Circular Letter CVM/SEP 01/07

CIRCULAR LETTER CVM/SEP Nº 001/2007
Rio de Janeiro, March 20, 2007
SUBJECT: General guidelines on procedures to be observed by public companies

Dear Director of Investor Relations,

The Circular Letters issued by the Department of Corporate Relations (SEP) have as their main objective to guide public companies on procedural aspects that must be observed when submitting periodic and occasional information, among other matters.

Through this instrument, SEP intends to promote the disclosure of corporate information in a manner consistent with best corporate governance practices, aiming for transparency and equity in the relationship with investors and the market, as well as to minimize eventual deviations and, consequently, reduce the need for formulation of demands and application of coercive fines and penalties.

This instrument, through the recommendations contained in the items listed below, consolidates the Circular Letters previously issued by SEP, without dispensing with the reading of applicable rules, and the update of corporate legislation and CVM regulation, especially those occurring after this date, must be observed.

The reading of CIRCULAR LETTER CVM/SNC/SEP Nº 01/2007, of 14.02.07, available on the CVM website, containing guidance on the preparation of accounting information by public companies, is also recommended.

PERIODIC FORMS – DFP, IAN and ITR
1.1. STANDARDIZED FINANCIAL STATEMENTS – DFP
1.2. ANNUAL INFORMATION – IAN
1.3. QUARTERLY INFORMATION – ITR
COMPLETE ANNUAL FINANCIAL STATEMENTS
REPORTS OF BANKRUPT AND LIQUIDATING COMPANIES
ORDINARY GENERAL ASSEMBLY – OGA
MAIN OCCASIONAL INFORMATION
5.1. EXTRAORDINARY GENERAL ASSEMBLY – EGA AND SPECIAL ASSEMBLY
5.2. SHAREHOLDERS’ AGREEMENT
5.3. GROUP OF COMPANIES CONVENTION
5.4. RELEVANT ACT AND FACT
5.5. BANKRUPTCY AND CONCORDAT JUDGMENT
5.6. DOCUMENTS RELATING TO COMPANIES IN JUDICIAL AND EXTRAJUDICIAL RECOVERY
5.7. SECURITIES OF ADMINISTRATORS AND RELATED PERSONS
5.8. RELEVANT SHAREHOLDING PARTICIPATION
5.9. TRADING POLICY
5.10. DISCLOSURE POLICY
5.11. MEETINGS OF THE BOARD OF DIRECTORS AND MANAGEMENT
5.12. COMMUNICATION OF CHANGE OF INDEPENDENT AUDITOR
COMMON OBSERVATIONS ON PERIODIC AND OCCASIONAL INFORMATION
CONSEQUENCES OF REGISTER UPDATING FAILURE
7.1. COERCIVE FINES
7.2. PUBLICATION OF THE LIST OF NON-COMPLIANT COMPANIES
7.3. SUSPENSION OF REGISTRATION OF PUBLIC COMPANY EX OFFICIO
7.4. CANCELLATION OF REGISTRATION OF PUBLIC COMPANY EX OFFICIO
7.5. SANCTIONING ADMINISTRATIVE PROCESS
CANCELLATION OF REGISTRATION OF PUBLIC COMPANY
ELIMINATION FROM THE LISTING OF PUBLIC COMPANIES
ARTICLE 203 OF THE SA (Corporations Law)
ELECTION OF MEMBERS OF THE BOARD OF DIRECTORS
11.1. ARTICLE 8 OF LAW Nº 10.303/01
11.2. INTERPRETATION OF ARTICLE 141, §5º, OF LAW Nº 6.404/76
ELECTION OF MEMBERS OF THE FISCAL COUNCIL
STATEMENT OF ADDED VALUE AND SOCIAL BALANCE SHEET
PROJECTIONS
CAPITAL BUDGET
LATE, CORRECTIVE OR COMPLEMENTARY DECLARATIONS OF DIVIDENDS
INFORMATION TO BE DISCLOSED IN OPERATIONS OF INCORPORATION, MERGER AND SPIN-OFF
ARTICLE 143 OF LAW Nº 6.404/76
APPEALS AGAINST DECISIONS OR MANIFESTATIONS OF UNDERSTANDING OF SEP
INQUIRIES BY PUBLIC COMPANIES
COMMUNICATIONS WITH SEP
REQUESTS FOR HEARINGS BY PRIVATE INDIVIDUALS
REQUEST FOR REVIEW OF PROCESS
CVMWIN SYSTEM
REGISTRATION SYSTEM OF PUBLIC COMPANIES – CVMWEB
PERIODIC AND OCCASIONAL INFORMATION SYSTEM – IPE
26.1. MOST RECENT CHANGES IN THE IPE SYSTEM
26.2. IPE MANUAL
PERIODIC FORMS – DFP, IAN and ITR
The DFP, IAN and ITR forms, provided for in article 16, items II, IV and VIII, of CVM Instruction nº 202/93, are sent to the CVM through the CVMWIN System (see item 24).

In line with a decision by the Collegiate Board of 13.07.2004 (available on the CVM website), bankrupt or liquidating public companies are exempt from providing the information provided for in items II, IV, and VIII of article 16 of Instruction nº 202/93, being required, in exchange, on a special basis, those set forth in paragraphs 2 and 3 of the cited article (see item 3).

1.1. STANDARDIZED FINANCIAL STATEMENTS – DFP
Article 16, item II, of CVM Instruction nº 202/93 provides for the submission of the Standardized Financial Statements (DFP) form. The final deadline for submission is up to 3 (three) months after the end of the fiscal year, or on the same day of its publication by the press or its making available to shareholders, if this occurs on a date prior to the first deadline.

It is worth alerting that the indication regarding the nature of the Independent Auditor’s Report presented in the DFP form ("Unqualified", "Qualified", "Disclaimer of Opinion" and "Adverse") must be strictly in accordance with the content of said document.

Under the sole paragraph of article 3 of CVM Instruction nº 414/04, securitizing companies must add to the Quarterly Information – ITR and Standardized Financial Statements – DFP forms:
I. a report on the acquisition, retrocession, payment and default of credits linked to the issuance of CRI (Certificados de Recebíveis Imobiliários);
II. the independent financial statements, for the issuance of CRI under the fiduciary regime, provided for in article 12 of Law nº 9.514, of November 20, 1997; and,
III. the quarterly update of the risk classification reports of the CRIs issued, referred to in § 7 of article 7 of CVM Instruction nº 414/04, if applicable.

It is emphasized that the DFP form is not to be confused with the Complete Annual Financial Statements (item I of art 16 of CVM Instruction nº 202/93), so that the presentation of the DFP form does not eliminate the obligation to present complete financial statements, as explained in item 2 below.

1.2. ANNUAL INFORMATION – IAN
The Annual Information (IAN) form must be presented by virtue of article 16, item IV, of CVM Instruction nº 202/93.

The final deadline for the submission of the IAN form is 5 (five) months after the end of the fiscal year or within a maximum period of one month, from the holding of the annual ordinary general assembly, if this deadline expires before the first, as established in letters "a" and "b" of item IV of article 16 of CVM Instruction nº 202/93, with the wording given by CVM Instruction nº 351/01.

The Annual Information (IAN) form should be understood as a dynamic document on the evolution of the company's business, not being linked to a specific fiscal year, despite the fact that a date for its presentation is set year by year.

In this sense, and under § 7 of article 1 of CVM Instruction nº 351/2001 (which altered the wording of article 16 of CVM Instruction nº 202/93), the IAN must be updated whenever any facts that alter information previously provided occur, within a period of ten days counted from the date of the occurrence of the fact.

Therefore, it is fundamental that public companies pay attention to the need to resubmit the IAN whenever corporate changes occur whose information is required in the form, especially information on the composition of the company's administrative bodies, on any statutory alterations and on changes in shareholding composition.

Regarding the particular case of the vacancy of seats of members of the fiscal council and assumption by the respective alternate, SEP has received constant inquiries about the appropriate way to update the form, whose formatting, currently, does not accept the imbalance between the number of principal and alternate councilors, by virtue of article 161, §1º, of Law nº 6.404/76.

In this case, it is recommended that the company resubmit the IAN, repeating the principal's data in the fields intended for the alternate, and including in Table 14.02 "Other Information Considered Important for a Better Understanding of the Company", observations regarding the events that altered the composition of the Fiscal Council.

When the balance is restored, the company must resubmit the IAN, within 10 (ten) business days from the election of the new alternate, with the appropriate updates, in accordance with article 16, §7º, of CVM Instruction nº 202/93.

Due to its permanent update, it may occur that previous and relevant information in the IAN form is suppressed, such as the exercise of mandates of company administration positions in a certain period, for which the CVM recommends that companies always preserve the logical continuity and integrity of the disclosed information.

Cases like this and other eventual difficulties in harmonizing the provision of information with the standard offered by the form can and should be circumvented through the best use of Table 14.02 – "Other Information Considered Important for a Better Understanding of the Company".

Regarding the indication of shares in circulation (items 09 to 14 of Table 03.01), attention should be paid to the fact that, according to the legal concept itself contained in article 4, §2º, of Law nº 6.404/76 and also stated in the help text of the CVMWIN System, shares held by the controlling shareholder, persons linked to it or company administrators and shares kept in treasury must be excluded from this count, since the latter, based on article 16 of CVM Instruction nº 10/80, have their patrimonial and political rights suspended.

Starting in 2006, it became mandatory to include, in the IAN Form, the field for filling in corporate participations greater than 5% of the total preferred shares.

It is worth noting that the disclosure of this information to the market was already provided for since the issuance of CVM Instruction nº 358/02 (recently amended by CVM Instruction nº 449/07), so since then, such data are communicated by the acquiring investor, and are available on the CVM website on the internet, in Market Notice and/or Relevant Fact, as the case may be.

