Circular Letter CVM/SEP 01/08 — CVM — BR

CIRCULAR LETTER CVM/SEP No. 001/2008
Rio de Janeiro, March 14, 2008
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 foster the disclosure of corporate information in a manner consistent with best corporate governance practices, aiming for transparency and equity in relationships with investors and the market, as well as to minimize possible deviations and, consequently, reduce the need to formulate requirements and apply penalty fines and sanctions.

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 must be observed, especially those that occurred after this date.

1. PERIODIC FORMS – DFP, IAN and ITR
1.1. GUIDELINES REGARDING THE VOLUNTARY SUBMISSION OF CONSOLIDATED FINANCIAL STATEMENTS IN IFRS (CVM INSTRUCTION NO. 457/07)
1.2. OF LAW NO. 11,638/07
1.3. STANDARDIZED FINANCIAL STATEMENTS – DFP
1.4. ANNUAL INFORMATION – IAN
1.5. QUARTERLY INFORMATION – ITR
2. COMPLETE ANNUAL FINANCIAL STATEMENTS
3. REPORTS OF BANKRUPT AND LIQUIDATING COMPANIES
4. ORDINARY GENERAL ASSEMBLY – OGA
5. 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 EXTRA-JUDICIAL RECOVERY
5.7. SECURITIES OF ADMINISTRATORS AND RELATED PARTIES
5.8. RELEVANT SHAREHOLDING
5.9. TRADING POLICY
5.10. DISCLOSURE POLICY
5.11. MEETINGS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD
5.12. COMMUNICATION OF THE CHANGE OF INDEPENDENT AUDITOR
6. COMMON OBSERVATIONS REGARDING PERIODIC AND OCCASIONAL INFORMATION
7. CONSEQUENCES OF OUTDATED REGISTRATION
7.1. PENALTY 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
8. CANCELLATION OF REGISTRATION OF PUBLIC COMPANY
9. ELIMINATION FROM THE LISTING OF PUBLIC COMPANIES
10. ARTICLE 203 OF THE CORPORATION LAW (LSA)
11. ELECTION OF MEMBERS OF THE BOARD OF DIRECTORS
11.1. ARTICLE 8 OF LAW NO. 10,303/01
11.2. INTERPRETATION OF ARTICLE 141, §5, OF LAW NO. 6,404/76
12. INSTALLATION OF THE FISCAL COUNCIL AND ELECTION OF ITS MEMBERS
13. STATEMENT OF ADDED VALUE AND SOCIAL BALANCE SHEET
14. PROJECTIONS
15. RECOMMENDATIONS ON GUIDANCE PRACTICE
16. CAPITAL BUDGETING
17. LATE, CORRECTIVE OR COMPLEMENTARY DECLARATIONS OF DIVIDENDS
18. INFORMATION TO BE DISCLOSED IN MERGER, CONSOLIDATION AND SPIN-OFF OPERATIONS
19. INFORMATION TO BE DISCLOSED IN OPERATIONS FOR THE ACQUISITION OF COMMERCIAL COMPANIES BY PUBLIC COMPANIES
20. TRADING IN OWN ISSUED SHARES
21. STATUTORY COMPETENCE OF THE BOARD OF DIRECTORS TO DELIBERATE ON THE ISSUANCE OF DEBENTURES
22. ARTICLE 143 OF LAW NO. 6,404/76
23. APPEALS AGAINST DECISIONS OR MANIFESTATIONS OF UNDERSTANDING OF SEP
24. INQUIRIES BY PUBLIC COMPANIES
25. COMMUNICATIONS WITH SEP
26. REQUESTS FOR HEARINGS BY PRIVATE INDIVIDUALS
27. REQUEST FOR REVIEW OF PROCESS
28. CVMWIN SYSTEM
29. REGISTRATION SYSTEM FOR PUBLIC COMPANIES – CVMWEB
30. PERIODIC AND OCCASIONAL INFORMATION SYSTEM – IPE
30.1. MOST RECENT CHANGES IN THE IPE SYSTEM

1. 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 submitted to the CVM through the CVMWIN System (see item 28).

In line with the decision of the Collegiate Body of 07/13/2004 (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. GUIDELINES REGARDING THE VOLUNTARY SUBMISSION OF CONSOLIDATED FINANCIAL STATEMENTS IN IFRS (CVM INSTRUCTION NO. 457/07)

CVM Instruction No. 457/07, of July 16, 2007, allowed public companies to present, until the fiscal year 2009, their "consolidated financial statements with the adoption of the international accounting standard, issued by the International Accounting Standards Board – IASB, in substitution for the Brazilian accounting standard" (see CIRCULAR LETTER CVM/SEP No. 004/2007).

The CVM, with the assistance of BOVESPA, is arranging for the development of a new version of the CVMWIN System, with the objective of allowing the submission of Consolidated Financial Statements in IFRS in standardized forms.

Until the new version is available, public companies that choose to disclose their Interim or Year-End Consolidated Financial Statements in IFRS, with a base date of 09/30/07 onwards, must send this information exclusively via the IPE System, in the category "Economic-Financial Data", type "Financial Statements in International Standards", species "Financial Statements in IFRS". These financial statements must be accompanied by explanatory notes and the report of independent auditors or, if applicable, a special review report by the auditors (see CVM Instruction No. 245/96). When dealing with companies listed in Levels 1, 2 or the Novo Mercado of BOVESPA, given the specific regulation, it is necessary to verify the need to include the consolidated performance commentary.

Furthermore, these companies must include, in the Explanatory Notes contained in their respective ITR and DFP forms, the information that the Consolidated Financial Statements in IFRS are available on the CVM and BOVESPA websites (in the case of companies registered there or registered in the organized over-the-counter market administered by BOVESPA), as well as on any other addresses on the internet. We highlight that, in this case, without prejudice to the provisions of article 31 of CVM Instruction No. 247, the reconciliation mentioned in paragraph 1 of article 2 of CVM Instruction No. 457/07 must be included in the explanatory notes to the Consolidated Financial Statements in IFRS.

It should be emphasized that (i) the aforementioned Instruction does not exempt the Company from submitting the ITR and DFP Forms, through the CVMWIN System, with all other information, which include the individual financial statements prepared in accordance with corporate legislation; and (ii) regardless of the submission of Consolidated Financial Statements in IFRS, in the manner mentioned above, the Company may submit, through the ITR and DFP Forms, the Consolidated Financial Statements in accordance with corporate legislation.

1.2. OF LAW NO. 11,638/07

On December 28, 2007, Law No. 11,638/07 was issued, which amended, revoked and introduced new provisions to Law No. 6,404/76, notably regarding chapter XV which deals with accounting matters.

As a result, the CVM will issue, in 2008 and 2009, a set of norms endorsing the pronouncements to be prepared by the Accounting Pronouncements Committee – CPC, with the objective of regulating the matter.

1.3. STANDARDIZED FINANCIAL STATEMENTS – DFP

Article 16, item II, of CVM Instruction No. 202/93 provides for the submission of the Standardized Financial Statements form (DFP). 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 in the press or its making available to shareholders, if this occurs on a date prior to the first deadline, without dispensing with the presentation, through the Periodic and Occasional Information System (IPE), of the complete financial statements, as provided for in item 2 of this Circular Letter.

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

In accordance with the sole paragraph of article 3 of CVM Instruction No. 414/04, securitization companies must add to the forms for Quarterly Information – ITR and Standardized Financial Statements – DFP:
I. a report on the acquisition, retrocession, payment and default of credits linked to the issuance of CRI;
II. the independent financial statements, by 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 paragraph 7 of article 7 of CVM Instruction No. 414/04, if applicable.

