltda. | 0.000006% | 0.97 | ||
| 100.000000% | 16,166,318.20 | |||
22
ATTACHMENT 12
MONTE TARDELI EMPREENDIMENTOS E PARTICIPAÇÕES LTDA.
Balance Sheet as at September 30, 2014
(amounts in Brazilian reais)
| ASSETS | |
| Current | |
| Cash and cash equivalents | 4,073.90 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |
| LIABILITIES | |
| Current | |
| Related parties | 1,495.00 |
| SHAREHOLDERS' EQUITY | |
| Share capital | 11,000.00 |
| Accumulated profit (loss) | (8,421.10) |
| SHAREHOLDERS' EQUITY | 2,578.90 |
| TOTAL OF LIABILITIES AND SHAREHOLDERS' EQUITY | 4,073.90 |
23
ATTACHMENT 13
MONTE TARDELI EMPREENDIMENTOS E PARTICIPAÇÕES LTDA.
Related Parties balance composition in 30/09/2014
(amounts in Brazilian reais)
| LIABILITIES | |
| Current | |
| Related parties - other | |
|
CBD |
(1,495.00) |
24
ATTACHMENT 14
MONTE TARDELI EMPREENDIMENTOS E PARTICIPAÇÕES LTDA.
Distribution of share capital and equity value of the shares on 30/09/14
(amounts in Brazilian reais)
| Share capital | ||||||
| Shareholders | In shares | In BRL | Participation | |||
| Companhia Brasileira de Distribuição | 10,990 | 10,990.00 | 99.909091% | |||
| GPA 2 Empreendimentos e Participações Ltda. | 10 | 10.00 | 0.090909% | |||
| 11,000 | 11,000.00 | 100.000000% | ||||
|
Book value of Capital Shares
| ||||
| Shareholders | In % | In BRL | ||
| Companhia Brasileira de Distribuição | 99.909091% | 2,576.56 | ||
| GPA 2 Empreendimentos e Participações Ltda. | 0.090909% | 2.34 | ||
| 100.000000% | 2,578.90 | |||
25
ATTACHMENT 15
GPA 4 EMPREENDIMENTOS E PARTICIPAÇÕES S.A.
Balance Sheet as at September 30, 2014
(amounts in Brazilian reais)
| ASSETS | |
| Current | |
| Cash and cash equivalents | 5,640.90 |
| TOTAL ASSETS | 5,640.90 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |
| LIABILITIES | |
| Current | |
| Taxes and contributions payable | 40.00 |
| Related parties | 1,755.00 |
| TOTAL LIABILITIES | 1,795.00 |
| SHAREHOLDERS' EQUITY | |
| Share capital | 11,000.00 |
| Accumulated profit (loss) | (7,154.10) |
| SHAREHOLDERS' EQUITY | 3,845.90 |
| TOTAL OF LIABILITIES AND SHAREHOLDERS' EQUITY | 5,640.90 |
26
ATTACHMENT 16
GPA 4 EMPREENDIMENTOS E PARTICIPAÇÕES S.A.
Related Parties balance composition in 30/09/2014
(amounts in Brazilian reais)
| LIABILITIES | |
| Current | |
| Related parties - other | |
|
CBD |
(1,755.00) |
27
ATTACHMENT 17
GPA 4 EMPREENDIMENTOS E PARTICIPAÇÕES S.A.
Distribution of share capital and equity value of the shares on 30/09/14
(amounts in Brazilian reais)
| Share capital | ||||||
| Shareholders | In shares | In BRL | Participation | |||
| Companhia Brasileira de Distribuição | 10,990 | 10,990.00 | 99.909091% | |||
| GPA 2 Empreendimentos e Participações Ltda. | 10 | 10.00 | 0.090909% | |||
| 11,000 | 11,000.00 | 100.000000% | ||||
|
Book value of Capital Shares
| ||||
| Shareholders | In % | In BRL | ||
| Companhia Brasileira de Distribuição | 99.909091% | 3,842.40 | ||
| GPA 2 Empreendimentos e Participações Ltda. | 0.090909% | 3.50 | ||
| 100.000000% | 3,845.90 | |||
28
ATTACHMENT 18
GPA 5 EMPREENDIMENTOS E PARTICIPAÇÕES S.A.
Balance Sheet as at September 30, 2014
(amounts in Brazilian reais)
| ASSETS | |
| Current | |
| Cash and cash equivalents | 6,141.20 |
| TOTAL ASSETS | 6,141.20 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |
| LIABILITIES | |
| Current | |
| Taxes and contributions payable | 40.00 |
| Related parties | 1,940.00 |
| TOTAL LIABILITIES | 1,980.00 |
| SHAREHOLDERS' EQUITY | |
| Share capital | 11,000.00 |
| Accumulated profit (loss) | (6,838.80) |
| SHAREHOLDERS' EQUITY | 4,161.20 |
| TOTAL OF LIABILITIES AND SHAREHOLDERS' EQUITY | 6,141.20 |
29
ATTACHMENT 19
GPA 5 EMPREENDIMENTOS E PARTICIPAÇÕES S.A.
Related Parties balance composition in 30/09/2014
(amounts in Brazilian reais)
| LIABILITIES | |
| Current | |
| Related parties - other | |
| CBD | (1,755.00) |
| Inst Pao de Acucar | (185.00) |
| (1,940.00) | |
30
ATTACHMENT 20
GPA 5 EMPREENDIMENTOS E PARTICIPAÇÕES S.A.