Starting in January 2007, with the availability of version 8.0 of the CVMWIN System (subsequently updated to version 8.1), the following information became required in the IAN form, as explained in CIRCULAR LETTER CVM/SEP Nº 04/2006, of 28.12.06:
I. filling out the Corporate Governance Information table, intended for companies to indicate the practices adopted in this regard, as well as to include justification for non-application of the recommendations expressed in the CVM Guide; and
II. identification of the company's corporate shareholders, holding more than 5% of the shares of each species and class, and in the impossibility of obtaining this information, the appropriate justifications must be presented in the "Other Information Considered Important for a Better Understanding of the Company" table.

It is worth noting that, in cases of registration of public distribution of securities, the same information inserted in the distribution prospectus must also be part of the IAN.

It is important to clarify that companies in the pre-operational phase must provide, upon presentation of said form, updated information on the progress of the project presented to the CVM at the time of the registration request, according to §1 of article 16 of CVM Instruction nº 202/93.

1.3. QUARTERLY INFORMATION – ITR
Article 16, item VIII, of CVM Instruction nº 202/93 provides for the submission of forms regarding quarterly information (ITR).

The deadline for submitting the ITR is up to 45 (forty-five) days after the end of each quarter of the fiscal year, except for the last one, or when the company discloses the information to shareholders, or to third parties, on a prior date.

It is worth clarifying that the information of the last quarter will be included in the DFP form (item II of the same article), which includes the entire fiscal year. If there is a statutory alteration that results in a fiscal year longer or shorter than 1 year (sole paragraph of article 175 of Law nº 6.404/76), it may be the case that the company presents more or less than 3 (three) ITR forms.

According to CVM Instruction nº 245/96, only public companies with registration for trading their securities on a stock exchange or organized over-the-counter market, and whose consolidated gross annual revenue in the immediately preceding fiscal year was less than R$ 100,000,000.00, are exempt from presenting the Special Review Report of the ITR (article 1, item I, letter "b"). For such Companies, the delivery deadline established in item VIII of article 16 of CVM Instruction nº 202/93 is increased by 15 days, i.e., it becomes 60 (sixty) days (article 1, item V), without prejudice to the obligation of its forwarding on an earlier date if the company discloses the information to shareholders, or to third parties, before this deadline.

Under article 8 of CVM Instruction nº 202/93, if the Company discloses projections, these must be informed and are subject to systematic monitoring in the Quarterly Information form (ITR). Thus, if the company made projections about its business, the realization or not of the planned steps must appear in the ITR, since the form is also an instrument for investors to monitor the progress of the company's projects.

As provided in the sole paragraph of article 3 of CVM Instruction nº 414/04, securitizing companies must add to the Quarterly Information – ITR and Standardized Financial Statements – DFP forms:
I. a report on the acquisition, retrocession, payment and default of credits linked to the issuance of CRI;
II. the independent financial statements, for the issuance of CRI under the fiduciary regime, provided for in article 12 of Law nº 9.514, of November 20, 1997; and
III. the quarterly update of the risk classification reports of the CRIs issued, referred to in § 7 of article 7 of CVM Instruction nº 414/04, if applicable.

Although there is no legal requirement, it is considered important to present consolidated quarterly information (if applicable) with a view to broad disclosure. In this sense, it is worth highlighting that, by virtue of BOVESPA's requirement, and in line with good corporate governance practices, companies listed in Levels I and II and the Novo Mercado must mandatorily present consolidated quarterly information.

COMPLETE ANNUAL FINANCIAL STATEMENTS
The financial statements and, if applicable, consolidated statements, prepared in accordance with article 176 of Law nº 6.404/76 and with the relevant CVM regulation, must be presented, as established in item I of article 16 of CVM Instruction nº 202/93, independent of the presentation of the DFP form, as already commented in subitem 1.1.

The financial statements must observe the provisions of CIRCULAR LETTER CVM/SNC/SEP Nº 001/2007, of 14.02.07 (available on the CVM website), which contains guidance on the preparation of accounting information by public companies.

The final deadline for submission of the financial statements is up to 3 (three) months after the end of the fiscal year or on the same day of its publication by the press or its making available to shareholders, if this occurs on a date prior to the first deadline.

The statements must be accompanied by the management report and the independent auditor's opinion, in a single file in doc or pdf format, not to be confused with their eventual publications in summarized form, as permitted by article 3 of CVM Instruction nº 207/94.

The sending of these statements must be carried out through the Periodic and Occasional Information System (IPE), in the category "Economic Financial Data – Complete Annual Financial Statements", filling in the fields referring to the dates and newspapers of the publications.

Article 133 of Law nº 6.404/76 provides for the need to publish the financial statements of companies up to 5 (five) days before the holding of the Ordinary General Assembly. In this case, it is also necessary to publish a Notice to Shareholders, 1 (one) month before the OGA, informing of the availability of the statements in question, at the company's headquarters, considering this requirement met if disclosed on the company's electronic page, with its filing at the CVM on the same date. If the publication is made with a one-month advance from the date of the OGA, the publication of the mentioned notice becomes unnecessary.

Article 289 of Law nº 6.404/76 determines that the publications ordered therein must be made in the official organ of the Union, State or Federal District, according to the place where the company's headquarters is located and in another newspaper of large circulation edited in the locality where the company's headquarters is located.

As provided in CVM Instruction nº 207/94, public companies whose securities are admitted to trading on stock exchanges must also carry out the publications ordered by law, in a newspaper of large circulation, edited in the locality where the stock exchange is located, in which in the 2 (two) last fiscal years, the largest amount of business with securities of its issuance has been verified, its requirement being dispensed with in the event that this locality coincides with the company's headquarters.

CVM Instruction nº 207/94 also made it possible to publish the financial statements in summarized form compared to the data of the previous fiscal year, provided that the information specified in its article 3 is disclosed, at a minimum.

The publications will always be made in the same newspaper, chosen in a meeting of the Board of Directors, and any change must be preceded by a notice to shareholders in the excerpt of the minutes of the OGA, according to §3 of article 289 of Law nº 6.404/76.

REPORTS OF BANKRUPT AND LIQUIDATING COMPANIES
The bankruptcy or liquidation of the company does not exempt it from complying with legal requirements imposed on public companies, notably the provisions of §§ 2 and 3 of article 16 of CVM Instruction nº 202/93.

In this sense, the decision of the Collegiate Board, in a meeting of 13.07.2004 (available on the CVM website), is highlighted, that bankrupt or liquidating public companies are exempt from providing the information provided for in items II, IV and VIII of article 16 of Instruction nº 202/93 (DFP, IAN and ITR Forms), being required, in exchange, those set forth in paragraphs 2 and 3 of the cited article.

According to §2 of article 16 of CVM Instruction nº 202/93, the trustee of companies that have been declared bankrupt must provide semi-annual information on fixed deadlines, stages reached, assets alienated, amounts collected, amounts disbursed and other information considered relevant for the securities market, up to 45 (forty-five) days after the end of the semester.

In the case of companies in extrajudicial liquidation, the aforementioned information must be presented within a period of 45 (forty-five) days after the end of each quarter of the fiscal year, as provided in §3 of article 16 of CVM Instruction nº 202/93.

With the objective of standardizing and facilitating the sending and control of these periodic information of bankrupt and liquidating public companies, it is recommended that, except for the first report, the others be sent, whenever possible, with a reference date that coincides with the quarters and semesters of the civil year.

It is worth noting that both the information about the petition or confession of bankruptcy and the declaratory judgment of bankruptcy, as stated in art 17, items IX and X of CVM Instruction nº 202/93, are occasional information that must be provided by the company (see subitem 5.5), constituting, furthermore, a Relevant Fact, in accordance with CVM Instruction nº 358/02 (recently amended by CVM Instruction nº 449/07).

Both the reports and the information cited above must be sent, mandatorily, through the IPE System.

ORDINARY GENERAL ASSEMBLY – OGA
According to the wording of article 132 of Law nº 6.404/76, annually, in the first four months following the end of the fiscal year, there must be a general assembly to take the accounts of the administrators, examine, discuss and vote on the financial statements, deliberate on the destination of the net profit of the fiscal year and the distribution of dividends, elect the administrators and the members of the Fiscal Council.

Under item II, of § 1, of article 124, of Law nº 6.404/76, with the wording given by Law n.º 10.303/01, the convocation of a general assembly of a public company shall be made through an announcement published three times, at least, containing, in addition to the location, date and time of the assembly, the agenda, and, in the case of statute reform, the indication of the matter, being the deadline for the first convocation 15 (fifteen) days and for the second convocation, 8 (eight) days.

The notices convening Ordinary and/or Extraordinary General Assemblies must explicitly enumerate, in the order of the day, all matters to be deliberated; it is not permitted for matters requiring assembly deliberation to fall under the heading "general business," as established in CVM Instruction No. 341/00, with its transgression considered a serious offense for the purposes of § 3 of Article 11 of Law No. 6.385/76.

Regarding the possibility of shareholder representation at a general assembly provided for in §1 of Article 126 of Law No. 6.404/76, although it is reasonable for the company to determine, by statutory or notice provision, that its shareholders deposit their respective instruments of proxy in advance, the early delivery of such documents constitutes merely a shareholder option, inasmuch as the aforementioned law does not establish any obligation in this sense.

Thus, the prohibition of participation in an assembly by a shareholder representative who has failed to adopt the procedure of early delivery of the instrument of proxy as established by the company constitutes an offense against Law No. 6.404/76.

