2007 Financial Statements - Rossi Residencial

Transcrição

February 14, 2008
To Rossi Residencial S/A
Attn.: Mr. Sérgio Pedroso Rossi Cuppoloni
Re.: Report of independent public auditors n.
n. 475475-20082008-7
(Translation of the report originally issued in the Portuguese language)
Dear Sir,
We hereby forward you the Financial Statements for the year ended December 31, 2007 of
Rossi Residencial S/A’s Financial Statements, together with the Report of Independent
Auditors.
Sincerely Yours,
J. André Viola Ferreira
JAVF/MZ/CPN
Rossi Residencial S/A
Financial Statements together with
Report
Report of Independent Auditors
December 31, 2007
1/37
Report of Independent Auditors
To the managers and shareholders of Rossi Residencial S/A:
1.
We have audited the balance sheets (individual and consolidated) of Rossi
Residencial S/A as of December 31, 2007 and the respective statements of
income, the changes in shareholders’ equity, the changes in financial position
corresponding to the period as of that date, elaborated under the responsibility
of your Management. Our responsibility is to express an opinion on these
financial statements.
2.
Our examinations were conducted according to the Brazilian audit regulations
and included: planning the works by taking into consideration material
balances, the transaction volume and the accounting system and internal
controls of the Company and investees; checking the evidences and records,
based on tests, that may support accounting amounts and information
disclosed; and evaluating the most substantial accounting practices and
estimates adopted by the managers of the Companies and also the
presentation of the financial statements, individual and consolidated, taken as
a whole.
3.
In our opinion, based on our examinations, the financial statements mentioned
in paragraph 1 above represent, in all material respects, the equity and
financial position of Rossi Residencial S/A as of December 31, 2007, the
individual and consolidated income of its operations, changes in its
shareholders’ equity and changes in financial position, corresponding to the
year ended on that date, in accordance with the accounting practices adopted
in Brazil.
4.
Our audits were conducted with the purpose of issuing a report on the
financial statements referred to in paragraph 1, taken as a whole. The
statements of cash flow (individual and consolidated) referring to the year
ended December 31, 2007, which are being presented in order to allow
additional analyses, are not required as an integral part of the basic financial
statements, pursuant to the accounting practices adopted in Brazil. These
statements have been submitted to the same audit procedures described in
paragraph 2 and, in our opinion, are properly presented, in all relevant aspects,
in relation to the financial statements as a whole.
2/37
5.
The financial statements (individual and consolidated) ended on December 31,
2006, presented for comparison purposes, were audited by different
independent auditors, whose report dated February 9, 2007 was unqualified.
São Paulo, February 13, 2008.
Auditores independentes
José André Viola Ferreira
Partner
tner - accountant
Par
3/37
Rossi Residencial S/A and subsidiaries
Balance Sheets as of December 31, 2007 and 2006
(Translation of the report originally issued in Portuguese)
(In thousands of Reais)
ASSETS
Parent company
Notes
Current assets
Cash and banks
Financial investments
Accounts receivable
Real estate to be sold
Dividends eeceivable
Unexpired expenses
Related parties
Deferred income tax and social contribution tax
Other Receivables
Total current assets
2007
Consolidated
2006
2007
2006
19,625
191,124
99,624
162,779
2,496
32,084
167,801
14,389
42,093
732,015
12,498
297,538
88,800
144,371
3,832
7,982
48,363
32,598
635,982
31,810
222,901
238,366
788,041
61,395
269
19,363
84,297
1,446,442
18,983
308,064
148,773
498,659
25,096
45,615
47,126
1,092,316
1,155
189,472
18,652
15,741
7,747
31,678
264,445
1,644
128,899
1,507
7,544
949
2,381
47,396
1,556
191,876
1,155
532,381
136,043
38,814
7,479
39,330
755,202
1,644
243,264
52,853
13,666
5,155
53,131
1,556
371,269
881,601
2,168
3,632
887,401
488,475
2,441
2,751
493,667
16,274
2,223
3,637
22,134
21,498
2,517
2,766
26,781
Total non-current assets
1,151,846
685,543
777,336
398,050
Total assets
1,883,861
1,321,525
2,223,778
1,490,366
Non-current assets
Long-term assets
Financial investments
Accounts receivable
Real estate to be sold
Unexpired expenses
Related parties
Court deposits
Deferred income tax and social contribution tax
Other receivables
Permanent assets
Investments
Property, plant and equipment
Intangible assets
4
5
6
15
18
7
4
5
6
15
18
7
8
9
10
The explanatory notes are an integral part of these financial statements.
4/37
Balance sheets as of December 31, 2007 and 2006
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes
Current liabilities
Building financing - real estate loan
Working capital loans
Suppliers
Accounts payable by acquistion of land
Payroll and related charges
Taxes and contributions payable
Debentures
Dividends payable
Management and employees interest payble
Advances to clients
Related parties
Deferred taxes and contributions
Other accounts payable
Total current liabilities
Non-current liabilities
Long-term liabilities
Building financing - real estate loan
Accounts payable by acquistion of land
Taxes and contributions payable
Debentures
Provision for contingencies
Advances to clients
Related parties
Total non-current liabilities
Shareholders' equity
Capital stock
Capital reserve - goodwill
Legal reserve
Treasury shares
Retained earnings reserve
Total liabilities and shareholders' equity
Parent company
2007
2006
Consolidated
2007
2006
11
11
12
16
17
21
15
18
13
51,442
14,092
40,657
5,646
4,789
17,417
31,188
9,505
1,067
113,188
14,602
6,273
309,866
33,013
1,639
8,358
27,205
3,417
5,199
10,380
1,419
51,111
12,068
11,079
164,888
98,702
21,911
207,108
5,932
9,912
17,417
31,188
9,505
500
1,812
28,130
15,364
447,481
87,693
1,639
12,916
101,844
3,734
9,302
10,380
1,578
32,681
13,850
13,295
288,912
11
12
16
14
15
18
40,017
11,706
300,000
3,359
8,931
6,508
32,147
402,668
33,329
7,745
2,475
10,386
5,508
17,517
76,960
64,594
175,149
406
300,000
2,348
4,347
58,126
604,970
37,278
48,008
4,476
9,369
22,646
121,777
17
17
17
17
17
445,117
548,115
14,653
(17,269)
180,711
1,171,327
445,117
548,115
8,087
(8,792)
87,150
1,079,677
445,117
548,115
14,653
(17,269)
180,711
1,171,327
445,117
548,115
8,087
(8,792)
87,150
1,079,677
1,883,861
1,321,525
2,223,778
1,490,366
5/37
Statements of income
for the years ended December 31, 2007 and 2006
(In thousands of Reais, except for the net income per share)
Parent company
Notes
Gross operating income
Property sales and services
Taxes on sales and services
-
Net operating income
Cost of properties sold and services rendered
Gross income
Operating income (expenses)
Administrative
Management fees
Trade
Depreciation and amortization
Equity accounting
Other operating income
-
Financial revenues, net
Revenue from client financing
Operating income
Non-operating income
2007
2007
218,589
(6,577)
769,692
(36,815)
425,023
(13,765)
248,477
(191,173)
212,012
(151,824)
732,877
(474,591)
411,258
(282,914)
57,304
60,188
258,286
128,344
(53,320)
(2,808)
(35,732)
(1,296)
164,693
(1,965)
(34,284)
(1,937)
(31,885)
(803)
47,012
15
(58,349)
(2,808)
(60,820)
(1,325)
(2,039)
(36,693)
(1,937)
(45,705)
(865)
15
23,725
7,362
45,890
6,949
31,466
7,362
47,439
6,949
157,963
91,145
171,773
97,547
(51,161)
(5,067)
39,984
166,706
45,805
(3,681)
1,577
18
(11,810)
3,717
(4,772)
(21,114)
Profit sharing
Management
Employees
21
21
(2,641)
(6,864)
-
(2,641)
(6,864)
Net Income per share of capital stock at the end of the year - R$
(51,742)
152,630
Income tax and social contribution tax
Current
Deferred
Net income for the year
2006
264,266
(15,789)
(5,333)
Income before taxes and interests
Consolidated
2006
131,315
43,701
1.68
0.55
131,315
43,701
6/37
