IAN 2006 - MDias Branco

Transcrição

FEDERAL PUBLIC SERVICE
CVM – BRAZILIAN SECURITIES COMMISSION
IAN – ANNUAL INFORMATION
Reference Date – 12/31/2006
01.01 – IDENTIFICATION
1 - CVM CODE
2 – CORPORATE NAME
3 – CNPJ (CORPORATE TAXPAYER’S ID)
02033-8
M DIAS BRANCO S.A IND E COM DE ALIMENTOS
07.206.816/0001-15
PROTOCOL
Final completion date: 5/22/2007
Person in charge:
DDD (Direct Dialing) and Telephone Number:
Magali Carvalho Façanha
85
40055563
GERALDO LUCIANO MATTOS JÚNIOR
Investor Relations Officer
---------------------------------------------------------SIGNATURE
1
1 - CVM CODE
02033-8
07.206.816/0001-15
PROTOCOL
Final completion date :
Person in charge:
DDD (Direct Dialing) and Telephone Number:
5/22/2007
Magali Carvalho Façanha
85
40055563
---------------------------------------------------------SIGNATURE
2
REGISTRATION AT THE CVM DOES NOT IMPLY ANY APPRECIATION ON THE COMPANY, AND ITS
ADMINISTRATORS ARE LIABLE FOR THE TRUTHFULNESS OF INFORMATION PROVIDED.
1 – CVM CODE
3 - CNPJ (CORPORATE TAXPAYER’S ID)
020338
07.206.816/0001-15
4 – TRADE NAME
5 – PREVIOUS CORPORATE NAME
M DIAS BRANCO IND E COM DE ALIM. LTDA.
6 - NIRE (CORPORATE REGISTRY ID)
23201000201
7 – WEBSITE
www.mdiasbranco.com.br
01.02 – HEADQUARTERS
1 – FULL ADDRESS
2 – DISTRICT
ROD. BR 116 KM 18
JABUTI
3 – ZIP CODE
4 – CITY
5STATE
61706-000
EUSEBIO
CE
6 - DDD
(DIRECT
DIALING)
7 – TELEPHONE
8 – TELEPHONE
9 – TELEPHONE
085
4005-5500
-
-
11 - DDD
12 – FAX
13 - FAX
14 - FAX
085
4005-5759
-
-
10 - TELEX
15 - E-MAIL
www.mdiasbranco.com.br
01.03 – SHAREHOLDERS DEPARTMENT
SERVICE TO SHAREHOLDERS AT THE COMPANY
1 - NAME
2 – TITLE
INVESTOR RELATIONS OFFICER
3 – FULL ADDRESS
4 - DISTRICT
RODOVIA BR 116, KM 18, S/N
JABUTI
5 - ZIP CODE
6 - CITY
7 - STATE
61760-000
EUSÉBIO
CE
8 – DDD
(DIRECT
DIALING)
9 - TELEPHONE
10 - TELEPHONE
11 - TELEPHONE
4005-5667
-
-
13 - DDD
14 - FAX
15 - FAX
16 - FAX
085
4005-5598
-
-
085
12 - TELEX
17 - E-MAIL
[email protected]
ISSUING AGENT/DEPOSITARY FINANCIAL INSTITUTION
18 - NAME
BANCO BRADESCO S.A.
19 - CONTACT
Rogério Felgueiras / Ademir R dos Santos
20 - FULL ADDRESS
21 - DISTRICT
AVENIDA YARA, S/N - PRÉDIO AMARELO VELHO - 2º ANDAR
22 - ZIP CODE
23 - CITY
06029-900
Osasco
25 - DDD
(DIRECT
DIALING)
30 - DDD
11
11
CIDADE DE DEUS
24 - STATE
SP
26 - TELEPHONE
27 - TELEPHONE
28 - TELEPHONE
3684-2309
3684-9289
-
31 - FAX
32 - FAX
33 - FAX
3684-5645
3684-9281
-
29 - TELEX
34 - E-MAIL
[email protected] / [email protected]
1
1 - CVM CODE
02033-8
07.206.816/0001-15
OTHER SERVICE BRANCHES TO SHAREHOLDERS
35 - ITEM
36 - CITY
37 - STATE
38 - DDD
39 - TELEPHONE
01
02
03
04
-
40 - TELEPHONE
-
01.04 – INVESTOR RELATIONS OFFICER (Mailing Address to the Company)
1 - NAME
2 - FULL ADDRESS
3 - DISTRICT
ROD. BR 116 KM 18
JABUTI
4 - ZIP CODE
5 - CITY
6 - STATE
61760-000
EUSÉBIO
CE
7 - DDD
8 - TELEPHONE
9 - TELEPHONE
10 - TELEPHONE
085
4005-5667
-
-
12 - DDD
13 - FAX
14 - FAX
15 - FAX
085
4005-5598
-
-
11 - TELEX
16 - E-MAIL
[email protected]
17 – BRAZILIAN OFFICER
18 - CPF (INDIVIDUAL
TAXPAYER’S ID)
18 – PASSPORT
YES
144.388.523-15
CO802078
01.05 – REFERENCE/AUDITOR
1 – START DATE OF LAST FISCAL YEAR
2 – END DATE OF LAST FISCAL YEAR
1/1/2006
12/31/2006
3 – START DATE OF FISCAL YEAR IN PROGRESS
4 – END DATE OF FISCAL YEAR IN PROGRESS
1/1/2007
12/31/2007
5 - NAME/AUDITOR CORPORATE NAME
6 - CVM CODE
KPMG AUDITORES INDEPENDENTES
00418-9
7 - NAME OF RESPONSIBLE TECHNICIAN
8 – RESPONSIBLE TECHNICIAN CPF
JOAO ALBERTO DA SILVA NETO
551.696.510-15
01.06 – CHARACTERISTICS OF THE COMPANY
1 – REGISTER AT THE STOCK EXCHANGE
BVBAAL
BVMESB
BVPR
BVES
BVPP
BVRG
BVRJ
X
BVST
BOVESPA
2 – TRADING MARKET
Stock market
3 – TYPE OF STATUS
Operational
4 – ACTIVITY CODE
1220 - Food
5 – MAIN ACTIVITY
6 – PREF. SHARES WITH CLASSES
MANUFACTURING AND TRADING OF COOKIES, CRACKERS, PASTA, FLOUR
AND FATS
NO
2
1 - CVM CODE
02033-8
07.206.816/0001-15
01.07 – SHARE CONTROL/SECURITIES
1 – NATURE OF THE SHARE CONTROL
Brazilian Corporation
2 – SECURITIES ISSUED BY THE COMPANY
X
Shares
Certificate of Real Estate Receivables
(CRI)
Debentures Convertible into Shares
Promissory Notes (NP)
Redeemable Shares
Securities Deposit Certificate (BDR)
Founder’s Shares
Simple Debentures
Subscription Bonus
Others
Description
Collective Investment Certificate (CIC)
01.08 – PUBLICATIONS OF DOCUMENTS
1 – NOTICE TO SHAREHOLDERS ABOUT AVAILABILITY OF FINANCIAL
STATEMENTS
2 – MINUTES OF ANNUAL GENERAL MEETING WHICH APPROVED
THE FINANCIAL STATEMENTS
1/17/2007
4/25/2007
3 – CALL OF ANNUAL GENERAL MEETING TO APPROVE FINANCIAL
STATEMENTS
4 – PUBLICATION OF FINANCIAL STATEMENTS
3/16/2007
3/20/2007
01.09 – NEWSPAPERS WHERE THE COMPANY DISCLOSES INFORMATION
1 - ITEM
2 – NEWSPAPER TITLE
3 – STATE
01
Official Gazette of the State of Ceará
CE
02
O Povo
CE
03
O Valor Econômico
SP
01.10 – INVESTOR RELATIONS OFFICER
1 – DATE
2 – SIGNATURE
5/22/2007
3
1 - CVM CODE
2 - CORPORATE NAME
3 - CNPJ (CORPORATE TAXPAYER No.)
02033-8
07.206.816/0001-15
02.01.01 – CURRENT COMPOSITION OF BOARD OF DIRECTORS AND BOARD OF EXECUTIVE OFFICERS
1 - ITEM
01
02
03
04
4 – DATE OF
ELECTION
5 – TERM OF
OFFICE
6 – ADMINISTRATOR
TYPE CODE*
7 – ELECTED BY
CONTROLLING
SHAREHOLDER
8 - POSITION/
ROLE
2 - NAME OF ADMINISTRATOR
3 - CPF
FRANCISCO IVENS DE SÁ DIAS BRANCO
000.165.433-00
4/25/2007
1 YEAR
2
YES
20
Chairman of the Board of Directors
272.898.853-68
4/25/2007
1 YEAR
2
NO
22
Board of Directors (sitting member)
273.184.433-72
4/6/2006
3 YEARS
1
19
Vice Chief Financial Officer
273.184.433-72
4/25/2007
1 YEAR
2
NO
22
NO
22
MARIA CONSUELO SARAIVA LEÃO DIAS
BRANCO
MARIA DAS GRAÇAS DIAS BRANCO DA
ESCÓSSIA
MARIA DAS GRAÇAS DIAS BRANCO DA
ESCÓSSIA
7 – ROLE
05
FRANCISCO ROBERTO ANDRÉ GROS
038.644.137-53
4/25/2007
1 YEAR
2
06
FRANCISCO CLÁUDIO S. LEÃO DIAS BRANCO
262.329.013-04
4/6/2006
3 YEARS
1
19
Vice Chief Industrial Officer - Mills
07
JÚNIOR
155.400.143-91
4/6/2006
3 YEARS
1
19
Vice Chief Industrial Officer - Cookies,
Crackers, Pasta and Fats
08
FRANCISCO MARCOS S. LEÃO DIAS BRANCO
220.794.163-91
4/6/2006
3 YEARS
1
19
Vice Chief Commercial Officer
10
MARIA REGINA S. LEÃO DIAS BRANCO
XIMENES
235.899.653-04
4/6/2006
3 YEARS
1
19
Vice Chief Administrative and Development
Officer
11
LEONARDO PORCIÚNCULA GOMES PEREIRA
606.399.897-72
5/25/2007
1 YEAR
2
22
12
000.165.433-00
4/6/2006
3 YEARS
1
10
Chief Executive Officer / Superintendent
13
144.388.523-15
4/6/2006
3 YEARS
1
12
*CODE:
NO
1 – IT IS ONLY RELATED TO THE BOARD OF EXECUTIVE OFFICERS;
2 – IT IS ONLY RELATED TO THE BOARD OF DIRECTORS;
3 – IT IS RELATED TO THE BOARD OF EXECUTIVE OFFICERS AND TO THE BOARD OF DIRECTORS.
4
02033-8
M DIAS BRANCO S.A. IND E COM DE ALIMENTOS
07.206.816/0001-15
02.02 – PROFESSIONAL EXPERIENCE AND BACKGROUND OF EACH BOARD MEMBER
(BOARD OF DIRECTORS AND FISCAL COUNCIL) AND OFFICER
Board Members:
Francisco Ivens de Sá Dias Branco. Mr. Ivens, 74 years old, is Chairman of the Board of
Directors, Chief Executive Officer and indirect controlling shareholder of the Company, by
means of the Seller Shareholder. Mr. Ivens initiated his corporate activities in 1953, when he
joined the company M. Dias Branco & Cia. Ltda., becoming partner of his father, who idealized
the Company, Mr. Manoel Dias Branco. In 1961, Mr. Ivens established the Company, then
becoming its main manager. In his business history, Mr. Ivens received several titles and
distinctions, especially: the Edson Queiroz Medal, granted by the House of Representatives of
the state of Ceará; the Industry Merit Medal, granted by Federation of Industries of the state of
Ceará - FIEC; and the Order of Military Merit, granted by the Brazilian Army. His current term
of office at the Company began in April 2006. His business address is Rodovia BR 116 - Km
18, CEP 61760-000, in the city of Eusébio, state of Ceará.
Maria Consuelo Saraiva Leão Dias Branco. Mrs. Consuelo, 72 years old, is member of the
Company’s Board of Directors. She held the position of Vice Chief Executive Officer of the
Company from April 2003 to April 2006, and idealized the Historical Center of M. Dias
Branco. Mrs. Consuelo coordinates social-related actions in communities under the Company’s
influence. Her current term of office at the Company began in April 2006. Her business address
is Rodovia BR 116 - Km 18, CEP 61760-000, in the city of Eusébio, state of Ceará.
Maria das Graças Dias Branco da Escóssia. Mrs. Escóssia, 47 years old, is member of the
Board of Directors of the Company and Vice Chief Financial Officer, and has been one of its
shareholders since 1998. Mrs. Escóssia began her business activities in 1985, in the
management of Hotel Praia Centro (company composing the economic group in which the
Company takes part), where she became Chief Executive Officer later in 1987. In 2001, Mrs.
Escóssia held the position of the Company’s Institutional Relations Officer and, subsequently,
Corporate Officer of Institutional Relations, in 2003, position held until her appointment for
current position at the Company. Mrs. Graça earned a bachelor’s degree in Law from the
Universidade Federal do Ceará in 1985. Her current term of office at the Company began in
April 2006. Her business address is Rodovia BR 116 - Km 18, CEP 61760-000, in the city of
Eusébio, state of Ceará.
Geraldo Luciano Mattos Júnior. Mr. Júnior, 44 years old, is Vice Chief Executive Officer of
Investments and Controllership, and Investor Relations Officer of the Company. Mr. Júnior
began his business activities in the economic group in which the Company takes part in 1995,
as Chief Financial Officer of Banco Equatorial. In 2000, Mr. Júnior joined the Company, as the
Board of Executive Officers’ Advisor. He held such position up to 2003, when he was
appointed as the Company’s Chief Financial Officer. During the years he worked in the
Company’s Board of Executive Officers, Mr. Júnior was responsible for implementing the
current financial risks mitigation policy and loan policy, as well as hedge strategies and other
equally important financial mechanisms. From 1977 to 1995, he worked in Banco do Nordeste
do Brasil – BNB, where, among others, he hold the positions of Presidency’s Advisor, Head of
the Capital Market Department and Executive Officer of Caixa de Previdência dos
Funcionários do BNB (BNB Employees Private Pension Plan). In 1994, he was transferred to
the state government of Ceará as Chief Financial and Foreign Exchange Officer of Banco do
Estado do Ceará up to 1995. Mr. Geraldo held the position of President in the Brazilian
Association of Capital Market Analysts – Northeast sector (ABAMEC), from 1995 to 1996.
5
02033-8
07.206.816/0001-15
Mr. Júnior is professor in financial subjects of Universidade de Fortaleza - UNIFOR and private
companies. He earned a bachelor’s degree in Business Administration from Universidade
Estadual do Ceará - UECE since 1985, and also a bachelor’s degree in Law from UNIFOR, in
1998, and a master’s degree in Business Administration from the Universidade Federal do Rio
de Janeiro (COPPEAD) in 1993. His current term of office at the Company began on April 6,
2006. His business address is Rodovia BR 116 - Km 18, CEP 61760-000, in the city of
Francisco Roberto André Gros. Mr. Gros, 65 years old, is independent member of the
Company’s Board of Directors. He earned a bachelor’s degree in Economics from Princeton
University, USA, in 1964. His career as investment banker began in 1972, in Kidder, Peabody
and Co. In 1975 he returned to Brazil and assumed the position of officer of Multiplic
Corretora, where he stayed until 1977. As of that year, he worked as Officer of CVM,
Unibanco, BNDES, BNDESPAR, Managing Director of Morgan Stanley Dean Witter, Chief
Executive Officer of Aracruz Celulose and, twice, President of Brazilian Central Bank. He was
President of BNDES from March 2000 to December 2001. Concomitantly, he was regular
member of the Chamber of Energy Crisis Management and responsible for the Electric Sector
Recovery Committee. He was President of Petrobrás from January 2 to December 31, 2002. He
assumed the positions of Chief Executive Officer and member of the Board of Directors of
Fosfertil and Ultrafertil on May 16, 2003. He is Chairman of Lojas Renner’s Board of
Directors, Vice Chairman of the Globex Utilidades S.A.’s Board of Directors, and board
member of Ocean Wilsons Ltda. and Energias do Brasil S.A. He is member of the Advisory
Councils of Air Liquide do Brasil Ltda., Scania Latin America Ltda., Farmasa S.A., and Banco
Financia S.A. He is also a volunteer, participating as Chairman of Escola da Gente Council and
board member of IBGC – Corporate Governance Brazilian Institute, O Eco and The Nature
Conservancy (Brazil). His term of office at the Company began in June 2006. His business
address is Avenida Luiz Carlos Berrini, 1.681, in the city of São Paulo, state of São Paulo.