Distribution of share capital and equity value of the shares on 30/09/14
(amounts in Brazilian reais)
| Share capital | ||||||
| Shareholders | In shares | In BRL | Participation | |||
| Companhia Brasileira de Distribuição | 10,990 | 10,990.00 | 99.909091% | |||
| GPA 2 Empreendimentos e Participações Ltda. | 10 | 10.00 | 0.090909% | |||
| 11,000 | 11,000.00 | 100.000000% | ||||
| Book value of Capital Shares | ||||
| Shareholders | In % | In BRL | ||
| Companhia Brasileira de Distribuição | 99.909091% | 4,157.42 | ||
| GPA 2 Empreendimentos e Participações Ltda. | 0.090909% | 3.78 | ||
| 100.000000% | 4,161.20 | |||
31
ATTACHMENT 21
ECQD PARTICIPAÇÕES LTDA.
Balance Sheet as at September 30, 2014
(amounts in Brazilian reais)
| ASSETS | |
| Current | |
| Other accounts receivable | 1,610.20 |
| Advances to suppliers | 5,045.35 |
| TOTAL ASSETS | 6,655.55 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |
| LIABILITIES | |
| Current | |
| Taxes and contributions payable | 773.98 |
| Related parties | 331,404.56 |
| Other accounts payables | 10,000.00 |
| Total current liabilities | 342,178.54 |
| Non current | |
| Allowance for loss in investments | 447,378.08 |
| TOTAL LIABILITIES | 789,556.62 |
| SHAREHOLDERS' EQUITY | |
| Share capital | 2,555,732.00 |
| Stock option reserve | 1,052.68 |
| Investments gains | 71,938.46 |
| Profit reserve | 923,757.75 |
| Accumulated profit (loss) | (4,345,813.92) |
| Adjustments | 10,431.96 |
| SHAREHOLDERS' EQUITY | (782,901.07) |
| TOTAL OF LIABILITIES AND SHAREHOLDERS' EQUITY | 6,655.55 |
32
ATTACHMENT 22
ECQD PARTICIPAÇÕES LTDA.
Related Parties balance composition in 30/09/2014
(amounts in Brazilian reais)
| LIABILITIES | |
| Current | |
| Related parties - other | |
|
CBD |
(331,404.56) |
33
ATTACHMENT 23
ECQD PARTICIPAÇÕES LTDA.
Distribution of share capital and equity value of the shares on 30/09/14
(amounts in Brazilian reais)
| Share capital | ||||||
| Quotaholders | In quotas | In BRL | Participation | |||
| Companhia Brasileira de Distribuição | 2,555,722 | 2,555,722.00 | 99.999609% | |||
| GPA 2 Empreendimentos e Participações Ltda. | 10 | 10.00 | 0.000391% | |||
| 2,555,732 | 2,555,732.00 | 100.000000% | ||||
|
Book value of Capital Shares
| ||||
| Quotaholders | In % | In BRL | ||
| Companhia Brasileira de Distribuição | 99.999609% | (782,898.01) | ||
| GPA 2 Empreendimentos e Participações Ltda. | 0.000391% | (3.06) | ||
| 100.000000% | (782,901.07) | |||
34
ATTACHMENT 24
VEDRA EMPREENDIMENTOS E PARTICIPAÇÕES S.A.
Balance Sheet as at September 30, 2014
(amounts in Brazilian reais)
| ASSETS | |
| Current | |
| Cash and cash equivalents | 7,735.90 |
| TOTAL ASSETS | 7,735.90 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |
| LIABILITIES | |
| Current | |
| Related parties | 20,414.82 |
| SHAREHOLDERS' EQUITY | |
| Share capital | 20,000.00 |
| Accumulated profit (loss) | (32,678.92) |
| SHAREHOLDERS' EQUITY | (12,678.92) |
| TOTAL OF LIABILITIES AND SHAREHOLDERS' EQUITY | 7,735.90 |
35
ATTACHMENT 25
VEDRA EMPREENDIMENTOS E PARTICIPAÇÕES S.A.
Related Parties balance composition in 30/09/2014
(amounts in Brazilian reais)
| LIABILITIES | |
| Current | |
| Related parties - other | |
|
CBD |
(20,414.82) |
36
ATTACHMENT 26
VEDRA EMPREENDIMENTOS E PARTICIPAÇÕES S.A.
Distribution of share capital and equity value of the shares on 30/09/14
(amounts in Brazilian reais)
| Share capital | ||||||
| Shareholders | In shares | In BRL | Participation | |||
| Companhia Brasileira de Distribuição | 19,999 | 19,999.00 | 99.995% | |||
| Sé Supermercados Ltda. | 1 | 1.00 | 0.005% | |||
| 20,000 | 20,000.00 | 100.000% | ||||
|
Book value of Capital Shares
| ||||
| Shareholders | In % | In BRL | ||
| Companhia Brasileira de Distribuição | 99.995% | (12,678.29) | ||
| Sé Supermercados Ltda. | 0.005% | (0.63) | ||
| 100.000% | (12,678.92) | |||
37
ATTACHMENT 27
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Balance Sheet as at September 30, 2014
(amounts in Brazilian reais)
| ASSETS | |
| Current | |
| Cash and cash equivalents | 41,612,304.97 |
| Marketable securities | 1,461,619,078.76 |
| Trade accounts receivable | 82,156,725.30 |
| Related parties | 87,382,733.22 |
| (-) Allowance for doubtful debts | (404,567.11) |
| Other accounts receivable | 62,004,303.50 |
| Employee advances | 23,384,544.66 |
| Tax credits | 181,419,266.52 |
| Dividends receivable | 41,611,728.48 |
| Advances to suppliers | 387,220,994.98 |
| Available for sale | 2,418,183.40 |
| Inventories | 2,292,585,014.89 |
| Prepaid expense | 73,507,569.08 |