Statements of changes in shareholders' equity (parent company)
Profit reserve
Balances as of December 31, 2005
Share issuance
Capital stock increase
Goodwill in issuance of shares
Proposal for net income allocation:
Treasury shares
Legal reserve
Dividends proposed
Proposal for net income allocation:
Treasury shares
Legal reserve
Dividends proposed
Capital stock
230,732
Capital reserve goodwill
-
Legal reserve
5,902
Retained
earnings reserve
56,014
Treasury shares
-
214,385
-
548,115
-
-
-
-
-
-
-
-
2,185
-
31,136
(8,792)
-
445,117
548,115
8,087
87,150
(8,792)
-
-
-
-
-
-
6,566
-
93,561
(8,477)
-
445,117
548,115
14,653
180,711
(17,269)
Retained
earnings
-
Total
292,648
-
-
214,385
548,115
-
43,701
43,701
(2,185)
(10,380)
(31,136)
(8,792)
(10,380)
-
-
-
1,079,677
131,315
131,315
(6,566)
(31,188)
(93,561)
(8,477)
(31,188)
-
-
1,171,327
7/37
Statements of changes in financial position
(In thousands of Reais, except for the amounts per shares or when otherwise referred )
Parent company
2007
Sources
From operations
Increase in long-term loans and financings
Increase in long-term accounts payable by acquistion of land
Transfer from long-term assets to current assets
Debentures
Other
Consolidated
2006
2007
2006
2,193
3,538
4,426
300,000
2,858
313,015
18,409
25,772
898
45,079
132,550
19,524
118,239
7,200
300,000
2,977
580,490
37,342
12,878
48,448
1,009
99,677
-
214,385
548,115
762,500
-
214,385
548,115
762,500
Total sources
313,015
807,579
580,490
862,177
Uses
In operations
Treasury shares
Increase in long-term accounts receivable from clients
Increase in long-term land
Court deposits
Long-term related parties
Additions of property, plant and equipment
Additions to intangible assets
Additions of investments
Dividends proposed
Transfer from long-term liabilities to current liabilities
Other
Total investments
24,514
8,477
28,066
17,147
6,799
256
1,648
231,744
31,188
3,930
8,191
361,960
11,846
8,792
29,560
1,160
1,160
1,562
317,801
10,380
33,936
6,222
422,419
8,477
218,459
83,190
7,479
253
1,648
31,188
9,091
25,148
384,933
8,792
71,739
1,220
1,162
1,562
20,595
10,380
70,921
8,039
194,410
Increase (decrease) in net working capital
(48,945)
385,160
195,557
667,767
From shareholders
Capital increase
Goodwill in issuance of shares
Parent company
2007
Changes in net working capital represented by
Increase in current assets
(Increase) decrease in current liabilities
Increase (decrease) in net working capital
Breakdown of funds (invested in) resulting from operations
Net Income for the period
Amounts not affecting working capital
Deferred taxes and contributions, net
Equity accounting
Net monetary variance of long-term amounts
Cost of investments sold
Goodwill amortization
Earnings in investments
Depreciations and amortizations
Total funds (invested in) resulting from operations
Consolidated
2006
2007
2006
96,033
(144,978)
358,497
26,663
354,126
(158,569)
702,974
(35,207)
(48,945)
385,160
195,557
667,767
131,315
43,701
131,315
43,701
30,348
1,500
(164,693)
(27,588)
1,001
2,455
(148)
1,296
(24,514)
(3,717)
(47,012)
(8,425)
1,532
157
1,106
812
(11,846)
49,281
1,500
(53,965)
3,094
1,325
132,550
(1,577)
(6,237)
581
874
37,342
8/37
Statements of cash flow for the years ended December 31, 2007 and 2006
supplementary sheet
(In thousands of Reais, except for the amounts per share or when otherwise referred)
Parent company
2007
2006
From operating activities
Net income
Adjustments to net income
Depreciation and amortization
Provision for doubtful accounts
Management and employees profit sharing
Interest in subsidiaries
Goodwill amortization
Deferred taxes and contributions, net
Interest and financial charges, net
Adjusted net income (loss)
Variations in current and long-term assets and liabilities:
Decrease in long-term financial investments
Increase in accounts receivable from clients
Increase in real estate to be sold
Decrease (increase) in prepaid expenses
Decrease (increase) in advance to suppliers
Increase in other receivables, net
of amounts classified in liabilities
Decrease (increase) in related parties, net
of amounts classified in liabilities
Decrease (increase) in other assets
Increase in accounts payable by acquistion of land
Decrease in taxes and contributions
Decrease in advance from clients
Increase in other liabilities
Net cash used in operating activities
From investment activities
Acquisition (disposal) of investments
Acquisition of property, plant and equipment
Funds invested in software development
Net cash arising from (used in) investment activities
From financial activities
Capital increase
Goodwill in share issuance
Treasury shares
Payment of dividends
Issuance of Debentures
Debt
Funding
Amortizations
Net cash arising from financial activities
Net increase (decrease) in cash and financial investments
Consolidated
2007
2006
131,315
43,701
131,315
43,701
1,296
1,500
2,348
9,505
(164,693)
3,308
20,049
(19,578)
(14,950)
812
500
(47,012)
1,263
(3,717)
(10,571)
(15,024)
1,325
1,500
2,348
9,505
3,094
43,493
(43,331)
149,249
874
500
581
(1,577)
(17,599)
26,480
489
(22,083)
(35,555)
(32,299)
(1,126)
490
(3,716)
(13,295)
903
4,996
489
(278,595)
(372,572)
(61,447)
(1,542)
490
(58,930)
(277,543)
(14,849)
2,684
(9,723)
(38,757)
(33,771)
(41,522)
(63,160)
(507)
17,414
(2,886)
(1,806)
6,206
(24,611)
(8,387)
12,185
(346)
(9,760)
798
6,999
7,193
213,008
(3,458)
(6,099)
9,850
(27,608)
(11,546)
33,415
(4,707)
(21,236)
7,356
(159,986)
(94,524)
(370,696)
(387,516)
(231,744)
(256)
(1,648)
(316,269)
(1,160)
(1,562)
2,129
(253)
(1,648)
(20,595)
(1,162)
(1,562)
(233,648)
(318,991)
(8,477)
(10,380)
300,000
214,385
548,115
(8,792)
(4,797)
-
(8,477)
(10,380)
300,000
214,385
548,115
(8,792)
(4,797)
-
65,325
(52,121)
294,347
89,557
(121,305)
717,163
122,769
(105,780)
298,132
145,214
(168,872)
725,253
(99,287)
303,648
(72,336)
314,418
310,036
210,749
6,388
310,036
327,047
254,711
12,629
327,047
228
(23,319)
Cash, banks and financial investments
At the beginning of the year
At the end of the year
9/37
Notes to the financial statements for the years
years
ended December 31, 2007 and 2006
(Amounts expressed in thousands of Reais, except for amounts per
share or when expressly mentioned the contrary)
1. Operations
The operations of Rossi Residencial S/A (Company) comprise the
development, building, sale of residential and commercial properties, land
subdivision and civil engineering services, through own operations, interest in
Special Purpose Entities (SPE) and consortiums.
2. Presentation of the financial statements and main practices
The financial statements were prepared and presented pursuant to the
accounting practices adopted in Brazil, and to the regulations and instructions
set forth by the Securities and Exchange Commission of Brazil (CVM).
(a) Financial investments
These are represented by bank deposit certificates, debentures and savings
accounts, shown at acquisition cost accrued of income earned until the
closing dates of the years.
(b) Real estate to be sold
These are appraised at building or acquisition cost, which are lower than the
market value. The classification between short and long term is based on the
expectation of launchings of real estate projects.
(c) Allowance for doubtful accounts
The allowance for doubtful accounts is established based on the risk
assessment of realization of accounts receivable in an amount deemed
sufficient by the management to cover possible losses estimated in the
realization of such credits.
(d) Investments
The equity interest in subsidiaries and affiliated companies as a whole is
assessed by the equity accounting method. Other investments are appraised
by the acquisition cost. Costs derived from goodwill ascertained in investment
acquisitions are amortized according to the realization of the project’s result,
in compliance with the appraisal reports.
10/37
(e) Property, plant and equipment
This is assessed at the acquisition cost, net of depreciation, recorded by the
straight-line method, taking into account the rates mentioned in Note 9.