Leonardo Porciúncula Gomes Pereira. Mr. Pereira, 49 years old, is independent member of
the Company’s Board of Directors. He earned a bachelor’s degree in Production Engineering
from the Universidade Federal do Rio de Janeiro, in 1981, and in Economics from the
Universidade Candido Mendes, in Rio de Janeiro, in 1986. In 1991, he earned MBA from
University of Warwick, in England. He also earned a graduate degree from AOTS/MITI, in
Japan, and from Wharton Business School in the United States. In 2005, he earned a degree in
Senior Executive Program, of Columbia University, in New York, United States. His career
began in Citibank of Rio de Janeiro, in 1982, in the corporate business area. He held several
positions, including as retail business expert in Brazil. In 1987, he joined the bank’s
international staff and worked abroad until 1995, in Asia, Latin America and United States,
always working in corporate financial area together with the bank’s large clients group. At the
end of 1995, he returned to Brazil to assume the position of Planning and Investor Relations
Officer of Globopar, holding company of Globo Organizations. In this position, he took part in
several Boards of Directors. In 2000, he became Chief Financial Officer (CFO) and Investor
Relations Officer of Net Serviços de Comunicação S.A., the largest multi-services cable
operator in Latin America and Level 2 Company of Bovespa, in terms of Corporate
Governance. In March 2007, he became Chief Executive Officer (CEO) of Companhia do Vale
do Araguaia, company which plants teak in Brazil. He participates in the Corporate Governance
Committee of American Chamber of Commerce, in São Paulo. His business address is Av. Rio
Branco, 85, 7º andar, in the city of Rio de Janeiro, state Rio de Janeiro.
6
02033-8
07.206.816/0001-15
Board of Executive Officers:
Francisco Ivens de Sá Dias Branco Júnior. Mr. Júnior, 46 years old, is the Company’s Vice
Chief Industrial Officer – Cookies, Pastas and Margarines. Mr. Júnior began its professional
activities at this Company, in 1976, working in several areas. In 1981, as he stood out in the
industrial area, he became one of the Company’s shareholders and assumed the position of
Industrial Officer. In 2002, he considerably contributed to implement G.M.E. (CE), one of the
Company’s industrial units, manufacturer of margarines and vegetable shortenings. In 2003,
Mr. Júnior became the Company’s Managing Director, position held until the appointment to
his current position. During his career, several awards and titles were bestowed to Mr. Júnior,
pointing out the Edson Queiroz Medal, granted in 2005 by the House of Representatives of
Ceará. His current term of office at the Company began on April 6, 2006. His business address
is Rodovia BR 116 - Km 18, CEP 61760-000, in the city of Eusébio, state of Ceará.
Francisco Marcos Saraiva Leão Dias Branco. Mr. Marcos, 42 years old, is the Vice Chief
Commercial Officer of the Company, and its shareholder since 1998. Mr. Marcos began his
business career at this Company in 1980. As he stood out in the Company’s commercial area,
he was appointed to the position of Commercial Officer in 1989, subsequently being vested to
the position of Corporate Commercial Officer, in 2003. His current term of office at the
Company began in April 2006. His business address is Rodovia BR 116 - Km 18, CEP 61760000, in the city of Eusébio, state of Ceará.
Maria Regina Saraiva Leão Dias Branco Ximenes. Mrs. Ximenes, 45 years old, is currently
Vice Chief Administrative and Development Officer of the Company, and its shareholder since
1998. She began her business activities at this Company in 1980. In 1989,
Mrs. Ximenes assumed the position of the Company’s Administrative Officer, position held
until 2003, when she was appointed as Corporate Administrative Officer. She earned a
bachelor’s degree in Business Administration from Universidade de Fortaleza – UNIFOR in
1987. Concurrently, Mrs. Ximenes is Administrative Officer of Idibra Participações S.A.,
company composing the same economic group of the Company, operating in the real estate
development and civil works market. Her current term of office at the Company began in April
2006. Her business address is Rodovia BR 116 - Km 18, CEP 61760-000, in the city of
Francisco Cláudio Saraiva Leão Dias Branco. Mr. Cláudio, 40 years old, is Vice Chief
Industrial Officer - Mills of the Company, and its shareholder since 1998. Mr. Cláudio began
his business activities at this Company, assuming in 1992 the position of Industrial Officer of
Moinho Dias Branco – the first wheat milling unit of the Company. In 2003, Mr. Cláudio
assumed the position of Corporate Industrial Officer – Mills Division of the Company. In
charge of the implementation of all the Company’s milling units, Mr. Cláudio earned a
bachelor’s degree in Mechanical Engineering from Universidade de Fortaleza in 1990, and
began a long specialization history in wheat milling, taking part in various courses in several
countries, especially the Milling Technology Course promoted by Swiss Milling School, St.
Gallen, in 1991. Mr. Cláudio earned the Wheat Milling Technology certificate from the
Training Center of Buhler, in Uzwil, Switzerland, in 1992. Also in 1992, he worked as trainee
at Weston Research, Maidenhead, England. In 1999, he took part in the Abitrigo Baking and
Milling Program. He was Director of the Federation of Industries of the state of Ceará - FIEC,
from 1999 to 2002, and Director of the Brazilian Association of Wheat Industries –
7
02033-8
07.206.816/0001-15
ABITRIGO, from 2002 to 2004. His current term of office at the Company began on April 6,
2006. His business address is Rodovia BR 116 - Km 18, CEP 61760-000, in the city of
8
1 - CVM CODE
2 - CORPORATE NAME
02033-8
07.206.816/0001-15
03.01 – EVENTS RELATED TO CAPITAL DISTRIBUTION
1 - BASIC EVENT
2 - DATE OF EVENT
STOCK EXCHANGE TRADING
3 - INDIVIDUALS AND LEGAL
ENTITIES
04/29/2008
4 - INSTITUTIONAL INVESTORS
0
5 - SHAREHOLDERS’ AGREEMENT
0
NO
7 – VOTING PREFERRED SHARES
6 – VOTING PREFERRED
SHARES
NO
8 – DATE OF LAST SHAREHOLDERS’ AGREEMENT
Outstanding shares in the market
9 – ARE THERE OUTSTANDING SHARES
COMMON SHARES
10 - QUANTITY (Unit)
YES
23,897,928
PREFERRED SHARES
11 - PERCENTAGE
20.82
TOTAL
13 - PERCENTAGE
0
0.00
23,897,928
15 - PERCENTAGE
20.82
16 – OUTSTANDING PREFERRED SHARES IN THE MARKET
1 - CLASS
2 – QUANTITY (Unit)
3 - PERCENTAGE
9
1 - CVM CODE
2 - CORPORATE NAME
02033-8
07.206.816/0001-15
03.02 – SHARE STATUS OF SHAREHOLDERS WITH MORE THAN 5% OF COMMON AND/OR PREFERRED SHARES
1 - ITEM
2 - NAME/CORPORATE NAME
6 - COMMON SHARES
7-%
3 – CPF/CNPJ
8 - PREFERRED SHARES
(Thousand)
9-%
(Thousand)
15/1 - CLASS
10 - TOTAL SHARES
12 – COMPOSITION
OF CAPITAL STOCK
11 - ¨%
4 – CITIZENSHIP
13 - INTEREST IN SHAREHOLDERS’
AGREEMENT
5 – STATE
14 - CONTROLLING
SHAREHOLDER
(Thousand)
15/2 – QUANTITY OF PREFERRED SHARES
15/3 - % PREFERRED SHARES
(Thousand)
001
DIBRA FUNDO DE INVEST EM PARTICIPAÇÕES
77,181
997
0.00
77,181
67.23
0.94
0
0.00
1,080
0.94
31.83
0
0.00
36,539
31.83
0
0.00
114,800
4/25/2007
BRAZILIAN
RJ
YES
OTHER
36,539
999
07.973.152-0001/10
0
TREASURY STOCKS
1,080
998
67.23
TOTAL
114,800
100.00
100.00
10
1 - CVM CODE
2 - CORPORATE NAME
02033-8
07.206.816/0001-15
03.03 – CAPITAL STOCK DISTRIBUTION OF SHAREHOLDERS WITH MORE THAN 5% OF COMMON AND/OR PREFERRED SHARES
1 - ITEM
2 – CONTROLLING COMPANY / INVESTOR
3 – DATE OF COMPOSITION OF THE CAPITAL
STOCK
001
DIBRA FUNDO DE INVEST EM PARTICIPAÇÕES
04/27/2006
1 - ITEM
2 - NAME/CORPORATE NAME
6 - COMMON SHARES/
7-%
8 - PREFERRED SHARES
QUOTAS (Units)
10 –TOTAL SHARES/
QUOTAS
(Units)
9-%
(Units)
001001
11 - ¨%
704
99.82
1
0.01
1
0.17
001002
0
0.00
704
99.82
1
0.01
0.17
IDIBRA PARTICIPAÇÕES S.A.
001003
0
0.00
DIBRA PARTICIPAÇÕES LTDA.
001999
0
0.00
1
0
0.00
706
3 - CPF/CNPJ
4 - CITIZENSHIP
5 – STATE
000.165.433-00
BRAZILIAN
CE
06.258.768-0001/46
BRAZILIAN
CE
34.554.071-0001/58
BRAZILIAN
CE
12 - COMPOSITION OF
THE CAPITAL STOCK
TOTAL
706
100.00
100.00
11
1 - CVM CODE
02033-8
07.206.816/0001-15
04.01 – COMPOSITION OF CAPITAL STOCK
1 – Date of Last Amendment:
2ITEM
3 – TYPE OF SHARES
01
COMMON SHARES
02
PREFERRED SHARES
11
PREFERRED SHARES
CLASS A
PREFERRED SHARES
CLASS B
PREFERRED SHARES
CLASS C
PREFERRED SHARES
CLASS D
PREFERRED SHARES
CLASS E
PREFERRED SHARES
CLASS F
PREFERRED SHARES
CLASS G
PREFERRED SHARES
CLASS H
PREFERRED SHARES
OTHER CLASSES
99
TOTAL
03
04
05
06
07
08
09
10
10/8/2007
4 – REGISTERED
OR BOOKENTRY SHARE
BOOK-ENTRY
5 – FACE VALUE
(Reais)
6 – QUANTITY OF
SHARES
(Thousand)
7 – SUBSCRIBED
(In Thousands of
Reais)
8 – PAID-IN
(In Thousands
of Reais)
114,800
704,837
704,837
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
114,800
704,837
704,837
12
1 - CVM CODE
2 - CORPORATE NAME
02033-8
07.206.816/0001-15
04.02 – SUBSCRIBED CAPITAL STOCK AND CHANGES OVER THE PAST THREE YEARS
1- ITEM
2 – DATE OF
CHANGE
3 – CAPITAL STOCK AMOUNT
(In Thousands of Reais)
01
02
03
04
05
06
07
08
09
10
11
12
4/30/2003
4/30/2003
4/30/2004
4/29/2005
9/20/2005
3/31/2006
3/31/2006
3/31/2006
4/11/2006
4/11/2006
4/11/2006
08/10/2007
488,404
520,000
565,000
600,000
604,000
677,198
925,804
604,000
632,449
662,182
688,800
704,837
4 - CHANGE AMOUNT
5 – ORIGIN OF THE CHANGE
28,242
31,596
45,000
35,000
4,000
73,198
248,606
(321,804)
28,449
29,733
26,618
16,037
7 - QUANTITY OF SHARES ISSUED 8 – SHARE PRICE ON ISSUE
(Thousand)
Capital Reserves
Profit Reserve
Capital Reserve
Capital Reserve
Capital Reserve
Profit Reserve
Retained Earnings
Partial Spin-off
Capital Reserve
Profit Reserve
Retained Earnings
Capital Reserve
0
0
45,000
35,000
4,000
73,198
248,606
-321,804
0
0
0
0
(Reais)
0.0000000000
0.0000000000
1.0000000000
1.0000000000
1.0000000000
1.0000000000
1.0000000000
1.0000000000
0.0000000000
0.0000000000
0.0000000000
0.0000000000
13
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04.03 – BONUS SHARES/SHARE SPLIT OR REVERSE SPLIT OVER THE PAST THREE YEARS
1- ITEM
01
02
03
2 – DATE OF
APPROVAL
4/6/2006
4/11/2006
8/31/2006
3 –FACE VALUE PER SHARE
PRIOR TO APPROVAL
(Reais)
4 - FACE VALUE PER
SHARE AFTER APPROVAL
(Reais)
5 - QUANTITY OF SHARES 6 - QUANTITY OF SHARES
PRIOR TO APPROVAL
AFTER APPROVAL
(Thousand)
(Thousand)
604,000
201,333
229,600
201,333
229,600
114,800
14
1 - CVM CODE
02033-8
07.206.816/0001-15
04.04 – AUTHORIZED CAPITAL STOCK
1 - QUANTITY
3 – DATE OF
AUTHORIZATION
2 – VALUE
(Thousand)
459,200
0
6/27/2006
04.05 – COMPOSITION OF AUTHORIZED CAPITAL
1- ITEM
2 – TYPE
3 - CLASS
4 - QUANTITY OF SHARES
AUTHORIZED TO BE ISSUED
(Thousand)
01
COMMON SHARES
459,200
15
1 - CVM CODE
2 - CORPORATE NAME
3 - CNPJ (CORPORATE TAXPAYER’S ID
02033-8
07.206.816/0001-15
05.01 – TREASURY STOCKS
1- ITEM
01
2 – TYPE OF SHARES
COMMON SHARES
3 – CLASS
4 - MEETING
09/03/2007
5 – TERM FOR ACQUISITION
09/03/2008
6 - AMOUNT OF SHARES TO BE
ACQUIRED
(Thousand)
3,769
7 – AMOUNT TO BE DISBURSED 8 – AMOUNT OF SHARES
ACQUIRED
(Thousand Reais)
(Thousand)
0
1,080
9 – AMOUNT
DISBURSED
(Thousand Reais)
25,695
16
1 - CVM CODE
2 - CORPORATE NAME
3 - CNPJ (CORPORATE TAXPAYER’S ID
02033-8
07.206.816/0001-15
06.01 – PROCEEDS DISTRIBUTED OVER THE PAST THREE YEARS
1 - ITEM
2 – YIELD
01
DIVIDEND
02
DIVIDEND
03
DIVIDEND
04
DIVIDEND
05
DIVIDEND
06
DIVIDEND
07
DIVIDEND
08
DIVIDEND
09
DIVIDEND
10
DIVIDEND
11
DIVIDEND
3 - APPROVAL OF
DISTRIBUTION EVENT
Board of Executive
Officers’ Meeting
Board of Executive
Officers’ Meeting
Board of Executive
Officers’ Meeting
Board of Executive
Officers’ Meeting
Board of Executive
Officers’ Meeting
Board of Executive
Officers’ Meeting
Board of Executive
Officers’ Meeting
Board of Executive
Officers’ Meeting
Board of Executive
Officers’ Meeting
Board of Executive
Officers’ Meeting
Annual General
Meeting
4 – DATE OF
DISTRIBUTION
APPROVAL
5 – END OF
FISCAL YEAR
6 – NET INCOME
OR LOSS FOR THE
PERIOD
(In Thousands of
Reais)
7 – YIELD VALUE
PER SHARE
8 – TYPE OF
SHARES
9 - CLASS OF
SHARES
11 – DATE OF
START OF
PAYMENT
10 – YIELD
AMOUNT
(In Thousands of
Reais)
4/28/2003
12/31/2000
104,493
0.0311400000
COMMON
16,194
4/28/2003
4/16/2004
12/31/2000
104,493
0.0311400000
COMMON
16,194
4/16/2004
5/3/2004
12/31/2000
104,493
0.0371000000
COMMON
20,963
5/3/2004
5/3/2004
12/31/2001
94,732
0.0436500000
COMMON
24,665
5/3/2004
1/6/2005
12/31/2000
104,493
0.0339700000
COMMON
16,194
1/6/2005
3/31/2006
12/31/2001
94,732
0.0485000000
COMMON
29,291
3/31/2006
3/31/2006
12/31/2000
104,493
0.1730000000
COMMON
3,335
3/31/2006
3/31/2006
12/31/1999
98,508
0.0545300000
COMMON
32,938
3/31/2006
3/31/2006
12/31/1998
72,465
0.0196900000
COMMON
11,891
3/31/2006
3/31/2006
12/31/1997
56,351
0.0000600000
COMMON
35
3/31/2006
4/25/2007
12/31/2006
115,751
0.3800000000
COMMON
43,985
4/25/2007
17
1 - CVM CODE
2 - CORPORATE NAME
02033-8
07.206.816/0001-15
06.03 – STATUTORY PROVISIONS OF CAPITAL STOCK
1 - ITEM
2 – TYPE OF SHARE
10 – PREMIUM
01
3 - CLASS OF
SHARE
11 – TYPE OF
DIVIDEND
4 - % OF CAPITAL
STOCK
12 - % DIVIDEND
5 –CONVERTIBLE
13 - R$/SHARE
COMMON SHARE
100.00
0.00
6 – CONVERTIBLE
INTO
14 – CUMULATIVE
NO
7 – VOTING SHARES
15 – PRIORITY
FULL
8 - TAG ALONG %
9 – PRIORITY IN
CAPITAL
REIMBURSEMENT
17 - REMARKS
16 – CALCULATED OVER
100.00
0.00000
