2011-03-31
Added · Updated
Issuers must submit the Reference Form annually within five months of fiscal year-end and update it within seven business days of triggering events. Directors and the CEO must ensure adequate internal review processes. Information in specific items must cover the last three fiscal years or financial statements, while non-applicable fields require explicit justification.
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CIRCULAR LETTER/CVM/SEP/N°005/2011
Rio de Janeiro, March 31, 2011
SUBJECT: General guidelines on the preparation of the Reference Form
Dear Director of Investor Relations,
Circular Letters issued by the Department of Corporate Relations (SEP) aim primarily to guide issuers of securities admitted to trading on regulated markets regarding procedural aspects to be observed when submitting periodic and occasional information, among other matters.
The objective of this Circular Letter is to provide guidance to issuers regarding the Reference Form, a periodic document provided for in CVM Instruction No. 480/09 that gathers the main information relating to the issuer, such as activities, risk factors, administration, capital structure, financial data, management comments on such data, securities issued, and transactions with related parties.
This Circular Letter consolidates the guidance previously issued regarding the preparation and submission of the Reference Form.
It should be noted that the new guidance contained in this Circular Letter originates mainly from the analyses carried out by SEP in the previous year on the information provided by issuers in the Reference Form. In this supervision, it was observed that several of the improvement requirements issued by SEP were caused by non-compliance with the guidance issued in the previous Circular Letter, as well as by failures occurring in the process of preparing and reviewing the document before its submission and disclosure to the market.
The Reference Form was designed to be one of the main periodic documents of the issuer, gathering relevant information for the understanding and evaluation of the company and the securities issued by it. For this reason, comprehensive information is required in this Form, originating from different areas of the company.
Thus, we remind you that the Directors and, in particular, the Chief Executive Officer and the Director of Investor Relations, who are ultimately responsible for the content of the information provided in the Form, must ensure that the company structures an adequate internal process for the preparation and review of the document before its submission and disclosure to the market.
In this regard, we inform you that a Pronouncement of the Committee for Guidance on Market Information Disclosure (CODIM) on "Preparatory Instructions for the Reference Form" is being drafted, whose monitoring is recommended (www.codim.org.br).
Finally, it should be noted that this Circular Letter does not deal exhaustively with all fields of the Reference Form, not dispensing, for this reason, with the reading and examination of Annex 24 of CVM Instruction No. 480/09 by issuers when submitting, updating, and resubmitting the Form, as well as the updating of corporate legislation and CVM regulation, especially that which may be issued after the present date.
SECTION A. GENERAL GUIDELINES ON THE REFERENCE FORM
SECTION B. GUIDELINES FOR THE PREPARATION OF THE REFERENCE FORM
AUDITORS
2.1. Information about independent auditors
2.2. Remuneration of independent auditors
2.3. Other information deemed relevant
SELECTED FINANCIAL INFORMATION
3.1. Selected financial information
3.2. Non-accounting measurements
3.3. Events subsequent to the last financial statements closing the fiscal year
3.4. Description of the policy for the allocation of results of the last 3 fiscal years
3.5. Dividend distributions and profit retentions occurring in the last 3 fiscal years
3.7. Level of issuer's indebtedness
3.8. Issuer's obligations according to nature and maturity
RISK FACTORS
4.1. Description of risk factors
4.2. Comments on the expectation of reduction or increase in exposure to relevant risks
4.3. Description of judicial, administrative, or arbitral proceedings in which the issuer or its controlled companies are parties
4.4. Description of judicial, administrative, or arbitral proceedings in which the issuer or its controlled companies are parties and whose opposing parties are directors or former directors, controlling shareholders or former controlling shareholders, or investors in the Company or its controlled companies
4.5. Information about relevant confidential proceedings in which the issuer or its controlled companies are parties and that have not been disclosed in items 4.3 and 4.4
4.6. Description of repetitive or connected judicial, administrative, or arbitral proceedings, which are not confidential and which are relevant collectively, in which the issuer or its controlled companies are parties
4.7. Description of other relevant contingencies not covered by the previous items
MARKET RISKS
5.1. Description of the main market risks
5.2. Description of the market risk management policy adopted by the issuer
ISSUER HISTORY
6.3. Brief history of the issuer
6.5. Description of the main corporate events through which the issuer or any of its controlled or affiliated companies have passed
6.6. Information about bankruptcy petitions, provided they are based on a relevant value, or about judicial or extrajudicial reorganization of the issuer, and about the current status of such petitions
ISSUER ACTIVITIES
7.1. Description of activities developed by the issuer and its controlled companies
7.2. Information about the issuer's operational segments
7.3. Information about the products and services relating to the operational segments disclosed in item 7.2
7.8. Information about the issuer's relevant long-term relationships
ECONOMIC GROUP
8.1. Description of the Economic Group in which the issuer is included
8.2. Organizational chart of the economic group
8.3. Description of restructuring operations that occurred in the group
RELEVANT ASSETS
9.1. Description of non-current assets relevant for the development of the issuer's activities
DIRECTORS' COMMENTS
10.1. and 10.2. Financial and equity conditions and Result of operations
10.3. Events with relevant effects, occurred and expected, in the financial statements
10.4. Significant changes in accounting practices and Reservations and emphases present in the auditor's report
10.5. Critical accounting policies
10.6. Internal controls relating to the preparation of financial statements: degree of efficiency and deficiency and recommendations present in the auditor's report
PROJECTIONS
11.1. Disclosure of Projections
11.2. Monitoring and alteration of projections disclosed during the last 3 fiscal years
GENERAL ASSEMBLY AND ADMINISTRATION
12.1. Description of the issuer's administrative structure
12.2. Description of the rules, policies, and practices relating to general assemblies
12.3. Dates and newspapers of publication of information required by Law No. 6.404/76
12.4. Description of the issuer's rules, policies, and practices relating to the board of directors
12.6. Identification of administrators and members of the statutory audit committee
12.7. Identification of members of statutory committees and of audit, risk, financial, and remuneration committees
12.8. Information about administrators and members of the statutory audit committee
12.11. Agreements, including insurance policies, for payment or reimbursement of expenses borne by administrators
REMUNERATION OF ADMINISTRATORS
13.1. Description of the policy or practice of remuneration of the board of directors, statutory and non-statutory management, statutory audit committee, statutory committees, and audit, risk, financial, and remuneration committees
13.2. Remuneration of the board of directors, statutory management, and statutory audit committee
13.3. Variable remuneration of the board of directors, statutory management, and statutory audit committee
13.5. Information, by body, about the participations held by members of the board of directors, statutory management, and statutory audit committee.
13.6. Share-based remuneration of the board of directors and statutory management
13.7. Open options of the board of directors and statutory management at the end of the last fiscal year
13.8. Options exercised and shares delivered relating to share-based remuneration of the board of directors and statutory management
13.9. Information necessary to understand the data disclosed in items 13.6 to 13.8
13.10. Pension plans in force granted to members of the board of directors and statutory directors
13.11. Value of the highest, lowest, and average value of individual remuneration of the board of directors, statutory management, and statutory audit committee.
13.12. Contractual arrangements, insurance policies, or other instruments that structure remuneration or indemnification mechanisms for administrators.
13.13. Percentage of total remuneration of each body attributed to members of the board of directors, statutory management, or statutory audit committee who are related parties to the controlling shareholders of the issuer
13.14. Remuneration of members of the board of directors, statutory management, or statutory audit committee received for any reason other than the function they hold
13.15. Remuneration of members of the board of directors, statutory management, or statutory audit committee recognized in the results of the controlling shareholders of the issuer, companies under common control, and controlled companies of the issuer
13.16. Other information deemed relevant
HUMAN RESOURCES
14.1. Information about the issuer's human resources
14.3. Description of the issuer's employee remuneration policy
CONTROL
15.1. Identification of the controlling shareholder or group of controlling shareholders
15.2. Identification of shareholders, or groups of shareholders acting in concert or representing the same interest, with participation equal to or greater than 5% of the same class or species of shares
15.3. Capital distribution
15.4. Organizational chart of the issuer's shareholders
15.5. Information about shareholder agreements that regulate the exercise of voting rights or the transfer of shares issued by the issuer
15.6. Information about relevant changes in the participations of the control group members and administrators of the issuer
TRANSACTIONS WITH RELATED PARTIES
SHARE CAPITAL
SECURITIES
18.1. Description of the rights of each class and species of issued share
18.5. Description of other securities
18.10. Other information deemed relevant
BUYBACK PLANS AND TREASURY SECURITIES
19.1. Information about the issuer's share buyback plans
19.2. Movement of securities held in treasury
19.3. Securities held in treasury at the date of closing of the last fiscal year
19.4. Provide other information that the issuer deems relevant
SECURITIES TRADING POLICY
INFORMATION DISCLOSURE POLICY
EXTRAORDINARY BUSINESS
SECTION A. GENERAL GUIDELINES ON THE REFERENCE FORM
Article 24 of CVM Instruction No. 480/09 provides that the issuer must submit the updated Reference Form annually, within 5 (five) months counted from the date of closing of the fiscal year.
CVM Instruction No. 480/09 also provides, in paragraphs 3 and 4 of Article 24, certain events that determine the obligation of issuers registered in Categories A and B to update, within 7 (seven) business days counted from the date of the occurrence of the event, the fields of the Reference Form whose information is affected by them.
The annual presentation of the reference form should occur, preferably, after the holding of the Annual General Meeting (AGO) and always include the information contained in the previous year's financial statements that are discussed and voted on in that assembly. With this procedure, for example, it will already be possible to include in the document information about any election and remuneration of administrators, as well as about the dates and newspapers of publication required in item 12.3.
Therefore, before the holding of the AGO, if any of the events that, under the terms of CVM Instruction No. 480/09, warrant the updating of the document occur, the issuer must resubmit the Reference Form of the previous year.
In the case of a request for registration of a public distribution of securities, in which the resubmission of the document is required, the issuer may resubmit the Reference Form of the previous year or present the Reference Form of the current year, provided that the information relating to the previous year is filled in.
It is alerted that all updated information that has been provided due to the updating rules provided for in paragraphs 3 and 4 of Article 24 of the Instruction (see item 2 of this section, below) must be reflected in the Reference Form when its annual presentation, regardless of the existence of a command in Annex 24 regarding the provision of information relating to the current year.
It is also important to alert that the general guidelines contained in Section B of this Circular Letter regarding updatable fields of the Reference Form do not constitute and should not be understood as an exhaustive list, being the obligation of the issuer to verify and update all fields of the Form that, in its specific case, are impacted by the occurrence of the events provided for in paragraphs 3 and 4 of Article 24.
It is further noted that issuers of Category B who opt to present information indicated in Annex 24 as optional for their category will be obliged to update this information in the manner provided for in paragraphs 3 and 4 of Article 24.
2.1. General rules on the preparation and disclosure of information
CVM Instruction No. 480/09 incorporates certain general rules on the preparation and disclosure of information that must be observed by issuers in the preparation and updating of the Reference Form. They are as follows:
(a) the issuer must disclose true, complete, consistent information that does not mislead the investor (Article 14); (b) all information disclosed by the issuer must be written in simple, clear, objective, and concise language (Article 15); (c) the information provided by the issuer must be useful for the evaluation of the securities issued by it (Article 17); (d) whenever the information disclosed by the issuer is valid for a determinable period, such period must be indicated (Article 18); (e) factual information must be differentiated from interpretations, opinions, projections, and estimates (caput of Article 19); (f) whenever possible and appropriate, factual information must be accompanied by the indication of its sources (sole paragraph of Article 19).
The Empresas.Net system incorporates both structured fields and free text fields for the presentation of the information required in the Reference Form.
In order to ensure better understanding and comparability by investors, it is alerted that whenever the required information is provided in free text fields, the issuer must, nevertheless, organize and present the information according to the structure and organization provided for in Annex 24 of CVM Instruction No. 480/09.
2.2. Field "other information deemed relevant"
Annex 24 provides in several sections of the Form open fields for the presentation of "other information deemed relevant". The objective of these fields is to allow the issuer to provide other information not requested in the Reference Form, deemed important to support the investment decision or to ensure the correct understanding, by investors, of the information provided in the Form about its economic-financial situation, its business, and the risks inherent to its activities and the securities issued by it.