| Financial instruments | 12,665,914.61 |
| Related parties | 166,235,978.74 |
| Total current assets | 4,915,419,774.00 |
| Non current | |
| Related parties | 924,814,920.38 |
| Other accounts receivable | 59,927,539.59 |
| Tax credit | 458,126,609.01 |
| Restricted deposits for legal proceedings | 383,150,665.53 |
| Prepaid expenses | 26,584,862.39 |
| Other receivables | 83,574,881.14 |
| (-) Allowance for doubtful debts | (41,268,845.11) |
| Advance for future capital increase | 132,980,000.00 |
| Financial instruments | 2,519,955.73 |
| Investments | 8,101,021,384.96 |
| Property and equipment, net | 6,637,253,761.00 |
| Intangible assets | 686,272,361.51 |
| Total non current assets | 17,454,958,096.13 |
| TOTAL ASSETS | 22,370,377,870.13 |
38
ATTACHMENT 27 (Continued)
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Balance Sheet as at September 30, 2014
(amounts in Brazilian reais)
| LIABILITIES AND SHAREHOLDERS' EQUITY | |
| LIABILITIES | |
| Current | |
| Loans and financing | 1,840,088,763.51 |
| Suppliers | 2,256,970,064.87 |
| Taxes and contributions payable | 131,895,932.66 |
| Taxes installments | 142,618,011.10 |
| Payroll and related charges | 376,143,631.88 |
| Related parties | 2,252,617,980.96 |
| Dividends payable | 629,832.21 |
| Other accounts payables | 176,783,390.73 |
| Total current liabilities | 7,177,747,607.92 |
| Non current | |
| Loans and financing | 3,507,626,545.86 |
| Tax payable in installments | 875,486,399.53 |
| Provision form contingencies | 355,580,415.00 |
| Other accounts payable | 12,445,886.40 |
| Tax obligations | 37,754,449.58 |
| Deferred revenue | 30,000,000.00 |
| Related parties | 138,459,971.60 |
| Total non current liabilities | 4,957,353,667.97 |
| TOTAL LIABILITIES | 12,135,101,275.89 |
| SHAREHOLDERS' EQUITY | |
| Share capital | 6,782,217,575.29 |
| Capital reserves | 37,651.50 |
| Stock option reserve | 257,444,322.49 |
| Investments gains | 157,882,126.85 |
| Other | 7,360,000.00 |
| Legal reserve | 353,433,185.92 |
| Profit reserve | 876,364,145.24 |
| Expansion reserve | 1,134,626,728.28 |
| Accumulated profit (loss) | 712,822,252.32 |
| Adjustments | (46,911,393.65) |
| SHAREHOLDERS' EQUITY | 10,235,276,594.24 |
| TOTAL OF LIABILITIES AND SHAREHOLDERS' EQUITY | 22,370,377,870.13 |
39
ATTACHMENT 28
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Related Parties balance composition in 30/09/2014
(amounts in Brazilian reais)
| ASSETS | |
| Current | |
| Accounts receivable - related parties | |
| Sendas | 39,249,762.28 |
| Se | 40,457,140.93 |
| Novasoc | 95,020.72 |
| Barcelona | 6,917,998.23 |
| Xantocarpa | 3,363.05 |
| Via Varejo S/A | 300,344.91 |
| Nova PontoCom | 357,128.24 |
| GPA Logistica e Transportes | 1,974.86 |
| 87,382,733.22 | |
| Credit with related parties | |
| Mutuo Rec. Nova.Com | 111,748,158.76 |
| Mutuo Rec. Barcelona | 54,487,819.98 |
| 166,235,978.74 | |
| Non current | |
| Credit with related parties | |
| CBD | 405,072,522.43 |
| Sendas | 44,625,611.21 |
| Se | 64,268,239.28 |
| Novasoc | 120,879.60 |
| PAPU | 23,858,163.60 |
| Barcelona | 25,766,042.76 |
| Xantocarpa Particip | 20,414.82 |
| Vedra Empr e Partici | 5,251,253.44 |
| Via Varejo S/A | 23,714,034.22 |
| Vancouver | 52,401,533.45 |
| Nova PontoCom | 27,957,410.09 |
| Gpa Malls & Properti | 1,206.86 |
| Gpa2 Empreend.Partic | 1,755.00 |
| Gpa4 Empreend.Partic | 1,755.00 |
| Gpa5 Empreend.Partic | 4,279,796.85 |
| GPA Logistica e Transportes | 1,495.00 |
| Monte Tardeli Empree | 331,404.56 |
| Mutuo a Receber Sé | 240,573,074.29 |
| Mutuo a Rec Nova.Com | 1,453,551.81 |
| Posto Dq Salim Maluf | 1,017,314.22 |
| Posto Dq Lj Conven | 2,083,140.38 |
| Posto Duque Imperio | 893,650.54 |
| Posto Duque Lapa | 1,120,670.97 |
| 924,814,920.38 | |
40
ATTACHMENT 28 (Continued)
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Related Parties balance composition in 30/09/2014
(amounts in Brazilian reais)
| LIABILITIES | |
|
Current |
|
| Suppliers - related parties | |
| Sendas | (21,650,712.80) |
| Se | (1,461,682.04) |
| Novasoc | (171,414.48) |
| Barcelona | (1,025,934.27) |
| Xantocarpa Participa | (351,802.21) |
| Via Varejo S/A | (316,281.66) |
| Nova PontoCom | (3,098.65) |
| GPA Logística e Transportes | (14,730,929.81) |
| (39,711,855.92) | |
|
Related parties - other |
|
| Sendas | (145,945,107.46) |
| Se | (1,424,389,485.29) |
| Novasoc | (3,599,405.43) |
| PAPU | (23,628,211.14) |
| Barcelona Com. Var. | (406,206,931.57) |
| Xantocarpa Particip | (5,641,469.70) |
| Via Varejo S/A | 443,457.85 |
| Bellamar | (25,527,399.99) |