06.04 – BYLAWS AMENDMENT/MANDATORY DIVIDEND
1 – DATE OF LAST AMENDMENT TO BYLAWS
8/31/2006
2 – MANDATORY DIVIDEND (PROFIT % )
25.00
18
1 - CVM CODE
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07.01 – COMPENSATION AND ADMINISTRATORS’ PROFIT SHARING
1 – ADMINISTRATORS’ PROFIT SHARING
2 – ADMINISTRATORS GLOBAL COMPENSATION
AMOUNT
NO
3 – FREQUENCY
7,000
ANNUAL
07.02 – SHARING AND CONTRIBUTIONS OVER THE PAST THREE YEARS
1 - FINAL DATE OF LAST FISCAL YEAR:
12/31/2006
2 - FINAL DATE OF NEXT TO LAST FISCAL YEAR:
12/31/2005
3 - FINAL DATE OF LAST BUT TWO FISCAL YEAR:
12/31/2004
4- ITEM
5 – DESCRIPTION OF SHARING AND CONTRIBUTIONS
6 – VALUE OF LAST
YEAR
(In Thousands of
Reais)
7 – VALUE OF NEXT
TO LAST YEAR
(In Thousands of
Reais)
8 – VALUE OF LAST
BUT TWO YEAR
(In Thousands of
Reais)
01
SHARING – DEBENTURE HOLDERS
0
0
0
02
SHARING – EMPLOYEES
0
0
0
03
SHARING – ADMINISTRATORS
0
0
0
04
SHARING – FOUNDER’S SHARES
0
0
0
05
ASSISTANCE FUND CONTRIBUTIONS
0
0
0
06
PENSION FUND CONTRIBUTIONS
0
0
0
07
OTHER CONTRIBUTIONS
0
0
0
08
NET INCOME FOR THE YEAR
115,751
100,097
68,611
09
NET LOSS FOR THE YEAR
0
0
0
19
1 - CVM CODE
2 - CORPORATE NAME
02033-8
07.206.816/0001-15
07.03 – INTEREST IN SUBSIDIARY AND/OR ASSOCIATED COMPANIES
1- ITEM
3 - CNPJ (CORPORATE
TAXPAYER’S ID)
2 - CORPORATE NAME OF SUBSIDIARY/ASSOCIATED COMPANY
4 – CLASSIFICATION
5 - % INTEREST IN
THE INVESTEE
CAPITAL
6 - % INVESTOR
SHAREHOLDERS’
EQUITY
10 – QT. SHARES LAST FISCAL YEAR
7 – TYPE OF COMPANY
8 – BEGINNING LAST FISCAL YEAR
9 – FINAL LAST FISCAL YEAR
(Thousand)
11 – BEGINNING NEXT TO LAST
FISCAL YEAR
01
12 – FINAL NEXT TO LAST
FISCAL YEAR
13 – QT. SHARES NEXT TO LAST
FISCAL YEAR
TERGRAN-TERM. DE GRÃOS DE FORTALEZA LTDA
14 – BEGINNING LAST BUT TWO
FISCAL YEAR
(Thousand)
01.591.524/0001-67
COMMERCIAL, INDUSTRIAL COMPANY AND OTHERS
1/1/2005
02
12/31/2005
6, 579
FABRICA FORTALEZA INVESTMENTS INC
1/1/2005
04
12/31/2005
ADRIA ALIMENTOS DO BRASIL LTDA.
2,752
1/1/2005
06
12/31/2005
81,150
M DIAS BRANCO INTERNACIONAL TRADING LLC
1/1/2005
07
12/31/2005
1
M DIAS BRANCO INTERN TRADING URUGUAY S.A.
1/1/2005
12/31/2005
1/1/2004
12/31/2004
6, 579
13
PRIVATE SUBSIDIARY
100.00
2.48
1/1/2006
12/31/2006
2,752
1/1/2004
12/31/2004
14,301
PRIVATE SUBSIDIARY
99.99
13.96
1/1/2006
12/31/2006
126,933
1/1/2004
12/31/2004
49,150
PRIVATE SUBSIDIARY
100.00
0.08
1/1/2006
12/31/2006
1
1/1/2004
12/31/2004
1
../-
0.25
6, 579
../-
33.33
12/31/2006
51.423.747/0001-93
PRIVATE SUBSIDIARY
(Thousand)
1/1/2006
../-
15 – FINAL LAST BUT TWO FISCAL
YEAR
16 – QT. SHARES LAST BUT TWO
FISCAL YEARS
INVESTEE OF THE
SUBSIDIARY/ASSOCIATED
COMPANY
100.00
0.04
1/1/2006
12/31/2006
13
1/1/2004
12/31/2004
13
20
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09.01 – A BRIEF HISTORY OF THE COMPANY
Since the 1940’s, the Company’s creator, Mr. Manuel Dias Branco, already had been operating
in the state of Ceará baking and cookies manufacturing activities, by using handmade
techniques.
As of 1953, after Mr. Francisco Ivens de Sá Dias Branco joining the company then known as
M. Dias Branco & Cia. Ltda., new guidelines started to be adopted in business, the investments
of which started to be focused on industrial production and trading of cookies and pastas.
In 1961, the Company was organized as a privately held company and, in 1980, Fortaleza Plant
activities have begun.
Due to Brazilian economic opening, including the wheat market, occurred in 1990, a new
period of growth in our business has begun as well.
In 1992, we opened the Moinho Dias Branco, in the state of Ceará, our first wheat mill. Such
fact allowed us to produce the main raw material of our products, so as to no longer depend on
this input suppliers, as well as enter in the competitive wheat flour market. We conquered
outstanding position in this segment, and in 2006 we sold 51.9% of our total production to our
clients.
In 2000, we opened Grande Moinho Potiguar (wheat mill and pastas plant), in the state of Rio
Grande do Norte.
By mid 2002, pursuing a policy of inputs verticalization and entering in new segments, we
opened the G.M.E. division, in the state of Ceará, unit which manufactures vegetable
shortenings, margarines and vegetable creams. Such verticalization strategy also occurs in the
Company’s manufacturing process of vegetable shortenings, margarines and vegetable creams,
since this unit produces most part of vegetable shortening, which is the second most important
raw material for the Company in the manufacturing process of cookie, in addition to the entire
hydrogen necessary in our manufacturing process.
In 2003, we opened the Grande Moinho Aratu, in the state of Bahia (industrial complex which
comprises a wheat mill and a plant of cookies and pastas, as well as a port terminal of grains
called Terminal Portuário de Cotegipe, controlled by Mr. Francisco Ivens de Sá Dias Branco),
initially producing wheat flour and bran. In the same year, we acquired the share control of
Adria, traditional manufacturer of cookies and pastas, leader in the Southeast and Southern
regions of Brazil, which allowed us a larger presence in these regions and leadership in the
Brazilian market of pastas and cookies. With the acquisition of Adria, the brands Adria,
Basilar, Isabela and Zabet joined our brands Richester and Fortaleza, thus, reaching a wider
range of consumers throughout the country. Moreover, our production potential became even
larger, taking into account that Adria has three industrial units in the state of São Paulo and one
in Rio Grande do Sul. Also in 2003, we opened the Moinho Tambaú, where wheat flour and
pasta are also produced.
In 2005, we began to produce cookies and pastas in Grande Moinho Aratu.
Since then, we have 10 plants strategically located in our main performance markets, which
eases the operation of our sales and distribution system, as well as contributing to (i) reduce
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transportation costs of our products; (ii) fast delivery; (iii) higher know how and regular supply
of local markets; and (iv) reduction of supply shortage risk.
In 2006, we recorded one of the most important milestones during the Company’s sixty years
history. We refer to its transformation into a corporation and subsequently going public, by
trading its shares on São Paulo Stock Exchange (BOVESPA) and joining the “Novo Mercado”
segment.
On March 31, 2006, we carried out a split in determined assets and liabilities, including: (i)
properties not used in the activities of industrialization, trading and distribution of food
products; (ii) investments in the capital of subsidiaries or associated companies not related to
industrialization, trading and distribution of food products; and (iii) investments in financial
market, execeeding our liquidity needs.
In April 2006, we became a corporation and we carried out the reverse split of our shares, in the
proportion of three for one. In addition, our parent companies at that time M. Dias Branco
Administração e Participações and Idibra Participações – which held 65.16% of our capital
stock – approved their respective capital stock reductions, refunding to its shareholders an
amount corresponding to the reduced portion of the capital stock, in proportion to their interest,
which occurred, in relation to the shareholder Mr. Francisco Ivens de Sá Dias Branco, by means
of delivery of shares issued by us. Due to this corporate restructuring, the shareholder
Mr. Francisco Ivens de Sá Dias Branco then held 84.25% of the capital, thus having transferred
his shares to the Seller Shareholder, whose majority quotaholder is Mr. Francisco Ivens de Sá
Dias Branco. Also in April 2006, the Company increased its capital stock and, in August 2006,
carried out the reverse split of its shares, at the proportion of two for one.
On October 18, 2006, the fully secondary IPO ocurred, which ended on November 16, 2006.
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Corporate Structure
The table below shows our current corporate structure:
FISDB
Other
0.18%
99.82%
Novo Mercado
Dibra Fundo de
Investimentos e
Participações
17.04%
67.21%
Other
15.75%
M.DIAS
BRANCO
99.99%
0.01%
Adria
33.33%
Tergran
100%
Fábrica Fortaleza
Investments Inc.
100%
M. Dias Branco
International Trading
LLC
100%
M. Dias Branco Int
Trading Uruguay
S/A
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Company’s Subsidiaries
Below, we briefly outline the companies in which the Company holds relevant interest.
Adria
Adria, which started its activities on August 8, 1957, is headquertered in the city of São
Caetano do Sul, state of São Paulo, the purpose of which, among others, is the industrialization,
trading and distribution of food products derived from wheat, especially cookies and pastas.
Adria is leader in Southeast and Southern regions of Brazil.
We acquired Adria on September 22, 2003, and the purchase price was fully paid on December
23, 2003. The purchase of Adria was carried out by means of one of the Company’s
subsidiaries at that time, Green Jungle Limited. Green Jungle Limited, wound up on July 29,
2006, was a subsidiary of Green Jungle Brasil, our subsidiary up to August 30, 2006, when it
was merged by Adria.
Tergran – Terminais de Grãos de Fortaleza Ltda.
Tergran was organized on September 22, 1996, with duration up to September 30, 2026, and
the purpose of which is the exploration of port operating activties, mainly performing imports,
exports and trading of grains and byproducts. Its current partners are J. Macêdo S.A., Grande
Moinho Cearense S.A., two of our competitors in the wheat milling segment, and the Company,
which hold equal interest in the capital stock and appoint, by common agreement, the
operations officer in charge of Telegran management.
The Quotaholders Agreement sets forth certain rules for Tergran operation, including the
unloading and storage of grains in Warehouse A2, which is leased to Tergran by Companhia
Docas do Ceará - CDC, always prioritizing increased productivity of unloading of wheat cargo
ships for the three partners, reducing the permanence of ships in Fortaleza Port and time laying
alongside.
Fábrica Fortaleza Investments Inc.
We hold 100.0% interest in the capital stock of Fábrica Fortaleza Investments Inc., the main
activity of which is the investment in financial assets.
M. Dias Branco International Trading LLC
M Dias Branco International Trading LLC is our direct subsidiary, and its main activity is to
intermediate raw materials procurement, mainly wheat for milling and vegetable oil used in our
production process.
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M. Dias Branco International Trading Uruguay S.A.
M Dias Branco International Trading Uruguay S.A. is our indirect subsidiary, and its main
activity is to intermediate raw materials procurement, mainly wheat for milling used in our
production process.
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09.02 – CHARACTERISTIC OF PERFORMANCE INDUSTRY
The macroeconomic scenario in Brazil has been favorable to the consumption sector over the
last years due to a stability scenario, favored by the decrease in interest and inflation rates, as
well as the growth of “massa salarial” (sum of all salaries paid to workers during the year) as a
result of an increase in minimum wage and prices stability. Moreover, the Northeast region,
where the Company heavily operates, has been growing at a higher rate than the country’s over
the last years, due to the growth in industry and tourism, as well as government social
programs.
Even taking into account an increase of 2.9% of GDP in 2006, lower than the 4.0% increase
expected by the Government, the economy upturning over the last months of 2006, associated
with good country’s fundamentals, continuous decrease in basic interest rates and public and
private investments announced for the next years, especially in civil works, real estate market
and infrastructure, lead us to have good prospects of an acceleration of the country growth for
the next years, with an increase in “massa salarial” and improvement in the Brazilians’ average
income, which will bring positive impacts on the sector and market where we operate. In
addition to the Brazilian’s macroeconomic scenario, the analysis of the Company’s
performance in 2006 must also take into account specific aspects of the sectors where we
operate, especially, cookies, pastas and wheat flour segments – since these are the most
significant ones for the Company (nearly 95% of gross sales).
Regarding cookies and pastas market, data based on A.C. Nielsen research will be presented. It
is worth pointing out that, in the methodology used, no information related to some states, such
as Maranhão and Piauí (Northeast region), Tocantins and Mato Grosso do Sul (Mid-West
region) and all states in Northern region was collected. In all these states, the Company trades
its products, but they are not considered by A.C. Nielsen market research. Thus, when we refer
to “Brazil” or “Brazilian market” in this document, we are taking into account only the group of
selected states for the study of Nielsen, due to the lack of reliable data covering the entire
Brazilian market.