2.3. Scope and content of information provided
Annex 24 includes notes that specify the scope or content of the information to be provided in some of the items that must be carefully observed by issuers when preparing, updating, and resubmitting the Form.
In this sense, we alert that, in the annual presentation of the Reference Form, the information provided regarding items 3.1, 7.2, 10.1, and 10.2 must refer to the last 3 financial statements closing the fiscal year. When presenting the Reference Form due to a request for registration of a public distribution of securities, the information requested in these items must refer to the last 3 financial statements closing the fiscal year and to the last accounting information disclosed by the issuer, such as, for example, the information relating to the last quarterly information form – ITR disclosed by the issuer.
We also alert that, in the annual presentation of the Reference Form, the information provided regarding items 3.7, 3.8, 7.4, 7.6, 9.1, and 10.8 must refer to the last financial statements closing the fiscal year. When presenting the Reference Form due to a request for registration of a public distribution of securities, the information requested in these items must refer to the last financial statements closing the fiscal year and to the last accounting information disclosed by the issuer, such as, for example, the information relating to the last quarterly information form – ITR disclosed by the issuer.
It is also noted that, in the annual presentation of the Reference Form, the information provided regarding items 2.1, 6.5, 8.3, 10.4, 10.7, 11.1"d", 12.3, 14.1, 15.6, 17.2, 17.3, 17.4, 18.8, 18.9, 19.1, 19.2, 22.1, 22.2, and 22.3 must refer to the last 3 fiscal years. When presenting the Reference Form due to a request for registration of a public distribution of securities, the information requested in these items must refer to the last 3 fiscal years and to the current fiscal year.
2.4. Information not applicable
If information requested in the Reference Form is not applicable to the issuer due to its characteristics, it must expressly state this fact in the Form and include justification, explaining the reason why the requested information is not applicable to it.
Regarding the free text fields of the Empresas.Net system, if the information is not applicable, the issuer must indicate in the field itself the reasons justifying the non-presentation of the required information. For example, if the issuer has not carried out a public distribution of securities in the last 3 fiscal years, it must inform in items 10.7.a, 10.7.b, and 10.7.c that these are not applicable, given that the issuer has not carried out a public distribution of securities in the last 3 fiscal years.
In the case of the structured fields of the Empresas.Net system 2.1/2, 3.5, 3.7, 3.8, 8.3, 9.1.a, 9.1.b, 9.1.c, 12.3, 12.7, 12.9, 12.10, 13.2, 13.11, 16.2, 17.2, 17.3, 17.4, 18.4, 18.5, 19.1, 19.2, 19.3, and 20.1, if the information is not applicable, the issuer must, instead of filling them in, disclose the reasons for the non-presentation of the required information, through the "Justify" icon.
SECTION B. GUIDELINES REGARDING THE FILLING OF THE REFERENCE FORM
2.1. Information about independent auditors
In this item, historical information must be presented for the identification of the auditors who worked with the company in the last 3 fiscal years, as well as for the services they provided to the issuer.
In line with the provisions of Article 2 of CVM Instruction No. 381/03 and item 2.2 of the Reference Form, which requires the separate disclosure of expenses incurred with audit services and with any other services provided by the independent auditor, in the description of the contracted services (letter "d") it must be informed not only the services related to independent audit, but also any other services that are not external audit that are provided to the
issuer by the independent auditor or by parties related to the independent auditor, as defined in CVM Resolution No. 642/10, which approved Technical Pronouncement CPC 05 (R1).
The eventual substitution of the auditor (letter “e”) must be reported even when the change occurred due to auditor rotation provided for in article 31 of CVM Instruction No. 308/99. In this case, as in other cases of alteration, the issuer’s justification for the auditor substitution (sub-item “i” of letter “e”) must contain the same content as the communication required in the caput of article 28 of CVM Instruction No. 308/99. If the auditor did not agree with the justification for their substitution, the information provided in response to sub-item “ii” of letter “e” must reproduce any reasons presented by the auditor, in accordance with the communication provided for in paragraph 2 of article 28 of CVM Instruction No. 308/99. It is emphasized that the information regarding “End of service contract,” required in table 2.1 of the Empresas.Net System, should not be included when the service provision is still ongoing. This information should only be included upon the termination of the relationship between the issuer and the independent auditor.
2.2. Remuneration of independent auditors
Information regarding the total amount of remuneration of independent auditors must be provided only with respect to the last fiscal year.
In addition to the total remuneration amount, it must be informed how this amount is segregated between:
(a) fees related to external audit services; and (b) fees related to any other services provided, regardless of whether these services represented less than 5% (five percent) of the remuneration for external audit services, given that, unlike CVM Instruction No. 381/03, item 2.2 of Annex 24 of CVM Instruction No. 480/09 does not make any reservation regarding the amount of fees from which information must be provided. In both cases of external audit services and other services provided, the issuer must indicate, in a segregated manner, the values paid as title for each of the services that have been reported in letter “d” of item 2.1.
2.3. Other information deemed relevant
This item must be used to present other information not requested in this section of the Reference Form, which the issuer deems important for the complete understanding, by investors, of its relationship with the independent auditor, such as: the policy or procedures adopted by the issuer to avoid the existence of conflict of interest, loss of independence or objectivity of its independent auditors (item III of article 2 of CVM Instruction No. 381/03) and existence of relevant transfers of services or resources between the auditors and parties related to the issuer, as defined in CVM Resolution No. 642/10, which approved Technical Pronouncement CPC 05 (R1).
3.2. Non-accounting measurements
In the disclosure of non-accounting measurements, the issuer must ensure that the values presented are reconcilable with the data contained in the financial statements and quarterly information it has disclosed, which were used for the preparation of the measurements.
3.3. Subsequent events to the last financial statements closing the fiscal year
In this field, subsequent events must be identified and commented on, in compliance with the rules provided in Technical Pronouncement CPC 24, approved by CVM Resolution No. 593/09, which appeared in the last financial statements closing the fiscal year or, in the case of presenting the Reference Form due to a request for registration of public distribution, in the latest accounting information disclosed by the issuer. Such comments must contain the information provided in the aforementioned accounting standard, such as: (a) the nature of the event; and (b) the estimate of its financial effect or a statement that such estimate cannot be made, in the case of significant subsequent events that did not result in adjustments. It is also important to include information regarding the date of authorization of the issuance of the accounting statements, as they do not reflect events subsequent to that date. The issuer must make it clear whether the information provided in this item refers to the individual or consolidated financial statements.
3.4. Description of the policy for the allocation of results
This item aims to consolidate the history of the allocation of the issuer’s results, including what was approved in the last Ordinary General Meeting.
In it, the issuer must describe the policy for the allocation of results it has adopted in the last 3 fiscal years, with the indication of the information required in letters “a” to “d”.
The description of the policy must be prepared taking as a basis the practices adopted by the issuer and the provisions on the subject existing in its Bylaws, and thus should not be limited to the mere transcription of the provisions of Law No. 6.404/76 regarding the subject.
In the description of the rules regarding profit retention (letter “a”), the issuer must inform whether, in addition to the mandatory reserves provided by law, it has other reserves regulated by the bylaws, informing their percentages, if it carried out retentions based on a capital budget during the period covered by this item of the Reference Form, etc. In addition to this information, the issuer must indicate, in a segregated manner, the values of all retentions that have been carried out in each of the fiscal years reported in this item of the Reference Form.
3.5. Dividend distributions and profit retentions occurring in the last 3 fiscal years
The information presented in this item must be consistent with corporate resolutions and the accounting information disclosed by the issuer.
As adjusted net profit (letter “a”), the value of net profit that served as the basis for the calculation of distributed dividends must be reported.
The return rate relative to shareholders’ equity (letter “f”) must be calculated based on the division of the net profit value in each fiscal year by the value of shareholders’ equity.
It should be clarified that dividends or interest on own capital attributed as dividends that have been distributed from retained profits or reserves constituted in previous fiscal years must be reported in item 3.6 of the Form.
3.7. Issuer’s indebtedness level
Regarding what is demanded in letter “a”, the total amount of debt must be understood as the sum of current liabilities and non-current liabilities.
The information disclosed in this item must be provided based on consolidated financial information, if the issuer is obliged to prepare it.
It is emphasized that the total amount of debt, of any nature, reported in item 3.7.a must coincide with the value disclosed in item 3.8 as the sum of debts with real guarantee, floating guarantee, and unsecured debts.
3.8. Issuer’s obligations according to the nature and maturity date
In this item, the issuer must disclose, in the form of a table, the amount of its obligations, segregated according to the type of debt guarantee – real guarantee, floating guarantee, and unsecured debts – and according to the maturity periods stipulated in letters “a” to “d” of this item. Although there may be various subdivisions due to the characteristics of the debts, the information on the issuer’s indebtedness must be consolidated within the 3 categories mentioned in this item. The basic information to be disclosed in the table provided for in this item, regarding the issuer’s indebtedness profile, aims to provide, to the investor, a classification of the debts that allows verifying which portion of these is guaranteed by the issuer’s assets and which is not, so as to allow an understanding of the order of preference of the debts, in a eventual creditors’ competition of the issuer. Thus, for the categorization of debts in the required manner, the costliness of the guarantee to the issuer must be taken into account, and not to third parties. Debts guaranteed by aval must be classified in one of the 3 categories provided for in item 3.8. Debts without real or floating guarantee, regardless of the fact that they have fiduciary guarantee, must be classified as unsecured debts. Debts guaranteed with third-party assets, as they do not encumber the issuer’s assets, must be considered as unsecured debts and classified as such in the table provided for in this item. In order to facilitate understanding by investors, the issuer must include information in item 3.8 itself regarding the criteria used for the segregation of its debts according to the categories provided for in the standard. The issuer must also make it clear, in the “Observation” field, whether the information provided in this item refers to the individual or consolidated financial statements.
It is emphasized that the total amount of debt, of any nature, reported in item 3.7.a must coincide with the value disclosed in item 3.8 as the sum of debts with real guarantee, floating guarantee, and unsecured debts.
4.2. Comments on the expectation of reduction or increase in exposure to relevant risks
In this item, the issuer may comment, if they exist, on its expectations regarding the reduction or increase in its exposure to the risk factors described in the previous item. In the comments, the internal or external factors to the issuer that underpin the opinion issued must be explicit, and the possible measures adopted by the issuer to reduce exposure to the risk factors may also be commented on.
4.3. Description of judicial, administrative, or arbitral proceedings in which the issuer or its subsidiaries are parties
In this item, the issuer must describe, with the presentation of the information required in letters “a” to “i”, the judicial, administrative, or arbitral proceedings in which it or its subsidiaries are parties, which are not under seal and are individually relevant to the issuer or its subsidiaries. For a better understanding by investors, the information must be organized by nature (administrative, civil, labor, tax, and others). The description of each of the proceedings must be presented in table format, according to the model below. Case No. [●] a. court b. instance
c. date of initiation
d. parties in the process e. values, assets, or rights involved f. main facts g. chance of loss (probable, possible or remote) h. analysis of the impact in case of loss of the process
i. value provided (if there is
provision)
It is alerted that only judicial proceedings that run under secrecy of justice, administrative procedures that are conducted under seal by determination of the administrative authority, and arbitral procedures that, by the will of the parties, are confidential are understood as confidential. The relevance must be assessed by the issuer taking into consideration the capacity that the information would have to influence the investment decision. In the assessment of relevance, the issuer must not focus only on the ability of the process to significantly impact its assets, its financial capacity, or its business, or those of its subsidiaries, but must consider other factors that could influence the decision of the investing public, such as, for example, the image risks inherent to a certain practice of the issuer or legal risks related to the discussion of the validity of bylaw clauses. In this sense, in the description of the process, the issuer must clarify the reasons why it understands that the process is relevant. Regarding the identification of the parties (letter “d”), the parties constituting the passive pole and the active pole of the process must be identified. Regarding the “main facts” (letter “f”), all information necessary for investors to understand the cause discussed by the parties, its relevance to the issuer or its subsidiaries, and the situation in which the process is located must be offered in clear and objective language. Regarding the chance of loss (letter “g”), the following concepts must be considered:
(a) Probable: when the chance of one or more future events occurring is greater than that of not occurring; (b) Possible: when the chance of one or more future events occurring is less than probable, but greater than remote; (c) Remote: when the chance of one or more future events occurring is small. The analysis of the impact in case of loss of the process, required in letter “h”, must be done without omission of relevant information, demonstrating the amount of losses related to the relevant processes and their possible impacts on the financial and asset situation of the issuer or its subsidiaries or on its business. It is emphasized that in the presentation of the Reference Form due to a request for registration of public distribution of securities, the information must be presented in an updated manner, as required in paragraph 2 of article 24 of CVM Instruction No. 480/09.
