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Disclosure Policy

Once Sonae Sierra Brasil becomes a publicly held corporation, it will be subject to the reporting requirements established by Brazilian Corporate Law and the CVM. Also, as a result of its listing on the Novo Mercado, Sonae Sierra Brasil will be required to comply with the information requirements set forth in the Novo Mercado regulations.

Periodic and Current Publication of Information

Cash Flow Statements

The Novo Mercado establishes that the Company must disclose its consolidated financial statements after the end of each quarter and at the end of its fiscal year, including a cash flow statement which must indicate, at a minimum, the changes in its cash and cash equivalents, divided into operational, finance and investment cash flows. Sonae Sierra Brasil must prepare these statements within six months as from the execution of the agreement for its common shares to trade within the Novo Mercado.

Financial Statements Prepared in Accordance with U.S. GAAP or IFRS

In view of the preparation of financial statements in observation of international standards and the process of convergence of the Brazilian rules, certain topics have been subject to discussions concerning its practical implementation, which caused certain companies listed in Novo Mercado and Level 2 to request to BM&FBovespa the postponement of the final terms for submission of its financial statements in international standards, in addition to the discharge of application of certain items of IFRS. Considering the aspects indicated above and in order to allow companies listed in Novo Mercado and Level 2 that have not disclosed its financial statements pursuant to international standards or with the reconciliation of the shareholders’ interest and net earnings for these standards to benefit of the final processes for application of a group of local regulations converging to the international IFRS standards, BM&FBovespa, pursuant to item 6.9 of the Regulations, enacted an external communication (comunicado), dated November 16, 2009, informing that such companies are dismissed from the obligation to disclose its financial statements of 2009 in observation of the international standards, provided that, in essence or form, such data shall be presented in a comparative manner in the financial statements of 2010, considering that CVM’s Ruling (Instrução) No. 457 determined that as of the end of the fiscal year of 2010 public companies shall disclose its consolidated financial statements in observation of the international standards IFRS. However, the requirement of presentation of financial statements in English has been maintained.

Quarterly Statements Prepared in English or in Accordance with International Standards

Pursuant to the rules of Novo Mercado, the Company must disclose its full quarterly information translated into the English language or disclose its financial statements or consolidated financial statements in accordance with U.S. GAAP or IFRS, as defined above.

The disclosure of such information shall be accompanied of a review report issued by Independent Auditors.

Additional Requirements for Quarterly Statements

Also pursuant to the Novo Mercado rules, its quarterly statements must include (i) its consolidated balance sheet, consolidated income statement, and commentary on its consolidated performance, if Sonae Sierra Brasil is required to disclose consolidated financial statements at the end of the fiscal year; (ii) any direct or indirect ownership interest exceeding five percent of its capital stock, to the level of ultimate beneficial individual owners; (iii) the number and characteristics of its common shares held directly or indirectly by its controlling shareholders and members of its board of directors, its board of executive officers and its fiscal council, if one is constituted; (iv) the increase/decrease of the respective interest held by the persons referred to in item iii, as regards to the respective marketable securities, for the 12 immediately preceding months; (v) its cash flow statement, which must include explanatory notes; (vi) the number of outstanding common shares, and its percentage in relation to the total number of issued common shares; and (vii) the existence of an arbitration clause for conflicts between or among the parties thereto.

Disclosure of Trading of its Common Shares, its Controlling Shareholders, Directors Officers or Members of the Fiscal Council

Pursuant to the CVM rules, its directors and officers, members of its fiscal council, if active at the time, as well as members of any other technical or advisory committee created under the bylaws, are required to disclose to the Company the ownership and trading of the common shares of Sonae Sierra Brasil or the common shares of publicly held subsidiaries or controlling companies, held by them or by persons related to them, as well as any alteration in its respective interests. In the case of individuals, they should include information as to securities held by a spouse, companion or dependent for income tax purposes, and by companies directly or indirectly controlled by these persons.

The information on securities must include at least the following information:

  • Name and position of the person providing the information;
  • The amount, per type and/or class of shares traded and other characteristics in case of other securities traded, the issuer and the balance of the amount withheld before and after the trading; and
  • Form, price and date of the transaction.
  • This information must be sent (i) on the first business day after the appointment of the director, officer or member for his or her position, (ii) when the request for the registration of the publicly held company is submitted to the authorities, and (iii) within five days after each trading.

The company must send the mentioned above information to the CVM and, if applicable, to the stock exchanges and organized over the counter exchanges where the company’s securities are listed, within ten days after the end of each month in which any change in such ownership occurred or after the end of each month in which any of the persons above invested in its positions.

The above mentioned information must be delivered individually and consolidated by each category of persons indicated therein, and the consolidated information will be available in the CVM’s electronic information filing system (Informações Periódicas e Eventuais), or IPE.