| Gpa Malls & Properti | (2,100,881.70) |
| GPA Logísitica e Transportes | (2,675,514.04) |
| Nova PontoCom | (44,960.00) |
| Passivo Ind. Via Var | (104,923,101.97) |
| Pas. Inden. Via Vare | (96,192,117.08) |
| Pontocred Neg de Var | (741,029.14) |
| Posto Duque S Maluf | (58,642.95) |
| Posto Duque S Andre | (10,107.60) |
| Loja Duque Convenien | (19,234.91) |
| Posto Duque Imperio | (37,969.29) |
| Posto Duque Lapa | (33,275.77) |
| Posto Duque Ciara | (11,125.68) |
| GPA Audax Esporte Cl | (99,293.57) |
| GPA Audax Rio Clube | (2,804.14) |
| Inst Pao de Acucar | (2,167.39) |
| CoopHabitacional Gpa | (3,933,805.35) |
| Wilkes | (209,398.52) |
| Financeira Itau | (5,971,401.32) |
| Casino | (1,056,597.81) |
| (2,252,617,980.96) | |
| Non current | |
|
Related parties |
|
| Mútuo a pagar Via Varejo | (138,459,971.60) |
41
ATTACHMENT 29
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Balance Sheet after the merger
(amounts in Brazilian reais)
| Adjustsments | |||||||||||||
| Vancouver | Duque | CBD | PAPU | API SPE 06 | Monte Tardeli | GPA 4 | GPA 5 | ECQD | Vedra | Debit | Credit | CBD após a Incorporação | |
| ASSETS | |||||||||||||
| Current | |||||||||||||
| Cash and cash equivalents | 18,353.34 | 2,813.72 | 41,612,304.97 | 8,177.59 | 7,570.20 | 4,073.90 | 5,640.90 | 6,141.20 | - | 7,735.90 | 41,672,811.72 | ||
| Marketable securities | - | - | 1,461,619,078.76 | - | - | - | - | - | - | - | 1,461,619,078.76 | ||
| Trade accounts receivable | - | 14,124.01 | 82,156,725.30 | - | - | - | - | - | - | - | 82,170,849.31 | ||
| Related parties | - | - | 87,382,733.22 | - | - | - | - | - | - | - | 87,382,733.22 | ||
| (-) Allowance for doubtful debts | - | - | (404,567.11) | - | - | - | - | - | - | - | (404,567.11) | ||
| Other accounts receivable | - | - | 62,004,303.50 | 2,358,970.65 | - | - | - | - | 1,610.20 | - | 64,364,884.35 | ||
| Employee advances | - | 12,448.38 | 23,384,544.66 | - | - | - | - | - | - | - | 23,396,993.04 | ||
| Tax credits | 914,874.44 | 24,241.69 | 181,419,266.52 | 1,024,110.18 | - | - | - | - | - | - | 183,382,492.83 | ||
| Dividends receivable | - | - | 41,611,728.48 | - | - | - | - | - | - | - | 41,611,728.48 | ||
| Advances to suppliers | - | - | 387,220,994.98 | - | - | - | - | - | 5,045.35 | - | 387,226,040.33 | ||
| Available for sale | - | - | 2,418,183.40 | - | - | - | - | - | - | - | 2,418,183.40 | ||
| Inventories | - | - | 2,292,585,014.89 | - | - | - | - | - | - | - | 2,292,585,014.89 | ||
| Prepaid expense | 25,608.60 | - | 73,507,569.08 | - | - | - | - | - | - | - | 73,533,177.68 | ||
| Financial instruments | - | - | 12,665,914.61 | - | - | - | - | - | - | - | 12,665,914.61 | ||
| Related parties | - | - | 166,235,978.74 | - | - | - | - | - | - | - | 166,235,978.74 | ||
| Total current assets | 958,836.38 | 53,627.80 | 4,915,419,774.00 | 3,391,258.42 | 7,570.20 | 4,073.90 | 5,640.90 | 6,141.20 | 6,655.55 | 7,735.90 | 4,919,861,314.25 | ||
| Non current | |||||||||||||
| Related parties | 600.00 | 20,756.17 | 924,814,920.38 | 23,668,038.23 | - | - | - | - | - | - | 48,003,584.35 | 900,500,730.43 | |
| Other accounts receivable | - | - | 59,927,539.59 | 1,251.44 | - | - | - | - | - | - | 59,928,791.03 | ||
| Tax credit | 2,516,473.14 | 31,411.47 | 458,126,609.01 | - | - | - | - | - | - | - | 460,674,493.62 | ||
| Restricted deposits for legal proceedings | - | 12,726.07 | 383,150,665.53 | 303,498.62 | - | - | - | - | - | - | 383,466,890.22 | ||
| Prepaid expenses | - | - | 26,584,862.39 | - | - | - | - | - | - | - | 26,584,862.39 | ||
| Other receivables | 53,000,853.91 | - | 83,574,881.14 | - | - | - | - | - | - | - | 136,575,735.05 | ||
| (-) Allowance for doubtful debts | - | - | (41,268,845.11) | - | - | - | - | - | - | - | (41,268,845.11) | ||
| Advance for future capital increase | 5,646,000.00 | - | 132,980,000.00 | - | - | - | - | - | - | - | 6,450,000.00 | 132,176,000.00 | |
| Financial instruments | - | - | 2,519,955.73 | - | - | - | - | - | - | - | 2,519,955.73 | ||
| Investments | (2,484,856.42) | - | 8,101,021,384.96 | - | - | - | - | - | - | - | 106,527,244.18 | 7,992,009,284.36 | |
| Property and equipment, net | 3,156.48 | - | 6,637,253,761.00 | - | 16,203,748.00 | - | - | - | - | - | 6,653,460,665.48 | ||
| Intangible assets | 38,777,074.73 | - | 686,272,361.51 | - | - | - | - | - | - | - | 725,049,436.24 | ||
| Total non current assets | 97,459,301.84 | 64,893.71 | 17,454,958,096.13 | 23,972,788.29 | 16,203,748.00 | - | - | - | - | - | 17,431,677,999.44 | ||