4.4. Description of judicial, administrative, or arbitral proceedings in which the issuer or its subsidiaries are parties and whose opposing parties are administrators or former administrators, controllers or former controllers, or investors of the Company or its subsidiaries
In this item, the issuer must describe, with the presentation of the information required in letters “a” to “i”, the judicial, administrative, or arbitral proceedings, which are not under seal, in which it or its subsidiaries are parties and whose opposing parties are administrators or former administrators, controllers or former controllers, or investors of the Company or its subsidiaries. All proceedings that fall under this definition must be described, since Annex 24 of CVM Instruction No. 480/09 does not mention the issue of relevance in item 4.4. The description of each of the proceedings must be presented in table format, according to the model below. Case No. [●] a. court b. instance
c. date of initiation
d. parties in the process e. values, assets, or rights involved f. main facts g. chance of loss (probable, possible or remote) h. analysis of the impact in case of loss of the process
i. value provided (if there is
provision)
It is alerted that only judicial proceedings that run under secrecy of justice, administrative procedures that are conducted under seal by determination of the administrative authority, and arbitral procedures that, by the will of the parties, are confidential are understood as confidential.
Regarding the identification of the parties (letter “d”), the parties constituting the passive pole and the active pole of the process must be identified.
Regarding the “main facts” (letter “f”), all information necessary for investors to understand the cause discussed by the parties, its relevance to the issuer or its subsidiaries, and the situation in which the process is located must be offered in clear and objective language.
Regarding the chance of loss (letter “g”), the following concepts must be considered:
(a) Probable: when the chance of one or more future events occurring is greater than that of not occurring; (b) Possible: when the chance of one or more future events occurring is less than probable, but greater than remote; (c) Remote: when the chance of one or more future events occurring is small. The analysis of the impact in case of loss of the process, required in letter “h”, must be done without omission of relevant information or mitigation, demonstrating the amount of losses related to the relevant processes and their possible impacts on the financial and asset situation of the issuer or its subsidiaries or on its business. Proceedings already described in item 4.3, which also fall under the information requested in this item, may be cited here by reference.
4.5. Information on relevant confidential proceedings in which the issuer or its subsidiaries are parties that have not been disclosed in items 4.3 and 4.4
Regarding relevant confidential proceedings in which the issuer or its subsidiaries are parties, only the presentation of the following information is required, without the need to detail the cause: (a) analysis of the possible impact for the issuer or its subsidiaries, in case of loss, without mitigation or omission of relevant information on the subject; and (b) disclosure of the values involved in these proceedings. It is alerted that only judicial proceedings that run under secrecy of justice, administrative procedures that are conducted under seal by determination of the administrative authority, and arbitral procedures that, by the will of the parties, are confidential are understood as confidential.
4.6. Description of repetitive or connected judicial, administrative, or arbitral proceedings, which are not under seal and which are relevant collectively, in which the issuer or its subsidiaries are parties
In this item, the issuer must describe the judicial, administrative, or arbitral proceedings that are repetitive or connected, based on similar facts and legal causes, which are not under seal and which, when considered together, are relevant, in which the issuer or its subsidiaries are parties. It is alerted that only judicial proceedings that run under secrecy of justice, administrative procedures that are conducted under seal by determination of the administrative authority, and arbitral procedures that, by the will of the parties, are confidential are understood as confidential.
The relevance must be assessed by the issuer, taking into account the ability of the information to influence investors' investment decisions. In evaluating relevance, the issuer should not focus solely on the ability of the process to significantly impact its assets, financial capacity, or business, or those of its subsidiaries; other factors that could influence the investing public's decision must be considered, such as, for example, image risks inherent in a certain practice of the issuer or legal risks related to the discussion of the validity of bylaws clauses.
For better understanding by investors, the information must be organized by nature (administrative, civil, labor, tax, and others) and subdivided by similar causes.
Regarding the requirement in letter "c" of this item, all information necessary for investors to understand the practice of the issuer or its subsidiary that originated the described contingency must be offered in clear and objective language.
4.7. Description of other relevant contingencies not covered by the previous items
Instruction 480/09 provides that the set of information contained in the Reference Form must be a true, accurate, and complete portrait of the issuer's economic-financial situation and the risks inherent in its activities and the securities issued by it.
This item must be used to present information about other relevant contingencies not covered by the previous items, which the issuer considers important to support investors' investment decisions.
5. MARKET RISKS
5.1. Description of the main market risks
In this item, all relevant market risks to which the issuer is subject in the normal course of its activities, including with respect to exchange rate and interest rate risks, capable of influencing its operational results, financial situation, future prospects, and investors' investment decisions, must be described quantitatively and qualitatively, in order of relevance, without mitigation or omission of relevant information.
5.2. Description of the market risk management policy adopted by the issuer
Risk management policy is understood as the set of rules and objectives that form an action program, established by its administrators, in order to mitigate risks.
In the description of the parameters used for risk management (letter "d"), the issuer must indicate the objective criteria to be monitored to verify the inclusion or exclusion of its exposure.
The issuer must also indicate whether it uses financial instruments with objectives other than asset protection (hedge) (letter "e"), including with respect to operations associated with derivative instruments such as "Total Equity Return Swap." The information provided must include the objectives of the operations and the risks associated for the issuer or its shareholders.
If it has implemented an organizational structure for risk management control (letter "f"), the issuer must describe it, indicating the administration bodies, committees, or other organizational structures involved, as well as discriminating the specific responsibilities of each of these bodies, committees, or structures, and their members, in risk management control.
If the issuer does not adopt an organizational structure or internal control systems aimed at verifying the effectiveness of the adopted policy (letter "g"), it must expressly state this fact. In this case, the issuer must also inform the reason why it does not adopt these procedures. Possible projects for implementing new practices, development stage, and estimated time for adoption may also be commented on.
6. ISSUER HISTORY
6.3. Brief history of the issuer
In this item, objective information must be presented about the most important events, useful for investors to know and evaluate the evolution and history of the issuer, such as: date of incorporation and founder; changes in name and corporate purpose; start and end of expansion program, if relevant; relevant corporate events already occurred, such as alienation or acquisition of control, merger, spin-off, or public offer to purchase or sell shares; bankruptcy, judicial reorganization, or extrajudicial reorganization, product diversification; development of new products; creation of a subsidiary of relevant nature; main projects or works executed; relevant losses or damages, entry of foreign shareholder.
6.5. Description of the main corporate events through which the issuer or any of its subsidiaries or affiliates have passed
In this item, the description of relevant corporate events involving the issuer or any of its subsidiaries or affiliates must be presented, such as incorporations, mergers, spin-offs, share incorporations, alienations and acquisitions of corporate control, acquisitions and alienations of important assets.
The importance of the asset alienated or acquired must be assessed by the issuer taking into account not only the value of alienation or acquisition, but also its relevance within its competitive, commercial, or operational strategy.
It is emphasized that, for the purposes of the information to be provided in this item, the concept of affiliate existing in CVM Resolution No. 605/09, which approved CPC 18, must be used.
Regarding the business conditions (letter "b"), all elements necessary for investors to understand the main characteristics on the basis of which the corporate event was carried out must be described, such as: price, form and payment term, eventual existence of suspensive clauses, agreements regulating voting rights, pending approval by regulatory bodies, and possible effects of the decision on the operation.
It is alerted that the occurrence of incorporation, share incorporation, merger, or spin-off involving the issuer is one of the hypotheses that determines the update of the Reference Form by issuers registered in Categories A and B, as provided in item VIII of paragraph 3 and item IV of paragraph 4 of article 24 of Instruction 480/09.
Thus, the occurrence of these events will result, without prejudice to the provisions of CVM Instruction No. 358/02, in the need to update the Reference Form within 7 (seven) business days counted from the date of the holding at which the operation was approved, with the update of the information provided based on item 6.5, as well as any other information provided in the Form that is affected by these events. If the event depends on the homologation of a specific regulatory body, the issuer must expressly state this information in item 6.5 itself.
6.6. Information about bankruptcy petition, if based on a relevant value, or judicial or extrajudicial reorganization of the issuer, and about the current status of such petitions
In this item, the existence of bankruptcy petitions against the issuer based on a relevant value and petitions for judicial or extrajudicial reorganization of the issuer must be informed, presenting all information necessary for investors to know and understand the effects of these events on the issuer, such as: values involved, petitioner, court in which the petition is pending and its current status, measures eventually adopted by the issuer.
It is emphasized that the declaration of bankruptcy, judicial reorganization, extrajudicial liquidation, or judicial homologation of extrajudicial reorganization is one of the hypotheses that determines the update of the Reference Form by issuers registered in Categories A and B, as provided in item XI of paragraph 3 and item VI of paragraph 4 of article 24 of CVM Instruction No. 480/09.
Thus, the occurrence of these events will result, without prejudice to the provisions of CVM Instruction No. 358/02, in the need to update the Reference Form as provided in the legislation, with issuers in judicial reorganization, bankruptcy, and liquidation subsequently exempted from delivering the annual Reference Form as provided in articles 36, 38, and 40 of CVM Instruction No. 480/09.
7. ISSUER ACTIVITIES
7.1. Description of activities developed by the issuer and its subsidiaries
In this item, information useful and necessary for the investor to know the activities developed by the issuer and its subsidiaries must be provided to the market, such as the issuer's corporate purpose, market of operation, geographic diversification, among others.
7.2. Information about the issuer's operational segments
The information requested in letters "a" to "c" of this item must be provided regarding each of the operational segments that have been disclosed, in the form of CVM Resolution No. 582/09, which approved Technical Pronouncement CPC 22, in the statements of closing of the social year or, if applicable, in the consolidated financial statements.
In the annual presentation of the Form, the information must refer to the last 3 financial statements of closing of the social year. In the presentation of the reference form due to the request for registration of public distribution of securities, the information must refer to the last 3 financial statements of closing of the social year and the last accounting information disclosed by the issuer.
The requirement to disclose, in some cases, information relating to the last 3 financial statements aims to allow comparison of the issuer's performance over the period. In view of this, exceptionally in the 2011 Reference Form, in the case of companies adopting international accounting standards for the first time, in preparing the information regarding item 7.2, comparison of data from financial statements prepared based on diverse accounting standards should be avoided, since the information disclosed to the market must be complete, consistent, and must not mislead the investor.
Thus, information extracted from the financial statements relating to the 2008 fiscal year, if prepared in a different accounting standard that does not allow adequate comparison, should not be included. In these cases, the reasons that led to the non-inclusion of this information must be informed in item 7.2 itself.
7.3. Information about products and services relating to operational segments disclosed in item 7.2
The information provided in this item must be prepared considering, as provided in item 7.2, the statements of closing of the social year or, if applicable, the consolidated financial statements.
Regarding the characteristics of the production process (letter "a"), objective information necessary to understand the issuer's production process must be provided, including, for example, information regarding: origin and holders of the technology used, comparison between annual production and installed capacity, comparison with productivity indicators characteristic of the activity sector, existence of insurance for machinery, equipment, products, etc., risks inherent to the production process that may cause suspension of activities, including time designated for maintenance, and other relevant aspects for a better understanding of the production process.
Regarding the characteristics of the distribution process (letter "b"), the physical distribution methods of products and services must be informed, including information on the number of agencies, stores, dealers, fleet, etc., and also, if controlled, affiliated, direct or indirect parent companies, or companies owned by the controlling shareholder are used in the process.