Regarding the wheat flour and bran segment, we present the Abitrigo (Brazilian Association of
Wheat Industry) and CONAB (Brazilian Supply Company) data.
EVOLUTION OF COOKIES AND PASTAS BRAZILIAN MARKET IN 2006
The pastas and cookies segments remain fragmented in Brazil in terms of market share.
According to A.C. Nielsen, the five largest players account for nearly 50% of respective
markets. We understand that these markets will undergo a consolidation process and the
Company may acquire companies with strong brands and/or operating in regions where the
Company’s products still have less market share.
Regarding the Brazilian market of cookies, the Northeast and Southeast regions stood out as the
largest consumers in 2006, accounting for 60.7% of sales in physical volume and 57.8% of
sales in reais. The representativeness of Northeast region is lower in terms of financial volume
26
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than physical volume, which shows a higher consumption of lower added value products in this
region.
COOKIES - Sales Segmentation in Brazilian Market by Region - 2006
Volume
16.2%
Sales
18.2%
30.6%
33.7%
6.6%
6.7%
16.5%
17.3%
30.1%
Southeast
Northeast
Source: AC Nielsen
24.1%
Southern
Mid-West
Other states
By analyzing different categories of cookies in Brazil in 2006, Filled Cookies, Água e Sal
(Water and Salt), and Cream Crackers account for nearly half of the sales, both in physical
volume and financial volume. We can also observe that Filled Cookies and Wafers are
classified as higher added value categories, since their percentage participation in financial
volume exceeds the percentage participation in physical volume.
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COOKIES – Sales Segmentation in the Brazilian Market by Product - 2006
Volume
Sales
5.7%
11.4%
6.6%
8.9%
27.8%
31.0%
10.1%
10.1%
11.4%
8.3%
22.1%
16.7%
17.1%
14.9%
Filled Cookies
Water and Salt/Cream Cracker
Dry/Special Sweets
Wafers
Salted
Maria/Cornstarch Cookies
Other
Source: AC Nielsen
Regarding pastas segment, we can observe that the Southeast region accounted for more than
half of sales in 2006, due to cultural factors related to food habits and higher population’s
income. The representativeness of Northeast region, in terms of physical volume is higher than
the financial volume, which shows again a higher consumption of lower added value categories
in this region.
PASTAS – Sales Segmentation in the Brazilian Market by Region - 2006
Sales
Volume
6.1%
6.5%
17.2%
18.6%
51.7%
25.1%
21.7%
Southeast
Northeast
Southern
53.2%
Mid-West
Source: AC Nielsen
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The main pastas categories in Brazil in 2006 are “semolina without eggs pasta” and “Egg
Pasta/semolina with eggs pasta”, accounting for nearly 70% of total sales both in physical and
financial terms. The “Ordinary” category shows to be a lower added value category than the
previous ones, and it is heavily consumed in the Northeast region, while “durum wheat” pasta is
typified as higher added value category.
PASTAS – Sales Segmentation in the Brazilian Market by Product - 2006
Volume
Sales
2.7% 0.1%
0.1%
3.6%
24.4%
7.0%
5.1%
39.3%
29.9%
Semolina without eggs pasta
Ordinary pasta
Durum wheat pasta
38.2%
18.8%
30.9%
Eggs pasta/semolina with eggs pasta
homemade pasta
In Bulk
Source: AC Nielsen
As of December 2005, the Company started to operate in instant pasta segment, which has an
added value higher than common pastas and represents a market of continuous growth and
optimum prospects, in view of quick, practical and ease making of pasta. Thus, this type of
pasta has been largely accepted by the market.
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Sales Segmentation in Brazilian Market of Traditional Pastas X Instant Pastas - 2006
Volume
Sales
13.0%
30.0%
70.0%
87.0%
Traditional Pasta
Instant Pasta
Source: AC Nielsen
WHEAT FLOUR
According to LAFIS data, in 2005 there were 206 mills, 74% of which were located in
Southern region, due to the proximity to raw material. These mills operate at nearly 30% idle
capacity due to competition with products derived from Argentina. In the USA there are
approximately 300 mills, and nearly 120 in Argentina.
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BRAZILIAN PRODUCTION OF WHEAT FLOUR – Tonnes
Year
1992/1993
1993/1994
1994/1995
1995/1996
1996/1997
1997/1998
1998/1999
1999/2000
2000/2001
2001/2002
2002/2003
2003/2004
2004/2005
2005/2006
Production
2,836,193
2,152,761
2,092,424
1,343,700
3,132,000
2,852,000
2,032,900
2,123,000
1,529,000
3,366,599
3,105,658
5,851,300
6,021,650
3,268,822
WHEAT
Imports
4,436,801
5,690,416
6,104,374
6,182,374
5,902,119
4,373,704
6,395,478
6,891,234
7,522,721
7,014,311
6,572,228
6,611,926
4,847,780
6,531,178
Total Wheat*
7,300,000
7,500,000
7,300,000
7,500,000
7,950,000
7,920,000
8,950,000
9,580,000
8,800,000
9,530,000
9,250,000
9,300,000
9,400,000
9,800,000
Wheat Flour
5,475,000
5,625,000
5,475,000
5,625,000
5,962,500
5,940,000
6,712,500
7,185,000
6,600,000
7,147,500
6,937,500
6,975,000
7,050,000
7,350,000
*Total Wheat (excluding exports, closing inventory, feed and seeds) – extraction base 75%
Source: SECEX, CONAB
The demand for wheat flour is very fragmented. Researches from Baking Industry Union show
that, in Brazil, up to the end of 2004 there were 53 thousand bakeries, of which 250 were bread
industries, 2.300 were large bakeries, 12.060 medium bakeries and 38.550 small bakeries. The
regional distribution of bakeries in the Brazilian territory is approximately estimated: 41% in
the Southeast region, 26% in the Northeast region and Southern region, 7% in the Mid-West
region and 5% in Northern region. Such regional distribution of bakeries reflects the
consumption standard of the local population, and it indicates local food habits. In this regard,
the Southern region stands out, since its colonization by European immigrants disseminated the
consumption of wheat and its byproducts.
Another fact that has been occurring in the segment is the change in the mix of wheat flour
consumption. According to Sindipan (Baking and Pastry Shop Industry Union of the state of
São Paulo) data, up to 1996 the bread manufacturing accounted for 60% of wheat consumption.
In 2006, such figure decreased to 55%. Concurrently, cookies which accounted for 5% of wheat
consumption, then accounted for 11%.
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WHEAT FLOUR – Consumption in the Brazilian Market by Segment - 2006
1.9%
17.5%
10.7%
55.4%
14.4%
Baking
Pasta
Cookies
Household Wheat
Other
Source: AC Nielsen
The consumption also differs from region to region, since in Southeast and Southern regions it
reaches 35 kg/inhabitant/year, and in Northeast it is nearly 10 kg/inhabitant/year.
FOLLOW-UP OF COMMODITIES MARKET
As already emphasized above, the economic activity developed by the Company is strongly
concentrated in the production and trading of products in cookies, pastas and wheat flour food
segments. These segments rely on two important inputs in their production matrix, which
greatly participate in the generation of the Company’s variable costs. Such inputs are: (i) wheat
grain (accounting for 35.8% of our COGS in 2006); and (ii) vegetable oil (accounting for 7.9%
of our COGS in 2006).
During 2006, costs of our main raw materials in relation to market price are as follows:
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Average Purchase Price M Dias Branco X Market Price
Wheat - 2006
(US$ / TONNE)
195
190
187
177
174
160
163
150
146
141
160
141
151
140
145
145
143
145
139
120
Jan
133
133
133
Mar
Apr
May
125
Feb
Jun
Jul
Aug
Sep
Nov
Dec
MDias
Market*
* Source: www.safras.com.br - Teletrigo – Daily Report on Information and Foreign and Domestic Markets Forecasts
Average Purchase Price M Dias Branco X Market Price
Soybean - 2006
R$/TONNE
1,907
1,769
1,580
1,432
1,456
1,459
1,462
1,474
1,415
1,423
Nov
Dec
1,363
1,320
1,319
1,240
1,240
1,240
Jan
Feb
Mar
1,301
* Source: www.safras.com.br
1,375
1,396
1,378
1,378
1,378
1,378
Jul
Aug
Sep
Oct
1,249
Apr
May
Jun
Market*
MDias
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09.03 – SEASONALITY PERIODS IN THE BUSINESSES
Overall, the demand for our products is not subject to seasonality.
34
1 - CVM CODE
2 - CORPORATE NAME
02033-8
07.206.816/0001-15
10.01 – PRODUCTS AND SERVICES OFFERED
1- ITEM
01
2 – MAIN PRODUCTS AND/OR SERVICES
3 - % NET REVENUES
COOKIES
47.35
02
PASTAS
24.77
03
FLOUR AND BRAN
23.02
04
MARGARINES AND FATS
4.78
35
1 - CVM CODE
2 - CORPORATE NAME
3 - CNPJ (CORPORATE TAXPAYER’S ID.)
02033-8
07.206.816/0001-15
10.02 – RAW MATERIALS AND SUPPLIERS
4 – IMPORT AMOUNT
1- ITEM
2 – RAW MATERIAL
7 - NAME OF SUPPLIER
01
5 – AVAILABLE IN THE
LOCAL MARKET
6 – AVAILABLE IN THE
FOREIGN MARKET
9 - % SUPPLY OVER
TOTAL OF COMPANY
PURCHASES
YES
53,479
YES
YES
SUBSIDIARY
ARGENTINE WHEAT GRAIN
M. DIAS BRANCO INTERN. TRADING LLC
(In Thousands of
Reais)
8 – TYPE OF SUPPLIER
ARGENTINE WHEAT GRAIN
M. DIAS BRANCO INTERN. TRADING URUGUAY
02
3 – IMPORT
12.70
YES
66,901
YES
YES
SUBSIDIARY
15.90
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11.01 – PRODUCTION PROCESS
Industrial Plants and Equipment
We have a modern industrial park strategically located in our main markets, composed of 10
industrial plants with state-of-art equipment, observing the most strict quality standards.
The table below lists our main industrial plants:
Eusébio
Total Area
(in m²)
508,050.0
Built-up
Area (in m²)
99,716.0
Fortaleza
53,332.5
19,535.5
Natal
Fortaleza
Salvador
Cabedelo
Jaboticabal
9,107.0
9,655.0
368,982.0
37,489.0
21,600.0
20,519.0
33,678.4
117,726.1
26,438.4
19,238.0
Company
Company (Committed
Buyer)
Company
Company (Leaseholder)
Company
Company (Leaseholder)
Adria
São Caetano do Sul
São Caetano
do Sul
9,777.0
14,671.0
Adria
Lençóis Paulistas
Lençóis
Paulistas
10,427.6
10,427.6
Adria
Bento Gonçalves
Bento
Gonçalves
133,242.0
21,300.0
Adria
Unit
Fábrica Fortaleza
GME – Shortening and Special
Margarines Division
GMP – Grande Moinho Potiguar
Moinho Dias Branco
GMA – Grande Moinho Aratu
GMT – Grande Moinho Tambaú
Jaboticabal
Location
Ownership
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The table below shows the production capacity in each one of our industrial units, in thousand
tonnes, in the periods indicated:
Cookies
Production Capacity/
Effective Production
YEAR YEAR
2005
2006
Fortaleza Plant
Fats,
Margarines
and vegetable
creams
YEAR YEAR YEAR
2006
2005
2006
Wheat Flour
and Bran
Pastas
YEAR YEAR YEAR
2005
2006
2005
Total
YEAR
2005
YEAR
2006
158.0
158.0
61.6
61.6
-
-
-
-
219.6
219.6
Moinho Dias Branco
-
-
-
-
384.8
384.8
-
-
384.8
384.8
GME – Shortening and
Special Margarines
Division
-
-
-
-
-
-
78.0
78.0
78.0
78.0
Grande Moinho
Potiguar
-
-
36.0
36.0
174.1
174.1
-
-
210.1
210.1
56.7
70.6
64.1
64.1
386.6
386.6
-
-
507.4
521.3
GMT – Grande Moinho
Tambaú
-
-
31.1
41.4
104.5
104.5
-
-
135.6
145.9
São Caetano do Sul
-
-
54.0
54.0
-
-
-
-
54.0
54.0
33.6
38.4
10.8
12.0
-
-
-
-
44.4
50.4
-
-
50.4
50.4
-
-
-
-
50.4
50.4
28.8
29.8
-
-
-
-
-
-
28.8
29.8
277.1
296.8
308.0
319.5
1,050.0 1,050.0
78.0
78.0
1,713.1 1,744.3
194.7
70.3%
201.6
67.9%
153.1
49.7%
179.5
56.2%
663.4
63.2%
53.1
68.1%
54.9
70.4%
1,064.3 1,204.2
62.1% 69.0%
Grande Moinho Aratu
Bento Gonçalves
Jaboticabal
Lençóis Paulistas
Total Production
Capacity
Total Production
Level of Capacity Use
768.2
73.2%
Products
Cookies
The mainspring of M. Dias Branco Group sales are the cookies. Among a diversified range of
products and aiming at briefly demonstrating their production process, we classified them as
following: salted, crackers, filled cookies, covered cookies, plain cookies and wafers.
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The cookies production process is unique, occurring some variations as to groups mentioned
above, and thus divided: Dough Preparation, Fermentation, Flatting/ Stamping/ Cutting,
Stoking, Cooling, Piling, Packaging, Crating, Palletizing/ Dispatch/ Distribution.
This process begins with dough preparation. In this phase, the ingredients used are divided into
the following three categories: micro ingredients, used at low quantities until approximately
3kg and are weighted in the dosimetry division; intermediate ingredients, measured out at
average quantities, from 3kg to 45kg and weighted in the preparation division; and macro
ingredients; used in large quantities, automatically controlled and measured out.
The person in charge of dough preparation manually adds the micro and intermediate
ingredients into the mixers, while the macro ingredients are automatically added via panel
control. Sugar is prepared in a separate reservoir, where it is ground and undergoes an inversion
process, then via tubing reaches the mixers. From the mixers, in which the ingredients are
mixed and homogenized, the dough goes to the fermentation phase.
Still regarding the dough preparation process, we point out that the incorporation of new work
may occur. It consists of processing again the finished product and/or dough, thus, avoiding the
waste of raw material.
The fermentation process occurs by microorganisms which transform starches and sugars into
alcohol and acid, and occurs in ambient temperature and humidity, where time and nutrition of
these microorganisms are controlled.
After lapsing the fermentation ideal time, dough through feeder conveyor system goes to
flatting division. In this phase, dough is directly directed to dough feeders, going through a
flatting system comprised by cutting rolls and markers corresponding to each product, which
follow strict standards.
After the flatting and cutting process, the cookies go to stoking, where they are baked,
observing pre-established quality standards, according to each production line. The cookies
already baked go through a natural cooling process, where the product exchanges heat with
ambient air, while these are carried by conveyors and undergo the piling process, through
channels working as leads, to then be directed to the packaging division. We also point out that
during the entire production process, the cookies go through different metal detectors, with a
view to ensuring the quality of product that reaches consumer.
The cookies packaging process is fully automated, with no human contact. Employees involved
in packaging process are properly guided to define the products compliance. After being
packed, the products are packed in cardboard boxes and organized into pallets to be transferred
to the dispatch of finished products division.
Regarding filled cookies, the filling mixture will undergo same process of dough mixing. After
being submitted to mixing time, the filling is placed in stainless steel carts and carried to the
filler, where its adding process is automatic.
Concerning covered cookies, the products follow the same manufacturing process already
outlined above and are carried to cobrideiras, specific machines where cookies will receive
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previously heated covering. After being covered, products undergo forced cooling through
cooling tunnels, then, being directed to the packaging automated process.