| TOTAL ASSETS | 98,418,138.22 | 118,521.51 | 22,370,377,870.13 | 27,364,046.71 | 16,211,318.20 | 4,073.90 | 5,640.90 | 6,141.20 | 6,655.55 | 7,735.90 | 22,351,539,313.69 | ||
42
ATTACHMENT 29 (Continued)
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Balance Sheet after the merger
(amounts in Brazilian reais)
| Adjustsments | |||||||||||||
| Vancouver | Duque | CBD | PAPU | API SPE 06 | Monte Tardeli | GPA 4 | GPA 5 | ECQD | Vedra | Debit | Credit | CBD após a Incorporação | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||
| LIABILITIES | |||||||||||||
| Current | |||||||||||||
| Loans and financing | - | - | 1,840,088,763.51 | - | - | - | - | - | - | - | 1,840,088,763.51 | ||
| Suppliers | - | - | 2,256,970,064.87 | - | - | - | - | - | - | - | 24,239.91 | 2,256,945,824.96 | |
| Taxes and contributions payable | 1,722,409.55 | 66,277.57 | 131,895,932.66 | 132,057.19 | - | - | 40.00 | 40.00 | 773.98 | - | 133,817,530.95 | ||
| Taxes installments | - | - | 142,618,011.10 | - | - | - | - | - | - | - | 142,618,011.10 | ||
| Payroll and related charges | 16,033.02 | 12,374.11 | 376,143,631.88 | - | - | - | - | - | - | - | 376,172,039.01 | ||
| Related parties | 23,854,487.30 | 56,208.63 | 2,252,617,980.96 | 308,890.01 | - | 1,495.00 | 1,755.00 | 1,940.00 | 331,404.56 | 20,414.82 | 47,979,344.44 | 2,229,215,231.84 | |
| Dividends payable | - | - | 629,832.21 | - | - | - | - | - | - | - | 629,832.21 | ||
| Advances for future capital increase | 6,365,000.00 | 30,000.00 | - | - | 45,000.00 | - | - | - | 10,000.00 | - | 6,450,000.00 | - | |
| Other accounts payables | 1,855,000.00 | 1,124.10 | 176,783,390.73 | 126,717.34 | - | - | - | - | - | - | 178,766,232.17 | ||
| Total current liabilities | 33,812,929.87 | 165,984.41 | 7,177,747,607.92 | 567,664.54 | 45,000.00 | 1,495.00 | 1,795.00 | 1,980.00 | 342,178.54 | 20,414.82 | 7,158,253,465.75 | ||
| Non current | |||||||||||||
| Allowance for loss in investments | - | - | - | - | - | - | - | - | 447,378.08 | - | 447,378.08 | ||
| Loans and financing | - | - | 3,507,626,545.86 | - | - | - | - | - | - | - | 3,507,626,545.86 | ||
| Tax payable in installments | - | - | 875,486,399.53 | - | - | - | - | - | - | - | 875,486,399.53 | ||
| Provision form contingencies | - | 3,728.91 | 355,580,415.00 | 204,478.74 | - | - | - | - | - | - | 355,788,622.65 | ||
| Other accounts payable | - | - | 12,445,886.40 | - | - | - | - | - | - | - | 12,445,886.40 | ||
| Tax obligations | - | - | 37,754,449.58 | - | - | - | - | - | - | - | 37,754,449.58 | ||
| Deferred revenue | - | - | 30,000,000.00 | - | - | - | - | - | - | - | 30,000,000.00 | ||
| Related parties | - | - | 138,459,971.60 | - | - | - | - | - | - | - | 138,459,971.60 | ||
| Total non current liabilities | - | 3,728.91 | 4,957,353,667.97 | 204,478.74 | - | - | - | - | 447,378.08 | - | 4,958,009,253.70 | ||
| TOTAL LIABILITIES | 33,812,929.87 | 169,713.32 | 12,135,101,275.89 | 772,143.28 | 45,000.00 | 1,495.00 | 1,795.00 | 1,980.00 | 789,556.62 | 20,414.82 | 12,116,262,719.45 | ||
| SHAREHOLDERS' EQUITY | 64,605,208.35 | (51,191.81) | 10,235,276,594.24 | 26,591,903.43 | 16,166,318.20 | 2,578.90 | 3,845.90 | 4,161.20 | (782,901.07) | (12,678.92) | 107,374,015.98 | 846,771.80 | 10,235,276,594.24 |
| TOTAL OF LIABILITIES AND SHAREHOLDERS' EQUITY | 98,418,138.22 | 118,521.51 | 22,370,377,870.13 | 27,364,046.71 | 16,211,318.20 | 4,073.90 | 5,640.90 | 6,141.20 | 6,655.55 | 7,735.90 | 161,827,600.33 | 161,827,600.33 | 22,351,539,313.69 |
43
ATTACHMENT 30
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Notes to Financial Statements
material for purposes of this Appraisal Report
1. Basis of preparation
The interim financial statements were prepared under the historical cost basis, and adjusted to reflect the fair value of financial assets and liabilities (including derivative instruments) measured at fair value through profit or loss.
The accounting practices adopted in Brazil include those in Brazilian Corporation Law and the Standards and technical guidelines and interpretations issued by the Accounting Pronouncements Committee - CPC and approved by the CVM.
In the parent company financial statements, investments in subsidiaries are stated at the equity method.
The items included in the financial statements were measured by adopting the currency of the main economic scenario where the subsidiaries operates (“functional currency”), that is Real (“R$”), which is the reporting currency of this financial statement.
The interim financial statements for the nine-month period ended September 30, 2014 were approved by the Board of Directors on October 30, 2014.