The types of sales channels used must also be informed, such as intermediaries, representatives, own salespeople, etc.
Regarding the request in letter "c", factors influencing the behavior of the markets in which the company operates must be presented objectively, such as: tax benefits, monopoly or oligopoly situations, subsidies, level of competition, costs of raw materials and other expenses, dependence on technology and labor, use of concessions and franchises, special legislation.
If there is seasonality (letter "d"), the period of the social year in which it concentrates must be informed, as well as information on the impact, in percentage, of seasonality on the income accounts.
7.8. Information about relevant long-term relationships of the issuer
This item must be used to describe long-term relationships not expressly mentioned in other items of the Reference Form that the issuer considers important for the understanding of other activities developed by it, such as: agreements maintained with national and foreign government instances or with communities, social and environmental responsibility policies, information on sustainability practices, sponsorship and cultural incentives adopted by the issuer, main projects developed in these areas or in which it participates, among others.
8. ECONOMIC GROUP
8.1. Description of the Economic Group in which the issuer is included
For the purposes of this item, Economic Group is understood as the set of companies in which the issuer is included and which present common control. It includes the direct and indirect controllers of the issuer, as well as subsidiaries and affiliates of the issuer and companies under common control.
Thus, the information requested in letters "a" to "e" must be provided regarding the companies mentioned above, accompanied by the respective participations existing along the corporate chain, regardless of whether the companies involved constitute a group of companies, by convention, in accordance with article 265 of Law No. 6.404/76.
For the identification of the issuer's subsidiaries and affiliates (letter "b"), the direct and indirect participations of the issuer in the companies involved must be considered.
The issuer's participations in companies of the group (letter "c") must be indicated in percentage.
It is emphasized that the alteration of the issuer's controlling shareholders, direct or indirect, as well as the carrying out of incorporation, share incorporation, merger, or spin-off operations involving the issuer are two of the hypotheses that determine the update of the Reference Form by issuers registered in Categories A and B, as provided in items V and VIII of paragraph 3 and items III and IV of paragraph 4 of article 24 of Instruction 480/09.
Thus, the existence of alteration of the issuer's controlling shareholders, direct or indirect, as well as the carrying out of the restructuring operations mentioned above that may alter the information contained in this item, will result, without prejudice to the provisions of CVM Instruction No. 358/02, in the need to update the Reference Form within 7 (seven) business days counted from the date of occurrence of the event, with the update of the information provided based on item 8.1, as well as any other information provided in the Form that is affected by this event.
8.2. Organizational chart of the economic group
Although the presentation of the organizational chart of the economic group in which the issuer is included is optional information, its disclosure in the Reference Form is recommended, as it facilitates visualization and understanding by investors of the corporate relationships maintained by the issuer with other companies of the group and about the form of organization with which its businesses are structured.
CVM Instruction No. 480/09 determines that the information inserted in the organizational chart must be compatible with those presented in item 8.1 of the Reference Form. In the organizational chart, the percentage of shares held by each of the issuer's controllers and by "other shareholders" relative to the total of ordinary and preferred shares and total capital of the company must be indicated. The issuer's participations in subsidiaries and affiliates and in companies of the group must be indicated as a percentage of the total capital of the companies involved.
It is emphasized that, if the organizational chart of the economic group is presented, it must be updated whenever the information of item 8.1 is updated.
8.3. Description of restructuring operations occurred in the Economic Group
In this item, any corporate restructuring operations that have occurred in the economic group, with relevant effects for the issuer, must be described, such as incorporations, mergers, spin-offs, share incorporations, alienations and acquisitions of corporate control, acquisitions and alienations of important assets.
The importance of the asset alienated or acquired must be assessed by the issuer taking into account not only the value of alienation or acquisition, but also the relevance of the asset in the competitive, commercial, or operational strategy of the economic group.
Given the provisions of item 8.1, the above-mentioned operations involving the following must be described in this item:
a) The issuer; b) Direct and indirect controllers of the issuer; c) Subsidiaries and affiliates of the issuer; d) Companies of the economic group that hold participations in the issuer; e) Companies under common control.
Given that in item 6.5 the relevant corporate events involving the issuer or any of its subsidiaries or affiliates must already be described, the operations involving these companies that have already been described in item 6.5 may be cited in item 8.3 by reference.
If the issuer does not opt for this procedure, it is worth remembering that the occurrence of incorporation, share incorporation, merger, or spin-off involving the issuer is one of the hypotheses that determines the update of the Reference Form by issuers registered in Categories A and B, as provided in item VIII of paragraph 3 and item IV of paragraph 4 of article 24 of Instruction 480/09.
Thus, the occurrence of these events will result, without prejudice to the provisions of CVM Instruction No. 358/02, in the need to update the Reference Form within 7 (seven) business days counted from the date of the holding at which the operation was approved, with the update of the information provided based on item 8.3, as well as any other information provided in the Form that is affected by these events. If the event depends on the homologation of a specific regulatory body, the issuer must expressly state this information in item 8.3 itself.
9. RELEVANT ASSETS
9.1. Description of non-current asset items relevant for the development of the issuer's activities
Information regarding companies in which the issuer has participation (letter "c") must be provided only with respect to companies included by the issuer as relevant for the development of its activities.
For the purposes of letters "vii" and "ix" of letter "c", the book value of the participations to be informed corresponds to the value recorded in non-current assets, i.e., the value resulting from the application of the equity method, in the case of subsidiaries and affiliates, or by acquisition cost, deducted from provision for possible losses in the realization of its value, when this loss is proven to be permanent, in the case of other participations.
Regarding letters "viii" and "x" of letter "c", for the purpose of calculating the market value of the participation, the closing quotation of the last business day of the fiscal year in which the transaction occurred must be considered. The information must be provided considering the species and class of the shares subject to the participation.
Information regarding the appreciation or depreciation of the participations required in letters "ix" and "x" of letter "c" must be provided in percentages.
10. DIRECTORS' COMMENTS
This section of the Form aims for directors to provide investors with their overall view of the issuer's business and the factors underlying the result of its operations and financial situation during the period covered by the financial statements, including with respect to the main trends and factors that may affect the future development of the entity.
In this section, directors have the opportunity to highlight and explain the factors that most affected the issuer's financial, economic, and asset situation, in order to allow a more precise interpretation of these facts by investors, enabling them to see the company through the eyes of the board.
Thus, the information provided in response to the requests in the items of this section, and especially in items 10.1 and 10.2, should not be a mere description or repetition of information already presented in other sections of the Reference Form.
Reference or in the issuer's financial statements. It is the responsibility of the directors to provide additional data and necessary comments so that the investor can understand and evaluate the context in which the information present in their financial statements is inserted.
In this sense, it is recommended to avoid mere citation of situations that can be directly observed by the investing public, such as references to percentages of growth or decline in accounts or lines of the result. It is intended that the reasons leading to their occurrence be clarified, and which measures will be observed to maintain, enhance, or correct this situation.
The directors must ensure that the information provided in this section presents the same quality, breadth, and depth as those that would be disclosed by them in a public distribution prospectus of securities.
If the issuer prepares consolidated financial statements, the information in this Section, when applicable, must be provided based on these statements, and the issuer must clearly identify this fact in the corresponding item of this section.
10.1. and 10.2. Financial and Patrimonial Conditions and Result of Operations
In the annual presentation of the Reference Form, the information required in items 10.1 and 10.2 must refer to the last 3 financial statements closing the social year. In the presentation of the Reference Form due to the request for registration of public distribution of securities, the information required in these items must refer to the last 3 financial statements closing the social year and the last accounting information disclosed by the issuer.
The requirement to disclose information regarding the last 3 financial statements aims to allow comparison of the issuer's performance during the period. In view of this, exceptionally in the 2011 Reference Form, in the case of companies adopting international accounting standards for the first time, in the preparation of the directors' comments regarding items 10.1 and 10.2, comparison of data from financial statements prepared based on diverse accounting standards should be avoided, as the information disclosed to the market must be complete, consistent, and must not mislead the investor.
Thus, information extracted from the financial statements regarding the 2008 fiscal year, if prepared under a different accounting standard that does not allow adequate comparison, should not be included. In such cases, the reasons leading to the non-inclusion of this information must be reported in items 10.1 and 10.2 themselves.
We draw attention to the fact that Annex 24 of CVM Instruction No. 480/09 requires in a note that, whenever possible, directors comment in these fields on the main known trends, uncertainties, commitments, or events that may have a relevant effect on the financial and patrimonial conditions of the issuer and, in particular, on its result, its revenue, its profitability, and on the conditions and availability of funding sources.
It is emphasized that the information above requested regarding the disclosure of trends should not be confused with the disclosure of projections or estimates, which are the subject of section 11 of the Form, or with the disclosure of the sensitivity analysis table provided for in CVM Instruction No. 475/08. At this point, it is important to differentiate the concepts of projection, the disclosure of which is optional and is reported in section 11 of the Reference Form, from that of trend. The trend does not confuse with projection because it is not quantified.
While projection refers to an estimate of reaching a possible value or range of values for a variable of interest (prices, sales, profits, etc.), conditioned by the occurrence of some premises, the trend is associated with the continuity (or not) of a past and present movement, already known by the market, as it is reflected in the information regularly disclosed by the issuer, such as sales growth history, price drops, etc., and therefore, are commentable to allow investors to see the company's situation from the management's perspective. Indeed, the causes of the detected movement must be commented on, and its perspective of continuity (or not), based on facts already occurred, not to occur, as in the case of projections.
It is also worth noting that administrators must weave their comments in the most objective way possible, specifically treating the theme provided for by the heading. Care must be taken with excessive generality in comments, as this can lead to misinformation.
In comments regarding financial conditions (letter “a” of item 10.1), the issuer must present a reasoned analysis based on indicators (liquidity, indebtedness, etc.).
In comments on the capital structure (letter “b” of item 10.1), the issuer must also provide information on the financing pattern of its operations, by equity and third-party capital, as well as information regarding redemption of shares or quotas.
Information on the levels of indebtedness and characteristics of the issuer's debts (letter “f”) must take into account information on the subject disclosed in item 3.7 of the Reference Form.
In accordance with the provision of letter “h” of item 10.1, the issuer must include, preferably in table form, horizontal and vertical analysis of significant variations in relevant accounts.
10.3. Events with relevant effects, occurred and expected, on the financial statements
In this item, directors must comment on the relevant effects that the introduction or alienation of an operating segment, constitution, acquisition, or alienation of corporate participation, and events or the realization of unusual operations have caused or are expected to cause on the issuer.
It is emphasized that the requested comments must be made regarding events already disclosed by the issuer in the manner of CVM Instruction No. 358/02.
Regarding the expected effect, it is worth indicating that the information requested here should also not be confused with the disclosure of projections or estimates, which are the subject of section 11 of the Form. What the Form requires in item 10.3 is the board's analysis of the potential impact that the indicated events, already disclosed by the issuer, may produce on the financial statements and the result of the issuer.
For the purpose of the information provided in item 10.3, the concept of operating segment should be understood as equivalent to the accounting concept of “cash-generating unit”.
10.4. Significant Changes in Accounting Practices and Reservations and Emphases Present in the Auditor's Report
The directors must comment in this item all the issues cited in letters “a”, “b”, and “c”.
In comments on significant changes in accounting practices (letters “a” and “b”), directors must not limit themselves to mere transcription of the information provided on the subject in the financial statements or to simply listing the CPCs adopted in each fiscal year. In this item, directors must insert comments that allow investors to understand the reason for the alteration, the differences of the new practices adopted in relation to the previous model, and the significant effects provoked on the result of the financial statements.
Comments on the reservations and emphases of the independent auditor (letter “c”) must be made regardless of the directors' judgment on their relevance. They must also not be limited to mere transcription of the information present in the auditor's report; it is up to the directors to insert comments on all aspects present in the report.
10.5. Critical Accounting Policies
In this item, directors must indicate and comment on the critical accounting policies adopted by the issuer, understood here as any accounting practice that, in the issuer's evaluation, if altered, would result in a relevant accounting alteration.