(f) Intangible
Intangible assets
Intangible assets are represented by expenditures related to the acquisition
and development of software and expenses referring to projects under
development. The amortization occurs by the straight-line method within five
years, as from the moment when the benefits start to be generated.
(g) Determination of development income and sale of real estate
On credit sale of housing unit built, the income is appropriated when sale is
materialized, regardless of the term to receive the contractual amount.
Pre-fixed interest rates are appropriated to income observing the accrual basis
of accounting, regardless of their collection.
On sales of housing units not yet concluded, the income is appropriated
according to the criteria set forth by Resolution 963/03 of the Federal
Accounting Board (CFC), detailed as follows:
(i)
Costs derived from units sold, including land cost, are fully appropriated
to the result;
(ii) Revenues from sales, bank loans interest for building and selling expenses
inherent to respective developments, represented, substantially, by
promotional expenses and sales kiosks are appropriated to income, by
using the method of conclusion percentage of each development, and this
percentage is measured in view of the cost incurred in relation to the total
cost budgeted for respective developments;
(iii) Revenues from sales verified as per item (ii), including the monetary
restatement, net of installments already received, are accounted as
accounts receivable, or as advances from clients in view of the ratio
between revenues recorded and amounts received;
(iv) Said commercial expenses and the bank loan interest for building (item
(ii)) are compounded as cost of real estate to be sold, in case of units in
stock, or at prepaid expenses, in case of real estate already sold. They are
also appropriated to income, using the conclusion percentage of each
project.
(h) Other current and nonnon-current assets and liabilities
Assets are stated by the lower of their costs (including incurred yields) and
market value and liabilities by known or estimated values, including the
corresponding yields or financial charges, when applicable.
11/37
(i) Income tax and social contribution
Income tax and social contribution are determined at the 15% regular rates
(plus an additional 10%), for income tax and 9% for social contribution
applied over taxable income, in compliance with the criteria established by the
tax legislation. Some subsidiary companies have chosen the “presumed profit
system” (taxable income computed based on a percentage of gross sales),
whose calculation basis for income tax is determined at the rate of 8% for
real-estate sales income and for social contribution at the rate of 12% over
gross sales (100%, for both taxes, in case the revenue earned comes from
financial revenues), over which there is application of the regular rates of the
respective tax and contribution.
(j) Contingent assets and liabilities and legal liabilities
The accounting practices for recording and disclosing contingent assets and
liabilities and legal liabilities are the following:
i)
Contingent assets are recognized only when there are actual guarantees or
favorable final and unappealable court decisions. Contingent assets likely
to be successful are only disclosed in explanatory notes;
ii) Contingent liabilities are provisioned when the losses are deemed as
probable and the amounts involved are measurable with sufficient safety.
Contingent liabilities deemed as being of remote losses are neither
provisioned nor disclosed;
iii) Legal liabilities are recorded as payable, regardless of the assessment on
possibilities of success, of lawsuits in which the Company questioned the
unconstitutionality of taxes.
(k) Accounting estimates
In the preparation of financial statements, it is necessary to use estimates to
account for specific assets, liabilities and other operations. The financial
statements include, therefore, several estimates related to the selection of
useful lives of fixed assets, provisions needed for contingent liabilities,
determination of tax provisions, budgeted costs, appropriation of sales
expenses, goodwill amortization and similar operations; actual results may
differ from the estimates.
Income per share
The income per share is calculated based on the number of shares outstanding
on the balance sheet dates.
(l) Cash flow statement (supplementary information)
Aiming at providing additional information, the Company is presenting the
cash flow statements, prepared in compliance with NPC no. 20 issued by the
Institute of Independent Auditors of Brazil (IBRACON).
12/37
3. Consolidation criteria
The consolidated financial statements were prepared pursuant to the
consolidation practices arising from the Brazilian Corporate Law and CVM
Instruction 247/96 and comprise Rossi Residencial S/A and investees
(individually or under common control, created for the specific purpose of real
estate development), listed in Note 8.
The accounting practices are consistently applied in all consolidated
companies.
At the consolidation, investments in Subsidiaries and associated companies,
as well as balances receivable and payable, revenues, expenses and unrealized
profits resulting from intercompany transactions are eliminated.
Considering that the control of investees companies is shared, they are
consolidated proportionally.
4. Financial investments
The financial investments represent the amounts invested in private securities
(bank deposit certificates and debentures) issued by financial institutions;
those having mean return equivalent to 98% - 104% of DI CETIP “CDI”. The
debentures represent purchase and sale commitments, recorded in CETIP, and
are not subject to credit risks of the respective issuers.
Current
Securities CBD
Debentures
Other
Exclusive investment
funds guaranteed in CDB
NonNon-current
Real Estate Receivables
Certificates - CRI
Parent company
2007
2006
Consolidated
2007
2006
51,161
132,793
7,170
11,407
4,311
69,141
139,242
14,518
21,933
4,311
191,124
281,820
297,538
222,901
281,820
308,064
1,155
192,279
1,644
299,182
1,155
224,056
1,644
309,708
13/37
5. Accounts receivable
These are represented by:
2007
Parent
company
Clients by real
estate
development
Allowance for
doubtful
accounts
Unearned
income
2006
Current
Non-Non
current
Total
Current
Non-Non
current
Total
123,975
237,913
361,888
103,880
150,790
254,670
(2,348)
-
(2,348)
-
-
-
(22,003)
99,624
(48,441)
189,472
(70,444)
289,096
(15,080)
88,800
(21,891)
128,899
(36,971)
217,699
Non-Non
current
Total
265,155
435,050
-
-
-
(114,600) (21,122)
770,747 148,773
(21,891)
243,264
(43,013)
392,037
392,03
7
2007
Consolidated
Clients by real
estate
development
Allowance for
doubtful
accounts
Unearned
income
Current
2006
Non-Non
current
Total
274,214 613,481
(2,348)
-
(33,500) (81,100)
238,366 532,381
Current
887,695 169,895
(2,348)
Clients by real estate development
The amounts related to accounts receivable from real estate are monetarily
restated according to contractual clauses, as follows:
Until surrender of keys of real estate sold, by the variation of Home-Building
Brazilian Index (INCC);
After surrender of keys of real estate sold, by the variation of IGP-M
(General Market Price Index), with 12% interest p.a. (“Price” table).
(a) Unearned income
Unearned income represents the portion of accounts receivable related to
interest rates to be appropriated in future periods, in accordance with the
accrual basis of years.
(b) Allowance for doubtful accounts
The Company has delinquent clients in its portfolio, to which amounts such as
allowance for doubtful accounts were accounted, and the Management deems
them as sufficient to cover related loss risks.
14/37
The balances receivable considered were those related to conditional sales
with guarantees on promissory notes and monetary restatements of overdue
accounts receivable.
6. Real estate
estate to be sold
These are represented by the historical costs of apartments, houses and
commercial blocks to be sold, either concluded or under construction, land for
future developments and materials to be used in works, distributed as follows:
Parent company
2007
2006
Current
Real estate concluded
Real estate under construction
Land for future developments
Materials
Non--current
Non
Land for future developments
Consolidated
2007
2006
35,095
65,440
54,595
7,649
162,779
38,886
60,213
42,841
2,431
144,371
53,241
180,079
544,934
9,787
788,041
47,033
125,274
321,975
4,377
498,659
18,652
181,431
1,507
145,878
136,403
924,084
52,853
551,512
7. Other receivables
Parent company
2007
2006
Current
Current
Accounts receivable
Advances to suppliers
Taxes recoverable
Clients on-lending
Other receivables
NonNon-current
Other receivables
Consolidated
2007
2006
8,535
6,413
9,831
6,244
11,070
42,093
5,287
9,971
10,639
6,701
35,598
40,066
10,465
12,196
10,049
11,521
84,297
2,037
8,924
13,115
12,672
10,378
47,126
42,093
1,556
34,154
84,297
1,556
48,682
Related to operations with partners in SPEs (Note 15), the balance of accounts
receivable refers to investments carried out in larger amounts than the
Company’s interest in the projects, which are offset throughout the execution
of said ventures.
Clients on-lending refers to funds or amortization to be released derived from
bank financings.