It is emphasized that the DFP form is not confused with the Complete Annual Financial Statement (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.

Public companies that choose to disclose their Year-End Consolidated Financial Statements in IFRS, with a base date of 12/31/07 onwards, may continue to voluntarily submit, through the DFP Forms, the Consolidated Financial Statements in accordance with corporate legislation (see item 1.1).

1.4. 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 submitting the IAN form is 5 (five) months after the end of the fiscal year or within a maximum period of one month, counting 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 fixed year after year.

In this sense, and in accordance with paragraph 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 provided are verified, within 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 alterations are verified whose information is required in the form, especially information regarding the composition of the company's management bodies, any statutory alterations and changes in shareholding composition.

Regarding 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, paragraph 1, 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 situation of 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, paragraph 7, of CVM Instruction No. 202/93.

Due to its permanent update, it may occur the suppression of previous and relevant information from the IAN form, such as the exercise of mandates of management 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 pattern 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".

With regard to 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, paragraph 2, of Law No. 6,404/76 and, also, stated in the help text of the CVMWIN System, shares that are in the possession of the controlling shareholder, persons linked to him or administrators of the company and shares held in treasury must be excluded from this calculation, 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 shareholdings greater than 5% of the total preferred shares. It is worth emphasizing that the disclosure of this information to the market was already provided for since the issuance of CVM Instruction No. 358/02 (amended by CVM Instruction No. 449/07), so since then, such data are communicated by the acquiring investor of the participation, and are available on the CVM website on the internet, in Market Notice 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 12/28/06:
I. filling out the Corporate Governance Information table, intended for the indication by companies of the practices adopted in this sense, as well as for the inclusion of justification for the non-application of the recommendations expressed in the CVM Guide; and
II. identification of the company's corporate shareholders, holders of more than 5% of the shares of each species and class.

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 submission of said form, updated information on the progress of the project presented to the CVM at the time of the registration request, in accordance with paragraph 1 of article 16 of CVM Instruction No. 202/93.

1.5. 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, or when the company discloses the information to shareholders, or to third parties, on an earlier 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 one 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 of their securities in a stock exchange or organized over-the-counter market, and whose consolidated annual gross 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, that is, it becomes 60 (sixty) days (article 1, item V), without prejudice to the obligation of its submission on an earlier date if the company discloses the information to shareholders, or to third parties, before this deadline.

In accordance with 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 be included in the ITR, since the form is also an instrument of monitoring for investors on the progress of the company's projects.

As provided in the sole paragraph of article 3 of CVM Instruction No. 414/04, securitization companies must add to the forms for Quarterly Information – ITR and Standardized Financial Statements – DFP:
I. a report on the acquisition, retrocession, payment and default of credits linked to the issuance of CRI;
II. the independent financial statements, by 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 paragraph 7 of article 7 of CVM Instruction No. 414/04, if applicable.

Although there is no legal requirement, it is considered important the presentation of 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 are required to present consolidated quarterly information.

Public companies that choose to disclose their Interim Consolidated Financial Statements in IFRS, with a base date of 09/30/07 onwards, may continue to voluntarily submit, through the ITR Form, the Consolidated Financial Statements in accordance with corporate legislation (see item 1.1).

COMPLETE ANNUAL FINANCIAL STATEMENTS

The financial statements and, if applicable, the consolidated statements, prepared in accordance with article 176 of Law No. 6,404/76 and 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 item 1.3.

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 being confused with their eventual publications in summarized form, as allowed by article 3 of CVM Instruction No. 207/94.

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

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 the requirement of availability met if the statements are disclosed on the company's electronic page, with their 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.

The submission of these statements must be made 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 or, when publishing in accordance with paragraph 3 of article 133 of Law No. 6,404/76, in the field referring to the dates, indicate the expected publication date or the company's electronic page, to access the information.

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 in 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 last 2 (two) fiscal years, the largest amount of transactions 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 allowed the publication of financial statements in summarized form compared to the data of the previous fiscal year, provided that at least the information specified in its article 3 is disclosed.

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 OGA minutes, in accordance with paragraph 3 of article 289 of Law No. 6,404/76.

Public companies that choose to disclose their Year-End Consolidated Financial Statements in IFRS, with a base date of 12/31/07 onwards, may continue to voluntarily disclose the Consolidated Financial Statements in accordance with corporate legislation (see item 1.1).

REPORTS OF BANKRUPT AND LIQUIDATING COMPANIES

Bankruptcy or liquidation of the company does not exempt it from complying with legal requirements imposed on publicly held companies, notably the provisions set forth in paragraphs 2 and 3 of Article 16 of CVM Instruction No. 202/93.

In this sense, the decision of the Collegiate Board, in a meeting held on July 13, 2004 (available on the CVM website), is highlighted, according to which bankrupt or liquidated publicly held 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), while they are required to provide those set forth in paragraphs 2 and 3 of the cited article.

According to paragraph 2 of Article 16 of CVM Instruction No. 202/93, the trustee of companies declared bankrupt must provide semi-annual information regarding fixed deadlines, stages reached, assets alienated, funds collected, amounts disbursed, and other information considered relevant for the securities market, within 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 45 (forty-five) days after the end of each quarter of the fiscal year, as provided for in paragraph 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 reports from bankrupt and liquidated publicly held companies, it is recommended that, except for the first report, the others be forwarded, whenever possible, with a reference date coinciding with the quarters and semesters of the civil year.

It should be noted that both information regarding the petition or confession of bankruptcy and the declaratory sentence of bankruptcy, as stated in Article 17, items IX and X of CVM Instruction No. 202/93, are occasional information that must be provided by the company (see item 5.5), constituting, furthermore, a Material Fact, under the terms of CVM Instruction No. 358/02.

Both the reports and the aforementioned information 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, within the first four months following the end of the fiscal year, there must be a general assembly to take account of the administrators, examine, discuss, and vote on the financial statements, deliberate on the allocation of net profit from the fiscal year and the distribution of dividends, elect the administrators and the members of the Fiscal Council.

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

The notices of convocation of Ordinary and/or Extraordinary General Assemblies must explicitly enumerate, in the order of the day, all matters to be deliberated, not admitting that under the heading "general matters" there are matters that require assembly deliberation, as established in CVM Instruction No. 341/00, with its transgression considered a serious offense for the purposes provided for in paragraph 3 of Article 11 of Law No. 6.385/76.

Furthermore, under the terms of Article 133 of Law No. 6.404/76, documents pertinent to matters included in the order of the day must be made available to shareholders at the company's headquarters until one month before the date scheduled for the holding of the ordinary general assembly.

Such documents must be forwarded to the CVM and, if applicable, to the stock exchange and organized over-the-counter market entity where the securities issued by the company are admitted to trading, via the IPE System, on the date of their availability at the company's headquarters, independent of the publication provided for in paragraph 3 of Article 133 of Law No. 6.404/76.

The documents must contain the necessary information for understanding the matters to be discussed in the assembly. For example, considering the provision of item II of Article 132 of Law No. 6.404/76, it must be informed whether the distribution of any benefit to shareholders, i.e., dividend, interest on equity capital, or eventual remuneration of capital, will be submitted for deliberation by the Assembly. If affirmative, the gross value in reais (R$) per share type and class must be provided, as well as whether the said value will be monetarily updated, as permitted by Article 4 of CVM Instruction No. 72/87.

In this sense, it is emphasized that the administration's proposal should not be restricted to the enumeration of items to be submitted to assembly deliberation, since such procedure would make it a mere repetition of information already contained in the Convocation Notice.