10.6. Internal Controls Relative to the Preparation of Financial Statements: Degree of Efficiency and Deficiency and Recommendations Present in the Auditor's Report
The information requested in item 10.6 regarding deficiencies and recommendations indicated by the independent auditor relative to the internal controls adopted by the issuer to ensure the preparation of financial statements must be provided in line with the auditor's report provided for in item II of article 25 of CVM Instruction No. 308/99.
It is worth observing that this field must not be filled with mere transcription of the auditor's report. The directors must insert their comments, at least, on: (a) the deficiencies reported by the auditor and their classification (significant or other deficiencies); (b) the respective recommendations of the auditors; and (c) the measures adopted to correct such deficiencies.
In general, item 10.6.b of the Reference Form must contain, at minimum, comments regarding significant deficiencies. However, it is important to highlight that it is up to the directors, making their own judgment regarding the probability and possible magnitude of distortions that may arise in the accounting statements due to the deficiencies pointed out by the auditor, to evaluate the relevance and need for disclosure of comments regarding other deficiencies identified by the auditors.
11.1. Disclosure of Projection
The disclosure of projections and estimates by the issuer is optional in accordance with article 20 of CVM Instruction No. 480/09.
In line with the provisions of items II, III, and IV of paragraph 1 of article 20 of CVM Instruction No. 480/09, it is emphasized that the projections disclosed by the issuer in this item of the Reference Form, and in the manner of CVM Instruction No. 358/02, must be:
(a) identified as hypothetical data that do not constitute a promise of performance; (b) reasonable; and (c) accompanied by the relevant premises, parameters, and methodology adopted, and whenever projections and estimates are provided by third parties, the sources must be indicated.
As provided in paragraph 2 of article 20 of CVM Instruction No. 480/09, the projections or estimates disclosed in this item of the Reference Form, and in the manner of CVM Instruction No. 358/02, must be revised at a time interval adequate to the object of the projection, which in no case may exceed 1 (one) year.
It is worth remembering that the alteration in projections or estimates or disclosure of new projections or estimates is one of the hypotheses that determines the update of the Reference Form by issuers registered in Categories A and B, as provided for in item IX of paragraph 3 and item V of paragraph 4 of article 24 of Instruction 480/09.
Thus, the occurrence of any of these events will entail, without prejudice to the provision of CVM Instruction No. 358/02, the need to update the Reference Form within 7 (seven) business days counted from the date of the alteration or disclosure of new projections or estimates, with the update of the information provided in this item, as well as any other information provided in the Form that is affected by these events, including with respect to item 11.2 below.
11.2. Monitoring and Alteration of Projections Disclosed During the Last 3 Social Years
This item requires that the issuer that has disclosed projections in the last 3 social years inform:
(a) which are being replaced by new projections included in the Form and which of them are being repeated; (b) regarding projections relating to periods already elapsed, the comparison of projected data with the actual performance of indicators, clearly indicating the reasons that led to deviations in the projections; (c) regarding projections relating to periods still in progress, whether the projections remain valid on the date of delivery of the Form and, when applicable, explain why they were abandoned or replaced.
Thus, the issuer must use this item to provide information regarding:
(a) the revision of projections or estimates disclosed in item 11.1, provided for in paragraph 2 of article 20 of CVM Instruction No. 480/09; (b) the monitoring of projections and estimates disclosed in item 11.1; and (c) the alteration or disclosure of new projections and estimates informed in item 11.1.
With regard to the monitoring of projections or estimates disclosed, it is alerted that CVM Instruction No. 480/09 determines that the issuer must also confront, quarterly, in the appropriate field of Forms ITR and DFP, the projections disclosed in the Reference Form with the results actually obtained in the quarter, indicating the reasons for any differences (paragraph 4 of article 20).
12.1. Description of the Issuer's Administrative Structure
In this item, the issuer must describe its administrative structure, based on what its corporate bylaws and internal regulations provide.
In preparing the description of the attributes of the statutory bodies and committees, the issuer must ensure that the information provided is consistent with what is provided for in its corporate bylaws.
The description of the attributes and individual powers of the members of the board of directors (letter “d”) must be presented by the issuer, even if the individual attributes and powers are provided only in the company's internal regulations.
Regarding what is requested in letters “c” and “e”, any types of performance evaluation mechanisms for the bodies or committees that make up the administrative structure of the issuer must be informed, as well as any types of performance evaluation mechanisms for the members of the board of directors, the committees, and the board of directors, even if these evaluation mechanisms do not directly influence the determination of remuneration of the components.
The information on evaluation mechanisms that are provided by the issuer in letters “c” and “e” of this item must be reconciled with the information provided in Section 13 of the Form, when the evaluation mechanisms described here are taken into consideration for the determination of remuneration.
12.2. Description of the Rules, Policies, and Practices Relative to General Assemblies
In this item, and especially regarding the information requested in letters “a” and “b”, the issuer must inform if it adopts differentiated practices and policies relative to the procedures stipulated in legislation, describing them.
If the issuer does not adopt any of the procedures provided for in letters “d” to “h” or differentiated policy or practice relative to the deadlines for calling and competencies of the assembly, as well as mechanisms intended to allow the inclusion, in the agenda, of proposals formulated by shareholders, it should only indicate this fact.
The issuer in this situation must also include information on the minimum requirements provided for in legislation regarding the deadlines for calling and competencies of the assembly, avoiding, however, mere reproduction of the legal text. The issuer must
also include information on the reason why it does not adopt these procedures. Possible projects for the implementation of new practices, stage of development, and estimated time for adoption may also be commented on.
12.3. Dates and Newspapers of Publication of Information Required by Law No. 6.404/76
In this item, the issuer must inform, in table form:
(a) the name of the official body of the Union, State, or Federal District, according to the place where the issuer's headquarters is located, and the newspaper of large circulation edited in the place where the issuer's headquarters is located, which have been used by the company, in the manner of article 289 of Law No. 6.404/76, for the publication of the information cited in letters “a” to “d” of this item; and
(b) date of publication of the information cited in letters “a” to “d” of this item.
The information must refer to the financial statements of the last 3 social years, even if the publications occur in the current fiscal year.
The issuer must ensure that the publication dates cited in letters “a” to “d” of this item are compatible with the information already disclosed in the IPE System.
12.4. Description of the Issuer's Rules, Policies, and Practices Relative to the Board of Directors
In this item, the issuer must describe the rules, policies, or practices adopted by it relative to the functioning of the board of directors, indicating: (a) frequency of meetings; (b) provisions existing in shareholder agreements that establish restriction or linkage to the exercise of the voting right of board members; and (c) rules for the identification and administration of conflicts of interest.
If the issuer does not adopt rules for the identification and administration of conflicts of interest, it should only indicate this fact. In this case, the issuer must include information on the reason why it does not adopt this procedure. Possible projects for the implementation of new practices, stage of development, and estimated time for adoption may also be commented on.
It is emphasized that the celebration, alteration, or rescission of a shareholder agreement filed at the issuer's headquarters or of which the controlling shareholder is a party regarding the exercise of the voting right or control power of the issuer is a hypothesis that determines the update of the Reference Form by Category A issuers, as provided for in item X of paragraph 3 of article 24 of Instruction 480/09.
Thus, the celebration, alteration, or rescission of shareholder agreements that establish restriction or linkage to the exercise of the voting right of board members will entail, without prejudice to the provision of CVM Instruction No. 358/02, the need to update the Reference Form within 7 (seven) business days of its filing at the issuer's headquarters, with the update of the information provided due to letter “b” of this item, as well as any other information provided in the Form that is affected by these events.
12.6. Identification of Administrators and Members of the Fiscal Council
In this item, the issuer must identify, in table form, the members of the board of directors, the statutory board of directors, and the fiscal council, with the presentation of the data required in letters “a” to “j”.
It is worth remembering that Instruction 480/09 included, in item I of paragraph 3 and item I of paragraph 4 of article 24, as a hypothesis that determines the update of the Reference Form, the alteration:
(a) of administrator or member of the issuer's fiscal council, for issuers registered in Category A; and
(b) of administrator, for issuers registered in Category B.
Thus, the occurrence of these events will entail the need to update the Reference Form within 7 (seven) business days of the date of election, with the update of the information about the administrators or members of the fiscal council provided by Category A issuers in attention to items 12.6, 12.8, 12.9, and 12.10 and by Category B issuers in attention to items 12.9 and 12.10, as well as any other information provided in the Form that is affected by these events.
It is emphasized that the above-mentioned update must be carried out even in cases of reelection.
If, by the deadline for the mandatory update of information, the alteration of the administrator is pending homologation by a specific regulatory body or has not occurred its appointment, the issuer must proceed with the update of the Form providing in item 12.12, regarding the administrator, the information required in items 12.6, 12.8, 12.9, and 12.10 (as exigible for its registration category), as well as informing that the alteration or appointment is pending. Upon homologation or appointment, the issuer must update, according to its registration category, items 12.6, 12.8, 12.9, and 12.10 to reflect the new composition of its administration and remove from item 12.12 the information previously provided regarding the administrator.
12.7. Identification of Members of Statutory Committees and of Audit, Risk, Financial, and Remuneration Committees
In this item, the issuer must indicate, in table form, the same information required in letters “a” to “j” of item 12.6, regarding:
(a) members of audit, risk, financial, and remuneration committees, or similar organizational structures, created by statutory provision;
(b) members of audit, risk, financial, and remuneration committees, or organizational structures, in cases where these, even if not statutory, participate in the decision-making process of the issuer's administrative or management bodies as consultants or auditors;
(c) members of the other committees provided for in the Issuer's Bylaws.
12.8. Information about administrators and members of the fiscal council
Information regarding the curriculum of administrators and members of the fiscal council must contain the information required in items “a.i” and “a.ii”. The information must be provided objectively, without the inclusion of information or statements that denote judgment regarding the quality of the administrator. In accordance with letter “b” of this item, the following information must be provided regarding administrators and members of the fiscal council of the issuer, concerning events that have occurred during the last 5 years:
(a) any criminal conviction, even if not final, indicating the stage at which the process is; (b) any conviction in an administrative process by the CVM and the penalties applied, even if not final, indicating whether the corresponding process is under appeal to the Council of Appeals of the National Financial System; (c) any final conviction, in the judicial or administrative sphere, that has suspended or disqualified them from practicing any professional or commercial activity.
12.11. Agreements, including insurance policies, for payment or reimbursement of expenses borne by administrators
In the case of the existence of an insurance policy that provides for the payment or reimbursement of expenses borne by administrators, resulting from damage repair caused to third parties or to the company, the issuer must include, in addition to the description of the insurance provisions, information about the value of the civil liability insurance premium for administrators.