15/37
8. Investments
(a) The main investment information on December 31, 2007 is
summarized below:
2007
Assets
Abelia Empr. Imob. Ltda.
Acalifa Empr. S/A
Acer Participações S/A
Acidantera Empr. Imob. Ltda.
Adenium Empr. Imob. Ltda.
Agave Empr. Imob. Ltda.
Alcea Empr. Imob. Ltda.
Aliberti Empr. S/A
Allure Des. Imob. S/A
Alpen Haus Des. Imob. S/A
Alpen Haus Neg. Imob. S/A
Alpínia Des. Imob. S/A
Alquemila Empr. S/A
Alteia Empr. S/A
América Piqueri Incorp. S/A
América Properties Ltda.
Ancusa Empr. S/A
Apuléia Empr. S/A
Argentea Empr. S/A
Aristasia Empr. S/A
Arquitotis Empr. S/A
Arundina Empr. Imob. Ltda.
Astilbe Empr. Imob. Ltda.
Autentic Des. Imob. S/A
Autentic Empr. S/A
Barão de Café Incorp. S/A
BCP Empr. Imob. S/A
Begônia Incorp. Ltda.
Betaquem Adm. de Bens Ltda.
Betimobili Adm. de Bens Ltda.
Bétula Empr. S/A
Bosq. Rio Branco Emp. Im. Ltda.
Brassica Empr. S/A
Bromélia Incorp. S/A
Calaminta Empr. S/A
Calêndula Empr. S/A
Caliandra Incorp. Ltda.
Califórnia 5 Empr. S/A
Capuchinha Empr. S/A
Cartatica Empr. S/A
Caudata Empr. S/A
Cedrela Empr. S/A
Celebrity Icaraí Des. Imob. Ltda.
Ch. Sto. Antonio Des. Imob. S/A
Cheflera Empr. S/A
Ciclame Des. Imob. Ltda.
Ciclame Empr. S/A
Citrus Empr. S/A
Colorata Empr. S/A
Cordifolia Empr. S/A
Courgete Empr. S/A
Cyrela Havai Empr. Imob. Ltda
Dalia Empr. Imob. Ltda.
Del Monte Des. Imob. S/A
Del Monte Neg. Imob. S/A
Dipladênia Empr. Imob. Ltda.
Dueto Des. Imobiliário Ltda.
Fasciata Empr. S/A
Galeria Boulevard Des. Imob. S/A
Galeria Boulevard Neg. Imob. S/A
1,137
2,555
518
1,135
1,135
1,135
69,228
6,578
10,291
8,323
3,899
18,733
2,944
30,771
45,250
61,144
8,724
10,328
2,055
15,946
22,656
3,090
1,510
3,419
2,374
7,808
20,192
9,861
5,319
1,922
18,391
2,760
6,322
4,418
6,468
12,279
18,224
2,248
7,056
1,638
1,630
1,630
8,761
12,823
10,894
16,718
4,290
8,270
16,813
1,579
3,468
36,437
15,148
7,235
4,238
4,171
6,235
3,125
26,565
27,197
Liabilities
2
64
44,846
4,660
7,380
3,690
3,096
497
2,048
7,307
45,778
24,204
5,478
9
1,184
7,985
17,927
182
2,493
1,044
6,192
922
4,668
3,527
1,273
1,768
18
4,314
1,097
4,839
5,947
13,394
75
3,920
77
69
33
2,613
756
9,733
1,698
2,412
2,231
15,777
636
2,044
27,380
1,760
389
3,590
338
408
1,694
1,875
22,627
Investment Balances
Shareholders'
Income for
Stake
Equity in the earnings
Equity
the Year
%
of subsidiary companies
1,135
2,491
518
1,135
1,135
1,135
24,382
1,918
2,911
4,633
803
18,236
896
23,464
(528)
36,940
3,246
10,319
871
7,961
4,729
2,908
1,510
926
1,330
1,616
19,270
5,193
1,792
649
16,623
2,742
2,008
3,321
1,629
6,332
4,830
2,173
3,136
1,561
1,561
1,597
6,148
12,067
1,161
15,020
1,878
6,039
1,036
943
1,424
9,057
13,388
6,846
648
3,833
5,827
1,431
24,690
4,570
(1,670)
1,211
754
644
88
2,248
(35)
6,025
(15,890)
(5,640)
3,245
(4)
7,670
4,502
1,399
710
1,284
1,433
7,776
(727)
(216)
(78)
4,294
1,031
1,206
603
128
2,192
3,638
(1)
3,056
668
2,647
1,154
924
442
(9)
(225)
942
501
(1,209)
(142)
1,541
125
(1)
1,897
(67)
22,643
1,229
33.93
60.00
99.99
33.93
33.93
33.93
99.99
75.00
99.99
70.00
70.00
99.99
99.99
99.99
20.00
99.99
99.90
99.99
80.00
70.00
99.99
33.93
33.93
70.00
70.00
50.00
99.99
99.95
70.00
70.00
70.00
99.99
70.00
99.99
50.00
99.99
99.95
99.99
70.00
99.99
99.99
99.99
80.00
99.99
99.98
99.99
70.00
99.99
99.99
99.90
50.00
50.00
50.00
99.99
99.90
50.00
50.00
99.99
50.00
50.00
(1,670)
908
754
451
62
2,248
(35)
6,025
(3,178)
(5,640)
3,242
(3)
5,369
4,502
475
497
899
716
7,776
(726)
(151)
(54)
3,006
1,031
844
603
64
2,192
3,637
(1)
2,139
534
2,647
1,153
924
309
(9)
(225)
941
250
(605)
(71)
1,541
125
(1)
948
(67)
11,321
615
2007
Parent Company
385
1,495
518
385
385
385
24,382
1,439
2,911
3,243
562
18,236
896
23,464
36,940
3,243
10,319
697
5,573
4,729
987
512
648
931
808
19,270
5,191
1,255
454
11,636
2,742
1,405
3,321
815
6,332
4,828
2,173
2,195
1,561
1,561
1,597
4,919
12,067
1,161
15,020
1,314
6,039
1,036
942
712
4,528
6,694
6,846
647
1,916
2,913
1,431
12,345
2,285
2006
Consolidated
-
Parent Company
Consolidated
385
518
385
385
385
26,053
1,890
1,891
500
1
1
3,072
42,581
1
1
512
512
152
32
92
11,494
5,917
8,631
1,711
561
954
1
3,100
1,191
1
1
1
1
4,384
4,877
1
6,096
1
1
5,857
1,173
366
1,917
1,965
618
-
16/37
2007
Assets
Garden Up Des. Imob. Ltda.
Garden Up Neg. Imob. S/A
Gardênia Participações S/A
Gelsemino Empr. S/A
Gestia Empr. S/A
Girassol Incorp. Ltda.
Glicínia Des. Imob. S/A
Glicínia Empr. S/A
Graminea Des. Imob. S/A
Gran Vita Des. Imob. Ltda.
Guaraná Empr. S/A
Helicônias Des. Imob. S/A
Hibisco Incorp. Ltda.
Iguatemi POA Des. Im. Ltda.
Image Empr. S/A
Jds. de Londres Des. Imob. S/A
Jetirana Empr. S/A
Klabin Segal Emp. Imob. Ltda.
Laciniata Empr. S/A
Landscape Empr. S/A
Malmequer Empr. S/A
Mandevila Empr. S/A
Marshall Empr. Ltda.
Natura Recreio Des. Imob. S/A
Natura Recreio Empr. S/A
Nidus Empr. S/A
Nigra Empr. S/A
Nilo Empr. Imob. Ltda.
North York Empr. S/A
Olerácea Empr. S/A
Orquídea Incorp. Ltda.
Pantai Des. Imob. S/A
Pantai Empr. S/A
Parnaso Des. Imob. S/A
Parnaso Incorp. S/A
Pátio Alamedas Des. Imob. S/A
Pátio Alamedas Empr. S/A
Peônia Empr. Imob. S/A
Petrea Empr. S/A
Piper Empr. S/A
Piracanta Empr. S/A
Plinia Empr. Imob. Ltda.
Porto Central Des. Imob. S/A
Porto Paradiso Empr. S/A
Porto Paradiso Incorp. S/A
Praça Capital Des. Imob. Ltda.