2. Significant accounting policies
a) Financial instruments
Financial instruments are recognized on the trade date and recorded at fair value plus transaction costs directly attributable to their acquisition or issue. Their subsequent measurement occurs at the end of each reporting period according to the rules established for each category of financial assets and liabilities.
(i) Financial assets
Initial recognition and measurement
The financial assets held by the Company and its subsidiaries within the scope of CPC 38 (IAS 39) are classified according the purpose for which they were acquired or contracted for the following categories: (i) assets measured at fair value through profit or loss; (ii) loans and receivables, and (iii) investments held to maturity. The Company determines the classification of their financial assets at inception.
Financial assets are initially recognized at fair value through profit or loss and transaction costs are expensed in the income statement. Loans and receivables are accounted for at amortized cost.
44
ATTACHMENT 30 (Continued)
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Notes to Financial Statements
material for purposes of this Appraisal Report
Purchases or sales of financial assets that require the assets to be delivered within a time frame established by regulations or market conventions (negotiations under regular conditions) are recognized on the trade date, i.e., on the date that the Company and its subsidiaries commits to purchase or sell the asset.
The financial assets of the Company and its subsidiaries include cash and cash equivalents; trade accounts receivable, related-party receivables, court deposits and derivative financial instruments.
Subsequent measurement
· Financial assets measured at fair value through profit or loss: they represent assets acquired for short-term realization purposes and are measured at fair value at the end of the reporting period, Interest rates, monetary restatement, exchange rate variation and variations arising from the fair value measurement are recognized in the income statement for the year as finance income or costs, when incurred.
· Loans and receivables: these are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After the initial recognition, they are measured using the amortized cost through the effective interest method. Interest income, monetary restatement, exchange rate variation, less any impairment loss, as applicable, are recognized in the income statement as finance income or costs, when incurred; and
· Held-to-maturity financial assets and liabilities: financial assets and liabilities that cannot be classified as loans and receivables as they are quoted in an active market, In this case, these financial assets are acquired with the intent and ability to hold to maturity. They are stated at their acquisition cost plus income earned against profit or loss for the year using the effective interest rate method.
Derecognition of financial assets
A financial asset (or, as applicable, a part of a financial asset or a part of a group of similar financial assets) is derecognized when:
· Its right to receive cash flows has expired; and
· The Company and its subsidiaries have transferred their rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full to a third party under an on lending agreement; and (a) the Company has transferred substantially all the risks and rewards related to the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards related to the assets, but has transferred its control.
45
ATTACHMENT 30 (Continued)
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Notes to Financial Statements
material for purposes of this Appraisal Report
When the Company has transferred its rights to receive cash flows from an asset or has entered into an on lending agreement, and has neither transferred nor retained substantially all the risks and rewards related to the asset or transferred control of the asset, the asset is maintained and an associated liability is recognized. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations retained by the Company and subsidiaries.
Impairment of financial assets
At the end of the reporting periods, the Company and its subsidiaries assess whether there is any indication of impairment of a financial asset or group of financial assets. The impairment of a financial asset or group of financial assets is only considered when there is objective evidence resulting from one or more events occurred after the asset’s initial recognition (“loss event”), and if said event affects the estimated future cash flows of the financial asset or group of financial assets, which can be reliably estimated. The evidence of impairment may include indications that debtors (or group of debtors) are going through relevant financial constraints, moratorium or default in the amortization of interest or principal; likelihood that they will file for bankruptcy or another type of financial reorganization; and when these data indicate a measurable decrease in future cash flows, such as default interest variations or economic conditions related to default.
Specifically in relation to financial assets held to maturity, the Company and its subsidiaries, firstly, verify whether there is objective evidence of impairment individually for financial assets that are individually significant, or collectively for assets that are not individually significant, Should the Company and its subsidiaries determine the nonexistence of objective evidence of impairment of a financial asset measured individually – whether or not this significant loss – the Company classifies it in a group of financial assets with similar credit risk characteristics which are evaluated collectively. The assets individually assessed as to impairment, or for which the impairment is (or continues to be) recognized, are not included in the collective assessment of the loss.
Impairment is measured as the difference between the carrying amount of an asset and the present value of the estimated future cash flows (excluding future credit losses that have not been incurred) discounted by the original effective interest rate of the financial asset. The asset’s carrying amount decreases through the use of a provision and the impairment loss is recognized in the income statement, Interest revenue is recorded in the financial statements as part of finance income, In the case of loans or investments held to maturity with a variable interest rate, the Company measures the non-recovery based on the fair value of the instrument adopting an observable market price.
46
ATTACHMENT 30 (Continued)
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Notes to Financial Statements
material for purposes of this Appraisal Report
If, in a subsequent period, impairment decreases and this reduction can be objectively associated with an event occurred after the recognition of the provision (such as an improvement in a debtor’s credit rating), the reversal of the previously recognized impairment loss is recognized in the income statement, If a write-off is later recovered, this recovery is also recognized in the income statement.
(ii) Financial liabilities
The financial liabilities under the scope of CPC 38 (IAS 39) are classified as loans, borrowings or derivative financial instruments designated as hedge instruments in an effective hedge relationship, as applicable. The Company defines the classification of its financial liabilities at initial recognition.
All financial liabilities are initially recognized at fair value and, in the case of loans and borrowings, plus directly attributable transaction costs.
The Company’s financial liabilities include loans and financing, debentures and derivative financial instruments.
Subsequent measurement
After initial recognition, interest-bearing loans and financings are subsequently measured at amortized cost using the effective interest rate method. Gains and losses are recognized in the income statement for the year when the liabilities are written off, or through amortization according to the effective interest rate method.
Derecognition of financial liabilities
A financial liability is derecognized when the underlying obligation is settled, cancelled or expired.
When an existing financial liability is replaced by another from the same lender, on substantially different terms, or the terms of an existing liability are substantially modified, this replacement or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in income statement.