Additionally, it should be noted that, in the case of the election of the Board of Directors with the adoption of the multiple voting system, pursuant to Article 141 of Law No. 6.404/76, the minimum percentage of participation in voting capital necessary to request the adoption of multiple voting must appear, obligatorily, in the notice convening the Assemblies intended for the election of members of the Board of Directors of publicly-held companies, as determined by CVM Instruction No. 165/91, amended by CVM Instruction No. 282/98.

A copy of the notice convening the ordinary general assembly must be forwarded to the CVM, through the IPE System, on the same day of its publication in the press, pursuant to item III of Article 16 of CVM Instruction No. 202/93.

According to items V and VI of Article 16 of CVM Instruction No. 202/93, summaries of decisions of the ordinary general assembly must also be sent, on the day following its realization, as well as the minutes of the OGAs, within 10 (ten) days of its realization, indicating the dates and newspapers of their publication.

In this sense, it should be observed that the summary of decisions taken in the assembly (provided for in item V of Article 16 of CVM Instruction No. 202/93) is not confused with the minutes of the OGA (provided for in item VI of Article 16 of CVM Instruction No. 202/93), which, pursuant to §1 of Article 130 of Law No. 6.404/76, may be drawn up in the form of a summary of events.

Therefore, the summary provided for in item V of Article 16 of CVM Instruction No. 202/93 deals only with the result of the assembly's deliberations, which must be forwarded, via the IPE System, in the category "Assembly," species "Summary of Decisions," and the OGA minutes, provided for in item VI of the same article, drawn up in full or in the form of a summary of events, must be sent via the species "Minutes."

Whenever possible, OGA minutes archived at the CVM must contain the attendance list, with the qualification of shareholders, specifying the quantity, type, and class of shares held by each, as well as be accompanied, in the same file, by all documents referenced in the minutes and related to the assembly's deliberations, such as contracts, opinions, and statements of dissenting votes by shareholders.

Given the expiration of the period provided for in § 4 of Article 8 of Law No. 10.303/01, Directors elected in the manner of Article 141, § 4, II, or § 5, of Law No. 6.404/76, have been freely indicated by shareholders since the OGA held in 2006.

Thus, pursuant to the decision of the CVM Collegiate Body in a meeting held on March 3, 2006 (see item 11.2 below), publicly-held companies have been recommended to include in the notice convening general assemblies where the election of directors is provided for, the possibility of exercising the faculties dealt with in the aforementioned paragraphs of Article 141 of Law No. 6.404/76.

It should be noted that, pursuant to Article 19, item II, of CVM Instruction No. 202/93, failure to observe the period fixed in Article 132 of Law No. 6.404/76 for the holding of the ordinary general assembly is considered a serious offense.

MAIN EVENTUAL INFORMATION
5.1. EXTRAORDINARY GENERAL ASSEMBLY – EGA AND SPECIAL ASSEMBLY
The notices convening Ordinary and/or Extraordinary General Assemblies must explicitly enumerate, in the order of the day, all matters to be deliberated; it is not permitted for matters requiring assembly deliberation to fall under the heading "general business," as established in CVM Instruction No. 341/00, with its transgression considered a serious offense for the purposes of § 3 of Article 11 of Law No. 6.385/76.

According to items I, II, and III of Article 17 of CVM Instruction No. 202/93, in addition to the mandatory sending, via the IPE System, of the notices convening extraordinary, special, and debentureholders' assemblies, whose publications follow the mold of Article 124, § 1, item II, of Law No. 6.404/76, companies are obligated to forward the summaries of decisions, on the day following their realization, and the minutes of the assemblies, within 10 (ten) days of their realization.

In this sense, it should be observed that the summary of decisions taken in the assembly (provided for in item II of Article 17 of CVM Instruction No. 202/93) is not confused with the minutes of the EGA (provided for in item III of Article 17 of CVM Instruction No. 202/93), which, pursuant to §1 of Article 130 of Law No. 6.404/76, may be drawn up in the form of a summary of events.

Therefore, the summary provided for in item II of Article 17 of CVM Instruction No. 202/93 deals only with the result of the assembly's deliberations, which must be forwarded, via the IPE System, in the category "Assembly," species "Summary of Decisions," and the EGA minutes, provided for in item III of the same article, drawn up in full or in the form of a summary of events, must be sent via the species "Minutes."

Whenever possible, minutes of Extraordinary General Assemblies, Special Assemblies, and Debentureholders' Assemblies archived at the CVM must contain the attendance list, with the qualification of debentureholders or shareholders, specifying the quantity of debentures and shares (designating their type and class) held by each, as well as be accompanied, in the same file, by all documents referenced in the minutes and related to the assembly's deliberations, such as contracts, opinions, and statements of votes by debentureholders or shareholders.

Thus, pursuant to the decision of the CVM Collegiate Body in a meeting held on March 3, 2006 (see item 11.2 below), publicly-held companies are recommended to include in the notice convening general assemblies where the election of directors is provided for, the possibility of exercising the faculties dealt with in the aforementioned paragraphs of Article 141 of Law No. 6.404/76.

5.2. SHAREHOLDER AGREEMENT
Shareholder agreements regarding the purchase and sale of their shares, preference to acquire them, exercise of voting rights, or control power (Article 118 of Law No. 6.404/76) must be forwarded to the CVM, via the IPE System, upon their filing at the Company, according to item IV of Article 17 of CVM Instruction No. 202/93.

The alteration of their clauses, their extinction due to term or resolutory condition, or the celebration of a new shareholder agreement implies their update with the CVM.

5.3. GROUP CONVENTION
According to item V of Article 17 of CVM Instruction No. 202/93, the controlling company and its controlled companies that constitute groups of companies, obligating themselves to combine resources or efforts to carry out their respective objects, or to participate in common activities or ventures, are obligated to send a copy of the convention to the CVM, via the IPE System, upon its approval by the companies comprising it (Article 265 of Law No. 6.404/76).

5.4. RELEVANT ACT AND FACT
Pursuant to Article 157, §4, of Law No. 6.404/76, the administrators of the publicly-held company are obligated to immediately communicate to the stock exchange and publish in the press any decision of the general assembly or the company's administrative bodies, or any relevant fact occurring in their business, that may substantially influence the decision of market investors to sell or buy securities issued by the company.

According to Articles 6 and 17, item VI, of CVM Instruction No. 202/93, and Article 3 of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07), it is the duty of the Investor Relations Director to disclose and communicate to the CVM, and, if applicable, to the stock exchange and organized over-the-counter market entity where the company's issued securities are admitted to trading, any relevant act or fact occurring or related to their business (defined in Article 2 of the aforementioned Instruction), as well as to guarantee its broad and immediate dissemination, simultaneously, in all markets where such securities are admitted to trading.

According to the sole paragraph of Article 4 of CVM Instruction No. 358/02, if there is atypical fluctuation in the quotation, price, or quantity traded of the securities issued by the publicly-held company or referenced therein, "the Investor Relations Director must inquire of persons with access to relevant acts or facts, with the aim of verifying if they have knowledge of information that should be disclosed to the market."

Furthermore, according to Art. 6, sole paragraph, of this Instruction, relevant acts or facts may exceptionally be withheld if controlling shareholders or administrators believe that their disclosure would put the company's legitimate interest at risk, and these persons are obligated to, directly or through the IRD, immediately disclose the relevant act or fact, in the event that the information escapes control or if there is atypical fluctuation in the quotation, price, or quantity traded of the securities issued by the publicly-held company or referenced therein.

Thus, in the case of non-disclosure of a relevant act or fact, without prejudice to the investigation of possible use of insider information, the IRD's responsibility for any offense against the aforementioned Articles 3, 4, and 6 of CVM Instruction No. 358/02 will also be assessed.

The decision regarding the disclosure of relevant acts or facts is the competence of the company's administration itself, with the CVM responsible for ensuring the quality of information brought to the market, prioritizing transparency (full disclosure) and combating information asymmetry.

Information subject to disclosure must be expressed in clear and objective language, exempting the company from issuing value judgments, particularly regarding the progress of judicial disputes and decisions rendered therein, which must reflect the exact wording of such decisions.

Corporate law does not prevent relevant information from being conveyed and discussed in meetings of trade associations, investors, analysts, or selected audiences, in the country or abroad. However, ensuring equitable treatment of all market participants, and in order to prevent, including the possibility of using insider information, it requires that the relevant fact in question be disclosed, prior to or simultaneously with the meeting, to the entire market, as determined in §3 of Article 3 of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07).

Following the orientation stated in Article 5 of the aforementioned Instruction, the disclosure of the relevant act or fact must be made, whenever possible, before the start or after the end of trading on the stock exchanges and organized over-the-counter market entities where the company's issued securities are admitted to trading.

Supported by Article 3, §6, and Article 4 of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07), the CVM may determine the disclosure, correction, amendment, or republication of information regarding the relevant act or fact, as well as request additional clarifications regarding its disclosure.

In cases where controlling shareholders or administrators believe that the revelation of the relevant act or fact may put the Company's legitimate interest at risk, a request for exception to immediate disclosure may be addressed to the President of the CVM in a sealed envelope, which must contain the word "Confidential," pursuant to Article 7, §1, of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07).

Disclosure will follow the procedure set forth in Article 289 of Law No. 6.404/76, with publication in an official organ of the Union, State, or Federal District, according to the location of the company's headquarters, and in another newspaper of large circulation published in the locality where the company's headquarters is located.

It should be noted that the sending of the file with the text of the relevant act or fact will be done via the IPE System, on the business day prior to or on the same day of its publication in the press, informing the respective locations and dates of publication.

It is alerted that, pursuant to Article 18 of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07), transgression of the provisions contained in the aforementioned Instruction constitutes a serious offense, for the purposes of § 3 of Article 11 of Law No. 6.385/76.