With a view at ensuring the quality and standardization of these processes, our cookies plants
have implemented the Quality Management System - ISO 9001:2000 standard. Regarding food
safety of our products, we have implemented Good Manufacturing Practices/POP’s and
HACCP System– Hazard Analysis and Critical Control Point.
Pastas
M. Dias Branco Group produces sundry products based on two (2) types of pastas: Semolina
Pasta with Natural Food Colorings and Semolina Pasta with Egg Powder and Natural Food
Colorings.
The production process of these pastas is the same; the only difference, however, is the addition
of whole egg powder into one of them.
The aforementioned production process starts by carrying wheat semolina from storage silos to
mini-silos, which are tanks between silos and troughs. Then the semolina is carried to a
reservoir (mixer) where pre-mix is prepared.
During pre-mix preparation, wheat semolina is mixed with natural food colorings and to whole
egg powder, properly weighted, when necessary. Then, this mixture is transferred to a gauger
located in troughs. All carrying process occurs by means of pneumatic system.
In gauger, pre-mix and water are measured out in predetermined and proportional quantities to
be transferred to the centrifuge trough, where the first ingredients mixing occurs. In the
following process, dough via mechanical transportation will reach the double trough where an
intensified homogenization of mixing will occur. Then, dough goes to the vacuum trough,
where air is fully removed, preventing oxidation and unpleasant aspect of pasta.
Then, dough is pressed and filtered to retain any type of strange material, then goes to the
molding machine (or trafila), responsible for the product shaping.
Once molded, macaroni undergoes drying process. Once observing time and dry ideal
temperatures of each dough, macaroni is ready to be cut and packed.
The packaging process is fully automated, carried out by packaging machine. In this process,
packages are properly weighted, submitted to metal detectors, where rejected products are
discarded. Then, packages are boxed in parcels and placed in pallets, which are directed to the
finished products dispatch division.
Wheat Flour
The production process of Wheat Flour is divided into the following phases: Wheat Receipt,
Wheat Preparation for Milling, Wheat Milling and Finished Products.
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The wheat is directly received at the company via maritime means. This operation is performed
by a ship unloading machine, which is an state-of-art equipment, composed of a tower which
moves lengthwise in the wharf, operated from a command booth, also composed of a movable
current carrier for transportation in ship holds and proper aspiration systems, filtering and waste
collection, also containing an acoustic booth with compressor and hydraulic system to
minimize noises.
After ship unloading, wheat is pre-cleaned. In this phase, the impurities are removed, with
larger dimensions than wheat, ferrous materials and impurities lighter than grain, basically
composed of powder and straw, which are added to Bran (wheat by-product). Then, the latter is
stored in silos and concrete spaces between silos.
Silos have transportation facilities and pneumatic valves that allow transilagem operations, or
total transfer of grains from a silo to another, optimizing storage capacity and providing
aeration lots stored for a longer time.
All wheat transportation processes undergo aspiration systems, composed of ducts of different
diameters, bag filters and medium-pressure ventilators to collect particles, which ensures great
return of clean air to the atmosphere. We also point out that the aspirated product is decanted
into filter and measured out by lock in waste residue silo, so that it can be added to the bran.
Before milling, wheat undergoes the preparation process, composed of two phases of cleaning;
between these ones, there is a phase of moistening and pause. The preparation phase will
ensure the quality and a better use of wheat in the milling process.
The wheat milling is a physical process of gradual and selected reduction which mainly aims at
separating the internal part of the wheat grain, called endosperm, from its peel, reducing the
intermediary products until obtaining the flour, which is the product, and the bran, which is
wheat byproduct.
This process consists of submitting wheat and its intermediary products to successive phases of
fragmentation, intercalated by phases of bolting, as well as granulometric and desimetric
classification, until the reduction of semolina into granulometric flour.
In different bolting phases occurred during milling process, flours of distinguished qualitative
characteristics are produced. Through helicoidal carriers, these flours are mixed, resulting into
2 types of intermediary flours, called “F1” and “F2”. The first one is clearer, with a low mineral
content withdraw from most internal part of grain. The second flour, darker, contains higher
mineral content, composed of flours removed from the endosperm part closer to the peel.
Both are carried to the wheat silos through pneumatic pressure carriers, so as to be used as raw
material for mixing and production of final flours. We point out that all flour transportation is
controlled by electronic flow scales, which, together with other flour and bran scales, are
integrated into an online system of process output control.
Then, “F1” and “F2” flours are mixed in different proportions, together with flour corrective
microingredients and vitamins complexes. All mixing procedures are commanded and
monitored via computer, which, together with a modern automation system and electronic
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scales, ensures high precision and reliability in measurement, which is the competitive
advantage of flour produced by M. Dias Branco Group.
From mixing lines, flours are directed to finished product silos to be packed in different
production cuts, then these are sent to the dispatch division.
The production process of wheat flour generates a byproduct called bran. The bran produced in
the mill is: Thick Bran and Fine Bran. This bran has independent transportation lines and may
be stored in silos. Likewise wheat storage, the facilities allow a continuous bran transilagem, or
total transfer of grains from a silo to another, thus ensuring its continuous flow and,
consequently, avoiding its stoppage in the silo.
The bran packaging may be carried out in different lines, in bags of 20, 30 or 40kg, which may
be dispatched directly to the trucks or stored in an area exclusively for this purpose.
Margarines and Vegetable Shortenings
In the production process of fats, the basic raw material of this segment is crude soy oil,
obtained from crushing of soy beans, acquired in domestic and foreign markets, mainly from
Argentina. Corn, canola, sunflower, palm and cotton oils are also used.
The phase of this process is the refining of crude oil, comprising the neutralization, bleaching
and deodorizing operations. The neutralization consists of the removal of the free acidness from
crude oil, through chemical and mechanical centrifugation procedures. In bleaching, improper
impurities and pigments are removed to purify the product. In the deodorizing phase, residual
acids and greases, responsible for the oil smell and taste, are removed, by means of a
distillation process with direct vapor injection.
Then, the oil undergoes the hydrogenation process, which consists of the injection of hydrogen
in a reactor, under certain conditions and using a catalyst. Thus, the hydrogenated vegetable
shortening is obtained, which is the basis for the production of vegetable shortenings for sundry
industrial uses, such as baking, production of cookies, cakes, chocolates and margarines.
Vegetable shortenings for industrial use may have different specifications, according to their
final use and specifications of clients who need a special product.
The margarine is a product prepared from vegetable oils and shortenings, as well as other
ingredients, such as: salt, milk, flavors, natural food colorings, stabilizers, vitamins and water.
Each ingredient is weighted in tank-like scales, being added in the correct quantity, according
to the product formula, so as to obtain emulsion.
This emulsion is composed of an aqueous phase, with hydrosoluble ingredients (salt and
preservatives) and an oily phase, composed of hydrogenated vegetable shortening, with
liposoluble ingredients (emulsifiers, flavors etc.). This emulsion undergoes the crystallization
and homogenization process, from which the margarine will emerge. Then, the margarine is
packed in jars or bucket, in case of household consumption, or boxes, in case of industrial or
institutional utilization.
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After packaging, the margarine must be stored in cool chambers at temperature between 5°C
and 7°C for, at least, 24 hours for its proper stability.
43
External Disclosure
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11.02 – TRADING, DISTRIBUTION PROCESSES, MARKETS AND EXPORT
Sales and Distribution Structure
Most of our sales occurs in Brazil. In 2004, 2005 and 2006, 99.8%, 99.8% and 99.9% of our
gross operating income derived from sales made in the Brazilian territory, respectively.
In Brazil, our sales are made through the combination of direct and indirect sales channels.
Direct sales comprise sales made through our branches or agents, off-the-shelf system and also
the sales of pre-order team. The indirect sales comprise sales made by outsourced distributors.
In this context, the mix of our gross sales regarding direct sales to consumers and sales to
intermediates is as follows:
On December 31,
Direct Sales to Consumers
Sales to Intermediates
Total
2004
2005
2006
50.3%
49.7%
100.0%
52.4%
47.6%
100.0%
52.0%
48.0%
100.0%
We believe that our wide direct sales network and our close relationship with indirect channels
ensure our solid presence in Brazilian territory and closeness to our clients, thus creating a
relationship that ensures our clients’ loyalty and, at the same time, increases our client base,
which allows a low dependence of our sales from large networks.
Also regarding our direct sales channels, we produce items of pasta and margarine segments for
certain distributors and industries which have their own brands. We call this activity as third
parties’ brand production.
Sales through Direct Channels
Sales through direct channels are made to retailers and final consumers by the Company’s
sellers and agents. The compensation of each internal seller is composed of a fixed amount and
a variable amount, determined by a combination of various performance measurement factors,
such as: amount sold, portfolio delinquency ratio, mix of products and number of clients. The
agents receive, as compensation, a commission based on the total of sales made and effectively
received.
We basically use two commercialization systems in traditional retail (small and medium
traders): off-the-shelf and pre-order systems. In order to meet the needs of large retail
supermarkets chains, the pre-order system is most adopted one.
44
External Disclosure
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Sales through Indirect Channels
Sales through indirect channels are made to wholesalers and distributors who, by means of a
loan limit, acquire our products and resell them to small and medium traders.
Clients
On December 31, 2006, we relied on nearly 48 thousand clients of most varied activity sectors,
which are mostly small and medium-sized companies.
On December 31, 2006, none of our clients accounted for more than 10.0% of our net revenues,
so that the distribution of our client base has been contributed to minimize our exposure to the
risk of impact of revenue reduction due to loss of one or some of our major clients. During
same period, our 10 major clients accounted for nearly 15.9% of our total net revenues and our
main client accounted for 4.9% of our total net revenues.
The table below shows the representativeness, in terms of net revenues, of our main clients
grouped according to their sectors:
Fiscal year ended December 31,
2004
Final Consumer
(1)
2005
2006
(% of net revenue)
1.0
0.9
0.9
Retail
Industrial
Wholesale
46.4
7.0
10.3
49.5
2.7
11.6
46.9
4.2
13.5
Large Chains (2)
Institutional ("Food Service" – Restaurants and Hotels)
Agribusiness
Distributor
Exports
9.7
0.7
1.3
20.4
0.2
8.4
0.4
1.4
22.4
0.3
7.9
0.5
1.4
23.1
0.2
Other
3.0
2.5
1.3
Total
100
100
100
(1)
Excluding large chains.
(2)
The following are deemed as large chains: Carrefour Com. e Ind. Ltda.,
Wal Mart Brasil Ltda., Dia Brasil Sociedade Ltda., Atacadão Distrib. Com. e Ind.
Ltda., Cia Brasileira de Distribuição, WMS Supermercados do Brasil Ltda., Sam’s
Club, CBD, Sonae, Cia. Zaffari Com. e Ind., A Angeloni e Cia Ltda., Makro
Atacadista S.A. and Bom Preço S.A Supermercados do Nordeste.
45
External Disclosure
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The table below shows the percentage of our net revenues in relation to the relevance
of our clients:
Fiscal year ended December 31,
2004
10 largest clients
(1)
100 largest clients
Other
Total (2)
(1)
(2)
2005
2006
(% of net revenue)
16.8
18.4
44.6
43.3
56.7
55.4
100
100
15.9
42.5
57.5
100
Including 10 largest clients
Sum of the 100 largest clients with Others
Sales by region
We operate on a diversified basis in all regions of Brazil, laying emphasis on Northeast and
Southeast regions. The table below shows the mix of consolidated gross operating revenue by
region in the country:
Gross Operating Revenue
Fiscal Year ended December 31,
2004
%
2005
%
2006
%
(In million of Reais, excluding percentage)
Consolidated
Mid-West
Northeast
Northern
Southeast
Southern
Exports
Other 1
1
1,557.40
30.6
990.8
61.0
347.7
108.4
2.7
100
2.0
63.6
3.9
22.3
7.0
0.2
1,593.60
31.6
1001.7
73.0
350.4
131.6
3.8
100
2.0
62.9
4.6
22.0
8.2
0.2
1,719.3
26.6
1135.1
65.7
352.2
135.6
2.8
100
1.7
65.4
4.2
22.2
6.2
0.2
16.2
1.0
1.5
0.1
1.3
0.1
It refers to the sale of other goods such as oil sludge, fatty acid, residues, among others.
Loan Policy
According to our loan policy, we granted a medium payment term of 36.1 days as of the date of
the invoice issue date to our clients. The large supermarket chains, considered separately, had
on average 48.0 days to pay their purchases, as of the issue date of the respective invoice.
During 2003, 2004, 2005 and 2006, the average delinquency rate of our clients was,
approximately, 1.6%, 1.4%, 1.7% and 1.2% of our net revenues, respectively.
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11.03 – POSITIONING IN THE COMPETITIVE PROCESS
For more than 60 years, our activities have consisted of the manufacturing, trading and
distribution of food products, especially (i) cookies and pastas, (ii) wheat flour and bran, and
(iii) margarines and vegetable shortenings.
We are leader in cookies and pastas markets in Brazil, in terms of sales volume, measured in
tonnes, according to AC Nielsen data. We also hold a relevant share in the Brazilian wheat
flour and bran market, one of our main raw materials, in which we believe to be positioned
among the three largest participants, in terms of consumption volume, measured in tonnes.
Moreover, since 2002, we have been operating in margarine and vegetable shortening
segments, products used in our manufacturing process of cookies and pastas, also traded by the
Company. Brazil is our main market, accounting for 99.9% of our net revenues in 2006.
Competition
The market segments in which we operate are highly competitive and dispersed. The brands
positioning, our image, the launch of new products and advertising are important factors in this
competition. We compete with other traditional companies, both domestic and multinational
companies, such as Nestlé, J. Macedo, Kraft Foods, Bunge, Danone and Marilan, among others.
We also compete against small local producers well accepted in certain markets; we believe
some of them operate in informal markets and, thus, may offer lower prices than ours.
Our main competitors in the segments of our products are indicated as follows:
•
•
•
•
cookies: Nestlé, Danone, Kraft Foods and Marilan;
pastas: Selmi, Bunge, Domingos Costa, Santa Amália and Piraquê;
wheat flour: Bunge, J. Macedo, Água Branca, Pacífico and Indústrias Reunidas São Jorge;
and
margarines and vegetable shortenings: Bunge, Sadia and Unilever.
The dispersion of pasta and cookies segment is high, mounting competition in the sector. None
of the players alone holds more than 20% of market share. M Dias Branco maintained and even
increased its market leadership in these two segments in 2006.
Market Share - MDias Branco (%)
16.4
16.0
15.8
13.9
13.7
13.9
2004
2005
2006
Cookies
Pastas
Source: AC Nielsen.
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02033-8
07.206.816/0001-15
COOKIES – Market Share - 2006
Volume
6.2%
Sales
7.2%
13.9%
12.4%
6.6%
8.0%
8.2%
11.9%
9.9%
7.7%
MDIAS
A
B
C
D
PASTAS – Market Share - 2006
Volume
5.4%
6.8%
Sales
4.2%
7.1%
16.4%
17.1%
11.0%
11.6%
11.6%
12.6%
MDIAS
A
B
C
D
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02033-8
07.206.816/0001-15
Brands
The ownership of a brand is acquired only upon registration validly issued by INPI (Brazilian
Institute of Industrial Property), and the titleholder is entitled to its exclusive use throughout the
Brazilian territory. During the registration process, the applicant has only one expectation of
right to use the brands applying for identification of its products and services.
On December 31, 2006, we had, approximately, 444 registered brands and 673 brands under
registration process at INPI.
The Fortaleza brand, with solid presence in the Northern, Northeast and Mid-West regions,
comprise cookies and pastas. The Richester brand is considered a premium brand, comprising a
wide portfolio of cookies and pastas which targets varied market niches. Currently, Richester is
widely present in the cities of Fortaleza and Rio de Janeiro.