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

Thus, the impediment of participation in the assembly by the representative of a shareholder who has failed to adopt the procedure of early delivery of the instrument of proxy as established by the company constitutes a violation of 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, under 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, mandatorily, in the convocation notice of the Assemblies intended for the election of the 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 convocation notice of the ordinary general assembly must be forwarded to the CVM, through the IPE System, on the same day of its publication by the press, according 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 holding, as well as the minutes of the OGAs, within 10 (ten) days of its holding, 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, under the terms of paragraph 1 of Article 130 of Law No. 6.404/76, may be drawn up in the form of a summary of the facts occurred.

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 minutes of the OGA, provided for in item VI of the same article, drawn up in full or in the form of a summary of the facts occurred, must be sent via the species "Minutes".

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

Given the expiration of the period provided for in paragraph 4 of Article 8 of Law No. 10.303/01, the Board Counselors elected in the manner of Article 141, paragraph 4, II, or paragraph 5, of Law No. 6.404/76, began to be freely indicated by shareholders since the OGA held in 2006.

Thus, under the terms of the decision of the CVM Collegiate Board in a meeting held on March 3, 2006 (see item 11.1 below), it has been recommended to publicly held companies to include in the convocation notice of general assemblies in which the election of board counselors is provided for, the possibility of exercising the faculties dealt with in the cited paragraphs of Article 141 of Law No. 6.404/76.

It should be noted that, under Article 19, item II, of CVM Instruction No. 202/93, the non-observance of 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 OCCASIONAL INFORMATION

5.1. EXTRAORDINARY GENERAL ASSEMBLY – EGA AND SPECIAL ASSEMBLY

Furthermore, as provided for in paragraph 3 of Article 135 of Law No. 6.404/76, documents pertinent to the matter to be debated in the extraordinary general assembly must be made available to shareholders at the company's headquarters, upon the publication of the first announcement of convocation of the general assembly.

Such documents must be forwarded to the CVM and, if applicable, to the stock exchange and organized over-the-counter market entity where the securities issued by the company are admitted to trading, via the IPE System, upon the publication of the first announcement of convocation of the general assembly.

The documents must contain the necessary information for understanding the matters to be discussed in the assembly. It is emphasized that the administration's proposal, for example, should not be restricted to the enumeration of items to be submitted to assembly deliberation, since such procedure would make it a mere repetition of information already contained in the Convocation Notice.

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 convocation notices of extraordinary, special, and debentureholders' assemblies, whose publications follow the mold of Article 124, paragraph 1, item II, of Law No. 6.404/76, companies are obliged to forward the summaries of decisions, on the day following their holding, and the minutes of the assemblies, within 10 (ten) days of their holding.

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, under the terms of paragraph 1 of Article 130 of Law No. 6.404/76, may be drawn up in the form of a summary of the facts occurred.

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 minutes of the EGA, provided for in item III of the same article, drawn up in full or in the form of a summary of the facts occurred, must be sent via the species "Minutes".

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

Thus, under the terms of the decision of the CVM Collegiate Board in a meeting held on March 3, 2006 (see item 11.1 below), it is recommended to publicly held companies to include in the convocation notice of general assemblies in which the election of board counselors is provided for, the possibility of exercising the faculties dealt with in the cited paragraphs of Article 141 of Law No. 6.404/76.

5.2. SHAREHOLDER AGREEMENTS

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 resolutory term or 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 for the realization of their respective objects, or to participate in common activities or undertakings, are obliged to send a copy of the convention to the CVM, via the IPE System, upon its approval by the companies that compose it (Article 265 of Law No. 6.404/76).

Law No. 6.404/76, when disposing about Groups of Companies in Articles 265 to 277 (Chapter XXI), stipulated in the sole paragraph of Article 267 that only groups organized in accordance with the cited chapter may use the designation with the words "group" or "group of companies".

Notwithstanding, the use of the word "group", in the sense of "economic group", is a practice that can be observed among companies that have several affiliates and controlled entities, without being the same formally constituted groups of companies according to Article 265.

In this sense, it is recommended that companies avoid mentioning the word "Group" in documents and information disclosed.

5.4. ACT AND MATERIAL FACT

Under Article 157, paragraph 4, of Law No. 6.404/76, the administrators of the publicly held company are obliged to immediately communicate to the stock exchange and disclose through the press any deliberation of the general assembly or the administration bodies of the company, or any material fact occurring in their business, that may influence, in a considerable manner, the decision of investors in the market 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, it is incumbent upon 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 securities issued by the company are admitted to trading, any act or material fact occurred or related to their business (defined in Article 2 of the said 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 occurs an 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 persons with access to acts or material facts, with the objective of verifying if they have knowledge of information that must be disclosed to the market".

Moreover, according to Article 6, sole paragraph, of this Instruction, acts or material facts may, exceptionally, fail to be disclosed if controlling shareholders or administrators understand that their disclosure will put at risk the legitimate interest of the company, with these persons being obliged to, directly or through the Investor Relations Director (IRD), immediately disclose the act or material fact, in the event that the information escapes control or if there occurs an atypical fluctuation in the quotation, price, or quantity traded of the securities issued by the publicly held company or referenced therein.

Therefore, in the case of non-disclosure of an act or material fact, without prejudice to the investigation of eventual use of privileged information, the responsibility of the IRD for the eventual violation of the cited Articles 3, 4, and 6 of CVM Instruction No. 358/02 will also be assessed.

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

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

Corporate legislation 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, even, the possibility of using privileged information, it requires that the relevant fact in question be disclosed, previously or simultaneously to the meeting, to the entire market, as determined in paragraph 3 of Article 3 of CVM Instruction No. 358/02.

Following the orientation set forth in Article 5 of the mentioned Instruction, the disclosure of the act or material fact must be made, whenever possible, before the start or after the closing of trading on stock exchanges and organized over-the-counter market entities where the securities issued by the Company are admitted to trading.

Backed by Article 3, paragraph 6, and Article 4 of CVM Instruction No. 358/02, the CVM may determine the disclosure, correction, amendment, or republication of information about the act or material fact, as well as request additional clarifications about its disclosure.

In the case where controlling shareholders or administrators understand that the revelation of the act or material fact may put the legitimate interest of the Company at risk, a request for exception to immediate disclosure may be addressed to the President of the CVM in a sealed envelope, in which the word "Confidential" must appear, according to Article 7, paragraph 1, of CVM Instruction No. 358/02.

The 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 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.

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

It is alerted that, under Article 18 of CVM Instruction No. 358/02, the transgression of the provisions contained in the said Instruction constitutes a serious offense, for the purposes provided for in paragraph 3 of Article 11 of Law No. 6.385/76.

5.5. BANKRUPTCY SENTENCE AND REORGANIZATION

It should be noted that, in this item, the provisions contained in the new Bankruptcy Law must be considered, especially regarding the substitution of judicial reorganization (concordata) by extrajudicial or judicial recovery.

Without prejudice to the disclosure of a Relevant Event regarding the filing of a petition for judicial reorganization or the request or confession of bankruptcy, in accordance with Article 2, sole paragraph, item XXII, of CVM Instruction No. 358/02, publicly held companies must submit to the CVM, via the IPE System, the sentences granting judicial reorganization or declaring bankruptcy, indicating the trustee of the bankruptcy estate, on the same day the company becomes aware of them, as provided in Article 17, items VIII and X, of CVM Instruction No. 202/93.