5.5. BANKRUPTCY AND REORGANIZATION JUDGMENT
It is emphasized that, in this subsection, the provisions contained in the new Bankruptcy Law must be considered, especially regarding the substitution of reorganization by extrajudicial or judicial recovery.

Without prejudice to the disclosure of a Relevant Fact regarding the petition for reorganization or request or confession of bankruptcy, pursuant to Article 2, sole paragraph, item XXII, of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07), publicly-held companies must submit to the CVM, via the IPE System, the judgments granting reorganization or declaring bankruptcy, indicating the trustee of the bankrupt estate, on the same day of the company's knowledge thereof, as provided by Article 17, items VIII and X, of CVM Instruction No. 202/93.

Furthermore, according to items IX and VII, information regarding the request or confession of bankruptcy must be provided, on the same day of the company's knowledge thereof, or upon the entry of the request into court, as applicable; as well as information regarding the request for reorganization, together with its grounds, financial statements specifically prepared to obtain the legal benefit, and, if applicable, the situation of debentureholders regarding the receipt of invested amounts, on the same day the request enters the court. These information must also be sent via the IPE System.

Companies must pay attention to the immediate need to update their registration with the CVM, notably by altering their status in the CVMWEB System (see item 25 below), as well as the trustee or judicial administrator data via the IPE System (see item 26).

5.6. DOCUMENTS RELATED TO COMPANIES IN JUDICIAL AND EXTRAJUDICIAL RECOVERY
Despite the lack of explicit requirement in CVM Instruction No. 202/93 for the sending of documents related to situations of judicial and extrajudicial recovery, the CVM has been requiring companies to send such information.

For this purpose, the category "Information on Companies in Judicial or Extrajudicial Recovery" was created in the IPE System, containing 5 (five) types of documents, namely, Initial Petition, Recovery Plan, Creditors' Assembly, Judgments, and Other Documents (see item 26.1 below).

It should be noted that, in addition to sending the aforementioned documents, companies must update their registration in the CVMWEB System, changing their status to "In Judicial Recovery" or "In Extrajudicial Recovery," from the date of the judgment granting the request.

It is further highlighted that the sending, via the IPE System, of the aforementioned information does not exempt the company from disclosing a Relevant Fact regarding the request or decree of judicial or extrajudicial recovery, pursuant to Article 2 of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07).

5.7. SECURITIES OF ADMINISTRATORS AND RELATED PERSONS
CVM Instruction No. 449/07 altered the wording of Article 11 of CVM Instruction No. 358/02, regarding the system for sending Forms containing information regarding the shareholdings of administrators and related persons.

The previous wording of CVM Instruction No. 358/02 provided that it was the responsibility of the administrators and related persons themselves to send to the CVM the information regarding the transactions they carried out.

In practice, however, Circular Letter/CVM/SEP/No. 02/2006, of 14.03.06, determined that the information was to be sent by the administrators and related persons to the Company's Investor Relations Director, who then transmitted it to the CVM via the IPE System.

The change promoted by CVM Instruction No. 449/07 aimed to formalize, in Article 11 of CVM Instruction No. 358/02, this procedure that was already occurring in practice.

Thus, as provided in Article 11, caput and §4, of CVM Instruction No. 358/02, directors, members of the board of directors, board of auditors, and any organs with technical and consultative functions, created by statutory provision, are obligated to communicate to the publicly-held company (Investor Relations Director) the quantity, characteristics, and manner of acquisition of the securities issued by it and by controlled or controlling companies, or referenced therein, of which they are holders:
I. within 5 (five) days after each transaction;
II. on the first business day after assuming office; and
III. upon submission of documentation for the registration of the company as publicly-held.

According to §3 of Article 11, the natural persons mentioned in this article will also indicate securities that are the property of a spouse from whom they are not judicially separated, a partner, any dependent included in their annual income tax return, and companies controlled directly or indirectly.

The Investor Relations Director must send, via the IPE System, the information subject to Article 11 of CVM Instruction No. 358/02, monthly to the CVM, within 10 (ten) days after the end of each month in which changes in holdings occurred or in the month in which the appointment of the aforementioned persons occurred, highlighting that the form models for completion are available on the CVM's Internet page, under the link "Sending of documents," "XML File Standards and others."

The information must be sent in only two files, one containing the forms of individual positions held by administrators and related persons, and the other, the consolidated position of each group (management, board of directors, board of auditors, and technical or consultative organs), with only the consolidated positions being available in the IPE System.

With the aim of having complete and reliable information, companies are requested to voluntarily send the forms, even in months when no movements or changes in the positions of administrators and related persons were verified. In this case, the forms must be filled out with the information that, during that period, there was no trading in securities of the company, its controlled company, its controlling company, or its affiliated company, repeating the initial balance values in the final balance.

5.8. RELEVANT SHAREHOLDING PARTICIPATION
By virtue of Article 12 of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07), any natural or legal person, or group of persons, acting jointly or representing the same interest who comes to acquire or alienate a participation of 5% or more of the type or class of shares representing the social capital of a publicly-held company, is obligated to, immediately after the operation, communicate to the Company the alteration in their participation.

It is emphasized that the alteration of participation is not exclusively linked to a single operation, being also assessed cumulatively, and referring to the acquisition/aliennation/extinction of shares and rights over shares both in the onerous modality (purchase and sale, exchange, and loan) and gratuitous (donation).

With the aim of facilitating the understanding of the concept encompassed by the expression

"representing the same interest," we mention below three exemplary hypotheses of the link between shareholders:

I. link by virtue of contract, shareholders' agreement providing for voting rights, or kinship;

II. shareholding control or participation, direct or indirect, in capital in a percentage greater than 10%; and

III. other hypotheses where there is discretionary management of resources, or where their portfolios are under common management.

In the case of acquirers, the aforementioned communication must be made through a "Declaration of Acquisition of Relevant Shareholding," which must contain the following information:

I. name and qualification of the acquirer, indicating the registration number in the National Registry of Legal Entities or the National Registry of Individuals;

II. objective of the participation and quantity sought, containing, if applicable, a declaration by the acquirer that their purchases do not aim to alter the composition of control or the administrative structure of the company;

III. number of shares, subscription bonuses, as well as subscription rights for shares and options to purchase shares, by type and class, already held, directly or indirectly, by the acquirer or a person linked to them;

IV. number of debentures convertible into shares, already held, directly or indirectly, by the acquirer or a person linked to them, specifying the number of shares subject to possible conversion, by type and class; and

V. indication of any agreement or contract regulating the exercise of voting rights or the purchase and sale of securities issued by the company.

If applicable, the companies controlled, subsidiaries, and other corporate vehicles through which the transactions were carried out must also be listed.

It should be noted that the rules for publishing this declaration in the press were amended by CVM Instruction No. 449/07.

In its previous wording, Article 12 of CVM Instruction No. 358/02 required publication in the press of any acquisition of shares exceeding 5% of the total of its type or class. Exceptionally, with CVM authorization, exemption from publication was admitted, provided that the company had dispersed shares and the acquisition did not aim to influence control or the administrative structure of the company.

The new rule changes the logic of the norm by turning the rule into an exception and vice versa.

Thus, no increase in participation in volume greater than 5% will, in principle, need to be disclosed in the press, nor will it be necessary for the CVM to grant exemption from this publication.

It should be noted that publication will continue to be required in the same cases where it was previously required; the change merely recognizes that cases where the acquisition aims to influence control or the administrative structure of the company are less frequent than imagined when CVM Instruction No. 358/02 was issued.

In this sense, in cases where the acquisition results from or has been carried out with the objective of altering the composition of control or the administrative structure of the company, as well as in cases where the acquisition generates the obligation to make a public offer, in accordance with Instruction No. 361/02, the acquirer, in addition to sending the aforementioned declaration to the Company, must promote its publication in the press in accordance with Article 3 of CVM Instruction No. 358/02.

Sellers of relevant shareholdings, according to Article 12, § 4º, of the aforementioned regulation, must inform the CVM of the sale or extinction of their shares issued by an open company each time they reach the 5% threshold. Such disclosure must be made by sending a "Declaration of Sale of Relevant Shareholding" to the Company.

The "Relevant Share Acquisition Declarations" and "Relevant Share Sale Declarations" must be sent to the Company's Investor Relations Director (DRI). The DRI will have them inserted into the IPE System, through the CVM page, in the Category "Market Communication," with the type "Acquisition/Sale of Shareholding (Article 12 of CVM Instruction No. 358)" and two individualized species of Declaration. In the case of declarations that have been published, by virtue of paragraph 5 of Article 12 or spontaneously, the dates and newspapers in which the publication was carried out must be informed.

It should be noted that the investor or group of investors who reaches, even through ownership of shares acquired by loan, a corresponding percentage of 5% (five percent) or more of the type or class of shares representing the capital of an open company, must proceed with the disclosure of the Declaration provided for in Article 12 of CVM Instruction No. 358/02.

Similarly, shares subject to loan must be considered in the calculation of the increase or decrease in relevant participation for the purposes of the caput and paragraphs 1º and 4º of the same article.

It recommends that the Declarations referred to in Article 12 of Instruction 358/02 make reference, if applicable, to the portion of shares held by the declaring investor that was acquired or sold by means of share lending.

5.9. TRADING POLICY

The securities trading policy, provided for in Article 15 of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07), is optional.

However, such a policy is very useful for companies to establish a code of conduct for transactions involving, primarily, shares issued by the company itself.

The preparation of a securities trading policy gains greater relevance in the case of companies that adopt or will adopt incentive programs for their employees and executives, such as stock option plans, because, by establishing internal rules, these companies define a general line of guidance, while simultaneously making it clear to their investors that they are attentive to the fairness and transparency of transactions involving the securities issued by them, with emphasis on those of a private nature.

Thus, companies that have a Trading Policy must send it to the CVM via the IPE System.