Patents
On December 31, 2006, Adria had 2 patent applications to protect its inventions, both related to
the manufacturing process of specific types of cookies, pointing out cookies with external
filling.
In addition to seeking brands protection in Brazil, we also aim at protecting or main brands in
other countries. Thus, we have under application and/or registered brands in various countries,
including Argentina, Bolivia, Chile, Costa Rica, Ecuador, United States, Panama, Peru,
Uruguay, Angola, Australia, Cuba, Canada, Paraguay and Mozambique.
Industrial Designs
On December 31, 2006, we also had approximately 69 industrial designs granted by INPI,
which aim at protecting the shape of our products.
Domain Names
On December 31, 2006, we had approximately
www.mdiasbranco.com.br and www.adria.com.br.
71
domain
names,
including
Copyright
In addition to brands, patents, industrial designs and domain names, we and our subsidiaries
also own various copyrights which mainly aim at protecting pictures (designs), highlighted in
our products packages. On December 31, 2006, the Company had 78 copyright registrations
with the Brazilian Institute of Fine Arts.
49
1 - CVM CODE
2 - CORPORATE NAME
02033-8
07.206.816/0001-15
13.01 – RELEVANT PROPERTIES
1- ITEM
2 – TYPE OF PROPERTY
4 - CITY
5 – STATE
3 – ADDRESS
6 - TOTAL AREA
(THOUSAND M²)
7 – BUILT-UP AREA
(THOUSAND M²)
8 - AGE
(YEARS)
9 – INSURANCE
10 – MORTGAGE
11 – LEASED FROM THIRD
PARTIES
12 – DATE OF AGREEMENT
13 – END OF LEASE
14 – REMARK
01
OPERATING REAL PROPERTY
EUSÉBIO
02
CE
CE
NO
19.535
9
NO
20.519
8
NO
9.655
33.678
9
YES
BA
NO
NO
368.982
NO
NO
ESPLAN. DO MUCURIPE, S/N, PÁTIOS B1 E B2
FEDERAL GOVERNMENT REAL PROPERTY
SALVADOR
NO
AV. HILDEBRANDO GOIS 1/117
9.107
CE
NO
RUA JOSÉ SETÚBAL PESSOA, 255
53.332
RN
FORTALEZA
05
30
NATAL
04
99.716
FORTALEZA
03
RODOVIA BR 116, S/N, KM 18
508.050
NO
YES
1/28/1997
1/28/2022
RODOVIA BA-528, EST. BASE NAVAL DE ARATU
117.726
4
NO
YES
NO
50
1 - CVM CODE
2 - CORPORATE NAME
02033-8
07.206.816/0001-15
1- ITEM
4 - CITY
5 – STATE
3 – ADDRESS
6 - TOTAL AREA
(THOUSAND M²)
7 – BUILT-UP AREA
(THOUSAND M²)
8 - AGE
(YEARS)
9 – INSURANCE
10 – MORTGAGE
PARTIES
13 – END OF LEASE
14 – REMARK
06
FEDERAL GOVERNMENT REAL PROPERTY
CABEDELO
07
PB
37.489
SP
21.600
08
SÃO CAETANO
SP
9,777
DO SUL
09
10
CRATO
26.438
4
NO
JABOTICABAL
PINHAIS
RUA CONDE AUGUSTO CHIERICARTTE, LOTE DE6
94.000
19.238
14
YES
27.200
12/27/2002
12/27/2027
NO
2/1/2006
2/1/2008
NO
RUA SÃO FRANCISCO, 531, B. SANTO ANTÔNIO
14,671
32
YES
94.000
0
YES
NO
NO
AV.MARINGÁ, 1843-B, SL 01-CHÁCARAS ATUBA
NO
YES
AV. PADRE CÍCERO, S/N, KM 02
CE
YES
AV. MARECHAL DEODORO, 1198, CENTRO
PR
NO
2.104
26
NO
NO
NO
51
1 - CVM CODE
2 - CORPORATE NAME
02033-8
07.206.816/0001-15
1- ITEM
4 - CITY
5 – STATE
3 – ADDRESS
6 - TOTAL AREA
(THOUSAND M²)
7 – BUILT-UP AREA
(THOUSAND M²)
8 - AGE
(YEARS)
9 – INSURANCE
10 – MORTGAGE
PARTIES
13 – END OF LEASE
7/1/2001
7/2/2008
14 – REMARK
11
JABOATÃO
13
AL
5
NO
PE
MA
5.418
1.361
4
NO
10.156
4.797
3
NO
BA
YES
4.364
6
NO
NO
NO
ROD BR 325, 501, LOT. PORTAL DA CIDADE
NO
NO
RUA GUAJAJARA, 510, FORQUILHA
12.097
SALVADOR
NO
RUA DURVAL GOES MONTEIRO, 5207 B, TABULE
SÃO LUÍS
16
5.893
PETROLINA
15
12.531
MACEIÓ
14
PE
ROD BR 101, SUL, KM 19/20, S/N, PRAZERES
NO
NO
RUA DR. ALTINO TEXEIRA, 1012, QD. F
6.390
4.158
8
NO
NO
NO
52
1 - CVM CODE
2 - CORPORATE NAME
02033-8
07.206.816/0001-15
1- ITEM
4 - CITY
5 – STATE
3 – ADDRESS
6 - TOTAL AREA
(THOUSAND M²)
7 – BUILT-UP AREA
(THOUSAND M²)
8 - AGE
(YEARS)
9 – INSURANCE
10 – MORTGAGE
PARTIES
13 – END OF LEASE
14 – REMARK
17
OPERATING REAL ESTATE
TERESINA
PI
RUA MINISTRO PEDRO BORGES, 790 TABULETA
4.343
18
VITÓRIA DA
BA
2.060
CONQUISTA
19
SÃO CAETANO
SP
6.729
DO SUL
20
CANOAS
2.955
7
NO
NO
RUA ACELINO PIRES DE ANDRADE, 461
1.682
3
NO
NO
NO
RUA SÃO FRANCISCO, 379, B. SANTO ANTÔNIO
6.294
0
YES
1.500
2
YES
RS
NO
NO
NO
RUA A, 221 PQ. INDUSTRIAL JORGE LANNER
4.000
21
LENÇOIS
SP
10.428
PAULISTAS
NO
YES
2/19/2004
3/1/2008
AV. BRASIL, 657, CENTRO
10.428
0
YES
NO
NO
53
1 - CVM CODE
2 - CORPORATE NAME
02033-8
07.206.816/0001-15
1- ITEM
4 - CITY
5 – STATE
3 – ADDRESS
6 - TOTAL AREA
(THOUSAND M²)
7 – BUILT-UP AREA
(THOUSAND M²)
8 - AGE
(YEARS)
9 – INSURANCE
10 – MORTGAGE
PARTIES
13 – END OF LEASE
14 – REMARK
22
LENÇOIS
SP
112.000
PAULISTAS
23
BENTO
RS
133.242
GONÇALVES
24
BENTO
RS
1.000
GONÇALVES
25
DUQUE DE
RJ
0.120
CAXIAS
26
SÃO CAETANO
SP
3.360
DO SUL
ROD. MARECHAL RONDON (SP300), KM 304
7.321
0
YES
NO
NO
RUA ESPÍRITO SANTO, 440, B. BOTAFOGO
21.300
29
YES
YES
NO
RUA ANTÔNIO MICHELON, 862, B. BOTAFOGO
1.000
4
YES
NO
YES
4/1/2002
3/31/2008
YES
7/1/2004
7/2/2007
YES
3/1/2003
3/31/2007
RODOVIA WASHINGTON LUIZ, 5049
0.120
2
YES
NO
RUA SÃO FRANCISCO, 239
3.360
3
YES
NO
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02033-8
07.206.816/0001-15
14.01 – COMPANY PROJECTIONS AND/OR OF RESULTS
The Company prefers not to disclose its results projections.
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02033-8
07.206.816/0001-15
14.02 – ADVISABLE, BUT NO MANDATORY INFORMATION
Not applicable.
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02033-8
07.206.816/0001-15
14.03 – OTHER INFORMATION DEEMED AS RELEVANT FOR A BETTER
UNDERSTANDING OF THE COMPANY
1. Share Ownership
Our capital stock on this date is R$704.8 million, fully subscribed, paid-up and divided into
114,800,000 shares, all non-par, common, registered, book-entry shares.
The table below shows the number of shares directly or indirectly held on this date by the
members of our Board of Directors and Officers:
CONSOLIDATED SHAREHOLDING OF CONTROLLING SHAREHOLDERS,
MANAGERS AND OUTSTANDING SHARES
Shareholding on 04/29/2008
Shareholder
Controlling Shareholder
Managers
Board of Directors
Board of Executive Officers
Fiscal Council
Treasury Shares
Other Shareholders
Total
Outstanding Shares
Number of Common
Shares (In units)
%
77,180,867
12,641,005
2,296,004
10,345,001
1,080,200
23,897,928
67.23
11.01
2.00
9.01
Total Number of
Shares (In units)
%
67.23
11.01
2.00
9.01
0.94
20.82
77,180,867
12,641,005
2,296,004
10,345,001
1,080,200
23,897,928
114,800,000
100.00
114,800,000
100.00
23,897,928
20.82
23,897,928
20.82
0.94
20.82
Note: We do not have Fiscal Council instated.
2. Research and Development
We are continuously concerned with and we endeavor significant efforts to innovate and
develop our products. We maintain 17 research and analysis centers, considering (i) 4 research
centers in units of Fortaleza Plant, GME – Shortening and Special Margarines Division, São
Caetano do Sul and Bento Gonçalves; (ii) 13 analysis centers distributed as follows: 01 in
Fortaleza Plant, 1 in Moinho Dias Branco, 2 in GME – Shortening and Special Margarines
Division, 1 in Moinho Potiguar, 2 in Moinho Tambaú, 2 in Moinho Aratu, 1 in São Caetano do
Sul, 1 in Bento Gonçalves, 1 in Lençóis Paulistas and 1 in Jaboticabal. Our research centers
develop new products, while our analysis centers focus on quality tests of our products and raw
materials. Even industrial units which only have an analysis center, research activities are also
carried out.
In 2006, we invested approximately R$1.3 million in the development of new products, when
comparing to R$1.6 million in 2005 and R$1.1 million in 2004. These amounts accounted for
0.10%, 0.13% and 0.10% of our net revenues in 2006, 2005 and 2004, respectively. We also
point out that, due to procurement of equipment for the manufacturing of new products, such as
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02033-8
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YOI and Tortinhas, the total amount of R$10.9 million were invested in assets from 2005 to
2006.
3. Fiscal Incentives
We have federal and state fiscal benefits.
Federal Benefit – ADENE – Income Tax
Our industrial units located in the states of Ceará, Rio Grande do Norte, Paraíba and Bahia have
federal fiscal benefits of ADENE (“Agency for the Northeast Development”), currently varying
from 25.0% to 75.0% of reduction in income tax calculation basis, according to each case,
which will vary in the future from 12.5% to 75.0% as of January 2009, calculated based on
activity profit, as detailed in the table below:
Percentage of reduction in IRPJ
calculation basis
Industrial Units
Fortaleza Plant
25.0%
12.5%
Moinho Dias Branco
25.0%
12.5%
GME - Shortening and
Margarines Division
Grande Moinho Potiguar
Grande Moinho Aratu
Special
Validity Period
up to Dec/2008
from Jan/2009 to Dec/2013
up to Dec/2008
from Jan/2009 to Dec/2013
75.0%
up to Dec/2012
75.0%
75.0%
up to Dec/2010
up to Dec/2013
We are under renegotiation with ADENE to extend the terms of our fiscal benefits.
The reduction in income tax and non-recoverable surtaxes is applicable until the production
limit within the installed capacity estimated in reports prepared to each one of our industrial
plants which are entitled to this tax benefit.
State Benefits – ICMS
The state tax benefits we are entitled to may be outlined as follows:
PROVIN
PROVIN consists of subsidy for investment granted by the state of Ceará to Moinho Dias
Branco and G.M.E. Division by means of 56.3% refunding of ICMS owed by the Company,
over products manufactured in these units. This benefit is valid until December 2015 and
December 2017, respectively.
As of July 2006, the subsidy for investment granted by the state of Ceará (PROVIN) to
Moinho Dias Branco unit was extended to Fortaleza Plant, resulting in a 56.3% refunding of
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02033-8
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ICMS included in the value of wheat grain used in the production of wheat flour composing the
costs of cookies and pastas produced in that unit.
PROADI
PROADI consists of subsidy for investment granted by the state of Rio Grande do Norte to
Grande Moinho Potiguar unit by means of 74.3% refunding of ICMS owed by the Company
over products manufactured in that unit. This benefit is valid until February 2014.
DESENVOLVE
DESENVOLVE consists of subsidy for investment granted by the state of Bahia to Grande
Moinho Aratu unit by means of 81.0% refunding of ICMS owed by the Company over products
manufactured in that unit. This benefit is valid until November 2015.
FAIN
FAIN consists of subsidy for investment granted by the state of Paraíba to Grande Moinho
Tambaú unit by means of 81.0% presumed credit of ICMS owed in our operations of wheat
grain acquisition. This benefit is valid until January 2015.
When assessing the Company’s net income, taxes expenses are fully deducted, without any
reduction due to subsidies for investments derived from ICMS and IRPJ tax incentives to which
the Company is entitled. The portion of these taxes corresponding to referred incentives are
directly recorded in the Capital Reserve account in Shareholders’ Equity, by means of equal
reduction of the amount of taxes payable, upon enjoyment conditions of each incentive are
complied with.
We point out that the non-addition to the net income of subsidies for investments received by
the Company by refunding part of due ICMS and IRPJ derives from the fact that these
subsidies are no recorded in accounting revenues and by force of law they cannot be purpose of
distribution to shareholders, and must be mandatorily reinvested in the Company. However,
these subsidies represent undeniable source of additional cash, generated beyond net income
for the year for investments continuity and the Company growth.
4. Risk Factors
The investment in our shares involves a high risk level. Before taking a decision on Shares
acquisition, potential investors must carefully and cautiously take into account all information
contained in this document and, especially, risks mentioned below. Our businesses, our
financial conditions and results of our operations may be adversely and substantially affected
by any of these risks. The market price of shares issued by the Company may drop due to any of
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02033-8
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these risks, and there is a possibility of they losing part or all their investment. The risks
outlined below are those which currently we believe may adversely affect the Company.
Additional risks of which we are not aware, or those we currently do not believe to be
substantial, may also substantially and adversely affect the Company.
For the purposes of this section, the indication that any risk, uncertainty or problem may have
or will “adversely affect” us or may or maybe will “adversely affect” means that the risk, the
uncertainty or problem may have or will adversely affect our business, financial condition,
liquidity, results of our operations, projections, future business and/or trade value of our
shares. Similar expressions may be understood as having same meaning.
RISKS RELATED TO THE SECTOR AND OUR BUSINESS
The price of our raw materials and our packages is volatile and a sudden or unexpected
fluctuation in these prices may adversely affect the Company.
Our main raw materials are wheat, vegetable oils and sugar, which contributed in 2006 with
approximately 47.4% of our costs of goods sold. These raw materials and/or their components
are commodities, so their prices are set in U.S. Dollar. The commodities prices float according
to their price in the international commodities market, which is affected by the variation of
worldwide supply and demand for these commodities. Historically, the price of these
commodities in the international market suffered fluctuations due to a series or factors. We do
not have and will not have control on factors which affect the fluctuations of these commodities
price.
Packages are also important components in our production process, in 2006 accounting for
approximately 14.1% of our costs of goods sold. The package price is relatively volatile, since
it is pegged to oil international prices, which are also based on U.S. Dollar. Historically, the oil
price went through significant fluctuations due to a series of factors over which we neither have
nor will have any control.