Praça Capital Empr. Dois S/A
Praça Capital Empr. S/A
Praça Capital Neg. Imob. S/A
Praça Paris Des. Imob. S/A
Praça Paris Incorp. S/A
Pça. Vila Romana Des. Imob. Ltda.
Prunus Empr. S/A
Purpurata Empr. S/A
Raritá Des. Imob. S/A
Raritá Neg. Imob. S/A
Reserva Petrópolis Empr. S/A
Riservato Des. Imob. Ltda.
Riservato Neg. Imob. S/A
Rossi Empr. Imob. S/A
Rossi Melnick Des. Imob. S/A
Rossi Melnick Empr. S/A
Rossi Montante Incorp. S/A
Rossi Oscar Porto Incorp. Ltda
Rossi Securities Empr. Imob. S/A
Rossi Trust e Participações Ltda.
Rossi-AEM Incorp. Ltda.
Rossi-GNO Incorp. Ltda.
RRTI Des. Imob. Ltda.
Salmiana Empr. S/A
Sândalo Des. Imob. S/A
Sanquezia Empr. Imob. Ltda
Santa Felicidade Empr. S/A
Saponaria Empr. S/A
SCON-Rossi Incorp. S/A
Senecio Empr. S/A
SPE Novo Pier Empr. Imob. Ltda.
SPE Pier Empr. Imob. Ltda.
4,701
12,816
8,199
5,013
25,450
2,973
1,815
3,570
14,004
20,579
5,956
1,343
7,272
5,166
4,852
8,201
17,230
21,884
857
9,193
40,919
1,614
19,100
1,994
7,189
21,225
19,500
4,558
1,896
13,078
2,487
1,839
3,097
1,552
11,007
1,988
3,141
74,060
1,621
18,845
4,153
13,789
8,420
5,685
23,688
10,182
5,009
6,688
20,804
17,940
7,730
11,277
27,371
6,762
5,661
7,400
4,912
15,357
1,631
1,361
4,074
941
46,413
29,445
14,386
839
1,063
5,588
16,053
17,896
27,562
58,907
889
6,766
11,222
13,163
16,530
21,089
Liabilities
2,346
11,730
599
378
20,719
2
127
2,648
11,928
11,259
4,969
84
5,770
392
229
6,130
1,059
8,786
29
4,001
4,832
128
1,800
134
731
20,370
14,502
1,096
349
4,923
360
99
464
11,071
976
1,272
28,392
135
6,870
1,237
761
6,080
3,740
16,253
5,235
1,171
2,361
18,031
1,259
6,544
202
2,499
11
1,646
4,979
1,793
932
162
60
3,336
148
38,443
12,502
8,113
62
652
642
4,246
4,721
21,298
5,061
42
920
8,148
11,173
5,225
10,431
Investment Balances
Shareholders'
Income for
Stake
Equity
the Year
%
2,355
1,086
7,600
4,635
4,731
2,971
1,688
922
2,076
9,320
987
1,259
1,502
4,774
4,623
2,071
16,171
13,098
828
5,192
36,087
1,486
17,300
1,860
6,458
855
4,998
3,462
1,547
8,155
2,487
1,479
2,998
1,088
(64)
1,012
1,869
45,668
1,486
11,975
2,916
13,028
2,340
1,945
7,435
4,947
3,838
4,327
2,773
16,681
1,186
11,075
24,872
6,751
4,015
2,421
3,119
14,425
1,469
1,301
738
793
7,970
16,943
6,273
777
411
4,946
11,807
13,175
6,264
53,846
847
5,846
3,074
1,990
11,305
10,658
12
299
(476)
138
(79)
(7)
294
876
(14)
4,119
344
129
(393)
2,301
1,314
(524)
(15)
3,737
(4)
(4)
(914)
(1)
1,464
5,201
616
(685)
(5)
1,218
7,604
(388)
276
(21)
(143)
(44)
1,759
(59)
(1)
3,061
858
6,990
1,474
1,103
2,731
644
2,606
3,524
1,288
10,650
381
(2)
5,155
1,971
1,075
2,087
4,142
(1)
720
709
746
(1,899)
(2,437)
5,161
(2)
(161)
94
7,800
8,775
(416)
26,286
168
5,846
(1,982)
(21)
13
50.00
50.00
50.00
99.99
70.00
99.99
99.99
70.00
50.00
99.99
70.00
99.95
99.99
99.99
99.99
99.99
50.00
50.00
99.99
99.99
42.50
99.99
99.99
99.90
99.99
70.00
70.00
99.62
50.00
50.00
99.99
99.99
99.99
99.99
99.95
99.99
99.90
33.70
99.99
60.00
33.33
99.99
99.99
75.00
75.00
70.00
70.00
70.00
70.00
70.00
70.00
33.33
42.50
70.00
70.00
70.00
99.90
99.99
99.99
99.99
70.00
70.00
70.00
99.95
99.99
99.99
50.00
99.99
99.99
50.00
99.99
70.00
70.00
70.00
50.00
45.00
50.00
50.00
6
150
(238)
138
(55)
(7)
294
613
(7)
4,119
241
129
(393)
2,301
1,314
(524)
(7)
1,868
(4)
(4)
(388)
(1)
1,463
5,201
431
(479)
(5)
609
3,802
(388)
276
(21)
(143)
(44)
1,757
(20)
(1)
1,836
286
6,990
1,474
827
2,048
451
1,824
2,467
901
7,455
267
(1)
2,191
1,380
752
2,085
4,142
(1)
720
496
522
(1,330)
(2,436)
5,161
(2)
(80)
94
7,800
4,388
(416)
18,400
117
4,092
(991)
(9)
6
2007
Parent Company
1,178
543
3,800
4,635
3,312
2,971
1,688
646
1,038
9,320
691
1,259
1,502
4,774
4,623
2,071
8,086
6,549
828
5,192
15,337
1,486
17,300
1,858
6,458
599
3,499
3,449
774
4,078
2,487
1,479
2,998
1,088
1,012
1,867
15,390
1,486
7,185
972
13,028
2,340
1,458
5,577
3,463
2,687
3,029
1,941
11,677
830
3,692
10,571
4,726
2,811
1,695
3,116
14,425
1,469
1,300
517
555
5,579
16,935
6,273
777
206
4,946
11,807
6,587
6,264
37,692
593
4,093
1,537
896
5,652
5,329
2006
Consolidated
-
Parent Company
Consolidated
1,172
95
4,038
4,497
1
2,666
1,121
33
1,045
5,201
1
1,129
947
2,473
814
4,681
1
1
1
17,300
395
1,188
168
165
2,487
802
1,204
1,109
79
1,056
111
15,410
1
5,348
686
6,039
340
631
3,012
863
562
361
672
3,692
7,914
1
1,431
86
1,030
10,283
1
581
20
33
2,520
1
1,112
779
1,755
4,852
4,007
17,402
475
1
2,484
4,301
5,323
17/37
4,301
-
2007
Assets
Tenela Empr. S/A
Terra Brazilis Empr. S/A
Tibouchina Empreend. S/A
Trombeta Empr. S/A
Tumbergia Empr. S/A
Venusta Empr. S/A
Vernonia Empr. S/A
Vila Albani Empr. Imob. Ltda.
Vila Solo Empreend. S/A
Visnaga Empr. S/A
Vitis Empr. S/A
Vivanti Des. Imob. S/A
Vivanti Empr. Imob. Ltda.