It should be highlighted that companies must adapt their Trading Policies to the extent that they are inconsistent with the changes promoted by CVM Instruction No. 449/07 in Articles 13 and 15 of CVM Instruction No. 358/02.

5.10. DISCLOSURE POLICY

The policy for disclosing material acts or facts is a mandatory document established in Article 16 of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07), applicable to all open companies.

CVM Instruction No. 358/02 did not make any restriction or exception to the obligation to adopt the document. Therefore, it is sufficient for the company to be regularly registered with the CVM, regardless of the corporate organization and the nature of the securities issued, to have the duty to adopt the disclosure policy.

The Disclosure Policy must be sent to the CVM via the IPE System.

5.11. MEETINGS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD

Law 6.404/76 only requires the filing in the commercial registry and the publication of the minutes of the Board of Directors meeting that produces effects vis-à-vis third parties (Article 142, §1º).

CVM Instruction No. 202/93, in turn, requires the presentation, for the initial registration of an open company, of the minutes of the Board of Directors meeting that appointed the investor relations director, if this was done in that meeting (Article 7, item I).

CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07) requires that the communication of the approval or alteration of the company's trading policy and disclosure policy be accompanied by a copy of the resolution and the full text of the documents that regulate and integrate the aforementioned policies, one of which is necessarily the minutes of the respective Board of Directors meeting that approved the policies.

Furthermore, CVM Instruction No. 202/93 provides that other eventual information may be requested by the CVM, within the timeframes indicated by it (Article 17, item XI).

Thus, despite no express mention in Article 17 of CVM Instruction No. 202/93 regarding the obligation to send all minutes of Board of Directors and Executive Board meetings, the CVM, through the IPE Manual, has been requiring their submission via the IPE System, under the category "Administration Meeting."

It is also worth highlighting that BOVESPA, in the case of companies listed on that exchange or on SOMA, has also been requiring submission via the IPE System, through electronic messages sent to the companies.

5.12. COMMUNICATION OF CHANGE OF AUDITOR

Regardless of the need to update the independent auditor's data in the Open Companies Registration System – CVMWEB (see item 25), in accordance with Article 13, item III, of CVM Instruction No. 202/93, the administration of the audited entity must, within 20 (twenty) days, communicate the change of auditor to the CVM, whether or not the audit services contract is terminated, with justification for the change, which must include the consent of the replaced auditor, as determined by Article 28 of CVM Instruction No. 308/99.

Such communication must be sent to the CVM via the IPE System, in the Category "Market Communication," Type "Change of auditor (Article 28, CVM Instruction No. 308/99)".

It should be noted that, according to Article 29 of the aforementioned Instruction, the supervisory board of the audited entity, when in operation, is responsible for verifying the correct compliance by the administrators with the provisions of Article 28.

COMMON OBSERVATIONS REGARDING PERIODIC AND EVENTUAL INFORMATION

The submission of periodic and eventual information provided for in CVM Instruction No. 202/93, Article 28 of CVM Instruction No. 308/02, and CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07) must be done as follows:

I. DFP, IAN, and ITR Forms – via the CVMWIN System (see item 24);

II. Registration Update – via the CVMWEB System (see item 25); and

III. Other periodic information and eventual information – via the IPE System (see item 26).

As permitted by Article 14, §1º, of CVM Instruction No. 202/93, the CVM, on an exceptional basis, may exempt the presentation of periodic and eventual information when the administrators believe that its disclosure would jeopardize the legitimate interest of the company, applying, where applicable, the provisions of Article 157, §5º, of Law No. 6.404/76 and Articles 6º and 7º, §1º, of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07).

According to §§ 1º, 2º, and 3º of Article 14, when administrators decide not to disclose the information, they must present their reasons, sending the confidential information to the President of the CVM in a separate document in a sealed envelope, which must contain the word "Confidential."

The final deadlines for submitting periodic and eventual information are non-extendable, as there is no express authorization in the legislation to authorize, for any reason, a request for extension of the submission deadline for this information, except for the hypothesis provided for in Article 14, §1º, of CVM Instruction No. 202/93.

If the final date coincides with a Saturday, Sunday, or national holiday, the final date for submitting periodic and eventual information will be the next business day, as established by Article 66 of Law No. 9.784, of 29.01.1999.

An open company that does not maintain its registration updated, in accordance with Articles 13, 16, and 17 of CVM Instruction No. 202/93, is subject to a daily coercive fine, according to the values listed in the table contained in Article 18 of the aforementioned Instruction, without prejudice to the responsibility of the administrators (and, when applicable, the receiver, trustee, judicial administrator, judicial manager, or liquidator), in accordance with Articles 9º, item V, and 11 of Law No. 6.385/76.

Furthermore, it is noted that violation of the provisions of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07), as provided in its Article 18, constitutes a serious offense for the purposes of Article 11, § 3º, of Law No. 6.385/76, and that the CVM must communicate to the Public Ministry the occurrence of the events provided for in this Instruction that constitute a crime (§1º of the cited article).

CONSEQUENCES OF OUTDATED REGISTRATION

As highlighted in the previous items, open companies must pay attention to compliance with the legal and regulatory requirements imposed, especially regarding the maintenance of their updated registration.

7.1. COERCIVE FINES

Initially, it should be clarified that coercive fines are imposed, observing the provisions of applicable regulations, regardless of the investigation of responsibility for non-compliance with the provisions contained in corporate legislation, as well as for non-compliance with a specific order issued by the CVM.

The penalties provided for in the caput of Article 11 (and respective items I to VIII) of Law 6.385/76, in turn, will only be imposed with observance of the procedure provided for in §2º of Article 9º of Law 6.385/76 (administrative process preceded by an investigative stage).

However, a company that does not maintain its registration updated, in accordance with Articles 13, 16, and 17 of CVM Instruction No. 202/93, will be subject to a daily coercive fine, according to the tables contained in Article 18 of the same Instruction.

It should be remembered that:

I. from the communication of the act of charging the coercive fine, an appeal to the CVM Collegiate Body will be possible, within 10 (ten) days, counted from the date of receipt, in accordance with CVM Resolution No. 273/98; and

II. the due date of the fine will correspond to the thirtieth day after the date of filing the appeal or, in the case of no appeal, to the thirtieth day after the end of the deadline to appeal, as provided by CVM Resolution No. 501/06.

In this sense, in accordance with item IX of CVM Resolution No. 463/03, in the case of error, omission, obscurity, or material inaccuracies in the decision, contradiction between the decision and its grounds, the Collegiate Body will consider requests for reconsideration of its decision regarding the appeal.

Finally, it is clarified that CVM Resolution No. 447/02, amended by CVM Resolutions No. 467/04 and No. 483/05, provides, among other things, for the installment payment of applied coercive fines, and CVM Resolution No. 501/06 provides for the incidence of late payment interest on debts arising, among others, from coercive fines.

7.2. PUBLICATION OF THE LIST OF NON-PAYING COMPANIES

The Securities and Exchange Commission, in accordance with CVM Resolution No. 178/95, semi-annually discloses to market participants the list of open companies whose company registration – as referred to in Article 21 of Law No. 6.385/76, as established in CVM Instruction No. 202/93 – has been outdated for more than 6 (six) months.

It should be noted that the published list refers to a specific date, so there is no question of updating or correcting the list, except in the case of undue inclusion.

7.3. SUSPENSION OF OPEN COMPANY REGISTRATION EX OFFICIO

An open company that has been in arrears with the obligation to provide information to the CVM for more than 3 (three) years will have its registration suspended, as established in Article 2 of CVM Instruction No. 287/98.

Concurrently with the suspension of registration, the initiation of an administrative inquiry will be proposed to investigate the responsibility of the administrators for non-compliance with the provisions contained in Articles 16 and 17 of CVM Instruction No. 202/93, as provided in the sole paragraph of Article 3 of CVM Instruction No. 287/98.

It should be remembered, however, that the investigation of the administrators' responsibility is independent of the ex officio suspension of the open company's registration, and is also provided for in Article 18 of CVM Instruction No. 202/93, as well as in Article 1, item I, letter "b" of CVM Instruction No. 251/96.

It is noted that, in accordance with Article 7 of CVM Instruction No. 287/98, the cancellation and suspension of registration do not exempt the company, its controllers, and administrators from administrative, civil, and criminal responsibility arising from the eventual infringement of the legislation applicable to them, while the company was open.

7.4. CANCELLATION OF OPEN COMPANY REGISTRATION EX OFFICIO

The ex officio cancellation of the open company's registration, provided for in Article 3 of CVM Instruction No. 287/98, will be carried out in the following hypotheses:

I. Extinction of the company, verified by deregistration in the commercial registry;

II. Cancellation of the commercial registration, due to the company being considered inactive by the competent Commercial Board;

III. Deregistration, by the Federal Revenue Secretariat, of the registration in the General Registry of Taxpayers – CGC;

IV. Failure to effectively place with the public the entirety of the securities whose registration of issuance is the cause for granting the open company registration;

V. Proof of the suspension of the company's activities for a period greater than three years, with its registration suspended for more than one fiscal year.

7.5. SANCTIONING ADMINISTRATIVE PROCESS

As provided for in Article 19 of CVM Instruction No. 202/93, it constitutes an offense of an objective nature, in which a summary administrative process procedure will be adopted, in accordance with the Regulation Annexed to CMN Resolution No. 1.657/89, for the administrator of an open company (and when applicable, the receiver, trustee, judicial administrator, judicial manager, or liquidator) to fail to adopt the procedures listed in items I to III of Article 13, except for the hypothesis provided for in item VI of Article 17, constituting, furthermore, a serious offense, for the purposes of Article 11, § 3º, of Law No. 6.385, of December 7, 1976: (NR)

I. non-compliance with the provisions of item VI of Article 17 of CVM Instruction No. 202/93;

II. non-observance of the deadline established in Article 132 of Law No. 6.404, of December 15, 1976, for holding the ordinary general meeting;

III. recurrence of objective nature infractions defined in the caput of Article 19 of CVM Instruction No. 202/93.

In turn, in accordance with Article 18 of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07), violation of the provisions of that Instruction constitutes a serious offense, for the purposes of Article 11, § 3º, of Law No. 6.385/76, and the CVM must communicate to the Public Ministry the occurrence of the events provided for in the aforementioned Instruction that constitute a crime.