A sudden or unexpected variation of commodities and oil prices due to alterations resulting
from exchange variations between Real and U.S. Dollar, and/or changes in the supply or
demand for these products, may directly impact the price of our raw materials and packages,
which may adversely and substantially affect us. In the event of price increase of these
products, we possibly may not transfer this increase to our clients, which may decrease our
profit margin and adversely and substantially affect our Company.
We are entitled to federal and state tax benefits and the suspension, cancellation or nonrenewal of these benefits may adversely and substantially affect our results.
We are entitled to federal and state tax benefits which ensure us IRPJ exemption or reduction,
as well as reimbursement of part of ICMS amount we collect to the states of Ceará, Bahia,
Paraíba and Rio Grande do Norte. These tax incentives are subject to the compliance with
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certain liabilities set forth in documents we entered into with various states, such as (i) the
improvement and diversification of industrial units for processing of wheat of our product lines,
(ii) the commitment of not distributing to our shareholders the amount of our profit resulting
from income tax payment exemption due to tax incentives; and (iii) the yearly presentation of
certain documents to proper authorities. The non-compliance with these liabilities may result in
the suspension or cancellation of these tax incentives and the obligation to pay the full amount
of taxes due, plus charges, which may adversely and substantially affect the Company.
We may not assure that the state tax benefits will be effectively maintained until the end of
their terms of effectiveness, or even in the event of state and federal tax benefits that we may
renew them, under favorable conditions, after expiring their current terms of effectiveness or
obtain new tax benefits after expiring the term of effectiveness of tax benefits we currently are
entitled to. Currently, our state tax benefits were extended for a term from 10 to 15 years and
the federal benefits will be effective until 2013. In the event these tax benefits are not
effectively maintained or renewed, this may adversely and substantially affect our Company.
Should these tax benefits we are entitled to be discussed in court by third parties, including the
Public Prosecution Office, other states and new governments of the states of Ceará, Bahia,
Paraíba or Rio Grande do Norte, and the final court decision is unfavorable to the Company,
our tax benefits may be cancelled an/or we may be charged by the amount of the exemption,
reduction an/or financing granted until the date of this decision (observing the status of
limitation and lapse of time), according each case, which may adversely and substantially affect
the Company.
Additionally, we may not assure that the procedure currently adopted by us together with state
banks which grant us financings concerning ICMS payment will be maintained in the future, or
even should this be altered, a procedure which envisages favorable conditions to us will be
adopted.
Moreover, a bill of constitutional amendment is under procedural progress at the legislative
branch, which proposes an amendment to the Brazilian tax system in which ICMS would be
centralized in the federal government, and no longer in the state governments. Should this tax
amendment be approved, the possibility of obtaining new tax incentives may be harmed, which
could adversely and substantially affect the Company.
We operate in high competitive segments, facing competitors from small companies to large
multinationals, including producers of products which may substitute ours; this may
adversely affect us
The market segments in which we operate are highly competitive and we compete against solid
companies, operating in both domestic and international markets, some of which have easier
access to capital than us, such as Nestlé, Unilever, J. Macedo and Bunge, among others. We
also compete against small local producers whose products are well accepted in certain
markets, some of them operating in informal market and thus may offer lower prices than ours,
which may result in a reduced volume of our sales and/or may impel us to reduce our prices,
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consequenty, resulting in lower margins. In addition, new competitors may enter our markets.
Any of these factors may adversely and substantially affect us.
We are also subject to competition of other segments of food sector, on the part of producers
whose products may substitute some of ours, taking as example, rice in relation to pastas,
generating an increase of our competitive scenario.
In different levels, our current and potential competitors may succeed in certain product lines or
regions, as well as have higher financial resources and better marketing campaigns, so that the
competition against these competitors in the markets where we operate, in our product lines or
even in sundry segments of the market in which we operate may lead us to reduce prices,
increase our marketing expenses, lose market share in some product lines, or even not suceed in
the launching of new products. Any of these events may adversely affect us.
Our growth strategy by means of acquisitions involves certain risks that may have adversely
affect us.
Part of our future growth strategy may involve the acquisition of companies or other assets,
should interesting opportunities emerge in the markets where we operate or in new markets
arise. Any acquisition of other companies or assets may involve the following risks:
•
•
•
•
•
•
•
operating difficulties of integrating new employees, information systems, products and
client base to our business; as a result from any acquisition, additional demands of our
senior managers, information system and other Company’s areas may occur;
the acquired companies may have liabilities and contingencies we were not aware of
upon their acquisition, or for which we cannot obtain contractual indemnification from
the seller;
any delay in the integration process may cause an increase above expectation of our
operating expenses;
the issue of shares or debt securities as funding source for new acquisitions may dilute
the interest of our shareholders in our capital stock or subject us to restrictions or
liabilities that may have an impact on our ability to execute other elements of our
strategy;
the acquisition process may be competitive and may increase the value of the intended
transaction, or even make unfeasible the completion of potential acquisition;
the result of acquisition of other businesses may also adversely affect our ability to pay
dividends to our shareholders;
timely complexities when determining the purchase price or difficulties in obtaining
authorizations from antitrust government authorities may lead us to waive the
acquisition or may result in the acquisition of less attractive companies.
Should any of these factors arise when implementing our acquisition strategies, this may
adversely and substantially affect us.
We are subject to unfavorable results in judicial or administrative tax proceedings, which
may adversely and substantially affect us.
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We are party in judicial and administrative tax proceedings and we obtained unfavorable
decisions in some of them. We are taking actions with a view to suspending the enforceability
of certain tax credits, so as to avoid the filing and/or continuance of tax foreclosures against us,
as well as the enforceability of tendering guarantees under the scope of these foreclosures.
Should we do not succeed in these actions, we may have to provide reimbursements or tender
guarantees. In addition, our estimates for these contingencies may not be sufficient to cover the
total amount that we may be required to pay. Unfavorable decisions regarding these
proceedings may adversely and substantially affect us.
We are subject to a strict control and broad environmental and sanitation laws, which may
imply increased costs, adversely and substantially affecting us.
Our activities are subject to broad federal, state and local laws concerned with environmental
preservation. In addition, we are subject to federal, state and local sanitation authorities
regulations and to the Ministry of Agriculture regulations related to the manufacturing process
of our products, as well as their hygiene, conservation, packaging and storage.
The non-compliance with environmental and sanitation authorities laws and regulations may
result, without prejudice to the obligation of remedying eventual damages, in the application of
criminal and administrative sanctions, such as fine, partial or total suspension of activities, loss
or restriction of tax incentives and the cancellation or suspension of credit lines with official
loan establishments, as well as the prohibition of contracting with public authorities. Any of
these events may adversely and substantially affect us.
Changes or amendments in current environmental and sanitation laws and regulations may
cause the need of substantial investments to adjust our activities to the new laws, which may
adversely affect us. In addition, eventual delays or rejections on the part of environmental
authorities in the issue or renewal of environmental licenses, as well as our eventual
impossibility of complying with requirements set forth by these authorities in the course the
environmental licensing process, may damage, or even prevent, as the case may be, the
installation and operation of our projects. In addition, the imposition of eventual monetary
sanctions or otherwise due to non-compliance with environmental laws or sanitation regulation
may also adversely and substantially affect us.
We may not be able to fully implement our business strategies.
Our ability of successfully executing our main measures related to our business strategies
depends on a series of factors, such as our ability to expand our market leadership, increase our
client base, develop and launch new products and identify attractive acquisitions opportunities
and other investments. We cannot assure that any of these goals will succeed, and, if not, these
may adversely affect us.
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An increase in retail market concentration may force a reduction in margins practiced by the
companies of the sector, which may adversely affect us.
Most of food sector companies production is distributed via the retail market. The retail market
concentration in few large companies, an event which we believe to represent a worldwide
trend and observed in Brazil, even less intense, increases the bargaining power of these
companies, which may use their market power to force the prices reduction practiced by their
peers, including us. This price reduction may adversely affect us. Moreover, the continuity of
the retail sectors concentration may cause a decrease in client base, including ours, intensifying
our dependence on large retail groups and, consequently, the bargaining power of these
companies. This may adversely affect us.
We are subject to consumer’s complaints and products recall, which may negatively affect
our image, substantially impacting on our costs and adversely affecting us.
We produce and sell food for human consumption, which involve risks, such as contamination,
deterioration, adulteration, among others. Should we be held liable for any civil liability
proceeding related to our products or perform any recall of our products, this may negatively
impact our profitability for a period, depending on: (i) the product volume in the market; (ii)
the competitors reaction; and (iii) our consumers reaction. Even if we are not held liable in a
judicial proceeding against us related to our products, the negative publicity to be generated in
relation to our products and our quality could adversely affect our reputation before current and
potential consumers, as well as our corporate and brand image, which may adversely affect us.
Our competitors may unduly use our brands or we may be prevented from using our most
well-known brands, which could adversely affect us.
Our brands and the design of our products are continuously subject to improper use and
violation of our intellectual property rights by third parties. The falsification of our products
and the improper use of our brands may not only cause adverse effects on our sales, but also
damage the integrity of our own brands when associated with lower-quality products, which
may adversely affect us.
Additionally, although we have registered most of our brands and patents, we may not assure
that our competitors will not claim we are infringing their intellectual property. In this event,
should we be prevented from manufacturing certain product or using certain brand, this may
adversely affect us.
Our insurances may not cover all the risks we are subject to, or may not be available at a
reasonable cost.
The occurrence of losses and other liabilities which are not covered by the insurance or exceed
the limits of our insurances may cause significant unforeseen additional costs, which may
adversely affect us.
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RISKS RELATED TO MACROECONOMIC FACTORS
The Federal Government had and still has significant influence on the Brazilian economy.
This influence, as well as the market condition and Brazilian policy, may adversely affect us
and our shares market value.
The Federal Government frequently intervenes in the Brazilian economy and occasionally
carries out significant changes in its policies and rules. Measures taken by the Federal
Government to control inflation, as well as other policies and rules, often imply increase in
interest rates, changes in tax policies, prices control, exchange devaluation, capital control and
imports restrictions, among others. Our Company and the market price of our shares may be
significantly damaged due to changes in policies or rules involving or affecting certain factors,
such as:
•
•
•
•
•
•
•
monetary, exchange policy and interest rate;
exchange control policies;
inflation;
liquidity of financing and domestic capital markets;
tax policy;
other political, social and economic factors which may occur in Brazil or affecting the
country; and
electric power rationing.
The uncertainty as to the implementation of changes by the Federal Government in policies or
rules which may affect these and other factors in the future may contribute to the economic
uncertainty in Brazil and increase the volatility in Brazilian securities market and securities
issued abroad by Brazilian companies.
RISKS RELATED TO SHARES
We may need capital in the future, by means of the issue of shares or securities convertible
into shares, which may result in a dilution of investor’s interest in shares issued by the
Company.
We may be possibly interest in raise funds in the capital markets by means of the issue of
shares and/or public or private placement of securities convertible into shares. The additional
fund raising by means of the shares issue may dilute investors’ shareholding in our capital
stock.
We may not be able to pay dividends to our shareholders.
Pursuant to our Bylaws, we must pay to our shareholders at least 25.0% of our annual adjusted
net income, in accordance with the Brazilian Corporation Law, as mandatory dividend. Net
income may be capitalized, used to offset loss or to be held, pursuant to the Brazilian
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Corporation Law, and may not be made available for payment of dividends. We may not pay
dividends to our shareholders in any fiscal year if our managers decide that this payment is not
advisable in view of our financial condition. Moreover, we may change our dividends
distribution policy at any moment, in compliance with legal limits.
Our controlling shareholder may make certain decisions related to our business that may
conflict with the Company’s potential investors’ interests.
Our controlling shareholder may take measures which may be contrary to the Company’s
potential investors’ interests, including corporate reorganization and dividends payment
conditions. The controlling shareholder will maintain our effective control, by electing the
majority members of our Board of Directors. The decision of our controlling shareholder as to
our future actions may differ from the decision expected by our minority shareholders.
Our Bylaws contain provisions that may prohibit or reduce the possibility of a hostile offer or
any other acquisition operations of the Company with a view to change our control, even if
these operations or change of our control are favorable to our shareholders.
Our Bylaws contain a provision limiting the acquisition of more than 10.0% of our shares,
aiming at avoiding the concentration of our shares in small group of investors, so as to
promote the dilution of shares issued by us. Any shareholder (rather than those who are
Company’s shareholders on the publication date of the Notice of Commencement and other
investors to become Company’s shareholders in certain transactions specified in our Bylaws)
who hold 10.0% or more of the Company’s capital stock (excluding treasury shares and
involuntary capital increases, as specified in our Bylaws) must carry out a public tender offer
to acquire the total outstanding shares at price determined according to our Bylaws within 60
days as of the acquisition of the referred interest. These provisions may have effects contrary
to the acquisition of control and may discourage, postpone or prevent our incorporation,
merger or acquisition, including transactions that our shareholders may receive premium for
their shares.
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14.05 – INVESTMENT PROJECTS
Due to significant investments made over the last years, which enabled us an increase in the
production installed capacity, M Dias Branco S.A. has no particularly relevant investment
project up to this date.
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15.01 – ENVIRONMENTAL PROBLEMS
In the development and execution of its industrial activities, the Company seeks to adopt the
best environmental management practices available. Although the Company is not party in any
agreement or contract which binds it to international standards related to environmental
protection, the environment preservation is included in its corporate principles, guiding the
corporate actions and balancing the social and economic growth with the environment
preservation, so as to practice an effective sustainable development.
Company’s activities generate both effluents and solid waste which, although they do not cause
great damages to environment, they deserve special attention in their treatment and
management. Waste is previously managed before removal and, as the case may be, these are
treated, recycled and reused.
During 2006, all solid waste management processes were reviewed at the Company,
contributing to reduce (nearly 30%) of quantitative drained activated sludge, with final disposal
in local landfills.
The Company has been developing in Fortaleza Plant a pilot for the utilization of GME (Fatty
Acids and Refinery Sludge) residues as fuel to burn in boilers, with optimum results, alternating
with current consumption of natural gas and BPF oil, which may be applicable to GME even in
2007, contributing to a better waste management and reducing energy costs.
Besides actions in environmental area directly related to its activities and respective waste, the
Company, aware that the environmental concern must go beyond the actions only restricted to
preservation and correction of its own sources that potentially cause environmental damages,
has also performed jointly with corresponding environmental authorities, actions not directly
related to its own activities, but with great relevance in environment where its units are located.
An example of such performance is the program for recovery of swamp near Aratu unit
(GMA), by means of which the Company has been developed and planted seedlings of native
vegetable species for recovery of flora in the environment, while monitoring the fauna in the
region.
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16.01 – LEGAL PROCEEDINGS WITH AMOUNT EXCEEDING 5% OF SHAREHOLDERS’ EQUITY OR NET INCOME
1- ITEM
2 – DESCRIPTION
3-%
SHAREHOLDERS’
EQUITY
4 - % NET
INCOME
6 – AMOUNT
PROVISIONED
7 – TOTAL
AMOUNT OF
SHARES
(In thousands of
Reais)
(In thousands of
Reais)
YES
10,527
28,016
YES
18,169
171,417
0
0
5 – PROVISION
8 - REMARKS
01
LABOR CLAIM
3.24
24.07
Amounts refer to civil and labor claims brought against the Company.
02
03
TAX PROCEEDING
OTHER
19.81
147.27
0.00
0.00
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17.01 – RELATED COMPANIES OPERATIONS
We believe that all relevant material operations or businesses existing between us and related
parties were executed in accordance with the usual market practices.
Financial and Trading Operations
As a rule, we do not execute financial and trading operations with companies under same
control. However, regarding tendering of guarantees, Mr. Francisco Ivens de Sá Dias Branco,
our Chief Executive Officer, appears in most part of financial agreements as a guarantor. The
most material information is as follows:
Guarantee to Tergran
Tergran is party in certain financial agreements in which Mr. Francisco Ivens de Sá Dias
Branco is guarantor.