Furthermore, in accordance with items IX and VII, information regarding the request or confession of bankruptcy must be provided on the same day the company becomes aware of it, or upon the entry of the request into court, whichever applies; as well as information regarding the request for judicial reorganization, along with its grounds, financial statements specifically prepared to obtain the legal benefit, and, if applicable, the situation of debenture holders regarding the receipt of invested amounts, on the same day the request enters 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, specifically by altering their status in the CVMWEB System (see item 29 below), as well as the data of the trustee or judicial administrator via the IPE system (see item 30).

5.6. DOCUMENTS RELATED TO COMPANIES IN JUDICIAL AND EXTRAJUDICIAL RECOVERY

Despite the lack of explicit requirement in CVM Instruction No. 202/93 to send documents related to situations of judicial and extrajudicial recovery, the CVM has been requiring companies to send such information.

To this end, a 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, Sentences, and Other Documents.

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

It is also highlighted that sending the aforementioned information via the IPE System does not dispense the company from disclosing a Relevant Event regarding the request or decree of judicial or extrajudicial recovery, in accordance with Article 2 of CVM Instruction No. 358/02.

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 the CVM information regarding the transactions they carried out.

In practice, however, Circular Letter/CVM/SEP No. 02/2006, dated 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 paragraph 4, of CVM Instruction No. 358/02, directors, members of the board of directors, the fiscal council, and any bodies with technical and advisory 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 them and by controlled or controlling companies, or referenced to them, of which they are holders:

I. within 5 (five) days after each transaction is carried out;
II. on the first business day after assuming office; and
III. upon the submission of documentation for the registration of the company as publicly held.

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

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, until 10 (ten) days after the end of each month in which changes in the positions held or the month in which the assumption of office of the persons mentioned occurred occurs, highlighting that the form models for completion are available on the CVM's Internet page, under the link "Submission of documents," "XML File Standards and others."

It should be emphasized that this rule aims to disclose all transactions carried out by administrators and related persons, with securities issued by the Company and its controlled or controlling companies. Thus, any transaction carried out by the persons mentioned must be reported to the investor relations director and will result in the obligation to send to the CVM the Form provided for in paragraph 6 of Article 11 of CVM Instruction No. 358/02 within 10 days after the end of the month in which such movement occurs, regardless of modification of the final balance.

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

With the objective of having complete and reliable information, it is requested that Companies voluntarily send the forms, even in months when no movements or changes in the positions of administrators and related persons have been verified.

In this case, the forms must be completed with the information that, during that period, there was no negotiation with 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 (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 dispose of 5% or more of the species or class of shares representing the share capital of a publicly held company, is obliged to, immediately after the operation, communicate to the Company the change in their participation.

It should be noted that the change in participation is not exclusively linked to a single operation, but is also assessed cumulatively, and refers to the acquisition/disposal/extinction of shares and rights on shares both in the onerous modality (purchase and sale, exchange, and loan) and gratuitous (donation).

With the objective of facilitating understanding of the concept covered by the expression "representing the same interest," we mention below three exemplary hypotheses of the link between shareholders:

I. link due to kinship, contract, or shareholders' agreement providing for voting rights;
II. shareholding control or participation, direct or indirect, in the 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, such communication must be made through a "Declaration of Acquisition of Relevant Shareholding Participation," 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 society;
III. number of shares, subscription bonuses, as well as subscription rights for shares and options to purchase shares, by species and class, already held, directly or indirectly, by the acquirer or a person related to them;
IV. number of debentures convertible into shares, already held, directly or indirectly, by the acquirer or a person related to them, specifying the quantity of shares subject to possible conversion, by species 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 discriminated.

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

In its previous wording, Article 12 of CVM Instruction No. 358/02 required the publication in the press of any acquisition of shares that exceeded the limit of 5% of the total of its species or class. On an exceptional basis, with CVM authorization, the 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 changed this logic by turning the rule into an exception and vice versa.

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

It should be noted that publication will continue to be required in the same cases in which it was previously required. The change in question 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 was 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 by the press in accordance with Article 3 of CVM Instruction No. 358/02.

Disposers of relevant shareholding participation, in accordance with Article 12, paragraph 4, of the aforementioned regulation, must inform the disposal or extinction of their shares issued by a publicly held company each time they reach the 5% percentage. Such disclosure must be made by sending a "Declaration of Disposal of Relevant Shareholding Participation" to the Company.

The "Declarations of Acquisition of Relevant Shareholding Participation" as well as the "Declarations of Disposal of Relevant Shareholding Participation" must be sent to the Investor Relations Director of the publicly held company. The IRD will have them inserted into the IPE System, through the CVM page, in the Category "Communication to the Market," with the type "Acquisition/Disposal of Shareholding Participation (Article 12 of CVM Instruction No. 358)" and two individualized species of Declaration. In the case of declarations that have been subject to publication, 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 emphasized that the investor or group of investors who attains, even through ownership of shares acquired by loan, a corresponding participation of 5% (five percent) or more of the species or class of shares representing the capital of a publicly held company, must proceed to disclose 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 reduction of relevant participation for the purposes of the caput and paragraphs 1 and 4 of the same article.

It is recommended that the Declarations referred to in Article 12 of Instruction 358/02 refer, if applicable, to the portion of shares held by the declaring investor that was acquired or disposed of through share lending.

In the case of non-resident investors, it is important to highlight that, in addition to the duty of the investor themselves to disclose the communication provided for in Article 12 of CVM Instruction No. 358/02, it is the responsibility of their legal representative, in accordance with item V of Article 5 of CMN Resolution No. 2.689/00, to immediately communicate to the CVM the occurrence of any irregularity of which they are aware. In this sense, whenever they have means to verify the increase or reduction of relevant shareholding participation of non-resident investors, the representative must take diligence to verify compliance with Article 12 of CVM Instruction No. 358/02 and communicate any irregularity to the CVM, if applicable.

5.9. TRADING POLICY

The securities trading policy, provided for in Article 15 of CVM Instruction No. 358/02 (amended by CVM Instruction No. 449/07), is optional. However, such policy is very useful for companies to establish a code of conduct for transactions involving, primarily, the shares issued by themselves.

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 at the same time 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 disclosure policy for relevant acts or events is a mandatory document established in Article 16 of CVM Instruction No. 358/02, applicable to all publicly held 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 MANAGEMENT

Law No. 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 against third parties (Article 142, paragraph 1).

CVM Instruction No. 202/93, in turn, requires the presentation, for the initial registration of a publicly held company, of the minutes of the Board of Directors meeting that designated the investor relations director, when this was designated in that meeting (Article 7, item I).

CVM Instruction No. 358/02, on the other hand, requires that the communication of the approval or alteration of the publicly held company's trading policy and disclosure policy must be accompanied by a copy of the deliberation 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 established by it (Article 17, item XI).

Thus, despite the lack of explicit mention in Article 17 of CVM Instruction No. 202/93 regarding the obligation to send all minutes of the Board of Directors and Management Meetings, the CVM, through the IPE Manual, has been requiring their sending, 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 the sending via the IPE System, through electronic messages sent to the companies.

5.12. COMMUNICATION OF AUDITOR CHANGE

Regardless of the need to update the independent auditor's data in the Companies Registration System – CVMWEB (see item 29), 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 there is a termination of the audit services contract, 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 "Communication to the Market," Type "Change of auditor (Article 28, CVM Instruction No. 308/99)."

It should be highlighted that, according to Article 29 of the aforementioned Instruction, it is the responsibility of the fiscal council of the audited entity, when functioning, to verify the correct compliance by the administrators with the provisions of Article 28.

6. 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 (amended by CVM Instruction No. 449/07) must be done as follows:

I. DFP, IAN, and ITR Forms – via the CVMWIN System (see item 28);
II. Registration update – via the CVMWEB System (see item 29); and
III. Other periodic information and eventual information – via the IPE System (see item 30).