Thus, and as provided for in Article 9º, item V, of Law No. 6.385/76, the CVM may investigate, through an administrative process, the eventual responsibility of administrators (and when applicable, the receiver, trustee, judicial administrator, judicial manager, or liquidator), members of the supervisory board, and shareholders of open companies for non-compliance with the provisions contained in the aforementioned Instructions.

In this sense, and pursuant to Article 11 of Law No. 6,385/76, the penalties provided for in items I to VIII of the same article shall only be imposed with observance of the administrative process mentioned in the preceding paragraph, also observing the provisions of CVM Deliberation No. 504/06, amended by No. 514/06.

CANCELLATION OF REGISTRATION OF AN OPEN COMPANY

The cancellation of registration of an open company must be preceded by a Public Tender Offer for Shares (OPA), formulated by the controlling shareholder or by the open company itself, and having as its object all shares issued by the target company, as provided in § 4 of Article 4 of Law No. 6,404/76 and in accordance with the procedure regulated by CVM Instruction No. 361/02, except for the situations provided for in Articles 17 and 18, which deal with companies that issued debentures or other securities other than shares.

As provided in Article 34 of the aforementioned Instruction, exceptional situations that justify the acquisition of shares without a public offer or with a differentiated procedure shall be reviewed by the CVM Board, for the purpose of dispensing with or approving procedures and formalities to be followed, including with respect to the disclosure of information to the public, when applicable.

It should be noted that the constitution of a wholly-owned subsidiary does not result in the cancellation of the Company's registration. In these cases, it is necessary to submit a request for cancellation of registration, formalizing the request, without which the company, although a wholly-owned subsidiary, remains subject to all obligations and penalties provided for in the current regulations, including those regarding the updating of the registration maintained with the CVM.

The violation of the provisions of CVM Instruction No. 361/02, according to its Article 36, is considered a serious offense, for the purposes of Article 11, § 3 of Law No. 6,385/76.

It should be emphasized that it is mandatory to submit documents and periodic information whose delivery deadline is prior to the date of cancellation of the company's registration.

It is also clarified that the company is liable for the supervision fee referring to the quarter in which the cancellation of its registration occurs. Thus, if the company has its registration cancelled in the 1st quarter and does not present the DFP form relating to the previous fiscal year, it must inform the CVM of the net equity of the previous fiscal year (which will serve as the basis for calculating the said fee) through supporting documentation, such as, for example, the publication of financial statements.

DELISTING OF OPEN COMPANIES

According to Article 219 of Law No. 6,404/76, the company is extinguished by the closing of liquidation, as well as by merger or consolidation, and by spin-off with transfer of all assets to other societies.

In cases of merger, consolidation, or spin-off, the cancellation of the company's registration results from its extinction, and the company is delisted from the list of open companies from the date of the Ordinary General Meeting (OGM) that decided on the merger, consolidation, or spin-off, regardless of the date of homologation by a government body. In addition to the mandatory submission of the Minutes of the respective OGM via the IPE System, the company is requested to formally communicate its extinction to the SEP.

It should be emphasized that it is mandatory to submit documents and periodic information whose delivery deadline is prior to the date of cancellation of the company's registration.

It is also clarified that the company is liable for the supervision fee referring to the quarter in which its extinction occurs. Thus, if the company is extinguished in the 1st quarter, it must inform the CVM of the net equity of the previous fiscal year (which will serve as the basis for calculating the said fee) through supporting documentation, such as, for example, the publication of financial statements.

We take this opportunity to remind that, pursuant to Article 223, § 3 of Law No. 6,404/76, if the merger, consolidation, or spin-off involves an open company, the succeeding society shall also be open, obtaining the respective registration and, if applicable, promoting the admission of trading of the new shares in the secondary market, within a maximum period of 120 (one hundred and twenty) days, counted from the date of the assembly that approved the operation, observing the pertinent norms issued by the Securities and Exchange Commission.

In accordance with § 4, the non-compliance with the provisions of Article 223, § 3, gives the shareholder the right to withdraw from the company, through the reimbursement of the value of their shares (Article 45), within 30 (thirty) days following the end of the period referred to therein, observing the provisions of §§ 1 and 4 of Article 137.

ARTICLE 203 OF THE CORPORATION LAW

Article 203 of Law No. 6,404/76 determines that the provisions of Articles 194 to 197 and 202 shall not prejudice the right of preferred shareholders to receive fixed or minimum dividends to which they have priority, including arrears, if cumulative.

Consequently, the reserves mentioned in Articles 194 to 197, and that referred to in § 5 of Article 202 of Law No. 6,404/76, cannot be constituted to the detriment of fixed or minimum dividends. Thus, if there is profit, even if unrealized, the fixed or minimum dividends must be distributed.

ELECTION OF MEMBERS OF THE BOARD OF DIRECTORS

11.1 ARTICLE 8 OF LAW NO. 10,303/01

In line with the decision of the CVM Board (Meeting of 03.03.06, available on the CVM website), since the ordinary general assembly held in 2006, whenever the election of directors occurs in the manner of Article 141, § 4, II, or § 5, of Law No. 6,404/76, such directors shall be freely indicated by the shareholders, in the manner of § 4 of Article 8 of Law No. 10,303/01, recommending that open companies include in the notice of convocation of general assemblies in which the election of board directors is provided for the possibility of exercising the faculties referred to in the cited paragraphs of Article 141 of Law No. 6,404/76.

11.2. INTERPRETATION OF ARTICLE 141, § 5, OF LAW NO. 6,404/76

In the meeting held on 11.04.06, the CVM Board decided to maintain the interpretation of Article 141, § 5, of Law No. 6,404/76 given in the meeting of 08.11.05 (both available on the CVM website), summarized below.

In cases where the company has only issued shares with voting rights, the majority of holders who hold at least 10% of the total voting shares shall have the right to elect and remove one member and their alternate from the Board of Directors, in a separate vote at the general assembly, excluding the controlling shareholder.

It is worth highlighting that this interpretation does not have retroactive effects.

ELECTION OF THE FISCAL COUNCIL

Law No. 6,404/76 established, in Article 161, § 4, letter "a", that holders of preferred shares without voting rights or with restricted voting rights shall have the right to elect, in a separate vote, one member and their respective alternate; the same right shall have minority shareholders, provided that they represent, collectively, ten percent or more of the shares with voting rights.

In interpreting this provision, the CVM expressed its understanding, through CVM Orientation Opinion No. 19/90, that in order for the right attributed by law to preferred shareholders not to become merely nominal, it should be understood that, in the separate vote of these shareholders for the election of their representative on the Fiscal Council, controlling shareholders shall not participate, even if they also hold preferred shares. Such participation, if admitted, would result in an effective curtailment of the essential right to supervise and in a non-equitable representation of interests, often contrary, which the law sought to protect.

In this sense, the understanding of the SEP, in consonance with the provisions of Orientation Opinion No. 19/90, is that, in the separate election for the fiscal council by preferred shareholders (Article 161 of Law No. 6,404/76), no shareholders who do not fall within the concept of minority that the law sought to protect should participate (elect), that is, in addition to controllers, persons linked to them should also not participate.

STATEMENT OF ADDED VALUE AND SOCIAL BALANCE SHEET

As described in item 1.12 of CIRCULAR-OFFICE/CVM/SNC/SEP No. 01/2007, of 14.02.07, the CVM has been encouraging and supporting the voluntary disclosure of information of a social nature.

With the objective of guiding and encouraging companies, a simplified model of Statement of Added Value (based on a model prepared by FIPECAFI) with instructions for its completion was presented in the cited item 1.12 of CIRCULAR-OFFICE/CVM/SNC/SEP No. 01/2007.

Currently, the Social Balance Sheet and the Statement of Added Value (which may integrate the Social Balance Sheet) are voluntarily disclosed by some open companies, annually, in the Explanatory Notes or in the Management Report.

In this sense, in order to facilitate the submission and consultation of such information, the types "Social Balance Sheet" and "Statement of Added Value" were created in the "Economic-Financial Data" category, which must be used in the submission of such information via the IPE System.

PROJECTIONS

The disclosure of projections is information of a relevant nature, subject to the determinations of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07).

CVM Instruction No. 202/93, in its Article 8, allows the presentation of business projections, determining, however, that when disclosed, the company must adopt the following procedures:

I. present, clearly, for each of the items and projected periods, the premises and calculation memos used;
II. present, when providing the quarterly information indicated in Article 16, item VIII, a comparison between the projections prepared and the results actually obtained in the quarter, clearly and accurately indicating the reasons that led to deviations from the projections previously made; and
III. when, in the judgment of the administrators, based on solid reasons, the projections cease to be valid or are modified, disclose the fact to the market, immediately, in the manner provided for by Article 157, § 4 of Law No. 6,404 of December 15, 1976, and CVM Instruction No. 31/84 (revoked by CVM Instruction No. 358/02), together with their reasons.