The investor relations officer is responsible for the transmission of the information received by the Company to the CVM and, if applicable, to the stock exchanges and organized over the counter exchanges where the company’s securities are listed.

If its controlling shareholders, shareholders which have elected its directors and fiscal council members, and/or any person or company, individually or as a group, acting jointly or representing the same interest, reaches on ownership interest directly or indirectly equal to at least 5.0% of its shares, such persons or entities must disclose to us, the CVM and the BM&FBOVESPA the following information:

  • The name and qualification of the acquirer of the shares;
  • The purpose of the investment and target number of common shares;
  • The amount, per type and/or class of shares traded or other characteristics in case of other securities traded; and
  • Information regarding any agreement regulating the exercise of voting rights or the purchase and sale of securities of the Company.
  • This information is also required from any person or group of persons sharing similar interests holding five percent or more of its common shares whenever their interest should increase or reduce by 5%.

Disclosure of Material Developments

Sonae Sierra Brasil is required to inform the CVM and the BM&FBOVESPA of any material developments relating to the Company and its business. It should also publish notices to disclose such information to the market. A material development consists of an event with the potential to affect the price of its securities, the decision of investors to buy, sell, or keep such securities, or its decision to exercise any of the rights inherent in such securities.

In exceptional circumstances, the Company may submit to the CVM a request for confidential treatment of certain material developments.

Pursuant to CVM Instruction No. 358/02, the Company will also adopt a policy for disclosure of information to the market that consists in the disclosure of material information and confidentiality as to undisclosed material information.

Under such regulation, material information includes (1) any decision by the controlling shareholder, resolution of a shareholders’ meeting and of the management of a publicly held company, or (2) any other policy or fact of an administrative, technical, business, financial or economic nature relating to the business of a company, which may substantially affect (a) the price of its publicly traded securities; (b) the decision of investors to buy, sell or keep such securities; and (c) the decision of investors to exercise any of the rights inherent in such securities as the owners of such securities.

The investor relations officer is required to disclose to the market, and inform the CVM and the stock exchanges of any material facts or acts affecting or relating to the business of a publicly held corporation deemed to consist of material information, and to disseminate such material information widely and promptly to the stock exchanges and the market, including by publishing notices in newspapers.

Sonae Sierra Brasil anticipates that in certain events, it must request that confidential treatment be given to certain material developments affecting them, including if it should consider that a disclosure could jeopardize the legitimate interests of the Company.

All persons related to the Company, including its controlling shareholders, its directors and officers, members of the fiscal council, if created, or other technical or advisory committee created under its bylaws, plus managers and employees with access to material information and other persons it may deem convenient, are required to execute instruments assuming the obligation to comply with its policy of disclosure of material information, and maintain the confidentiality of undisclosed information, subject to indemnification of the losses the Company may suffer, payable to them and the persons related to them.


In accordance with the Novo Mercado Regulation and its Bylaws, the Company, its shareholders, its managers, and members of its fiscal council, if established, are obligated to resolve, by means of arbitration any and all disputes or controversies which may arise amongst each other relating to or resulting from the application, validity, effectiveness, interpretation, violation and respective effects of the provisions contained in Brazilian Corporate Law, its bylaws, rules and regulations of the CMN, the Central Bank, and the CVM, as well as other rules and regulations applicable to the Brazilian securities markets, in addition to those contained in the Novo Mercado Participation Agreement, the Novo Mercado rules, and the Arbitration Regulations of the Market Arbitration Chamber.

Public Meetings with Analysts

Pursuant to the Novo Mercado rules, at least once a year the Company is required to hold a public meeting with analysts and any other interested parties to disclose information concerning its relevant economic and financial condition, projects and perspectives.

Annual Calendar

Pursuant to the Novo Mercado regulations, the Company and its managers must send to the BM&FBOVESPA and disclose to the public, by no later than the end of January of each year, an annual calendar setting forth its scheduled corporate events, including the scheduled events, the date and time of such scheduled events, the date that notice is to be published and the date of remittance of the relevant document to the BM&FBOVESPA. Any further changes in connection with the scheduled events shall be sent to the BM&FBOVESPA and immediately disclosed to the public.

Shareholders’ Agreements

The Company is required to send to the BM&FBOVESPA and the CVM, until the date that the initial distribution of its common shares is announced, a copy of all shareholders agreements, as well as amendments thereto, filed at its headquarters and notify the BM&FBOVESPA and the CVM of the entry of existing agreements in its corporate register. As it states in item 15.5 of the Reference Form, “Any agreement among shareholders recorded at the Company’s headquarters or which the controller takes part, which regulates the right to vote or transfer shares issued by the Company”.