Goodwill in investments
Other
7,625
4,139
16,554
5,110
12,631
36,995
16,430
14,192
12,555
6,001
12,971
2,391
5,075
Liabilities
274
507
5,961
1,859
1,296
35,493
610
1,413
590
3,000
2,867
172
47
Investment Balances
Shareholders'
Income for
Stake
Equity
the Year
%
7,351
3,632
10,593
3,251
11,335
1,502
15,820
12,779
11,965
3,001
10,104
2,219
5,028
(140)
374
(497)
5,942
3,573
4,622
609
(7)
(90)
1,504
99.99
99.99
50.00
99.99
50.00
99.99
99.99
99.99
99.99
45.00
99.99
99.99
99.99
(140)
374
(249)
2,971
3,573
4,622
609
(7)
(90)
1,504
(675)
164,693
Advances for future capital increase:
Alquemila Empr. S/A
Alteia Empr. S/A
Alternantera Empr. S/A
Ancusa Empr. S/A
Apuléia Empr. S/A
Asmiscada Empr. S/A
Caroba Empr. S/A
Cartatica Empr. S/A
Caudata Empr. S/A
Cedrela Empr. S/A
Celebrity Icaraí Neg. Imob. S/A
Centela Empr. S/A
Ch. Sto, Antonio Des. Imob. S/A
Cheflera Empr. S/A
Chenopodio Empr. S/A
Cianus Empr. S/A
Citrus Empr. S/A
Cleome Empr. S/A
Colocasia Empr. S/A
Colorata Empr. S/A
Congea Empr. S/A
Cyrela Havai Empr. Imob.s Ltda
Equio Empr. S/A
Falcatus Empr. S/A
Fasciata Empr. S/A
Florença Participações S/A
Gestia Empr. S/A
Gustávia Empr. S/A
Hirtela Empr. S/A
Image Empr. S/A
Jetirana Empr. S/A
Laciniata Empr. S/A
Landscape Empr. S/A
Lonicera Empr. S/A
LT Incorp. SPE Ltda.
Malvaisco Empr. S/A
Mandevila Empr. S/A
Moscatu Empr. S/A
2007
Parent Company
2006
Consolidated
Parent Company
Consolidated
7,351
3,632
5,297
3,251
5,667
1,502
15,820
12,779
11,965
1,350
10,104
2,219
5,028
15,609
6,205
15,609
60
1
700
3,949
1
1
12,247
8,157
1
921
3,524
17,135
2,931
17,181
16
762,584
15,669
349,727
21,498
8,915
369
1,124
267
4,096
4,975
1,830
2,945
696
3,054
5,671
623
484
7,008
495
340
1,494
2,231
1,932
5,626
6,775
1,326
444
1,058
1,014
525
1,162
971
4,121
11
187
429
5,965
339
1,511
270
3,819
1,800
16,451
-
-
266
3,721
934
17,438
10,321
227
1,763
1,038
2,173
113
1,561
1,561
1,597
484
210
78
4,537
7
6,100
1,261
1,502
735
1,053
298
4,814
257
90
656
3,991
1,779
2,593
1,019
834
5,195
434
1,486
69
-
4
5
3
1
2
6
1
444
1
1
1
1
6
4
16
-
18/37
2007
Assets
Liabilities
Investment Balances
Shareholders'
Income for
Stake
Equity
the Year
%
Nigra Empr. S/A
Pantai Empr. S/A
Petrea Empr. S/A
Piper Empr. S/A
Purpurata Empr. S/A
Rossi Morumbi Incorp. S/A
Sândalo Empr. S/A
Tapiriri Empr. S/A
Tenela Empr. S/A
Tumbergia Empr. S/A
Venusta Empr. S/A
Vernonia Empr. S/A
Vila Solo Empr. S/A
Vitis Empr. S/A
2007
Parent Company
Parent Company
Consolidated
109
-
1,065
1,517
306
1,486
526
3,595
679
3,898
6,642
1,074
447
1,469
3,173
1,405
6,280
924
44
2,401
2,557
2,726
1,501
11,450
1,388
-
119,017
605
138,748
-
881,601
16,274
488,475
21,498
1,607
946
708
541
2,798
4,891
500
274
793
199
546
2,861
164,693
2006
Consolidated
19/37
(b) In 2007, changes in investments may be presented as follows:
Abelia Empr. Imob. Ltda.
Acalifa Empr. S/A
Acer Participações S/A
Acidantera Empr. Imob. Ltda.
Adenium Empr. Imob. Ltda.
Agave Empr. Imob. Ltda.
Aliberti Empr. S/A
Alpen Haus Des. Imob. S/A
Alquemila Empr. S/A
Alteia Empr. S/A
América Piqueri Incorp. S/A
Ancusa Empr. S/A
Apuléia Empr. S/A
Argentea Empr. S/A
Aristasia Empr. S/A
Arundina Empr. Imob. Ltda.
Astilbe Empr. Imob. Ltda.
Autentic Empr. S/A
BCP Empr. Imob. S/A
Betimobili Adm. de Bens Ltda.
Bétula Empr. S/A
Bosq. Rio Branco Emp. Im. Ltda.
Brassica Empr. S/A
Calaminta Empr. S/A
Cartatica Empr. S/A
Caudata Empr. S/A
Cedrela Empr. S/A
Ch. Sto, Antonio Des. Imob. S/A
Cheflera Empr. S/A
Ciclame Empr. S/A
Citrus Empr. S/A
Colorata Empr. S/A
Cordifolia Empr. S/A
Courgete Empr. S/A
Cyrela Havai Empr. Imob. Ltda
Dueto Des. Imobiliário Ltda.
Fasciata Empr. S/A
Gardênia Participações S/A
Gelsemino Empr. S/A
Gestia Empr. S/A
Girassol Incorp. Ltda.
Glicínia Empr. S/A
Graminea Des. Imob. S/A
Guaraná Empr. S/A
Iguatemi POA Des. Im. Ltda.
Image Empr. S/A
Jetirana Empr. S/A
Klabin Segal Emp. Imob. SPE Ltda.
Laciniata Empr. S/A
At the beginning
Increase
(Goodwill)
Equity
At the end
of the year
(decrease)
discount
accounting
of the year
385
518
385
385
385
26,052
1,890
1,891
500
1
1
3,072
42,580
1
1
512
512
151
32
92
11,494
5,917
8,630
1,711
561
954
1
3,100
1,191
1
1
1
1
4,385
4,877
1
6,096
1
1
5,857
1,173
366
1,917
1,965
618
1,172
95
4,038
4,497
1
2,666
1,121
33
1,045
5,201
1
1,130
947
2,473
814
4,681
-
1,495
531
265
901
15,987
931
17,438
106
10,319
700
203
227
1,406
508
1,764
750
1,038
2,174
55
1,560
1,560
1,596
4,538
7
8,000
1,005
6,048
1,260
462
5,133
908
4,115
83
1,498
1,024
1,052
298
3,366
312
272
449
948
3,309
1,780
8,086
832
2
2
5
17
73
1
1
7
-
(1,670)
908
754
451
62
2,248
(35)
6,025
(3,178)
(5,640)
3,242
(3)
5,369
4,502
475
497
899
716
7,776
(726)
(151)
(54)
3,006
1,031
844
603
64
2,192
3,637
(1)
2,139
534
2,647
1,153
924
309
(9)
(225)
941
250
(605)
(71)
1,541
125
(1)
948
(67)
11,321
615
6
150
(238)
138
(55)
(7)
294
613
(7)
4,119
241
129
(393)
2,301
1,314
(524)
(7)
1,868
(4)
385
1,495
518
385
385
385
24,382
1,439
2,911
3,243
562
18,236
896
23,464
36,940
3,243
10,319
697
5,573
4,729
987
512
648
931
808
19,270
5,191
1,255
454
11,636
2,742
1,405
3,321
815
6,332
4,828
2,173
2,195
1,561
1,561
1,597
4,919
12,067
1,161
15,020
1,314
6,039
1,036
942
712
4,528
6,694
6,846
647
1,916
2,913
1,431
12,345
2,285
1,178
543
3,800
4,635
3,312
2,971
1,688
646
1,038
9,320
691
1,259
1,502
4,774
4,623
2,071
8,086
6,549
828
20/37
Landscape Empr. S/A
Malmequer Empr. S/A
Mandevila Empr. S/A
Nidus Empr. S/A
Nigra Empr. S/A
North York Empr. S/A
Olerácea Empr. S/A
Pantai Empr. S/A
Parnaso Incorp. S/A
Pátio Alamedas Des. Imob. S/A
Pátio Alamedas Empr. S/A
Petrea Empr. S/A
Piper Empr. S/A
Piracanta Empr. S/A
Plinia Empr. Imob. Ltda.
Porto Paradiso Empr. S/A
Praça Capital Des. Imob. Ltda.
Praça Capital Empr. Dois S/A
Praça Capital Empr. S/A
Pça. Vila Romana Des. Imob. Ltda.
Prunus Empr. S/A
Purpurata Empr. S/A
Reserva Petrópolis Empr. S/A
Riservato Des. Imob. Ltda.