Offsetting of financial instruments
Financial assets and liabilities are offset and stated net in the financial statements only if there is a currently enforceable legal right to offset the recognized amounts and there is an intention of settling them on a net basis or realizing the assets and settling the liabilities simultaneously.
47
ATTACHMENT 30 (Continued)
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Notes to Financial Statements
material for purposes of this Appraisal Report
b) Foreign currency transactions
Foreign currency transactions are initially recognized at market value of the corresponding currencies on the date the transaction is qualified for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated to Real according to the market price at the end of the reporting periods. Differences arising on payment or translation of monetary items are recognized in financial result.
c) Hedge accounting
The Company uses derivative financial instruments such as interest rate and exchange rate swaps.
These derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value at the end of each reporting period. Derivatives are accounted for as financial assets when their fair value is positive and as financial liabilities when their fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are directly recorded in the income statement.
At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which it wishes to apply hedge accounting and its objective and risk management strategy for contracting the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the Company will assess the effectiveness of the changes in the hedging instrument’s fair value in offsetting the exposure to changes in the fair value of the hedged item or cash flow attributable to the hedged risk. These hedges are expected to be highly effective in offsetting changes in the fair value or cash flow and are assessed on an ongoing basis to determine if they actually have been highly effective throughout the years of the financial reports for which they were designated.
For the purposes of hedge accounting, these are classified as fair value hedges when hedging the exposure to changes in the fair value of a recognized asset or liability.
The following are recognized as fair value hedges, in accordance with the procedures below:
· The change in the fair value of a derivative financial instrument classified as interest rate hedging is recognized as financial result. The change in the fair value of the hedged item is recorded as a part of the carrying amount of the hedged item and is recognized in the income statement;
48
ATTACHMENT 30 (Continued)
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Notes to Financial Statements
material for purposes of this Appraisal Report
· For fair value hedges relating to items accounted for at amortized cost, the adjustment to the carrying amount is amortized in profit or loss over the remaining term to maturity. Effective interest rate amortization may begin as soon as an adjustment exists and shall begin no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the hedged risk;
· If the hedge item is derecognized, the unamortized fair value is immediately recognized in profit or loss; and
· In order to calculate the fair value, debts and swaps are measured through rates disclosed in the financial market and projected up to their maturity date. The discount rate used in the calculation by the interpolation method for borrowings loans denominated in foreign currency is arrived at through DDI curves, clean coupon and DI x Yen, indices disclosed by the BM&FBovespa (the Brazilian Securities, Commodities and Futures Exchange), whereas for loans denominated in reais, the Company uses the DI curve, an index published by the CETIP and calculated through the exponential interpolation method.
d) Cash and cash equivalents
Cash and cash equivalents consist of cash, checking account and highly liquid short-term investments that are readily convertible into a known cash amount, and are subject to an insignificant risk of change in value, with intention and possibility to be redeemed in the short term in until 90 days.
e) Trade accounts receivable
Trade receivables are stated and maintained in the balance sheet position at their face sales amounts less allowance for doubtful debts, which is recorded based on the track record of loss and the risk analysis of the entire customer portfolio and the respective likelihood of collection.
Trade receivables refer to non-derivative financial assets with fixed payments or which may be calculated, without quotation in an active market. After the initial measurement, these financial assets are subsequently measured at amortized cost according to the effective interest method (“EIM”), less impairment. The amortized cost is calculated taking into account eventual discounts or premiums over the acquisition and tariffs or costs comprising the EIM. The EIM amortization is included in net finance income (costs) in the income statement. Impairment expenses are recognized in the income statement.
At the end of each reporting period, the Company assesses if the financial assets or group of financial assets are impaired.
49
ATTACHMENT 30 (Continued)
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Notes to Financial Statements
material for purposes of this Appraisal Report
Impairment of receivables are based on historical rates observed in the last 24 months, besides observation of economic events like unemployment rates, consumer trends and past due receivables in the portfolio.
Impairment of receivables is considered uncollectable, therefore, written off definitely after 180 days past due.
f) Inventories
Inventories are accounted for at cost or net realizable value, whichever is lower. Inventories purchased are recorded at average cost, including warehouse and handling costs, to the extent these costs are necessary to make inventories available for sale in the stores, less bonuses received from suppliers.
Net realizable value is the selling price in the ordinary course of business, less the estimated costs necessary to make the sale.
Inventories are reduced by an allowance for losses and breakage, which is periodically reviewed and evaluated as to it is adequacy.
g) Bonuses
Bonuses received from suppliers are measured and recognized based on contracts and agreements signed, and recorded the result insofar as the corresponding inventories are sold.
Comprise purchase volume agreement, logistics services and specific negotiations to recompose margin or marketing agreements, among others, and are deducted from payables to the respective suppliers, once the Company is contractually entitled to settle trade payables net of amounts receivable by way of bonus.
h) Present value adjustment of assets and liabilities
Current monetary assets and liabilities, when relevant, and long-term assets and liabilities are adjusted to their present value. The present value adjustment is calculated taking into account contractual cash flows and the respective explicit or implied interest rates.
Interest rates embedded in revenue, expenses and costs associated with said assets and liabilities are adjusted for appropriate recognition in conformity with the accrual basis of accounting. The present value adjustment is recorded in those items, subject to the application of the rule against the financial result.
Present value adjustment of sales received in installments is initially recognized against “Trade Accounts Receivable” account, and unwinded against net sales over time.
Other accounts over which present value adjustment is recorded, the unwinding is made against financial result.
50
ATTACHMENT 30 (Continued)
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Notes to Financial Statements
material for purposes of this Appraisal Report
i) Impairment of non-financial assets
Impairment testing is designed, so the Company can present the net realizable value of an asset.
