Circular No. 2.204

CIRCULAR No. 002204 ------------------ IT ALLOWS THE ABSORPTION BY SHAREHOLDERS OR QUOTA HOLDERS OF THE BALANCE OF ACCUMULATED LOSSES. WE COMMUNICATE THAT THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BRAZIL, IN A SESSION HELD ON 22.07.92, HAVING REGARD TO THE PROVISIONS OF ART. 10, ITEM VII, OF LAW No. 4.595, OF 31.12.64, WITH THE AMENDMENTS INTRODUCED BY ART. 19 OF LAW No. 7.730, OF 31.01.89, AND BASED ON ART. 4, ITEM XII, OF THE AFOREMENTIONED LAW No. 4.595, BY COMPETENCE DELEGATED BY THE NATIONAL MONETARY COUNCIL, DECIDED THAT: ART. 1. THE BALANCE OF ACCUMULATED LOSSES, DETERMINED BY FINANCIAL INSTITUTIONS, CONSORTIUM ADMINISTRATORS AND OTHER INSTITUTIONS AUTHORIZED TO OPERATE BY THE CENTRAL BANK OF BRAZIL IN THE BALANCE SHEET AT THE END OF THE FISCAL YEAR, MAY BE ABSORBED WITH THE USE OF FUNDS FROM SHAREHOLDERS OR QUOTA HOLDERS, AFTER THE ABSORPTION OF EXISTING BALANCES IN ACCUMULATED PROFITS, PROFIT RESERVES AND CAPITAL RESERVES. PARAGRAPH 1. THE ABSORPTION MAY BE CARRIED OUT AT ANY TIME OF THE YEAR, OBSERVING THE PROVISIONS IN ITEMS 1.20.3.3 AND 4 AND 1.20.6.2 OF THE ACCOUNTING PLAN FOR INSTITUTIONS OF THE NATIONAL FINANCIAL SYSTEM - COSIF. PARAGRAPH 2. IN THE CASE OF AN INSTITUTION WITH FOREIGN CAPITAL PARTICIPATION, THE ABSORPTION OF LOSSES REFERRED TO IN THIS ARTICLE, WITH THE USE OF EXTERNAL FUNDS ORIGINATING FROM SHORT, MEDIUM AND LONG-TERM FINANCIAL OPERATIONS, SHALL BE CONDITIONED ON PRIOR AUTHORIZATION FROM THE DEPARTMENT OF FOREIGN CAPITAL (FIRCE) AND/OR THE DEPARTMENT OF EXCHANGE (DECAM), OBSERVING THE RESPECTIVE COMPETENCE. PARAGRAPH 3. THE AMOUNT CORRESPONDING TO THE ABSORPTION SHALL BE DEBITED TO THE APPROPRIATE LIABILITY ACCOUNT THAT HAS RECORDED THE INFLOW OF AVAILABLE FUNDS AND CREDITED TO ACCUMULATED PROFITS OR LOSSES. ART. 2. THIS CIRCULAR ENTERS INTO FORCE ON THE DATE OF ITS PUBLICATION. ART. 3. CIRCULAR No. 1.885, OF 24.01.91, IS REVOKED. BRASÍLIA (DF), 23 JULY 1992 GUSTAVO JORGE LABOISSIERE LOYOLA ARMINIO FRAGA NETO DIRECTOR DIRECTOR