Free Lease of Assets
The Company is party in certain free leasing agreements of machines and vehicles with Adria.
Leasing Agreements
The Company is party in certain leasing agreements of properties owned by Mr. Francisco
Ivens de Sá Dias Branco Junior at market prices and conditions. Yet, the Company is lessee, at
market prices and conditions of a property owned by Dibra Fundo de Investimentos em
Participações, of which majority shareholder is Mr. Francisco Ivens de Sá Dias Branco.
Free Lease of Properties
The Company is party in certain free leasing agreements of properties with Adria. The
Company is also lessee of properties owned by Mr. Francisco Ivens de Sá Dias Branco,
including a residential property for events organization purposes.
Electric Power and Gas Supply Agreements
The Company is party in certain Electric Power and LPG (Liquefied Petroleum Gas) supply
agreements in which FIDSB is guarantor, together with his wife.
Wheat Supply
The Company supplies wheat to Adria at market prices and conditions.
Aircraft Leasing
For commercial purposes, the Company leases an aircraft owned by FISDB’s subsidiary. Such
leasing has market prices and conditions. This is a 120-month leasing term of a US$322.4
thousand rental monthly paid.
Property Purchase
On May 15, 2006, Adria sold three lands to Mr. Francisco Ivens de Sá Dias Branco at the total
price of R$886.6 thousand.
Property Mortgage
We have established a 5th level mortgage over properties composing the industrial complex
Grande Moinho Aratu, as a result of guarantees tendered in a trading credit certificate at the
amount of approximately R$32.4 million on its issuance date, issued by Terminal Portuário do
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17.01 – RELATED COMPANIES OPERATIONS
Cotegipe Ltda., subsidiary company of Mr. Francisco Ivens de Sá Dias Branco, in favor of
BNB.
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18.01 – COMPANY’S BYLAWS
M. DIAS BRANCO S.A. INDÚSTRIA E COMÉRCIO DE ALIMENTOS
CNPJ/MF (Corporate Taxpayer’s ID) no. 07.206.816/0001-15
BYLAWS
APPROVED ON JUNE 27, 2006
* With amendments approved at Extraordinary General Meeting held on August 31, 2006 and at the
Annual and Extraordinary General Meetings held on April 25, 2007.
CHAPTER I
CORPORATE NAME, HEADQUARTERS, JURISDICTION, PURPOSE AND TERM
OF DURATION
ARTICLE 1 - M. Dias Branco S.A. Indústria e Comércio de Alimentos is a joint stock
company ruled by these Bylaws and applicable legislation.
ARTICLE 2 - The Company has as purpose (i) the manufacture and sale of wheat-based food
products, especially cookies, crackers, pasta and wheat flour; (ii) the manufacture of
hydrogenated fats, margarine, vegetable oils, and the import and export of these products; (iii)
the import, manufacture and sale of wheat, corn, animal feed, other cereals and related products
for resale; (iv) the import of raw materials, secondary materials and packaging materials; (v) the
import of machinery, equipment, spare parts and other goods, intended for own use, sale, lease
or rent; (vi) interest in other companies, in Brazil or abroad, affiliated or subsidiary companies.
ARTICLE 3 - The Company’s headquarters and jurisdiction are located in the city of Eusébio,
State of Ceará, and the Company may open and close branches, agencies, warehouses and
offices whether in Brazil or abroad, by resolution taken by the Board of Executive Officers.
ARTICLE 4 - The Company started operations on October 4, 1961 and its duration term is
undetermined.
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CHAPTER II
CAPITAL STOCK AND SHARES
ARTICLE 5 - The Company’s capital stock, fully subscribed and paid in is six hundred eightyeight million and eight hundred thousand reais (R$688,800,000.00), divided into one hundred
fourteen million and eight hundred thousand (114,800,000) non-par registered, book-entry,
common shares.
Paragraph 1 - Each common share corresponds to one vote at the General Meetings.
Paragraph 2 – The Company may not issue preferred shares or beneficiary parties.
Paragraph 3 - After three fourths (3/4), at least, of the capital stock is paid, the Company may
increase it upon public or private subscription of shares. Capital increases may be paid with any
assets and rights, including credits, as long as appraisable in cash, being excluded, however, the
payment upon the offer and commitment of future profits which may be generated by the
Company.
Paragraph 4 - The Company’s capital stock may be increased regardless of bylaws amendment,
upon resolution taken by the Board of Directors, which will establish the conditions for
issuance of shares, up to the limit of 459,200,000 million common shares.
Paragraph 5 - Shareholders will have the preemptive right for the subscription of the capital
increase, pursuant to article 171 of Law no. 6,404/76, proportionally to the amount of shares
held. The preemptive right may be fully or partially transferred to other shareholders, whose
exercise will be made proportionally to each shareholder’s stake in the capital stock. The
preemptive right will be exercised within thirty (30) days.
Paragraph 6 - The Company may reduce or exclude the term for the exercise of the preemptive
right in the issuance of shares, debentures convertible into shares or subscription bonus whose
placement is made by means of sale on a stock exchange, public subscription or trade for shares
in a mandatory public offering of acquisition of control pursuant to articles 257 to 263 of Law
no. 6,404/76. There will also be no preemptive right in the granting and in the exercise of the
stock option, pursuant to the provision in paragraph 3 of article 171 of Law no. 6,404/76.
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Paragraph 7 - In the event of the nonperformance of the issuance price of the shares in the
conditions set forth in the subscription list or in the call, the shareholder will be remiss of full
right constituted in delay, pursuant to article 106, paragraph 2 of Law no. 6,404/76, being
subject to the provision in article 107 of the same law.
ARTICLE 6 - The possible shareholders’ agreements which set forth the purchase and sale
conditions of their shares, or the preemptive right in their purchase, or the voting right exercise,
will be always complied with by the Company, as long as they have been filed at the
headquarters, and it is incumbent upon the management to abstain from computing the votes
cast against the terms of these agreements.
Sole Paragraph - The rights, obligations and responsibilities resulting from these shareholders’
agreements will be valid and opposable to third parties, as soon as they have been duly
registered in the Company’s share registration books. The Company’s managers will ensure the
compliance with these agreements and the chairman of the general meeting will not compute
the vote against the provisions of these agreements.
CHAPTER III
GENERAL MEETING
ARTICLE 7 - The General Meeting is the Company’s decision-making body and will meet, on
an ordinary basis, within the four (4) months subsequent to the end of the fiscal year for the
purposes provided for by the law and, on and extraordinary basis, whenever required by the
social interests.
Paragraph 1 - The General Meeting must be called pursuant to the law, or by telegram or
registered letter, by the Chairman of the Board of Directors, and the works will be presided by a
board composed of the chairman and the secretary, pursuant to paragraph 2 below.
Paragraph 2 - The General Meeting will be chaired by the Chairman of the Company’s Board
of Directors, or, in his absence, by the one chosen by the majority of those attending the
meeting. The chairman of the Meeting will choose, among those attending the meeting, the
secretary of the presiding board.
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Paragraph 3 - The resolutions of the General Meeting, not considering the exceptions provided
for by the law, in these Bylaws or in the shareholders’ agreement duly filed at the Company’s
headquarters, will be taken by majority vote, not computing the blank votes.
ARTICLE 8 - The shareholders may be represented at the General Meetings by attorneys-infact, pursuant to article 126, paragraph 1, of Law no. 6,404/76.
CHAPTER IV
MANAGEMENT
Section I – General Rules
ARTICLE 9 - The Company will be managed by a Board of Directors and a Board of Executive
Officers.
Paragraph 1 - It is incumbent upon the General Meeting to determine the global amount of the
managers’ compensation, and upon the Board of Directors the distribution of the compensation
among the members of the Board of Directors and of the Board of Executive Officers.
Paragraph 2 - The managers will be invested in office by means of the execution of the
instrument of investiture in the Company’s records, within thirty (30) days following their
election, and are exempted from posting bond for guarantee of their management. The
investiture of the managers will be subject to the previous subscription of the Managers’
Instrument of Agreement, referred to in the Novo Mercado (New Market) Listing Rules and to
the Policy for Disclosure of Material Act or Fact adopted by the Company pursuant to CVM
Instruction no. 358, as of January 22, 2002.
Paragraph 3 - The members of the Board of Directors and of the Board of Executive Officers
undertake, without adverse affects to the duties and responsibilities attributed to them by the
law, to maintain reservation about all the Company’s businesses, considering as confidential all
the information they have access to and concerning the Company, its businesses, employees,
managers, shareholders or contracted persons and service providers, undertaking to use this
information in the Company’s exclusive and best interest. The managers, when invested in
office, must execute an Instrument of Confidentiality, as well as ensure that the violation to the
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obligation of confidentiality does not take place by means of subordinated persons or third
parties.
Section II - Board of Directors
ARTICLE 10 - The Board of Directors, elected by the General Meeting, will be composed of,
at least, five (5) and, at most, nine (9) sitting members, natural persons and shareholders,
domiciled or not in Brazil, with unified term of office of one (1) year, and reelection is allowed,
with one Chairman, appointed by the General Meeting. At least 20% of the Board of Directors’
members must be Independent Board Members.
Paragraph 1 - For purposes of these Bylaws, “Independent Board Member” is that who: (i) does
not have any bond with the Company, except equity interest; (ii) is not a Controlling
Shareholder, spouse or relative up to the second level, or is not or has not been, in the past 3
years, bound to a company or entity related to the Controlling Shareholder (persons bound to
public education and/or research institutions are excluded from this restriction); (iii) has not
been, in the past 3 years, an employee or executive officer of the Company, of the Controlling
Shareholders or of a company controlled by the Company; (iv) is not a supplier or a purchaser,
direct or indirect, of services and/or products of the Company, in an importance that causes loss
of independence; (v) is not an employee or manager of a company or entity which is offering or
demanding services and/or products of the Company; (vi) is not an spouse or a relative up to the
second level of any manager of the Company; and (vii) does not receive other compensation of
the Company in addition to the one of board member (earnings in cash resulting from the equity
interest are excluded from this restriction).
Paragraph 2 - Those elected by means of the authorization provided for in paragraphs 4 and 5 of
article 141 of the Corporate Law will also be considered Independent Board Members.
Paragraph 3 - When, due to the compliance with the percentage referred to in the caput of this
article 10, a fractional number of board members occurs, the rounding to the whole number: (i)
immediately higher, when the fraction is equal or higher than 0.5 or (ii) immediately smaller,
when the fraction is smaller than 0.5, will be made.
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ARTICLE 11 - In the event of vacancy in the position of board member, a General Meeting
will be called within ten (10) days as from the vacancy in the position of board member, with
the purpose of choosing a substitute, who will take over the position of board member for the
remaining time of the term of office of the board member replaced.
ARTICLE 12 - The meetings of the Board of Directors will be summoned in written, by its
Chairman or by three (3) of its members, and it is necessary, for its performance, the
attendance, at least, of the majority of its members in office. The resolutions of the Board of
Directors will be taken by the majority of the board members attending the meeting, and the
vote of the Chairman or of its substitute must prevail in the event of tie.
Sole Paragraph - From the meetings of the Board of Directors minutes will be drawn up in the
Company’s records, becoming effective with the signature of the members sufficient to
constitute quorum required for the instatement and resolution.
ARTICLE 13 - After the term of office ends, the Board of Directors’ members will remain in
the exercise of their positions until the investiture of the new board members elected.
ARTICLE 14 - In addition to the attributions provided for by the law and in these Bylaws, it is
incumbent upon the Board of Directors:
(i)
to determine the general guidance of the Company’s businesses;
(ii)
to inspect the management of the Board of Executive Officers and examine, at
any time, the Company’s records and documents;
(iii)
to call the General Meetings;
(iv)
to previously voice about the Management Report, the accounts of the Board of
Executive Officers, the Financial Statements for the year and examine the
monthly balance sheets;
(v)
to distribute the compensation determined by the General Meeting among the
Company’s managers;
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(vi)
to elect and dismiss the executive officers, as well as determine their
attributions and compensations;
(vii)
to authorize the sale of permanent assets, the constitution of possessory lien and
the tendering of guarantees to third-party liabilities;
(viii)
to choose and dismiss the Company’s independent auditors; and
(ix)
to authorize the Company to acquire shares issued by it, for cancellation or to
be held in and their subsequent sale.
Section III – Board of Executive Officers
ARTICLE 15 - The Board of Executive Officers is composed of seven (7) members, domiciled
in Brazil, shareholders or not, appointed and dismissible by the Board of Directors, who will
have the following designations: :
(i)
President;
(ii)
Industrial Vice President - Cookies, Pasta and Margarine;
(iii)
Industrial Vice President - Mills;
(iv)
Commercial Vice President;
(v)
Management and Development Vice President;
(vi)
Financial Vice President; and
(vii)
Investments and Controllership Vice President.
Paragraph 1 - The term of office of each Executive Officer will be three (3) years, and
reelection is allowed. After the term of office ends, the Executive Officers will remain in the
exercise of their positions until the investiture of the new Executive Officers elected.
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Paragraph 2 - The exercise of the position of Executive Officer ceases by the dismissal, at any
time, of the sitting executive officer, or by the end of the term of office, if there is not
readmission, also in compliance with the provision in the final part of paragraph 1 above. The
resignation becomes effective, in relation to the Company, from the moment in which it takes
knowledge of the written communication of the renouncer, inuring before third parties of good
faith after its filing in the Public Registration of Commercial Companies and publication.
Paragraph 3 - The replacement of the Executive Officers, in the event of absence or temporary
impairment, or also by resignation, death or incapacity, will be resolved at a Meeting of the
Board of Directors, and the Chairman of the Board of Directors may appoint, on an interim
basis, a substitute.
ARTICLE 16 - It is incumbent upon the Board of Executive Officers to exercise the attributions
that the law, the General Meeting, the Board of Directors and these bylaws grant them for the
practice of the acts required for the regular operation of the Company, taking upon it the
management of the Company and the practice of all and any act which is not of the private
competence of the General Meeting, pursuant to article 122 of Law no. 6,404/76.
ARTICLE 17 - Without adverse effects to the specific competences defined in the paragraphs
of this article 17, it is incumbent upon the Executive Officers:
(i)
to ensure the compliance with the law and these bylaws;
(ii)
to administrate, manage and supervise the social businesses;
(iii)
to prepare the report and the financial statements of each year; and
(iv)
to practice the acts of its competence, as set forth in these bylaws and in the Internal
Regulation of the Board of Executive Officers.
Paragraph 1 - It is incumbent upon the President:
(i) to define, implement and coordinate the actions aimed at the preservation of the vision,
mission and values of the Company;
(ii) to superintend and promote coordinated and integrated actions of the productive and
development process of the Company’s activities;
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(iii) to supervise and control the production and profitability levels of each Division;
(iv) to represent the Company, actively and passively, in court or out of it;
(v) to execute agreements, take loans and financings, sell, acquire, mortgage, or, otherwise,
encumber the company’s assets, personal property, real property and other rights;
(vi) to accept, withdraw, endorse and guarantee foreign exchange documents, trade bills,
checks, promissory notes and any other bonds which are under the responsibility
of the Company;
(vii) to open, operate and close bank accounts.
Paragraph 2 - It is incumbent upon the Industrial Vice President - Cookies, Pasta, and
Margarine:
(i) To define policies and promote the corporate management of the productive processes
of cookies, pasta and margarine, ensuring their continuous improvement, in
accordance with the strategic guidelines set forth by the President;
(ii) To direct the activities of production, packaging and storage of finished products, as
well as develop production engineering projects, in the segments of cookies, pasta
and margarine;
(iii) To ensure excellence in the process of maintenance of the industrial parks of cookies,
pasta and margarine, by means of the adoption of preventive and corrective
procedures;
80

IAN 2006 - MDias Branco

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