As allowed by Article 14, paragraph 1, 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 their disclosure would put the legitimate interest of the company at risk, applying, where applicable, the provisions of Article 157, paragraph 5, of Law No. 6.404/76 and Articles 6 and 7, paragraph 1, of CVM Instruction No. 358/02.

According to paragraphs 1, 2, and 3 of Article 14, when the 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 deadline for submitting this information, except for the hypothesis provided for in the aforementioned Article 14, paragraph 1, of CVM Instruction No. 202/93.

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

A publicly held company that does not keep 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, the trustee, the judicial administrator, the judicial manager, or the liquidator), in accordance with Articles 9, item V, and 11 of Law No. 6.385/76.

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

Finally, it is highlighted, without prejudice to the provisions of the last two paragraphs, that the company must keep the market informed about any difficulty in meeting the deadlines provided for the presentation of periodic and eventual information.

7. CONSEQUENCES OF OUTDATED REGISTRATION

As highlighted in the previous items, publicly held 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 regulation, notably CVM Instruction No. 452/07, regardless of the assessment 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 No. 6.385/76, in turn, will only be imposed with the observance of the procedure provided for in paragraph 2 of Article 9 of Law No. 6.385/76 (administrative process preceded by an investigative stage).

However, a company that does not keep 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

from article 18 of the same Instruction.
Note that from the decision to apply penalty fines, an appeal may be filed with the CVM Board, within 10 (ten) days, in accordance with article 13 of CVM Instruction No. 452/07.
In this sense, it is highlighted the need to maintain updated registration data, particularly the addresses of the company and the DRI, as provided in the last paragraph of item 29.
Since 2007, appeals must be filed through the CVM website (www.cvm.gov.br), at the link "Inspection Fee and Penalty Fine"/"Appeal against Penalty Fine – Ordinary and Extraordinary"/"CVMWeb Login".
Furthermore, in accordance with item IX of CVM Deliberation No. 463/03, in the event of errors, omissions, obscurity, or material inaccuracies in the decision, or contradiction between the decision and its grounds, the Board will review requests for reconsideration of its decision regarding the appeal.
It is also clarified that CVM Deliberation No. 447/02, amended by CVM Deliberations No. 467/04 and No. 483/05, provides, among other things, for the installment payment of applied penalty fines, and CVM Deliberation No. 501/06 provides for the incidence of late payment interest on debts arising, among others, from penalty fines.
Finally, it is recommended that companies maintain contact with the CVM Collection Management to verify if they are up to date with the payment of inspection fees and penalty fines, avoiding inscription in the Defaulters Registry (CADIN) and in Active Debt.

7.2. PUBLICATION OF THE LIST OF DEFAULTING COMPANIES
The Securities and Exchange Commission, in accordance with CVM Deliberation No. 178/95, semi-annually discloses to market participants the list of open companies whose registration as a company – 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 determine 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 recalled, however, that the determination of the responsibility of administrators is independent of the ex officio suspension of the registration of an open company, 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 emphasized 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 liability 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 registration of an open company, provided for in article 3 of CVM Instruction No. 287/98, will be carried out in the following situations:
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 Register 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 registration of the open company;
V. Proof of the suspension of the company's activities for a period exceeding three years, with its registration suspended for more than one fiscal year.
It is emphasized 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 liability arising from the eventual infringement of the legislation applicable to them, while the company was open.

7.5. SANCTIONING ADMINISTRATIVE PROCESS
As provided in article 19 of CVM Instruction No. 202/93, it constitutes an offense of an objective nature, for which a summary administrative process procedure will be adopted, in accordance with the Regulation Annexed to CMN Resolution No. 1.657/89, to fail to adopt, by the administrator of an open company (and, where applicable, the receiver, trustee, judicial administrator, judicial manager, or liquidator), the procedures listed in items I to III of article 13, except for the situation provided for in item VI of article 17, constituting, furthermore, a serious offense, for the purposes provided for in paragraph 3 of article 11 of Law No. 6.385/76:
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. 6.404/76, for the holding of the ordinary general assembly;
III. recurrence of objective nature infractions defined in the caput of article 19 of CVM Instruction No. 202/93.
For its part, in accordance with article 18 of CVM Instruction No. 358/02, it constitutes a serious offense, for the purposes provided for in paragraph 3 of article 11 of Law No. 6.385/76, the transgression of the provisions of that Instruction, and the CVM must communicate to the Public Ministry the occurrence of the events provided for in that Instruction that constitute a crime. Therefore, and as provided in article 9, item V, of Law No. 6.385/76, the CVM may investigate, through an administrative process, the eventual responsibility of administrators (and, where applicable, the receiver, trustee, judicial administrator, judicial manager, or liquidator), members of the fiscal council, and shareholders of open companies for non-compliance with the provisions contained in the aforementioned Instructions. In this sense, and in accordance with article 11 of Law No. 6.385/76, the penalties provided for in items I to VIII of the same article will only be imposed with observance of the administrative process mentioned in the previous paragraph, also observing the provisions of CVM Deliberation No. 504/06, amended by No. 514/06.

CANCELLATION OF OPEN COMPANY REGISTRATION
The cancellation of registration of an open company must be preceded by a Public Offer to Acquire 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 paragraph 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 that are not 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 will 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 recalled that the establishment 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 plea, without which the company, although a wholly-owned subsidiary, remains subject to all obligations and penalties provided for in the current regulation, including those regarding the updating of the registration maintained at the CVM. Transgression of the provisions of CVM Instruction No. 361/02, according to its article 36, is considered a serious offense, for the purpose of the provisions of article 11, paragraph 3 of Law No. 6.385/76. It should be noted that it is mandatory to forward the 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 inspection fee for 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 related to the previous fiscal year, it must inform the CVM of the previous fiscal year's net equity (which will serve as the basis for calculating the aforementioned fee) through supporting documentation, such as, for example, the publication of financial statements.
ELISION OF OPEN COMPANY LISTING
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 the transfer of all assets to other companies.
In the cases of merger, consolidation, or spin-off, the cancellation of the company's registration results from its extinction, and the company is elided from the listing of open companies from the date of the General Shareholders' Meeting that deliberated 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 General Shareholders' Meeting via the IPE System, the company is requested to formally communicate its extinction to the SEP. It should be noted that it is mandatory to forward the 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 inspection fee for the quarter in which its extinction occurs. Thus, if the company is extinguished in the 1st quarter, it must inform the CVM of the previous fiscal year's net equity (which will serve as the basis for calculating the aforementioned fee) through supporting documentation, such as, for example, the publication of financial statements. It is emphasized that, in view of article 223, paragraph 3, of Law No. 6.404/76, if the merger, consolidation, or spin-off involves an open company, the succeeding company will also be open, and must obtain the respective registration and, if applicable, promote 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 relevant norms issued by the Securities and Exchange Commission. In the form of paragraph 4, non-compliance with the provisions of article 223, paragraph 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 paragraphs 1 and 4 of article 137.
ARTICLE 203 OF THE LSA
Article 203 of Law No. 6.404/76 determines that the provisions of articles 194 to 197 and 202 will 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 paragraph 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 counselors occurs in the form of article 141, paragraph 4, II, or paragraph 5, of Law No. 6.404/76, such counselors will be freely indicated by the shareholders, in the form of paragraph 4 of article 8 of Law No. 10.303/01, recommending to open companies that they include in the notice of convocation of general assemblies in which the election of administrative counselors is provided for, the possibility of exercising the faculties referred to in the aforementioned 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, paragraph 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 own at least 10% of the total shares with voting rights, excluding the controlling shareholder, will have the right to elect and dismiss one member and their alternate from the Board of Directors, in a separate vote at the general assembly.
It is worth highlighting that this interpretation does not have retroactive effects.