Rossi Empr. Imob. S/A
Rossi Melnick Empr. S/A
Rossi Oscar Porto Incorp. Ltda
Rossi Securities Empr. Imob. S/A
Rossi Trust e Participações Ltda.
Salmiana Empr. S/A
Santa Felicidade Empr. S/A
Saponaria Empr. S/A
Senecio Empr. S/A
Tenela Empr. S/A
Tibouchina Empr. S/A
Trombeta Empr. S/A
Tumbergia Empr. S/A
Venusta Empr. S/A
Vernonia Empr. S/A
Vila Solo Empr. S/A
Visnaga Empr. S/A
Vitis Empr. S/A
Goodwill in investments
Other
At the beginning
Increase
(Goodwill)
Equity
At the end
of the year
(decrease)
discount
accounting
of the year
1
1
1
17,300
395
1,188
168
165
2,487
802
1,204
1,109
79
1,056
110
15,410
1
5,349
686
6,038
340
631
3,012
863
562
361
672
3,693
7,914
1
1,431
86
1,031
10,283
1
580
21
33
2,520
1
1,112
779
1,755
4,852
4,007
17,402
476
1
2,484
4,301
5,323
1
700
3,949
1
1
12,247
8,157
1
921
3,524
17,135
2,931
349,727
5,195
15,724
1,486
68
3,978
3,454
276
1,065
1,517
64
1,486
526
3,529
679
3,514
563
466
4,725
857
1,469
4,389
19,370
(1,469)
2,199
6,680
1,890
44
905
1,351
7,490
2,558
1,597
3,250
2,696
1,501
11,356
1,350
10,110
1,388
929
4,948
251,472
1
1
36
(2,455)
(999)
(3,308)
(4)
(388)
(1)
1,463
5,201
431
(479)
(5)
609
3,802
(388)
276
(21)
(143)
(44)
1,757
(20)
(1)
1,836
286
6,990
1,474
827
2,048
451
1,824
2,467
901
7,455
267
(1)
2,191
1,380
752
2,085
4,142
(1)
720
496
522
(1,330)
(2,436)
5,161
(2)
(80)
94
7,800
4,388
(416)
18,400
117
4,092
(991)
(9)
6
(140)
374
(249)
2,971
3,573
4,622
609
(7)
(90)
1,504
(675)
164,693
5,192
15,337
1,486
17,300
1,858
6,458
599
3,499
3,449
774
4,078
2,487
1,479
2,998
1,088
1,012
1,867
15,390
1,486
7,185
972
13,028
2,340
1,458
5,577
3,463
2,687
3,029
1,941
11,677
830
3,692
10,571
4,726
2,811
1,695
3,116
14,425
1,469
1,300
517
555
5,579
16,935
6,273
777
206
4,946
11,807
6,587
6,264
37,692
593
4,093
1,537
896
5,652
5,329
7,351
3,632
5,297
3,251
5,667
1,502
15,820
12,779
11,965
1,350
10,104
2,219
5,028
15,609
6,205
762,584
21/37
Special Purpose Entities (SPE) and other investees have as main special
purpose the real estate projects related to building and sale of residential and
commercial real estate, similar to the Company.
9. Property, plant and equipment
This is represented by:
Machinery and equipment
Furniture and fixtures
Facilities
Data processing equipment
Vehicles
Rights of use
Trademarks and patents
Works of art
Subtotal
Annual
amortization
rate %
10
10
10
20
20
-
Accumulated depreciation
Total
Parent company
Consolidated
2007
12
303
1,576
2,168
32
80
108
6
4,285
2006
636
289
1,346
1,678
32
80
108
6
4,175
2007
12
419
1,576
2,311
32
94
119
6
4,569
2006
636
407
1,346
1,821
32
94
119
6
4,461
(2,117)
2,168
(1,734)
2,441
(2,346)
2,223
(1,944)
2,517
10. Intangible assets
This is represented by:
Annual
amortization
rate %
Projects under
development expenses
Software expenses
Accumulated
amortization
20
20
Parent company
Consolidated
2007
2007
2006
2006
1,177
10,364
1,177
8,716
1,177
10,674
1,177
9,026
(7,909)
3,632
(7,142)
2,751
(8,214)
3,637
(7,437)
2,766
22/37
11. Loans and financing
Parent company
2007
2006
Current:
Housing credit
Working capital loans
NonNon-current:
Housing credit
Consolidated
2007
2006
51,442
51,442
33,013
1,639
34,652
98,702
98,702
87,693
1,639
89,332
40,017
91,459
33,329
67,981
64,594
163,296
37,278
126,610
a) Housing credits
These correspond to financing for building real estate, subject to interest rates
ranging from 11% to 12% p.a., indexed by Reference Rate (TR), to be paid in
installments with maturity until 2010. Such financing is guaranteed by
mortgages of respective real estate.
b) Consolidated schedule of maturities
The following table shows the schedule of maturities of loans and financing
outstanding on December 31, 2007:
Year
2008
2009
2010
Total
Parent company
51,442
35,166
4,851
91,459
Consolidated
98,702
51,537
13,057
163,296
12. Accounts payable by acquisition of land
These refer to acquisitions of land in stock for the real estate development
projects, whose disbursement flow is as follows:
Year
2008
2009
2010
2011
2012
Current
Non--current
Non
Parent company
40,657
11,706
52,363
40,657
11,706
Consolidated
219,339
53,023
16,428
1,179
92,288
382,257
207,108
175,149
23/37
Out of a total of R$52,363 (R$382,257 - consolidated), the amount of
R$10,206 (R$80,072 - consolidated) shall be paid by means of contribution to
development revenues entered in respective land. The remaining R$42,157
(R$302,185 - consolidated) shall be paid in cash, monetarily restated, as per
flow. These accounts payable are guaranteed by promissory notes, sureties or
by the own real estate.
13. Other accounts payable
Amounts payable for client rescission
Accounts payable
Contractual retention from suppliers
Total
Parent company
Consolidated
2007
2006
2007
2006
1,248
348
2,170
767
2,090
7,665
8,326
8,096
2,935
3,066
4,868
4,432
6,273
11,079 15,364 13,295
14. Provision for contingencies
(a) Civil and labor matters
The Company is responsible for certain proceedings before several courts,
mainly deriving from solidarity towards certain contractors, whose controls
used for reducing exposure are monitored by the Company, which also makes
contractual retentions for provisions to such disbursements. In conformity
with the evaluation of its legal counsels and with the contractual retentions,
the Company performs complements for provisions for risks of probable
losses. In 2007, complements amounting to R$1,500 were carried out.
(b) Tax matters
The Company challenges in court the constitutionality of federal taxes in
relation to the Contribution for Social Security Financing (COFINS) and Social
Integration Program (PIS), specifically as to the extension of basis and
triggering of said taxes over revenues earned on sale of real estate, prior to
Law 9718/98, to which a court deposit exists.
24/37
A summary of the constituted provisions and court deposits performed is
presented below:
Parent company
Court
deposit
Provision
Tax
20,484
22,082
Civil
743
800
Labor
542
2,246
21,
25,
21,769
25,128
Net
1,598
57
1,704
3,359
Consolidated
Court
deposit
Provision
25,777
26,374
3,243
3,250
502
2,246
29,
31,
29,522
31,870
Net
597
7
1,744
2,348
The Company is also involved with other civil and labor proceedings which
arose during the normal course of its business, which, in the opinion of the
Management and its legal counsels, have an expectation of loss classified as
possible. Consequently, no provision was constituted in order to eventually
face unfavorable decisions. The amounts of these proceedings, as of
December 31, 2007, are: civil R$8,294 and labor R$949.
15. Related parties
(a) Checking
Checking accounts with partners in ventures
The Company participates in real estate development projects along with other
partners in a direct way, through joint-ventures or related parties, by means of
shareholding interest (normally in SPEs) or through consortiums.
The management structure of these ventures and the cash management are
centralized in the company leading the project, which supervises the evolution
of the construction works and the budgets, being able to ensure that the
necessary investments are made and allocated according to the plan.
The changes in financial position of the venture are reflected in these
balances, observing the respective interest percentage, which are not subject
to restatement or financial charges and do not have a pre-determined maturity.
The average term for the development and conclusion of the ventures in
which the funds have been invested is three years, always based on the
physical and financial projects and schedules for each work. Thus, the
allocation of funds allows the conditions for negotiation settled with each
partner and in each of the projects to be concentrated in specific structures,
more adequate to its characteristics.