Agreements within the Same Control Group

In accordance with the Novo Mercado Regulation, the Company must submit to BM&FBOVESPA, and publish information regarding, any and all agreements entered into between them and its subsidiaries and affiliates, controlling shareholders and managers, as well as agreements between them and subsidiaries and affiliates of its managers and its controlling shareholder, and any other companies with which any of the above persons participates in the same group, whenever such agreements, either individually or as part of a series of successive agreements (with or without a common objective), in any one year period, equal or exceed R$200,000 or 1.0% of its net equity, whichever is greater.

Such information must specify the subject matter of the relevant agreement, its duration, amount and termination or expiration terms, and any influence that such agreement may have on the management or conduct of its business.

Code of Best Corporate Governance Practices of the Brazilian Institute of Corporate Governance - IBGC

The Brazilian Institute of Corporate Governance (Instituto Brasileiro de Governança Corporativa), or IBGC, has adopted a Code of Best Corporate Governance Practices (Código de Melhores Práticas de Governança Corporativa) aiming at pointing the way to all kinds of companies in the pursuit of (i) increased value; (ii) improved performance; (iii) access to capital at low cost; and (iv) to contribute to long lasting companies. The intrinsic principles it adopted for such purpose are transparency, equity, accountability, and corporate responsibility. Among the best practices of corporate governance recommended by the IBGC in its code, the Company adopts the following:

  • Issue of common shares only;
  • “One common share, one vote” policy;
  • Independent auditors to review balance sheets and financial statements, which should not be retained for other purposes, so as to ensure full independence;
  • Clearly worded bylaws as to (i) procedure for calling shareholders’ meetings; (ii) the duties of the board of directors and of the board of executive officers; (iii) the voting system, election, removal and terms in the office of directors and officers; and (iv) the events related to termination rights.
  • Transparent dissemination of the annual management reports;
  • Availability of calls for shareholders’ meetings and related documents from the date of the first call, and presentation of detailed information on the agenda of these meetings, without references to “other matters of interest to the company,” and meetings effectively held on the scheduled dates, times and places, thus permitting attendance by as many shareholders as may wish to attend;
  • If so requested, inclusion of the terms of dissenting votes in the minutes of meetings;
  • Inclusion of a provision in its bylaws ordering abstention in the event of conflicts of interest;
  • Prohibited use of privileged information and adoption of a policy for disclosure of material information;
  • Inclusion of a provision in its bylaws electing arbitration to settle disputes between its shareholders and the Company;
  • Free float, to ensure the liquidity of securities;
  • Requirement that at least 20.0% of its board of directors be made up of independent, unrelated persons, with no ties to the Company or its controlling shareholders;
  • Election of directors that are experienced in operational, financial and accounting matters, with previous participation in other boards;
  • Availability to all shareholders, and access to the terms of shareholders’ agreements filed with the Company; and
  • Inclusion of a provision in its bylaws preventing directors who have a conflict of interest with them from having access to information or voting rights.

Regulation of Foreign Investment

Investors residing outside Brazil, including institutional investors, are authorized to purchase equity instruments, including its common shares, on the Brazilian stock exchange, provided that they comply with the registration requirements set forth in CMN Resolution No. 2,689 and CVM Instruction No. 325/00.

With certain limited exceptions, CMN Resolution No. 2,689 investors (1) are permitted to carry out any type of transaction in Brazilian capital markets involving a security traded on a stock, future or organized over the counter market but (2) may not transfer the ownership of investments made under CMN Resolution No. 2,689 to other non Brazilian holders through private transactions. Investments and remittances outside Brazil of gains, dividends, profits or other payments under its common shares are made through the foreign exchange market.

In order to become a CMN No. 2,689 investor, an investor residing outside Brazil must:

  • Appoint at least one representative in Brazil that will be responsible for complying with registration and reporting requirements and procedures with the Central Bank and the CVM. If the representative is an individual or a non financial company, the investor must also appoint an institution duly authorized by the Central Bank that will be jointly and severally liable for the representative’s obligations;
  • Complete the appropriate foreign investor registration form;
  • Register as a foreign investor with the CVM;
  • Register the foreign investment with the Central Bank;
  • Appoint a tax representative in Brazil; and
  • Obtain a taxpayer identification number from the Brazilian federal tax authorities.

Securities and other financial assets held by foreign investors pursuant to CMN Resolution No. 2,689 must be registered or maintained in deposit accounts or under the custody of an entity duly licensed by the Central Bank or the CVM. In addition, securities trading by foreign investors is generally restricted to transactions on BM&FBOVESPA or in organized over the counter markets licensed by the CVM. See “Tax Considerations-Brazilian Tax Considerations,” in this offering memorandum for a description of the tax consequences to an investor residing outside Brazil of investing in its common shares in Brazil.