INSTALLATION OF THE FISCAL COUNCIL AND ELECTION OF ITS MEMBERS
Law No. 6.404/76 established, in article 161, paragraph 4, letter "a", that holders of preferred shares without voting rights or with restricted voting rights will have the right to elect, in a separate vote, one member and respective alternate; the same right will have minority shareholders, provided that they represent, jointly, ten percent or more of the shares with voting rights. In interpreting the aforementioned provision, the CVM expressed its understanding, through CVM Advisory Opinion No. 19/90, in the sense that so as not to become merely nominal the right attributed by law to preferred shareholders, it should be understood that, in the separate vote of these shareholders for the election of their representative on the Fiscal Council, controlling shareholders cannot participate, even if holders of preferred shares as well. Such participation, if admitted, would result in an effective curtailment of the essential right to audit and in 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 Advisory 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, besides controllers, persons linked to them should also not participate. As provided in paragraph 2 of article 161 of Law No. 6.404/76, the fiscal council, when its operation is not permanent, will be installed by the general assembly at the request of shareholders representing, at minimum, 0.1 (one tenth) of the shares with voting rights, or 5% (five percent) of the shares without voting rights, and each period of its operation will end at the first ordinary general assembly after its installation. CVM Instruction No. 324/00 establishes a scale reducing, based on social capital, the minimum percentages of shareholding participation necessary for the request to install a Fiscal Council of an open company provided for in paragraph 2 of article 161 of Law No. 6.404/76. Thus, the minority shareholder has the right to request, in a general assembly, the installation of the Fiscal Council, observing the special quorum for installation provided for in Instruction 324/00. Once the installation is approved, the election of its members becomes mandatory. However, the quorum for separate election, referred to in paragraph 4, (a), of article 161 of Law 6.404/76, cannot be reduced by the CVM, as it does not fall under one of the situations provided for in article 291 of the same law. For this reason, in cases where (i) there are no minority shareholders holding preferred shares; and (ii) minority shareholders holding ordinary shares do not meet the quorum for the separate election of a member of the fiscal council, the CVM's understanding is that the shareholders present,
including the controller, may elect the fiscal counselors, by majority vote. The controlling shareholder is not obliged to participate in the election of the members of the fiscal council in the mentioned situation, and if they do not, all counselors will be elected by the vote of the other shareholders, regardless of their participation in the capital, as the council will be installed (art. 161, paragraph 2), and the election of its members is mandatory (art. 161, paragraph 4).
STATEMENT OF ADDED VALUE AND SOCIAL BALANCE SHEET
As described in item 1.12 of CIRCULAR LETTER/CVM/SNC/SEP No. 01/2007, of 14.02.07, the CVM has been encouraging and supporting the voluntary disclosure of social nature information.
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 LETTER/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 forwarding of such information via the IPE System.
PROJECTIONS
The disclosure of projections is information of a relevant nature, subject to the provisions of CVM Instruction No. 358/02.
CVM Instruction No. 202/93, in its article 8, allows the presentation of business projections, determining, however, that, when disclosed, the company is subject to adopting the following procedures:
I. present, clearly, for each of the projected items and periods, the premises and calculation memos used;
II. present, when providing 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 previously made projections; 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 form provided by article 157, paragraph 4, of Law No. 6.404/76, and CVM Instruction No. 31/84 (revoked by CVM Instruction No. 358/02), together with their reasons.
RECOMMENDATIONS ON THE PRACTICE OF GUIDANCE
Some companies adopt the practice of disclosing to the market their expectations of future performance (guidance), both short and long term, mainly with respect to the financial and operational aspects of their businesses.
It is emphasized that such practice is of an optional nature, and therefore, such decision lies with the company itself.
Thus, with a view to guiding companies that wish to implement the practice of guidance, the following precautions are recommended to be observed when adopting it:
I. The Company's Disclosure Policy must contemplate the adoption of this practice;
II. The advance disclosure of results may be admitted in the case of preliminary information, not yet audited, because, otherwise, the final part of the provisions of item VIII of article 16 of CVM Instruction No. 202/93 applies, which determines the immediate presentation of electronic forms of quarterly information – ITR;
III. The disclosure of preliminary financial data entails the trading restriction set forth in paragraph 4 of article 13 of CVM Instruction No. 358/02;
IV. Results or reports prepared in accordance with foreign accounting standards must present the reconciliation to Brazilian accounting practices;
V. If the company uses calculated financial metrics, such as EBITDA – earnings before interest, taxes, depreciation, and amortization, it must present the reconciliation with the accounting items expressed directly in the company's financial statements and, therefore, obtained by the accounting criteria adopted in Brazil;
VI. If the disclosed information involves the preparation of projections, it is recommended to pay attention to the provisions of article 8 of CVM Instruction No. 202/93, as mentioned in item 14 above, and the same must appear in table 14.01 of Form IAN, and the monitoring between what was projected and what was achieved must appear in table 12.01 of Form ITR; and
VII. If the disclosed projections are discontinued, this fact must be informed, accompanied by the reasons that led to their loss of validity, in the form of Relevant Fact, as provided in CVM Instruction No. 358/02.
CAPITAL BUDGET
The main sources of capital of open companies are: the raising of new resources, via the issuance of debt titles or sale of equity participation, on 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 Corporate 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 deliberates on the balance sheet of the fiscal year.
The legislator sought to protect minority shareholders against arbitrary decisions of controllers and administrators, when deliberating on the destination of profits earned at the end of the fiscal year, as the reinvestment of profits imposes the sacrifice of receiving dividends in the present. In effect, the formal requirement to present, in 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 from 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, and by the nature of the application given to the available funds. If the periods provided to realize the respective assets are less than 5 (five) 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, a

The investment project will be discussed at the Shareholders' Meeting.
Both the capital budget and the investment project must be available to shareholders up to 1 (one) month before the Annual General Meeting (AGO), as provided for in item V of Article 133 of Law No. 6,404/76, and therefore must also be sent to the CVM, via the IPE system, in the "Assembly" Category, Type "AGO" or "AGO/E", Species "Management Proposal", Subject "Capital Budget". As a model, the following is suggested:

Sources
Realized To Be Carried Out
2005 2006 2007 (...) 2011
Retained earnings (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 regarding the realized sources and applications must be equal, and appear in a note to the financial statements, as these values are recorded; Observation 2 The administrator must pay attention to what Article 199 of Law No. 6,404/76 provides, which obligates the write-down of profit reserve balances 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, 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 share holders at the time of the original declarations. It is worth noting that this orientation is in line with the decision of the Collegiate Body in a meeting on 03.05.06 (available on the CVM website), in response to the inquiry from 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 communicating the merger, consolidation or spin-off operation (paragraph 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 (Articles 224 and 225 of Law No. 6,404/76). The substitution ratios must be disclosed by the company both in the relevant fact (Article 2, paragraph 1, item III, of CVM Instruction No. 319/99) and in the Protocol (Article 224 of 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 ratios 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 company's net assets and the declaration of the existence or non-existence, regarding them, of any conflict or community of interests, current or potential, with the controlling shareholder of the company, or with minority shareholder(s) thereof, or regarding another involved society, its respective partners, or concerning the operation itself (Article 2, paragraph 1, item XIV, of CVM Instruction No. 319/99) does not coincide 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.