CAPITAL BUDGET

The main sources of capital for open companies are: the raising of new resources, via the issuance of debt securities or sale of equity participation, on the one hand, and the reinvestment of own resources, on the other. The latter modality is regulated by Articles 194 (Statutory Reserves) and 196 (Retention of Profits) of the Corporation Law. The latter disciplines the retention of profits for investment purposes. In its terms:

Retention of Profits

Art. 196. The general assembly may, upon proposal of the administrative bodies, decide to retain a portion of the net profit of the fiscal year provided for in a capital budget previously approved by it.

§ 1 The budget, submitted by the administrative bodies with the justification of the proposed retention of profits, must comprise all sources of resources and applications of capital, fixed or current, and may have a duration of up to five fiscal years, except in the case of execution, for a longer period, of an investment project.

§ 2 The budget may be approved in the ordinary general assembly that decides on the balance sheet of the fiscal year.

The legislator sought to protect minority shareholders against arbitrary decisions by controllers and administrators, when deliberating on the destination of profits earned at the end of the social year, since the reinvestment of profits imposes the sacrifice of receiving dividends in the present. Indeed, the requirement formulated to present, in the Assembly, the capital budget, or investment project, has the effect of informing partners of the administration's recommendation on the best destination to be given to the resources obtained with the social business of the last fiscal year. This retention will finance the exploitation of available opportunities, capable of increasing the value of the company, and, consequently, the shareholder's equity. By the wording given to the article, it seems that the legislator differentiated the capital budget from the investment project, both by the duration period, as well as by the nature of the application given to the available funds. If the periods provided for to realize the respective assets are less than 5 years, and have the purpose of maintaining the operational capacity of the company, a capital budget will be presented. On the other hand, if the investment has a duration greater than the limit of 5 (five) years, and aims to expand operations, with a view to increasing scale gains, for example, then an investment project will be discussed in the Assembly.

Both the capital budget and the investment project must be available to shareholders up to 1 (one) month before the OGM, as provided for in item V of Article 133 of Law 6404/76, and therefore must also be sent to the CVM, via the IPE system, in the "Assembly" Category, Type "OGM" or "OGM/E", Species "Administration Proposal", Subject "Capital Budget".

As a model, the following is suggested:

Sources
Realized To Be Realized
2005 2006 2007 (...) 2011
Retention of profits (art. 196)
Statutory Reserves (art. 194)
New indebtedness
Capital increase
Others (Specify)
Total Sources
Applications 2005 2006 2007 (...) 2011
Project 1
Project 2
(...)
Total Applications
Observation 1 The totals relating to the realized sources and applications must be equal, and appear in a note to the financial statements, as such values are recorded; Observation 2 The administrator must pay attention to what Article 199 of Law 6404/76 provides, which obliges to write off the balances of profit reserves, when the limit provided for is reached (also considering Article 193), whether by capitalization or distribution of dividends.

LATE, CORRECTIVE OR COMPLEMENTARY DECLARATIONS OF DIVIDENDS

In the case of late, corrective or complementary declarations of dividends (or other benefits) due by open companies, the payment must be made to the persons holding the shares on the date of the late, corrective or complementary declaration, or on another subsequent date, made public concomitantly with the declaration, and not to the holders of shares at the time of the original declarations.

It is worth highlighting that this orientation is in line with the decision of the Board in a meeting of 03.05.06 (available on the CVM website), in response to the inquiry of the SEP regarding the shareholder base to be used in the cited cases.

INFORMATION TO BE DISCLOSED IN MERGER, CONSOLIDATION AND SPIN-OFF OPERATIONS

CVM Instruction No. 319/99 provides for merger, consolidation and spin-off operations involving open companies, including the information that must be disclosed in these cases.

Companies must pay attention, notably, to the minimum information that must be contained in the relevant fact that communicates about the merger, consolidation or spin-off operation (§ 1 of Article 2 of the aforementioned Instruction), as well as to the information that must be included in the Protocol and Justification of the operation (Arts. 224 and 225 of Law No. 6,404/76).

The substitution relationships must be disclosed by the company both in the relevant fact (Article 2, § 1, item III, of CVM Instruction No. 319/99), as well as in the Protocol (Article 224 Law No. 6,404/76), highlighting that, in addition to the criteria used, the values that served as the basis for the calculation of the substitution relationships must also be disclosed.

Furthermore, it is important to emphasize that the identification, in the relevant fact, of the experts or the specialized company to evaluate the net equity of the company and the declaration of the existence or not, with respect to the same, of any conflict or community of interests, current or potential, with the controlling shareholder of the company, or in relation to minority shareholder(s) of the same, or regarding the other society involved, their respective partners, or with regard to the operation itself (Article 2, § 1, item XIV, of CVM Instruction No. 319/99) does not confuse with the information referred to in Article 5 of CVM Instruction No. 319/99, which must be provided by the companies and professionals themselves who have provided services related to the operation.

ARTICLE 143 OF LAW NO. 6,404/76

When consolidating the bylaws, companies must pay attention to the provisions of Article 143 of Law No. 6,404/76, regarding the composition of the board of directors of a corporation.

In particular, according to that legal command, it is necessary to fully detail the designations, attributes and powers of each directorate provided for in the bylaws, up to the maximum number initially provided.

Therefore, it is recommended that those companies whose bylaws are out of compliance with the Law adopt the necessary measures (including timely convocation of a general assembly, including in its notice the amendment of the bylaws in question) to correct any gaps that may exist in their respective bylaws.

APPEALS AGAINST DECISIONS OR MANIFESTATIONS OF UNDERSTANDING OF THE SEP

Pursuant to CVM Deliberation No. 463/03, the deadline to appeal to the Board against decisions issued by the CVM Superintendents is 15 (fifteen) days counted from the knowledge by the interested party.

The Superintendent must, within a period of 10 (ten) business days from the receipt of the appeal, reform or maintain the appealed decision and, in the second case, forward the process to the Board even if he understood the appeal as untimely or inadmissible.

CVM Deliberation No. 510/06, which amended CVM Deliberation No. 463/03, provides that the appeal will be received in the devolutive effect and if there is a just fear of damage of difficult or uncertain repair resulting from the execution of the decision, the Superintendent may, ex officio or upon request, give suspensive effect to the appeal.

If the request for suspensive effect is denied (totally or partially), the Superintendent must, immediately, notify the appellant and send a copy of the appeal and the decision to the President of the CVM, who will be responsible for the re-examination of the decision denying the suspensive effect.

The Superintendent will notify the appellant of the Board's decision within a period of 5 (five) business days.

Finally, it is highlighted that, at the request of a member of the Board, the Superintendent who issued the appealed decision, or of the appellant himself, the Board will review the allegation of existence of error, omission, obscurity or material inaccuracies in the decision, contradiction between the decision and its grounds, or doubt in its conclusion, correcting them if necessary, with the request forwarded to the Director who drafted the winning vote in the review of the appeal, within a period of 15 (fifteen) days, and submitted by him to the Board for deliberation.

INQUIRIES FROM OPEN COMPANIES

Inquiries regarding the application of norms and regulations issued by the CVM and the understanding of provisions of Laws No. 6,385/76 and 6,404/76 and subsequent amendments must be submitted in writing, via protocol, by the Director of Investor Relations to the SEP, with the identification of the open company. If the inquiry is made by legal representatives of the companies, it must be accompanied by their respective powers of representation.

The formulation of the inquiry must be clear regarding its object, avoiding generic form and theoretical inquiries, guiding towards the presentation of all elements and arguments deemed important for the conclusive manifestation of the CVM.

Inquiries on accounting matters must be accompanied by a statement from the independent auditor on the subject, in accordance with item 28.1 of CIRCULAR-OFFICE/CVM/SNC/SEP No. 001/07.

Finally, it is worth highlighting that the submission of an inquiry by the company does not exempt it from complying, within the due deadlines, with legal and regulatory obligations, even if they are the object of the formulated inquiry.