13.1. Description of the remuneration policy or practice of the board of directors, statutory and non-statutory management, the fiscal council, statutory committees, and audit, risk, financial, and remuneration committees
In this item, the issuer must describe, clearly and objectively, the remuneration policy or practice adopted by it for members:
(a) of the board of directors, statutory and non-statutory management, and the fiscal council; (b) of audit, risk, financial, and remuneration committees or similar organizational structures, created by statutory provision; (c) of audit, risk, financial, and remuneration committees or similar organizational structures, even if non-statutory, if such committees or structures participate in the decision-making process of the issuer's administration or management bodies as consultants or auditors; and (d) of other committees provided for in the issuer's Bylaws. The qualitative description of the remuneration policy or practice must comprise, at a minimum, the information required in letters “a” to “g” of this item, and the issuer may provide additional information deemed pertinent for better understanding by investors, such as changes implemented relative to policies or practices adopted in previous fiscal years. To facilitate understanding by investors, it is recommended that, whenever there are significant variations between remuneration practices and policies among different bodies, the information requested in this item be presented by body. The issuer must describe the elements that make up the total remuneration practiced by it and the objectives of each (item 13.1.b.i). “Remuneration elements” are understood as the portions of remuneration described in letter “c” of item 13.2. Thus, the remuneration elements described in item 13.1.b.i must be consistent with the information provided in item 13.2 and vice-versa. The issuer must also describe direct and indirect benefits, disclosing their components. Direct or indirect benefits are understood as the right to medical assistance, dental care, life insurance, car, fuel, housing, educational aid, etc. Post-employment benefits were defined in Technical Pronouncement No. 33 of CPC, approved by CVM Deliberation No. 600/09. In the information regarding the subject, values related to private pension plans must be included. In accordance with item 13.1.b.ii, the issuer must inform the share held by each remuneration element described in item 13.1.b.i in the total remuneration. Such information must be provided for each body, committee, or similar structure cited in item 13.1, and the issuer may present them in the form of a graph or table. The issuer must also present all information necessary for understanding the methodology used to establish the value and method of adjustment of remuneration (item 13.1.b.iii), describing the organizational structures involved, the responsibility of each of the bodies and members involved, as well as the criteria used by them. For example, if the issuer takes into account market practices for fixing and adjusting remuneration, it must specify how the company monitors and verifies these practices, and must also include detailed information about the comparison criteria used (for example, based on companies of the same size or different size, same sector or different
sectors, etc.). Regarding the performance indicators taken into consideration for determining each element of remuneration (item 13.1.c), the issuer must, without the need to specify internal targets established, disclose the indicators used by it to assess individual or company performance, mainly regarding the variable portions of remuneration, indicating if these are based, for example, on the result of the sale of products and services, the operating result of the company, net revenue, EBITDA, market value of shares, etc. In accordance with item 13.1.f, the issuer must inform if there are portions of remuneration received by administrators and other persons cited in the caput of item 13.1, due to the exercise of office at the issuer, that are supported by subsidiaries, controlled entities, or direct and indirect controlling shareholders. Such information must also include the identification of the type of remuneration received (considering the portions of remuneration described in letter “c” of item 13.2) and the company or controlling shareholder that supported it. Where applicable, the information must be reconciled with that required in section 13.15.
13.2. Remuneration of the board of directors, statutory management, and fiscal council
In this item, the issuer must provide, in table form, by body, quantitative data on the annual remuneration attributed to the board of directors, statutory management, and fiscal council, segregated between their different fixed and variable components, according to the content specified in letters “a” to “e” of this item. The information must refer not only to the remuneration recognized in the issuer's results for the last three fiscal years, but also to that projected for the current fiscal year, discriminating the portions of remuneration described in letter “c”. Direct or indirect benefits (item 13.2.c.i) are understood as the right to medical assistance, dental care, life insurance, car, fuel, housing, educational aid, etc. Post-employment benefits (item 13.2.c.iii) were defined in Technical Pronouncement No. 33 of CPC, approved by CVM Deliberation No. 600. In the information regarding the subject, values related to private pension plans must be included. The values of stock-based remuneration (item 13.2.c.v) must be reported in line with the definition of stock-based remuneration, paid in shares or money, contained in CVM Deliberation No. 650/10, which approved Technical Pronouncement CPC 10 (R1), regardless of whether the entity's equity instruments were granted by the issuer itself or by its shareholder. The same applies to the information required in items 13.4, 13.6, 13.7, and 13.8. The issuer must indicate the value corresponding to INSS contributions, paid by the employer, recognized in its results. When applicable, the values referring to these contributions must be presented in a segregated manner in items “c.i” and “c.ii” (“others”). The number of members of each body (letter “b”) must correspond to the annual average of the number of members of each body calculated monthly, with two decimal places. For example: in a company whose monthly distribution of the number of members of a certain body is that described in the table below, the number of members must be calculated as specified below:
Month | No. members
January | 7
February | 7
March | 7
April | 7
May | 6
June | 6
July | 7
August | 7
September | 5
October | 5
November | 5
December | 5
Total | 74
No. of members (item 13.2 “b”) = 74/12 months = 6.17 members
The issuer must make clear in the “Observation” field of item 13.2 itself that the number of members of each body (letter “b”) was calculated as specified above.
To avoid duplication, remuneration values must be calculated by body. In cases where the same administrator holds office in statutory management and in the board of directors, the remuneration received by him as a member of the board of directors shall not be computed for the purpose of calculating the remuneration of the management, and vice-versa. The value, per body, of remuneration (letter “d”) corresponds to the total annual remuneration of each of the bodies, that is, the sum of all portions covered in letter “c” that have been attributed to the members of the body in the fiscal year. The total value of remuneration of the board of directors, statutory management, and fiscal council (letter “e”) corresponds to the sum of the total remunerations of the three bodies indicated in letter “d”. Information regarding the current fiscal year must be presented considering the number of members and the annual remuneration projected by the issuer. It is noted that CVM Instruction No. 480/09 allowed, in its article 67, that issuers omit from this section of the Reference Form the information relating to the fiscal years of 2007 and 2008.
13.3. Variable remuneration of the board of directors, statutory management, and fiscal council
In this item, the issuer must provide, in table form, by body, additional information regarding the values reported in the table provided for in item 13.2 concerning bonuses and profit sharing attributed by it to members of the board of directors, statutory management, and fiscal council. The information required in letters “a” to “d” must be provided not only regarding the variable remuneration of the last 3 fiscal years, but also that projected for the current fiscal year. Information regarding the current fiscal year must be presented considering the number of members and the annual variable remuneration projected by the issuer. To avoid duplication, annual remuneration values must be calculated by body. In cases where the same administrator holds office in statutory management and in the board of directors, the remuneration received by him as a member of the board of directors shall not be computed for the purpose of calculating the remuneration of the management, and vice-versa. The number of members of each body (letter “b”) must correspond to the number of directors and councilors to whom variable remuneration recognized in the issuer's results in the fiscal year was attributed. The information required in letters “c” and “d” must be provided in current currency, even when the remuneration attributed as bonus or profit sharing is fixed based on another criterion, such as, for example, number of salaries. In this case, the issuer may include in a note to the table provided for in item 13.3 information about the criterion actually used for the calculation of these remunerations. The table required in this item must be presented according to the revised model below and must be consistent with the values reported in table 13.2, comprising all portions referring to bonuses and profit sharing recognized in the issuer's results. It is noted that CVM Instruction No. 480/09 allowed, in its article 67, that issuers omit from this section of the Reference Form the information relating to the fiscal years of 2007 and 2008.
Projected variable remuneration for the current fiscal year (20XX) Board of Directors | Statutory Management | Fiscal Council | Total No. of members Bonus Minimum value projected in the remuneration plan Maximum value projected in the remuneration plan Value projected in the remuneration plan, if targets are met Profit sharing Minimum value projected in the remuneration plan Maximum value projected in the remuneration plan Value projected in the remuneration plan, if targets are met
Variable remuneration - fiscal year ended xx/xx/xxxx Board of Directors | Statutory Management | Fiscal Council | Total No. of members Bonus Minimum value projected in the remuneration plan Maximum value projected in the remuneration plan Value projected in the remuneration plan, if targets had been met Value effectively recognized in the results of the fiscal year Profit sharing Minimum value projected in the remuneration plan Maximum value projected in the remuneration plan Value projected in the remuneration plan, if targets had been met Value effectively recognized in the results of the fiscal year
13.5. Information, by body, on the holdings held by members of the board of directors, statutory management, and fiscal council.
In this item, the issuer must report, in consolidated form, by body, without the need to individualize the administrator, the total quantity of the following securities held by members of the board of directors, statutory management, or fiscal council on the date of closing of the last fiscal year:
(a) shares or quotas directly or indirectly held, in Brazil or abroad, issued by the issuer, its direct or indirect controlling shareholders, controlled entities, or entities under common control; and (b) other securities convertible into shares or quotas, issued by the issuer, its direct or indirect controlling shareholders, controlled entities, or entities under common control. It is noted that item 13.5 does not restrict the disclosure of shares, quotas, or other securities held by administrators and members of the fiscal council to those whose possession or acquisition is linked to the office they hold at the issuer. Therefore, all securities referred to in this item must be listed by the issuer. In presenting the information, the issuer must identify the issuing company of the reported securities. Information regarding securities issued by the company held by members of the board of directors, statutory management, or fiscal council must be consistent with the consolidated information provided by the issuer in the “Securities Traded and Held (art. 11 of Instr. CVM No. 358)” form relative to the month of closing of the last fiscal year. Regarding eventual indirect holdings held through investment funds or similar vehicles, the understanding expressed in the sole paragraph of article 20 of CVM Instruction No. 358/02 must be applied, which excluded from the concept of indirect trading transactions carried out through investment funds, provided that such funds are not exclusive, nor can the fund's trading decisions be influenced by the quota holders.
13.6. Stock-based remuneration of the board of directors and statutory management
In this item, the issuer must present, in table form, quantitative information regarding stock-based remuneration recognized in the issuer's results for the last 3 fiscal years and projected for the current fiscal year, of the board of directors and statutory management, according to the content specified in letters “a” to “e” of this item. To avoid duplication, annual remuneration values must be calculated by body. In cases where the same administrator holds office in statutory management and in the board of directors, the remuneration received by him as a member of the board of directors shall not be computed for the purpose of calculating the remuneration of the management, and vice-versa. The number of members of each body (letter “b”) must correspond to the number of directors and councilors to whom stock-based remuneration recognized in the issuer's results in the fiscal year was attributed. Regarding all data resulting from evaluations or calculations made by management, such as in the case of the information requested in items “c.vi”, “d” and “e”, the issuer must report in item 13.9 the data, models, and assumptions used. It is noted that CVM Instruction No. 480/09 allowed, in its article 67, that issuers omit from this section of the Reference Form the information relating to the fiscal years of 2007 and 2008. The table required in this item must be presented according to the model below.
Stock-based remuneration projected for the current fiscal year (20XX) Board of Directors | Statutory Management No. of members Grant of stock purchase options Grant date Number of options granted Timeframe for options to become exercisable Maximum timeframe for exercise of options Timeframe for restriction on transfer of shares Weighted average exercise price:
(a) Of options outstanding at the beginning of the fiscal year (b) Of options forfeited during the fiscal year (c) Of options exercised during the fiscal year (d) Of options expired during the fiscal year Fair value of options on the grant date Potential dilution in the event of exercise of all options granted
Stock-based remuneration - fiscal year ended xx/xx/xxxx Board of Directors | Statutory Management No. of members Grant of stock purchase options Grant date Number of options granted Timeframe for options to become exercisable Maximum timeframe for exercise of options Timeframe for restriction on transfer of shares Weighted average exercise price:
(a) Of options outstanding at the beginning of the fiscal year (b) Of options forfeited during the fiscal year (c) Of options exercised during the fiscal year (d) Of options expired during the fiscal year Fair value of options on the grant date Potential dilution in the event of exercise of all options granted
13.7. Options outstanding of the board of directors and statutory management at the end of the last fiscal year
In this item, the issuer must present, in table form, information regarding options outstanding of the board of directors and statutory management, at the end of the last fiscal year, according to the content specified in letters “a” to “d” of this item.
To avoid duplication, annual remuneration values must be calculated by body. In cases where the same administrator holds office in statutory management and in the board of directors, the remuneration received by him as a member of the board of directors shall not be computed for the purpose of calculating the remuneration of the management, and vice-versa. The number of members of each body (letter “b”) must correspond to the number of directors and councilors linked to the options plan. Regarding all data resulting from evaluations or calculations made by management, such as in the case of the information requested in items “c.vi”, “d” and “e”, the issuer must report in item 13.9 the data, models, and assumptions used. The table required in this item must be presented according to the model below.
Options outstanding at the end of the fiscal year ended xx/xx/xxxx Board of Directors | Statutory Management No. of members Options not yet exercisable Quantity Date on which they will become exercisable Maximum timeframe for exercise of options Timeframe for restriction on transfer of shares Weighted average exercise price Fair value of options on the last day of the fiscal year Exercisable options Quantity Maximum timeframe for exercise of options Timeframe for restriction on transfer of shares Weighted average exercise price Fair value of options on the last day of the fiscal year Fair value of the total of options on the last day of the fiscal year
13.8. Exercised options and delivered shares relating to stock-based remuneration of the board of directors and statutory management
In this item, the issuer must present, in table form, information regarding exercised options and delivered shares relating to stock-based remuneration of the board of directors and statutory management, in the last 3 fiscal years, according to the content specified in letters “a” to “d” of this item. The number of members of each body (letter “b”) must correspond to the number of directors and councilors linked to the options plan. Regarding all data resulting from evaluations or calculations made by management, such as in the case of the information requested in items “c.vi”, “d” and “e”, the issuer must report in item 13.9 the data, models, and assumptions used. The table required in this item must be presented according to the model below.