INFORMATION TO BE DISCLOSED IN ACQUISITION OPERATIONS OF COMMERCIAL COMPANIES BY OPEN COMPANIES
Article 256 of Law No. 6,404/76 determines that the purchase, by an open company, of the control of any commercial company, will depend on the deliberation of the general meeting of the purchaser, especially convened to consider the operation, whenever:
I the purchase price constitutes, for the purchaser, a relevant investment (Article 247, sole paragraph); or II the average price of each share or quota exceeds one and a half times the highest of the three values indicated below:
a) average quotation of shares on the stock exchange or in the organized over-the-counter market, during the 90 (ninety) days prior to the date of contracting; b) net asset value (Article 248) of the share or quota, with the assets evaluated at market prices (Article 183, paragraph 1); c) net profit value of the share or quota, which may not exceed fifteen times the annual net profit per share (Article 187, VII) in the last two fiscal years, monetarily updated. Additionally, in its paragraph 2, it provides that "if the acquisition price exceeds one and a half times the highest of the three values referred to in item II of the caput [average quotation, net asset value adjusted to market and 15 times the average annual net profit per share of the last two exercises], the dissenting shareholder of the deliberation of the assembly that approves it will have the right to withdraw from the company through reimbursement of the value of their shares, in accordance with Article 137, observed the provisions of its item II". For this reason, when disclosing the acquisition of a commercial company, the open company must inform whether the acquisition will be submitted to the deliberation of the general meeting of shareholders, as well as whether it will give rise to the right of withdrawal for its shareholders, as provided in the aforementioned Article 256. If the operation is to be subject to assembly deliberation, the period in which the assembly is intended to be held must be informed. If the operation gives rise to the exercise of the right of withdrawal, it must also be informed:

(i) shareholders who may exercise the right of withdrawal (i.e., shareholders registered in the Company's records up to a certain date), should they dissent from the Assembly's deliberation, to be convened to ratify this acquisition; (ii) The reimbursement value, in reais (R$) per share; and (iii) the deadline and procedures that dissenting shareholders must adopt to manifest themselves. Additionally, due to the provisions of paragraph 1 of Article 256 of Law No. 6,404/76, it is worth highlighting the need to comply with the provisions of paragraph 3 of Article 135 and paragraph 6 of Article 124, both of the same law.

TRADING IN OWN ISSUANCE SHARES
The legal principle instituted through Article 30 of Law No. 6,404/76 is that a company may not trade its own shares, except for the exceptions enumerated in its paragraph 1.
Furthermore, in paragraph 2 of the cited article, the Law provided for the regulation of the acquisition of shares by the issuing company itself by the CVM, which issued CVM Instruction No. 10/80, amended by CVM Instructions No. 268/97 and No. 390/03.
Thus, through CVM Instruction No. 10/80, the CVM sought to establish the conditions under which companies could deliberate on the acquisition of shares of their own issuance, for cancellation or retention in treasury, and respective alienation, among which: the statutory provision for deliberation by the board of directors; the balance sheet accounts originating the resources for acquisition and those that would be prohibited from being used as collateral; validity periods of acquisition programs; percentage limits for acquisition relative to the volume of shares in circulation, by species and class; political and patrimonial rights attributable to treasury shares; among other points. Furthermore, Article 23 of the norm in question established the need for prior analysis by the CVM, respecting the prohibition of Article 2, for cases not perfectly circumscribed in the provisions of the Instruction. In particular, regarding the balance sheet accounts originating the resources for share buyback programs, Article 7 of the aforementioned normative considers as available all profit reserve and capital accounts, except the following:
legal, profits to be realized, revaluation, special for mandatory undistributed dividends.
For its part, Law No. 6,404/76 established, through Articles 176 and 178, the periodicity of the determination of balance sheets and their constituent accounts, to which Articles 2 and 7 of the Instruction in question refer.
Similarly, as provided for in Article 132 of the aforementioned Law, the need for approval of said balance sheets, within the periodic reporting of administrations of companies, by shareholders gathered in ordinary general meetings was established.
It is thus observed that deliberations that approve share buyback programs must strictly observe the legal precepts for the determination and approval of the balance sheet accounts originating the resources to be used for such purpose; which evidently does not occur when programs of this kind are approved from the determination of profits in formation balances therefore, precarious balances that did not observe the accounting and corporate procedures provided for in Law during the fiscal years to which they refer. It is worth noting that for Article 2 of the Instruction in question, share acquisition operations of its own issuance are prohibited when, among other reasons, they require the use of resources greater than the available reserve balances. In line with its Article 24, disobedience to the norms of CVM Instruction No. 10/80 implies the nullity of the operation, without prejudice to the responsibility of administrators and controlling shareholders. Finally, Article 25 of the norm establishes that the transgression of its Articles 1, 2, 3, 6, 9, 12 and 16 constitutes a serious offense, for the purposes of paragraph 3, of Article 11, of Law No. 6,385/76.
STATUTORY COMPETENCE OF THE BOARD OF DIRECTORS TO DELIBERATE ON THE ISSUANCE OF DEBENTURES
Item IV of Article 122 of Law No. 6,404/76 established as the exclusive competence of the general meeting of shareholders the authorization for the issuance of debentures.
At the same time, the cited Law, in the same device, reserved the competence of the board of directors, in light of paragraph 1 of Article 59.
The aforementioned paragraph attributes to the board a competence of a permanent nature: the approval of the issuance of debentures not convertible into shares and without real guarantee, and another competence of a transitory nature, in respect of an express delegation by a shareholders' assembly, which, in turn, must observe the limits established by Law. For the reasons enumerated above, the corporate bylaws of a company cannot innovate in the scope of the competences attributed to the board of directors, even for companies with authorized capital in accordance with Item VII of Article 142 to the detriment of the legal provisions regarding the matter in question. Thus, the corporate bylaws that establish, through its provisions, the competence for the board of directors to authorize the issuance of debentures, when the strict conditions of paragraph 1 of Article 59 of Law No. 6,404/76 are not observed, incur in non-compliance with the Law.
ARTICLE 143 OF LAW NO. 6,404/76
When consolidating the corporate 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.
According to this legal command, the corporate bylaws must establish: (a) the number of directors, or the maximum and minimum allowed; (b) the duties and powers of each director; (c) term of office, not exceeding three years, reelection allowed; and (d) the method of substitution.
Thus, it is recommended that those companies whose bylaws are out of compliance with the Law adopt the necessary measures (including timely convening of a general meeting, including in its notice the statutory amendment in question) to correct any gaps that may exist in their respective corporate bylaws.
APPEALS AGAINST DECISIONS OR MANIFESTATIONS OF UNDERSTANDING OF THE SEP
In accordance with CVM Deliberation No. 463/03, the deadline to appeal to the Collegiate Body the decisions issued by the CVM Superintendents is 15 (fifteen) days counted from the knowledge by the interested party.
The Superintendent must, within 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 Collegiate Body even if he has 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 with devolutive effect and if there is 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 there is a denial (total or partial) of the request for suspensive effect, 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 about the decision of the Collegiate Body within 5 (five) business days.
Finally, it is highlighted that at the request of a member of the Collegiate Body, the Superintendent who issued the appealed decision, or of the appellant himself, the Collegiate Body will appreciate the allegation of the 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 examination of the appeal, within 15 (fifteen) days, and submitted by him to the Collegiate Body 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 sent 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, orienting 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 the independent auditor's statement on the subject, in accordance with item 28.1 of CIRCULAR LETTER/CVM/SNC/SEP/No.001/07.
Finally, it is worth highlighting that the presentation of an inquiry by the company does not exempt it from compliance, within the due deadlines, with legal and regulatory obligations, even if object of the formulated inquiry.
COMMUNICATIONS WITH THE SEP
In the case 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 this correspondence via the IPE System, when not expressly requested by the SEP, has been used by some companies, causing, sometimes, embarrassment to its own administration or difficulty in tracking responses to requests or manifestations of this Superintendency.
It is emphasized that, as a general rule, the deadlines for attending to the requests contained in the letters sent by the SEP must be counted from the date of receipt of the Letter (date of AR).
REQUESTS FOR HEARINGS WITH PRIVATE INDIVIDUALS
In line with Decree No. 4,334, of August 12, 2002, requests for scheduling meetings with organizational components of the CVM must be sent electronically, through the CVM website, selecting, for this purpose, the option HEARING WITH PRIVATE INDIVIDUALS.

