Circular No. 1.885

CIRCULAR N. 001885 ------------------ TO THE INSTITUTIONS OF THE NATIONAL FINANCIAL SYSTEM IT ALLOWS THE ABSORPTION OF THE ACCUMULATED LOSS BALANCE BY SHAREHOLDERS OR QUOTA HOLDERS. WE INFORM THAT THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BRAZIL, IN A MEETING HELD ON 17.01.91, BASED ON ARTICLE 4, ITEM XII, OF LAW NO. 4.595, OF 31.12.64, UNDER AUTHORITY DELEGATED BY THE NATIONAL MONETARY COUNCIL, DECIDED THAT: ART. 1. THE ACCUMULATED LOSS BALANCE DETERMINED BY INSTITUTIONS THAT ARE PART OF THE NATIONAL FINANCIAL SYSTEM MAY BE ABSORBED, ON THE BASE DATE OF THE BALANCE SHEET AT THE END OF THE FISCAL YEAR, WITH THE USE OF FUNDS FROM SHAREHOLDERS OR QUOTA HOLDERS, AFTER THE ABSORPTION OF EXISTING BALANCES IN ACCUMULATED PROFITS, PROFIT RESERVES AND CAPITAL RESERVES. PARAGRAPH 1. IN THE CASE OF AN INSTITUTION WITH FOREIGN CAPITAL PARTICIPATION, THE ABSORPTION OF LOSSES REFERRED TO IN THIS ARTICLE, WITH THE USE OF EXTERNAL FUNDS, ORIGINATING FROM MEDIUM- AND LONG-TERM FINANCIAL OPERATIONS, REGISTERED WITH THE DEPARTMENT OF FOREIGN CAPITAL (FIRCE), SHALL BE CONDITIONAL UPON PRIOR AUTHORIZATION FROM THAT DEPARTMENT, IN ACCORDANCE WITH THE REGULATIONS IN FORCE. PARAGRAPH 2. THE AMOUNT CORRESPONDING TO THE REDUCTION SHALL BE CHARGED TO THE APPROPRIATE LIABILITY ACCOUNT THAT RECORDED THE INFLOW OF AVAILABLE FUNDS AND CREDITED TO ACCUMULATED PROFITS OR LOSSES. ART. 2. THIS CIRCULAR ENTERS INTO FORCE ON THE DATE OF ITS PUBLICATION, PRODUCING EFFECTS, INCLUDING, WITH RESPECT TO THE FINANCIAL STATEMENTS PREPARED ON 31.12.90. BRASÍLIA (DF), 24 JANUARY 1991 GUSTAVO JORGE LABOISSIÈRE LOYOLA ANTONIO CLÁUDIO SOCHACZEWSKI DIRECTOR DIRECTOR