Exercised options - fiscal year ended xx/xx/xxxx Board of Directors | Statutory Management No. of members Exercised options Number of shares Weighted average exercise price Difference between the exercise value and the market value of the shares relating to the exercised options Delivered shares Number of delivered shares Weighted average acquisition price Difference between the acquisition value and the market value of the acquired shares
13.9. Information necessary for the understanding of the data disclosed in items 13.6 to 13.8
In this item, the issuer must ensure that the information provided is sufficient to allow understanding of the information provided in items 13.6 to 13.8 by moderately informed investors.
It is noted that, in the description of the data and assumptions used in the pricing model (letter “b”), the issuer must include quantified information, including regarding the weighted average price of shares, exercise price, expected volatility, option life, expected dividends, and risk-free interest rate.
13.10. Pension plans in force conferred upon members of the board of directors and statutory directors
In this item, the issuer must present, in table form, information regarding pension plans in force conferred upon members of the board of directors and statutory directors, according to the content specified in letters “a” to “h” of this item.
The number of members of each body (letter “b”) must correspond to the number of directors and councilors linked to the pension plan.
The table required in this item must be presented according to the model below. If there is more than one pension plan in force, the information must be presented by plan.
Board of Directors
Executive Management
Statutory Board
Number of members
Plan name
Number of administrators meeting retirement conditions Conditions for early retirement Updated accumulated value of accumulated contributions until the close of the last fiscal year, minus the portion related to contributions made directly by administrators Total accumulated value of contributions made during the last fiscal year, minus the portion related to contributions made directly by administrators Possibility of early redemption and conditions
13.11. Value of the highest, lowest, and average value of individual remuneration of the Board of Directors, Executive Management, and Statutory Audit Committee.
In this item, the issuer must inform, in table form, by body, the value of the highest, lowest, and average annual individual remuneration of the Board of Directors, Executive Management, and Statutory Audit Committee, relative to the last three fiscal years.
The information provided must be consistent with the values indicated in the table provided for item 13.2, and must include all components of remuneration included therein.
To avoid duplication, the values reported must be calculated by body. In cases where the same administrator holds a position in both the Executive Management and the Board of Directors, the remuneration received by them as a member of the Board of Directors shall not be computed for the purpose of calculating the remuneration of the Executive Management, and vice versa. The number of members of each body must correspond to the number of members of the respective body informed in letter “b” of item 13.2. Except in cases where an administrator renounces remuneration, the average annual remuneration of each body must correspond to the division of the total annual remuneration of each body (letter “d” of item 13.2) by the number of members informed for the respective body (letter “b” of item 13.2). If any administrator renounces remuneration, they shall not be considered for the calculation of the average annual remuneration, although they remain counted for the indication of the number of members (letter “a”). In this case, the issuer must disclose in the observation field the number of members actually used for the calculation of average remuneration. The value of the lowest annual individual remuneration of each body must be calculated by excluding all members of the respective body who held the position for less than 12 months. If it is necessary to adopt this procedure, the issuer must clearly state in the “Observation” field of item 13.11 that the value was calculated excluding body members. If all members held the position for less than 12 months, the lowest annual individual remuneration must be calculated considering the remuneration actually recognized in the results of the fiscal year. The value of the highest annual individual remuneration of each body must be calculated without any exclusions, considering all remuneration recognized in the results. The issuer must also inform, in a note within item 13.11, the number of months in which the respective member held their functions in the entity. It is noted that CVM Instruction No. 480/09, in its article 67, allowed issuers to omit from this section of the Reference Form the information relating to the fiscal years 2007 and 2008. Only companies that do not provide the information required due to a judicial decision must leave the field blank and, through the “Justification for non-completion” icon, mention the aforementioned judicial decision, identifying the case number and the court in which it is proceeding.
13.12. Contractual arrangements, insurance policies, or other instruments that structure remuneration or indemnification mechanisms for administrators.
The information provided in this item must allow the investor a complete understanding of the logic of the remuneration and indemnification mechanisms for administrators, if removed from their positions or retired.
13.13. Percentage of total remuneration of each body attributed to members of the Board of Directors, Executive Management, or Statutory Audit Committee who are related parties to the issuer’s controllers.
In this item, the issuer must inform the percentage participation in the total annual remuneration of each body (informed in letter “d” of item 13.2) held by members of the Board of Directors, Executive Management, and Statutory Audit Committee who are related parties to the direct and indirect controllers of the issuer. The information must be provided relative to the last 3 fiscal years and must be calculated considering the concept of related party contained in CVM Resolution No. 642/10, which approved Technical Pronouncement CPC 05 (R1). It is noted that CVM Instruction No. 480/09, in its article 67, allowed issuers to omit from this section of the Reference Form the information relating to the fiscal years 2007 and 2008.
13.14. Remuneration of members of the Board of Directors, Executive Management, or Statutory Audit Committee received for any reason other than the function they hold.
In this item, the issuer must inform in a consolidated manner, by body, the annual values recognized in its results as remuneration of members of the Board of Directors, Executive Management, and Statutory Audit Committee that were received for any reason other than the function held, such as commissions and consulting or advisory services provided. The information must be provided relative to the last 3 fiscal years. It is noted that CVM Instruction No. 480/09, in its article 67, allowed issuers to omit from this section of the Reference Form the information relating to the fiscal years 2007 and 2008.
13.15. Remuneration of members of the Board of Directors, Executive Management, or Statutory Audit Committee recognized in the results of the issuer’s controllers, jointly controlled entities, and subsidiaries.
Item 13.15 does not restrict the disclosure of information required to remuneration supported by the issuer’s subsidiaries, direct or indirect controllers, and jointly controlled entities, which have been attributed to administrators and members of the Statutory Audit Committee due to the exercise of their position in the issuer. In this item, the following must be informed, in a consolidated manner, by body:
(a) the portions of remuneration supported by the issuer’s subsidiaries, direct or indirect controllers, and jointly controlled entities, which have been attributed to members of the Board of Directors, Executive Management, and Statutory Audit Committee due to the exercise of their position in the issuer (whose existence must be informed in item 13.1.f); (b) other remuneration received by administrators and members of the Statutory Audit Committee of the issuer, which has been recognized in the results of the issuer’s subsidiaries, direct or indirect controllers, or jointly controlled entities, even if not related to the exercise of a position in the issuer. The information must be provided on an annual basis, relative to the last 3 fiscal years. It is noted that CVM Instruction No. 480/09, in its article 67, allowed issuers to omit from this section of the Reference Form the information relating to the fiscal years 2007 and 2008. In the calculation, remuneration received for any title, in Brazil or abroad, must be computed, and it must also be specified under what title the values reported were attributed to members of the Board of Directors, Executive Management, or Statutory Audit Committee. The information must be provided in a consolidated manner, by type of body and entity (issuer’s subsidiaries, direct or indirect controllers of the issuer, and jointly controlled entities), without the need to identify the corporate name of these entities. The information must be provided in table form, according to the model below:
Fiscal year 20XX
Board of Directors
Executive Management
Statutory Audit Committee
Total
Direct and indirect controllers
Issuer’s subsidiaries
Jointly controlled entities
13.16. Other information deemed relevant
CVM Instruction 480/09 does not mandate the presentation, in section 13 of the Reference Form, of values relating to the remuneration of administrators recognized in the issuer’s consolidated results.
However, the disclosure of this information, additionally in this item, by issuers is considered desirable, as it is useful to allow a better understanding and evaluation by investors of the company’s business and its results.
14.3. Description of the remuneration policy for the issuer’s employees
In the description of the characteristics of remuneration plans based on shares for non-administrator employees, the issuer may refer to information eventually provided on the subject in item 13.4 of the Form, provided that all information required in letters “a” to “c” of this item is provided there, in a clearly identifiable manner.
15.2. Identification of shareholders, or groups of shareholders acting in concert or representing the same interest, with participation equal to or greater than 5% of the same class or species of shares
In this item, the issuer must provide information on the identification of shareholders, or groups of shareholders acting in concert or representing the same interest, whose total participation, direct or indirect, is equal to or greater than 5% of the same class or species of shares, which are not listed in item 15.1, in line with the information required in letters “a” to “g”. All participations held in species or classes of shares must be informed in compliance with letter “d”, even if the percentage held in the species or class distinct from that in which the shareholder holds a relevant participation is less than 5% of the shares. In line with the decision issued by the CVM Collegiate Body on 11/03/2011, if the relevant participation is held jointly by different investment funds or portfolios under the same discretionary management, the identification of the funds or portfolios may be replaced by the indication of the manager’s name, with the presentation of the total participation held by the funds or portfolios managed by him. In this case, the issuer must make it clear that the indicated participation is held by different investment funds or portfolios. Also in line with this decision, it is noted that the above guidance is not applicable to relevant participations held by exclusive funds or by funds in which trading decisions may be influenced by the unit holders, in which case the identification of the funds is required. In case of doubt regarding the disclosure rules for relevant participations in the form of article 12 of CVM Instruction No. 358/02, issuers must consult item 12.8 of Circular Letter CVM/SEP No. 04/2011, of 15/03/2011. As the date of the last change (letter “g”), the base date of the last information provided in this item must be informed. It is worth noting that the Reference Form is a periodic obligation provided for in article 24 of CVM Instruction No. 480/09 and must be presented updated annually within 5 (five) months counted from the date of closure of the fiscal year. Thus, in the annual presentation of the Reference Form, the issuer must consult its shareholder list and insert into the Form the data on shareholders who hold 5% or more of the same class or species of shares, regardless of the receipt of the communications provided for in article 12 of CVM Instruction No. 358/02. It is noted that CVM Instruction No. 480/09 provides, in items VI and VII of paragraph 3 of article 24, that the Reference Form must be updated by issuers registered in Category A:
(a) when any natural or legal person, or group of persons representing the same interest, attains participation, direct or indirect, equal to or greater than 5% (five percent) of the same species or class of shares of the issuer, provided that the issuer has knowledge of such change; (b) when there is a variation in the share position of the aforementioned persons greater than 5% (five percent) of the same species or class of shares of the issuer, provided that the issuer has knowledge of such change. Thus, the receipt by the issuer of the communication provided for in article 12 of CVM Instruction No. 358/02 will result in the need to update the Reference Form within 7 (seven) business days counted from the receipt of the communication, with the update of the information provided due to item 15.2, as well as any other information provided in the Form that is affected by this event. It is also noted that whenever item 15.2 is updated, items 15.3 “d” and 19.2 must also be updated.
15.3. Capital distribution
In this item, the issuer must describe, in table form, the distribution of its share capital, as calculated in the last shareholders’ meeting.
The quantities of natural and legal entity shareholders of the issuer (letters “a” and “b”) must be calculated without excluding shareholders who have been informed in items 15.1 and 15.2 as controlling shareholders or holders of 5% or more of the ordinary or preferred shares. For the purposes of this item, funds and investment clubs must be classified as legal entities. In addition to the quantity of legal entity shareholders, the issuer must also inform the approximate quantity of institutional investors included in this category of investors (letter “c”). Institutional investors are market participants who manage third-party resources. Included in this category, among others, are insurance, pension, and capitalization companies, mutual investment funds in shares, real estate investment funds, private pension funds, benefit plan funds, insurance companies, and institutions of a charitable nature. The number of shares in circulation, by class and species (letter “d”), must be calculated according to the provisions of article 62 of CVM Instruction No. 480/09, which defines, as shares in circulation, all shares of the issuer, excluding those owned by the controller, persons linked to them, the issuer’s administrators, and shares held in treasury. As provided in paragraph 1 of the same article of the Instruction, a linked person is understood to be a natural or legal person, fund, or universality of rights, that acts representing the same interest of the person or entity to which it is linked. The number of shares in circulation, by class and species, and the quantities of natural and legal persons and institutional investors must be calculated based on the information contained in the company’s corporate books and the information provided by the custody service provider institution. In view of what article 146 of Law No. 6.404/76 provides, which determines that members of the Board of Directors must necessarily be shareholders of the company, it is also noted that:
a) the sum of the number of natural and legal entity shareholders cannot be equal to zero; b) the number of shares in circulation cannot be indicated as equal to or greater than the total number of shares issued; c) the sum of the number of natural and legal entity shareholders cannot be equal to the total number of shares issued when there are shareholders with relevant participation indicated in item 15.2 or shares held in treasury; d) in any case, the sum of the number of natural and legal entity shareholders cannot be greater than the total number of shares issued by the company. It is worth remembering that whenever items 15.1 or 15.2 are updated, item 15.3 “d” must also be updated.