In this request, the clear specification of the subject to be treated must be included, with the necessary condition, in the case of company inquiries, their prior forwarding, as described in the previous item.

REQUEST FOR VIEWING OF PROCESS
In accordance with paragraph 2 of Article 8 of Law No. 6,385/76, all documents and records of administrative processes that are pending or archived at the CVM are public, except those whose confidentiality is indispensable for the defense of intimacy or social interest, or whose confidentiality is ensured by express legal provision.
Article 46 of Law No. 9,784/99 must also be taken into account 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 photocopies 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 for the investigation of illegal acts and unfair practices that is preceded by an investigative stage, the confidentiality necessary for the elucidation of facts or required by public interest will be ensured, as provided in paragraph 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 records of administrative processes of any nature instituted within the scope of the CVM.
Requests for viewing processes pending in this Autarchy must be sent by presenting a signed request, specifying whether it is for viewing and/or copies, with the qualification of the signatories and, in the case of company representatives, accompanied by their respective powers of attorney.
In accordance with paragraph 1 of Article 3 of CVM Deliberation No. 481/05, the request must specify the interest of the requester in obtaining access to the records, except when it is an accused in a sanctioning administrative process, in which case the granting of viewing will always be ensured.
The granting depends on the authorization of the head of the Superintendency responsible for conducting the administrative process or the Relator, if there is a pending appeal or decision of the Collegiate Body, with the postponement of the granting of viewing being permitted 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 instituted due to requests for postponement of general meetings of open companies or interruption of the flow of their convocation, 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 records by the company within the deadline for its manifestation, as provided in Article 4 of CVM Deliberation No. 481/05. Furthermore, processes instituted for the purpose of verifying the possible occurrence of infractions to 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 the possible author of the infraction 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 decision of the Superintendent, when he considers it unnecessary for the elucidation of facts and there are no data or information in the records protected by the cases of confidentiality ensured by express legal provision or for the defense of intimacy or social interest. As stated in paragraph 2 of Article 5 of CVM Deliberation No. 481/05,

the provisions in the two paragraphs above, regarding the processes of investigation of irregularities, apply to complaints filed by investors and any other market participants, including regarding viewing requests filed by them.
In sanctioning administrative processes, viewing will be admitted for the accused upon request addressed to: (i) the Process Control Coordination, in processes governed by CMN Resolution No. 454/77; or (ii) the Superintendency that instituted 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 the right to appeal to the CVM Collegiate Body in the event of denial of the request, in accordance with CVM Deliberation No. 463/03. According to Article 3, paragraph 3, of CVM Deliberation No. 481/05, if the denial decision is issued by the Relator, an appeal against his decision to the Collegiate Body will be available, within 5 (five) days, from the date of knowledge by the interested party. For approved 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 the 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 website (www.cvm.gov.br), in the MARKET PARTICIPANTS section, DOCUMENT SUBMISSION item, subitem PROGRAM) and on the Bovespa website (www.bovespa.com.br), in the COMPANIES section, FOR COMPANIES item, subitem FOR LISTED COS. link ITR/DFP/IAN SYSTEM. It is worth noting that any problems or technical difficulties in sending these forms must be brought to the attention of the CVM by the CVM's IT Systems Support.
OPEN COMPANY REGISTRATION SYSTEM – CVMWEB
Companies are obliged to update their registration data with the CVM, up to 5 (five) days after any change occurs, in view of the provisions of 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 penalty.
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.
Recidivism of these objective infractions constitutes a serious offense, for the purposes provided in paragraph 3 of Article 11 of Law No. 6,385/76.
CIRCULAR LETTER/CVM/SEP/No. 01/04, of 16.02.04, communicated to companies the implementation of the new Registration Update System (CVMWEB), with each one required to make modifications directly on the CVM website on the worldwide web, having been provided to DRIs 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 inserted in the DFP, IAN and ITR forms.

The following items became subject to registration updates by this system: corporate and trade name, date of incorporation of the company, address, telephone, fax, email, securities trading institution, activity sector, trading market, company status, and information on the current independent auditor.

It should be noted that any of these changes must be made by the company and, depending on the case, after the forwarding by the IPE System of the amendment act (minutes of the shareholders' meeting or board meeting), as the system will only accept changes if the IPE protocol number is indicated.

It is emphasized that the update of DRI, trustee, judicial administrator, judicial manager, or liquidator data continues to be done through the IPE System.

Attention is drawn to the need for adequate maintenance of the company's data in this registration system, in order to avoid discrepancies with the information contained in the DFP, IAN, and ITR forms (which are sent by the CVMWIN System), as well as the sending of correspondence to outdated addresses, since the data and information contained in the CVM Registration System are used by the Agency for communication with companies and their Investor Relations Directors (DRI).

PERIODIC AND EVENTUAL INFORMATION SYSTEM – IPE

Developed in 2003, in partnership with BOVESPA, the Periodic and Eventual Information System – IPE replaced the physical submission of information with electronic submission, providing broad and widespread dissemination to the securities market and the interested public.

The documents and information submitted are simultaneously available on the CVM and BOVESPA websites, in the case of companies registered there, with the exception of the form for the notice provided for in Article 11 (individual) of CVM Instruction No. 358/02 (amended by CVM Instruction No. 449/07) (see item 5.7).

The submitted information will be the responsibility of the Investor Relations Director (DRI), who must, for this purpose, keep their data updated in the DRI Registration module.

Attention should be paid to ensure that files in PDF format present legible formatting, which facilitates the reading, manipulation, and printing of documents by interested parties.

It is absolutely indispensable to read the document "IPE Manual", available on the CVM website, which presents a listing of the categories, types, and species of documents provided for in the system, classified by the obligation or not of submission, by the periodicity of their disclosure and by the need or not of publication by the press, as well as bringing guidance regarding the procedure for accessing the system (submission and cancellation of data and DRI registration).

Finally, it is highlighted that companies may request the CVM to send documents not provided for in the IPE System.

30.1. MOST RECENT CHANGES TO THE IPE SYSTEM

New option for document submission by publicly held companies

As informed through OFFICIAL CIRCULAR/CVM/SEP/No. 002/2007, the São Paulo Stock Exchange – BOVESPA also made available on its website access to the IPE System so that publicly held companies have another address for document submission.

With this new option for document submission, the Securities and Exchange Commission expects to minimize potential external link problems, avoiding that publicly held companies fail to provide the

information so essential to the market.

The procedures for using login/password and submitting documents are identical to those currently used and do not depend on whether the publicly held company is registered in that exchange or not.

To submit a document through this new option, simply access the BOVESPA website (www.bovespa.com.br), select COMPANIES, then For Companies and IPE – Document Submission.

The link for this new address is http://www.bovespa.com.br/ipe.

Sincerely,

ELIZABETH LOPEZ RIOS MACHADO

Superintendent of Corporate Relations