This amount may be realized directly or indirectly, respectively, through the sale of the asset or the cash generated by the use of the asset in the Company and its subsidiaries’ activities.
The Company and its subsidiaries test their tangible or intangible assets for impairment annually or whenever there is internal or external evidence that they may be impaired.
An asset’s recoverable amount is defined as the asset’s fair value or the value in use of its cash generating unit (CGU), whichever is higher, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.
If the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and an allowance for impairment is recorded to adjust its carrying amount to its recoverable amount, In assessing the recoverable amount, the estimated future cash flow is discounted to present value using a pre-tax discount rate that represents the Company’s weighted average cost of capital (“WACC”), reflecting current market assessments of the time value of money and the risks specific to the asset.
Impairment losses are recognized in profit or loss for the year in expense categories consistent with the function of the respective impaired asset. Previously recognized impairment losses are only reversed in case of change in the assumptions used to determine the asset’s recoverable amount at its initial or most recent recognition, except for goodwill, which cannot be reversed in future years.
j) Property and equipment
Property and equipment is stated at cost, net of accumulated depreciation and/or impairment losses, if any. This cost includes the cost of acquisition of equipment and financing costs for long term construction projects, if the recognition criteria are met. When significant components of property and equipment are replaced, they are recognized as individual assets with specific useful lives and depreciation. Likewise, when a major replacement is performed, its cost is recognized at the carrying amount of the equipment as a replacement, if the recognition criteria are met. All other repair and maintenance costs are recognized in profit or loss for the year as incurred.
51
ATTACHMENT 30 (Continued)
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Notes to Financial Statements
material for purposes of this Appraisal Report
|
Asset category _ |
Average annual depreciation rate |
|
Buildings |
2.50% |
|
Improvements |
4.43% |
|
Data processing equipment |
20.14% |
|
Software |
12.78% |
|
Facilities |
8.04% |
|
Furniture and fixtures |
9.92% |
|
Vehicles |
23.81% |
|
Machinery and equipment |
9.30% |
|
Decoration |
20.00% |
k) Foreign currency translation
Quarterly financial information is presented in Brazilian reais, which is the functional currency. Each entity determines its functional currency and all your financial transactions are measured in that currency.
The financial statements of subsidiaries that use a different functional currency are translated according to the closing exchange rate:
· Assets and liabilities, including goodwill and fair value adjustments, are translated into Reais at the closing date;
· Statement of income and statement of cash flows are translated into Brazilian reais using the average rate for the period, unless significant changes occurred, at which time the rate of the transaction date is used;
Differences in foreign exchange variations are recognized directly in a separate component of equity. When a foreign operation is sold, the accumulated value of exchange rate adjustment in equity is released to the income statement.
Conversion effects of investment in a foreign operation are recognized in separate component of equity and reclassified to earnings when the write off of the investment.
Transactions in foreign currencies (i.e., transactions in currencies other than the functional currency) are translated into reais using the exchange rate at the transaction date.
Monetary assets and liabilities denominated in foreign currencies are translated at the closing rate and the resulting exchange rate is recorded in financial income. Non-monetary assets and liabilities denominated in foreign currencies are translated at the transaction rate.
l) Pension plan
The pension plan is funded through payments to insurance companies, which are classified as a defined contribution plan according to CPC 33 (IAS 19). A defined contribution plan is a pension plan whereby the Company pays fixed contributions to a separate legal entity. The Company has no legal or constructive obligation to pay additional contributions in relation to the plan’s assets.
52
ATTACHMENT 30 (Continued)
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Notes to Financial Statements
material for purposes of this Appraisal Report
a) General legislation
Provisional Presidential Decree 627/13 – in November 2013, the Provisional Presidential Decree MP 627 was issued, changing the tax legislation and eliminating the Transitory Tax Regimen – RTT. In May 2014, the Law 12,973 was issued, resulted from the conversion of the MP 627 in law. The Company, together with its external advisors, analyzed the Law 12,973 and Normative Instruction − IN 1,492, to assess the implications of its anticipated application and the possible impact on the parent company and consolidated interim financial information for the nine-month period ended September 30, 2014. Until the date of approval of this interim financial information, the Company has not identified any significant effects to be recognized as consequence of enactment of the Law 12,973.
Judgments, estimates and assumptions
The preparation of the individual and consolidated quarterly financial information of the Company requires Management to make judgments, estimates and assumptions that impact the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the period; however, uncertainty about these assumptions and estimates could result in outcomes that require material adjustments to the carrying amount of the asset or liability impacted in future periods.
The significant assumptions and estimates for quarterly financial information for the nine-month period ended September 30, 2014 were the same as those adopted in the consolidated and individual financial statements for the year ended December 31, 2013, presented on February 14, 2014, and therefore, should be read together, except for the impairment test, which is tested annually only observing indicators during the year as described in notes 15 and 16.
The Company has not identified evidence of loss in the amount of the items of its property and equipment, which require a new measurement of recoverable amount of assets at September 30, 2014.
53
ATTACHMENT 30 (Continued)
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO
Notes to Financial Statements
material for purposes of this Appraisal Report
c) Impairment test of goodwill and intangible assets
Goodwill and intangible assets were tested for impairment as of December 31, 2013 according to the method described in note 4 - Significant accounting policies, in the financial statements of December 31, 2013, released on February 14, 2014.
As a result of the impairment test conducted in 2013 and because there is no evidence of loss in this value on September 30, 2014, the Company concluded not necessary to perform a new measurement of recoverable amount of these assets. For the year ending December 31, 2014, Company’s Management will perform new impairment tests for all goodwill and intangible assets recognized until this date.
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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 12, 2014 | By: /s/ Ronaldo Iabrudi Name: Ronaldo Iabrudi Title: Chief Executive Officer | |
| By: /s/ Daniela Sabbag Name: Daniela Sabbag Title: Investor Relations Officer | ||
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