15.4. Organogram of the issuer’s shareholders
The organogram requested in item 15.4 is information of a voluntary nature. Its objective is to facilitate the visualization of the information presented in items 15.1 and 15.2 regarding the issuer’s control structure and share distribution.
For this reason, it must be compatible with the information provided in those items, but does not need to be at the same level of detail. The organogram must identify, in any case, all direct and indirect controllers of the issuer, as well as shareholders with participation equal to or greater than 5% of a species or class of shares. It is noted that, if the issuer chooses to present the organogram, there will be a need to update it whenever the information relating to items 15.1 and 15.2 is updated.
15.5. Information on shareholders’ agreements that regulate the exercise of voting rights or the transfer of shares issued by the issuer
In this item, the issuer must describe, with the presentation of the information required in letters “a” to “g” of this item, any shareholders’ agreement that regulates the exercise of voting rights or the transfer of shares issued by the issuer, that:
a) is archived at its headquarters; or b) of which the controller is a party, regardless of its archiving at the issuer’s headquarters.
In this sense, it is worth remembering that article 43 of CVM Instruction No. 480/09 provides that the controller must promptly provide the issuer with all information necessary to comply with the legislation and regulation of the securities market.
It is also worth remembering that the execution, alteration, or rescission of a shareholders’ agreement archived at the issuer’s headquarters or of which the controller is a party regarding the exercise of voting rights or control power of the issuer is a hypothesis that determines the update of the Reference Form by Category A issuers, as provided for in item X of paragraph 3 of article 24 of Instruction 480/09. Thus, the occurrence of any of these events, which affects the information provided in item 15.5, will result, without prejudice to the provisions of CVM Instruction No. 358/02, in the need to update the Reference Form within 7 (seven) business days counted from the date of its archiving at the issuer’s headquarters, with the update of the information provided in item 15.5, as well as any other information provided in the Form that is affected by these events.
15.6. Information on relevant changes in the participations of the issuer’s control group and administrators
In this item, relevant changes (acquisitions or alienations) must be informed, as defined in article 12 of CVM Instruction No. 358/02, occurred
in the last 3 last fiscal years in the participations of the members of the control group and administrators.
For the provision of the information requested in the items of this Section, the concept of related party contained in CVM Deliberation No. 642/10, which approved Technical Pronouncement CPC 05 (R1), must be considered.
If the issuer does not adopt rules, policies, or practices regarding the execution of transactions with related parties (item 16.1), it must expressly state this fact.
In this case, the issuer must also inform the reason why it does not adopt these procedures. Possible projects for the implementation of new practices, development stage, and estimated time for adoption may also be commented on.
The information requested in item 16.2 regarding transactions with related parties that, according to accounting standards, are disclosed in the individual or consolidated financial statements, must be provided regarding transactions:
(a) that are in force in the current fiscal year; or (b) that have been executed in the last 3 fiscal years, even if these transactions are no longer in force in the current fiscal year.
Regarding the provision in item 16.3, the issuer must clearly and objectively identify the measures adopted to avoid conflicts of interest, as well as provide all necessary information to demonstrate that the operations were carried out based on strictly commutative conditions or with adequate compensatory payment similar to those that could be established in transactions with unrelated parties, informing, among other things, the terms and conditions applied in the operation and the existence of any guarantees.
The information regarding the commutative nature of transactions with related parties must be consistent with the information provided in item 16.2, particularly with respect to item 16.2.k.i (nature and reasons for the operation) and 16.2.k.ii (interest rate charged), for loan operations.
The information requested in the items of this section must be provided even if homologation by a specific regulatory body is pending, and the issuer must expressly state this information in item 17.5.
With respect to item 17.1, the following must be informed in the Empresas.Net system, regarding “Date of authorization or approval”:
(a) in the case of information on authorized capital, the date of the last deliberation on the subject; and (b) in the case of information on issued capital, subscribed capital, and paid-up capital, the date of the last alteration of the information.
It should be noted that Instruction 480/09 provides, in items II and III of paragraph 3 and in item II of paragraph 4 of article 24, that the Reference Form must be updated:
(a) upon alteration of share capital or issuance of new securities, even if privately subscribed, in the case of issuers registered in Categories A; (b) upon issuance of new securities, even if privately subscribed, in the case of issuers registered in Categories B.
Thus, the occurrence of any of these events will result in the need to update the Reference Form within 7 (seven) business days counted from the respective date of alteration or issuance, with the update of the information affected by these events provided by issuers registered in Category A in items 17.1, 17.2, 17.3, and 17.4 and by Category B issuers in item 17.1, as well as any other information provided in the Form that is affected by this event.
18.1. Description of the rights of each class and species of issued shares
In this item, the issuer must describe the rights of each class or species of shares issued by it, presenting the information required in letters “a” to “i” of this item.
The information requested in this item must be described considering the rights and rules provided in the issuer’s Bylaws.
It should be recalled that changes in the rights and advantages of issued securities are a circumstance that determines the update of the Reference Form by Category A issuers, as provided in item IV of paragraph 3 of article 24 of Instruction 480/09.
Thus, the occurrence of this event will result in the need to update the Reference Form within 7 (seven) business days counted from the date the alteration becomes effective, with the update of the information provided in response to items 18.1, 18.2, and 18.3, as well as any other information provided in the Form that is affected by these events.
18.5. Description of other securities
In this item, the issuer must describe other securities issued by it that are not shares, presenting the information required in letters “a” to “j” of this item.
The information requested in this item must be described considering the conditions provided in the respective legal documents for each security discussed.
In the Empresas.Net system, the information required regarding debt securities in letter “h” must be provided in the “Characteristics of the Security” field, which may also be used to provide additional information about other securities disclosed, judged relevant by the issuer.
It should be recalled that the issuance of new securities, even if privately subscribed, is a circumstance that determines the update of the Reference Form by issuers registered in Categories A and B, as provided in item III of paragraph 3 and item II of paragraph 4 of article 24 of Instruction 480/09.
Thus, the occurrence of this event will result in the need to update the Reference Form within 7 (seven) business days counted from the date of issuance, with the update of the information provided in item 18.5, as well as any other information provided in the Form that is affected by this event.
18.10. Other relevant information
Instruction 480/09 provides that the set of information contained in the Reference Form must be a true, accurate, and complete picture of the issuer’s economic-financial situation and the risks inherent in its activities and the securities issued by it.
For this reason, it is recommended that issuers also disclose in the Reference Form, including through its update, information on titles issued abroad not characterized as securities, whenever the issuance has been relevant or contains provisions that impose restrictions on the issuer or that may affect holders of securities issued by the company.
For this purpose, the issuer must describe, in item 18.10, the characteristics of the issuance and the issued titles, providing, with respect to these, the information required in item 18.5. If the titles are admitted to trading, issuers must also provide, in item 18.10, with respect to these, the information required in item 18.7, to the extent applicable.
19.1. Information on the issuer’s share buyback plans
In this item, the issuer must provide information on its share buyback plans.
The percentage provided in letter “ii” of letter “b” must be calculated by dividing the quantity informed in letter “i” of letter “b” by the total number of shares in circulation after the purchase of the number of shares provided in the buyback plan.
With respect to the reserves and profits available for the buyback operation (letter “iv” of letter “b”), the issuer must also indicate the base date to which the information refers.
Regarding what is requested in letter “v” of letter “b”, other important information must be disclosed, such as the objective of the program and the name and address of the financial institutions that acted as intermediaries.
Regarding the quantity of shares acquired (letter “vi” of letter “b”), updated information must be presented up to the date of delivery of the Reference Form.
The percentage of shares acquired in relation to the total approved (letter “viii” of letter “b”) must correspond to the division between the value informed in letters “vi” and “i” of letter “b”.
19.2. Movement of securities held in treasury
In this item, the issuer must inform, in table form, about the movement of securities held in treasury, segregated by type, class, and species, and presenting information regarding quantity, total value, and weighted average price.
It should be clarified that the initial balance of securities held in treasury (letter “a”) must correspond to the final balance verified on the last day of the previous fiscal year.
It should be recalled that whenever items 15.1 or 15.2 are updated, item 19.2 must also be updated.
19.3. Securities held in treasury on the date of closure of the last fiscal year
In this item, the issuer must provide, in table form, with respect to securities held in treasury on the date of closure of the last fiscal year, the information requested in letters “a” to “d”.
Given the provision in letter “c”, the required information must be provided by acquisition date. Exceptionally, in cases where the acquisitions have been in a quantity that makes it difficult to fill out this table in the Empresas.Net System, the initial date of the period informed in item 19.1.b.iii may be indicated as the acquisition date.
19.4. Provide other information that the issuer deems relevant
This item must be used to present other information not requested in this section of the Reference Form, which the issuer judges to be important to support the investment decision. It must be informed, for example, if the issuer uses financial instruments with objectives other than asset protection (hedge), involving the evolution of the quotes of the shares it has issued, including with respect to operations associated with instruments such as “Total Equity Return Swap”, or similar operations. The information provided must include the objectives of the operations and the risks associated for the issuer or its shareholders.
The securities trading policy, provided for in article 15 of CVM Instruction No. 358/02 (as amended by CVM Instruction No. 449/07), is optional.
Thus, if the issuer has approved, by resolution of the board of directors, a trading policy, in accordance with article 15 of CVM Instruction No. 358/02, the information required in letters “a” to “d” of item 20.1 must be provided.
The above information must also include the rules applicable to transactions carried out by the issuer with its own issued shares.
If the issuer has not adopted a trading policy, it must expressly state this fact. In this case, the issuer must also inform the reason why it does not adopt this procedure. Possible projects for the implementation of new practices, development stage, and estimated time for adoption may also be commented on.
It is emphasized that the information provided in this item does not exempt the issuer from sending the Trading Policy to the CVM, as provided in item XI of article 30 of CVM Instruction No. 480/09.
The policy for disclosing material acts or facts is a mandatory document, provided for in article 16 of CVM Instruction No. 358/02.
The Form must inform not only the main characteristics of the disclosure policy adopted by the issuer, indicating the procedures provided for therein regarding the maintenance of confidentiality concerning undisclosed material information, but also the internal mechanisms established for its implementation, describing them in items 21.1 and 21.2.
It is emphasized that this section requires the issuer to describe the main characteristics of the disclosure policy adopted by it. Therefore, the full text of the issuer’s disclosure policy should not be inserted in the items of the section, which may, however, refer to the location on the worldwide web where the complete text of its policy is available.
It is emphasized that the information provided in this section does not exempt the issuer from sending to the CVM any updates possibly made to the Issuer’s Information Disclosure Policy, as provided in item XII of article 30 and item VII of article 31 of CVM Instruction No. 480/09.
Information must be provided in items 22.1, 22.2, and 22.3, regarding the last 3 fiscal years, on:
(a) the acquisition or alienation of any relevant asset that does not fit as normal operation in the issuer’s business, including a description of the conditions under which the business was carried out and the reasons for the acquisition and alienation. The information already described in items 6.5 and 8.3 may be cited here by reference; (b) significant changes in the way the issuer’s business is conducted, including information on the motivating facts and derived reflections on the issuer’s business; (c) relevant contracts entered into by the issuer and/or its controlled companies with third parties, not directly related to their operational activities.
Sincerely,
FERNANDO SOARES VIEIRA
Superintendent of Corporate Relations
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Source: Comissão de Valores Mobiliários — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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