COMMUNICATIONS WITH THE SEP
In the event of forwarding questions, answers, appeals against decisions or understandings of the SEP, or petitions/representations, companies must use direct correspondence; sending via the IPE System is not admitted unless expressly requested by the SEP.
In this sense, it is worth highlighting that the sending of these correspondences via the IPE System, when not expressly requested by the SEP, has been used by some companies, causing, at times, embarrassment to their own administration or difficulty in monitoring responses to requests or statements from this Superintendence.
It is emphasized that, as a general rule, the deadlines for responding to requests contained in letters sent by the SEP must be counted from the date of receipt of the Letter (date of the AR).
REQUESTS FOR HEARINGS WITH PRIVATE INDIVIDUALS
In line with Decree No. 4,334, of August 12, 2002, requests to schedule meetings with organizational components of the CVM must be forwarded electronically, through the CVM page, selecting, for this purpose, the option HEARING WITH PRIVATE INDIVIDUALS.
In this request, there must be a clear specification of the subject matter to be treated, with the necessary condition, in the case of company consultations, their prior forwarding, as described in the previous item.
REQUEST FOR VIEWING OF PROCESS FILES
In accordance with §2 of Article 8 of Law No. 6,385/76, all documents and files of administrative processes that are pending or archived at the CVM are public, except those whose confidentiality is essential for the defense of intimacy or social interest, or whose confidentiality is ensured by express legal provision.
It must be kept in mind, furthermore, Article 46 of Law 9,784/99, which regulates the administrative process within the Federal Public Administration, which guarantees interested parties the right to view the process and to obtain certificates or reprographic copies of the data and documents that integrate it, except for data and documents of third parties protected by confidentiality or by the right to privacy, honor, and image. In the case of an administrative process to investigate illegal acts and unfair practices that is preceded by an investigative stage, the necessary confidentiality for the elucidation of facts or required by public interest will be ensured, as provided in §2 of Article 9 of Law No. 6,385/76. In April 2005, the Autarchy regulated, through CVM Deliberation No. 481/05, the granting of viewing of files of administrative processes of any nature initiated within the scope of the CVM. Requests for viewing of processes pending in this Autarchy must be forwarded by presenting a signed request, specifying whether it concerns the granting of viewing and/or copies, with the qualification of the signatories and, in the case of company representatives, accompanied by the respective powers of attorney. In accordance with §1 of Article 3 of CVM Deliberation No. 481/05, the request must specify the requester's interest in obtaining access to the files, except if it concerns a defendant in a sanctioning administrative process, in which case the granting of viewing will always be ensured. The granting depends on authorization by the holder of the Superintendence responsible for conducting the administrative process or by the Rapporteur, in case there is a pending appeal or decision by the Collegiate Body, with the postponement of the granting of viewing being optional in the interest of the service when such measure would hinder the performance of an act or the adoption of measures necessary for the conduct of the process. In administrative processes initiated due to requests for postponement of general meetings of open companies or interruption of the flow of the convocation period, in accordance with CVM Instruction No. 372/02, the granting of viewing will not be admitted while the process is pending decision, except for the right of access to the files by the company within the period for its statement, as provided in Article 4 of CVM Deliberation No. 481/05. Furthermore, processes initiated for the purpose of verifying possible occurrences of violations of legal or regulatory norms whose supervision is incumbent upon the CVM will be conducted under confidentiality, except in cases where the requester has been publicly indicted by the CVM as a possible author of the violation under investigation, in which case the granting of viewing will be considered mandatory. It is worth noting that the confidentiality of the process may be lifted by a decision of the Superintendent, when he considers it unnecessary for the elucidation of facts and
there are no data or information in the files protected by cases of confidentiality ensured by express legal provision or for the defense of intimacy or social interest. As stated in §2 of Article 5 of CVM Deliberation No. 481/05, the provisions of the two preceding paragraphs, regarding processes for the investigation of irregularities, apply to complaints filed by investors and any other market participants, including regarding viewing requests made by them. In sanctioning administrative processes, defendants will be admitted to the granting of viewing by means of a request addressed: (i) to the Process Control Coordination, in processes governed by CMN Resolution No. 454/77; or (ii) to the Superintendence that initiated the process, until the eventual filing of an appeal to the Collegiate Body, in processes governed by CMN Resolution No. 1,657/89, or to the CCP, after the eventual filing of appeals to the Collegiate Body. Viewing requests will be analyzed on a case-by-case basis, with the requesters having, in the event of denial of the request, an appeal to the CVM Collegiate Body, in accordance with CVM Deliberation No. 463/03. According to Article 3, §3, of CVM Deliberation No. 481/05, if the denial decision is issued by the Rapporteur, an appeal against his decision lies to the Collegiate Body, within a period of 5 (five) days, counted from the date the interested party becomes aware. For granted requests, the processes will be made available at the Consultation Center – SOI/GOI of this Autarchy, with the indication of the availability period through a letter in response to the request.
CVMWIN SYSTEM
The CVMWIN System, used for sending DFP, IAN, and ITR forms, provided for in Article 16, items II, IV, and VIII, of CVM Instruction No. 202/93, is available for download on the CVM page (www.cvm.gov.br), in the MARKET PARTICIPANTS section, item DOCUMENT SUBMISSION, subitem PROGRAM), and on the Bovespa page (www.bovespa.com.br), in the COMPANIES section, item FOR COMPANIES, subitem FOR LISTED COS, link ITR/DFP/IAN SYSTEM. In accordance with OFFICE/CIRCULAR/CVM/SEP/No. 004/2006, of 28.12.06 (available on the CVM page), the submission of forms, as well as their resubmission, began to be carried out using version 8.0 (subsequently updated to version 8.1) of the CVMWIN System. The new version of CVMWIN brings two relevant changes to all forms (DFP, IAN, and ITR), namely:
I. introduction of a new list of accounts, mainly due to what was established in CVM Deliberation No. 488/2005;
II. compatibility with more recent versions of Word (up to XP 2003); and
III. possibility of creating files in XML format with data from financial statement tables and other structured tables.
It is worth highlighting that for forms with closing dates from 31.12.06, inclusive, the cited new list of accounts must be used, mandatorily.
In the case of submission or resubmission of forms with closing dates prior to 31.12.06, the new version (8.0) will allow the use of the previous list of accounts.
The installation of the new version must be done in the same directory where the previous version is located and does not imply the loss of any information existing there. It is recommended that, before installing the new version, backups of existing files be made. It is important to read the system help before sending any electronic file. Doubts can be clarified by the CVM Systems Support.
OPEN COMPANY REGISTRATION SYSTEM - CVMWEB
Companies are obliged to update their registration data with the CVM, within 5 (five) days after the occurrence of any change, in view of what is provided in Article 13, item III, of CVM Instruction No. 202/93.
As established in Article 18 of CVM Instruction No. 202/93, without prejudice to the responsibility of administrators under Articles 9, item V, and 11 of Law No. 6,385/76, an open company that does not keep its registration updated, in accordance with Articles 13, 16, and 17 of the same Instruction, will be subject to a daily coercive fine. In accordance with Article 19 of CVM Instruction No. 202/93, non-observance of the procedures listed in items I to III of Article 13 of this Instruction constitutes an offense of an objective nature, in which a summary administrative process procedure will be adopted, in accordance with the Regulation Annexed to CMN Resolution No. 1,657/89. The recurrence of these objective offenses constitutes a serious offense, for the purposes provided in §3 of Article 11 of Law No. 6,385/76. OFFICE/CIRCULAR/CVM/SEP/No. 01/04, of 16.02.04, communicated to companies the implementation of the new Registration Update System (CVMWEB), with each one responsible for making modifications directly on the CVM page on the worldwide web, having been provided to IR Directors with an access password and guidance on how to proceed with the registration update. Therefore, the registration update of companies ceased to be done automatically by importing data entered in DFP, IAN, and ITR forms. Registration updates by this system now include: social and commercial name, date of company constitution, address, telephone, fax, email, securities trading institution, activity sector, trading market, company status, and information on the current independent auditor. In this sense, it is worth highlighting the creation, during the year 2005, of new activity sectors replacing the sector "Admin. and Holding Cos.", as well as the creation of open company statuses "Judicial Recovery" and "Out-of-Court Recovery". It is worth remembering that any of these alterations must be made by the company and, depending on the case, subsequently to the forwarding via the IPE System of the alteration act (minutes of the general meeting or board meeting), as the system will only accept alterations if the IPE protocol number is indicated. It is emphasized that the update of IR Director, trustee, judicial administrator, judicial manager, or liquidator data continues to be done via the IPE System. Attention is drawn to the need for adequate maintenance of company data in this registration system, in order to avoid discrepancies with the information contained in DFP, IAN, and ITR forms, which are sent via the CVMWIN System.
PERIODIC AND OCCASIONAL INFORMATION SYSTEM - IPE
Developed in 2003, in partnership with BOVESPA, the Periodic and Occasional Information System - IPE replaced the physical sending of information via electronic means, providing broad and disseminated publicity to the securities market and the interested public.
The documents and information sent are available simultaneously on the CVM and BOVESPA pages, in the case of companies registered there, with the exception of the form for the communication provided for in Article 11 (individual) of CVM Instruction No. 358/02 (recently amended by CVM Instruction No. 449/07) (see item 5.7).
The information sent will be under the responsibility of the Investor Relations Director (IR Director), who must, for this purpose, keep his data updated in the IR Director Registration module.
Attention must be paid to ensure that pdf format files present a legible format, which facilitates reading, manipulation, and printing of documents by interested parties.
Finally, it is highlighted that companies may request the CVM to send documents not provided for in the IPE System.

26.1. MOST RECENT CHANGES IN THE IPE SYSTEM

ASSEMBLY
The "Assembly" category, in types "AGE" and "AGO/E", species "Management Proposal" now includes the subject "Capital Budget", intended for sending the capital budget provided for in Article 196 of Law No. 6,404/76, it being worth noting that it was made available on the CVM page, in the "Document Submission" link, "XML File Standards and other MARKET COMMUNICATION It was created, in the "Market Communication" category, the type "Auditor Change (Article 28, CVM Instruction No. 308/99)", through which the company must forward to the CVM the communication of the auditor change, with or without termination of the audit services contract, with justification of the change, which must include the consent of the replaced auditor, as determined by Article 28 of CVM Instruction No. 308/99 (see item 5.12). INFORMATION ON COMPANIES IN JUDICIAL OR OUT-OF-COURT RECOVERY The "Information on Companies in Judicial or Out-of-Court Recovery" category now includes one more type of document, namely, "Creditors' Assembly", subdivided into 4 (four) species ("Proposal for the Assembly", "Convocation Notice", "Summary of Decisions", and "Minutes"). ECONOMIC-FINANCIAL DATA The following changes were made in the "Economic-Financial Data" category:
I. creation of types "Social Balance Sheet" and "Statement of Added Value";
II. in the type "Financial Statements in International Standards", the creation of 5 (five) species, namely, "Financial Statements in US GAAP", "Financial Statements in IFRS", "Financial Statements with reconciliation to US GAAP", "Financial Statements with reconciliation to IFRS", and "Others".
It is worth highlighting that the "Social Balance Sheet" category was deactivated, in view of the alteration mentioned in item "I" above.

26.2. IPE MANUAL
It is absolutely essential to read the document "IPE Manual", available on the CVM page, which presents a list of categories, types, and species of documents provided for in the system, classified by the obligation or not of sending, by the periodicity of its disclosure, and by the need or not of publication in the press, as well as bringing guidance on the procedure to access the system (sending and cancellation of data and IR Director registration). Sincerely, ELIZABETH LOPEZ RIOS MACHADO Superintendent of Company Relations

Circular Letter CVM/SEP 01/07

Lineage: In force

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