25/37
The balances are presented as follows:
Assets
2007
Liabilities
Assets
2006
Liabilities
In SPEs
Acer Part. S/A
Adiantum Empr. S/A
Afelandra Empr. S/A
Agerato Empr. S/A
Aliberti Empr. S/A
Alium Empr. S/A
Alocasia Empr. S/A
América Piqueri Incorp.
Anagalis Empr. S/A
Argentea Empr. S/A
Aristasia Empr. S/A
Asperula Empr. S/A
BCP Empr. Imob. S/A
Bétula Empr. S/A
Borago Empr. S/A
Bordo Empr. S/A
Brassica Empr. S/A
Cairica Empr. S/A
Calaminta Empr. S/A
Calêndula Des. Imob. S/A
Campainha Empr. S/A
Celosia Empr. S/A
Centela Empr. S/A
Chenopodio Empr. S/A
Ciclame Empr. S/A
Clarquia Empr. S/A
Cleome Empr. S/A
Cond. das Palmeiras Empr. S/A
Coreópisis Empr. S/A
Courgete Empr. S/A
Cravina Empr. S/A
Cruá Empr. S/A
Decta Engenharia Ltda.
Dueto Neg. Imob. S/A
Engeplano Part. Ltda
Fucsia Empr. S/A
Gardênia Part. S/A
Gerbreras Empr. S/A
Gestia Empr. S/A
Giardino Des. Imob. S/A
Giardino Empr. Imob. S/A
Glicínia Empr. S/A
Graminea Empr. S/A
Horizonte Empr. S/A
Housing Barão Do Café Ltd
Ibicela Empr. S/A
Jetirana Empr. S/A
932
1,057
1,703
1,300
211
809
108
140
1,634
1,095
480
175
304
2,774
362
1,307
217
3,901
3,597
238
466
1,490
338
331
1,043
228
660
85
439
3,401
471
165
155
7,000
10
334
276
255
1,168
193
980
676
2,930
339
1,637
437
282
303
173
957
136
420
1,677
4,986
400
1,934
2,120
164
961
252
385
1,005
212
338
272
1,544
219
-
233
1,341
584
1
423
5
212
308
254
2,392
1,022
105
379
255
188
13
3
94
2,300
457
426
2
46
967
420
1,571
10,402
1,769
434
26
219
-
26/37
Assets
Landscape Empr. S/A
Malmequer Empr. S/A
Manêtia Empr. S/A
Marianinha Empr. S/A
Mucuna Empr. S/A
Nidus Empr. S/A
Nigra Empr. S/A
North York Neg. Imob. S/A
Olerácea Empr. S/A
Parnaso Empr. S/A
Parnaso Incorp. S/A
Pátio das Alamedas Incorp. S/A
Piper Empr. S/A
Piracanta Empr. S/A
Prunus Empr. S/A
Pumila Empr. S/A
Rossi Oscar Porto Incorp. Ltda.
Rossi Securities Emp. Imob. S/A
Rossi Trust e Part. Ltda.
Salmiana Empr. S/A
Sanquezia Empr. Imob. Ltda.
Santa Felicidade Incorp. S/A
Santo Expedito Cons. Adm. Ltda.
Saponaria Empr. S/A
Scon-Rossi Incorp. S/A
Senecio Empr. S/A
Sibipuruna Empr. S/A
Tapiriri Empr. S/A
Terra Brazilis Empr.
Tibouchina Empr. S/A
Tumbergia Empr. S/A
Other
2007
Liabilities
Assets
2006
Liabilities
3,592
1,296
374
721
369
36
168
2,111
828
1
396
321
168
47
821
1,851
6,140
737
484
786
3,207
161
1,669
3,962
1,238
7,227
1,410
376
16,124
273
3,187
183
1,488
1,915
442
1,156
364
3,854
158
2,020
200
2,487
208
210
658
777
1,000
858
56
4,135
4,600
3,900
489
681
2,747
248
1,032
24
1
1
1
240
1,148
168
(24)
50
199
155
526
904
7
100
18
32
809
804
1
3,022
1,841
1
(68)
383
310
109
2,187
220
2,490
52
105
682
40
1,850
3,460
600
2,747
280
1,482
119,185
43,353
24,959
28,849
184
799
2,131
316
1,553
169
1,000
2,054
775
2,022
2,535
667
228
78
129
274
758
-
401
284
750
167
In Consortiums
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Allure Condominium Club
Altavista
Atmosfera
Autentique
Bosque Rio Branco
Breeze Ecoville
Brooklin to Live
27/37
Assets
2007
Liabilities
Assets
2006
Liabilities
In Consortiums
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Other
Califórnia 5
Catalunya
Chácara Santa Cruz
Chácara Santo Antonio
Clube Tuiuti
Colinas Morumbi
Country
Del Monte
Gaia
Garden Up
Garten Haus
Giardino Paraiso
Gran Vita
Iguatemi Porto Alegre
Image
Jardins de Londres
Landscape
Monte Serrat
Natura Recreio
Orizzonte
Orizzonti San Carlo
Pantai Enseada
Parnaso
Passeo Embaré
Patio Alamedas
Patio das Alamedas
Porto Central
Reserva Campolin
Reserva Petrópolis
Riservato
Rossi-AEM
Rossi-GNO
Solar Tatuapé
Splendore
Victoria Bay
Vivanti
Parent Company
Consolidated (after compensations)
578
3,992
104
2,214
2,667
678
518
812
2,231
1,592
263
1,540
3,968
391
1,064
4,196
274
4,570
508
2,864
1,488
1,034
1,483
153
624
2,103
4,233
5,069
4,117
1,836
337
325
368
4,947
2,758
1,551
2,851
4,930
1,863
3,483
2,696
404
2,524
1,170
359
3,365
2,378
2,294
1,241
1,030
1,296
2,534
603
1,315
1,396
876
2,494
2,875
7,074
2,290
1,748
80
279
517
1,148
668
246
672
1,191
180
1,897
1
374
29
869
2,315
10
714
935
3,518
1,205
2,000
847
239
30
314
1,090
3,039
2,674
1,333
159
50
785
1
1,763
18
665
350
697
649
115
850
6,071
1,651
19
925
1,834
56,363
76,343
24,353
27,770
175,548
119,696
49,312
56,619
7,748
1,812
45,615
32,681
28/37
b) Operations
In November 2007, the Company executed a commercial property lease
agreement, corresponding to 246.56 square meters, for the expansion of its
administrative headquarters located at Condomínio América Business Park,
along with company Paradiso Administração e Participações Ltda., owned by a
controlling shareholder. The agreement was executed under normal market
conditions, the monthly value being R$13.6 thousand, with clause of annual
restatement by IGP-M (General Market Price Index) for the term of 60 months.
On December 2007, the Company sold real estate units of the Praça Capital
project, located in the city of Campinas, to companies owned by controlling
shareholders. The total operation amounted to R$2.3 million. The sale value
per square meter follows the same conditions as the remaining units of the
project traded during the year. These units are leased to the Company for it to
operate its branch in the city of Campinas.
16. Debentures
On July 25, 2007, the first issuance of thirty thousand (30,000) simple
debentures, non convertible into shares, of unsecured type, in a single series,
excluding possibilities of renegotiation, with unit face value of ten thousand
eighty reais and twenty-four centavos (R$10,080.24), and valid through seven
years as of the issuance date, in the total amount of R$302,407, was settled
with remuneration that will earn interest equivalent to 106.6% of daily
average rates of one day Interbank Deposits (DI) one day, extra-group
expressed on a percentage basis per annum (252 business days), calculated
and disclosed by CETIP.
The debentures yield must be paid on a semiannual basis, and the first
maturity date was January 2008, the balance of which on December 31,
2007 amounted to R$17,417, classified under current liabilities.
The issuance expenses amounted to R$1,747, recorded in non-operating
income.
Covenant contractual clauses
The private instrument of deed of the first issuance of simple debentures has
restrictive clauses determining maximum levels of indebtedness and leverage,
as well as minimum levels of coverage of outstanding installments and costs
to be incurred.
29/37
There are other financial commitments in addition to these, among which are:
non-renewal of authorizations and licenses, including environmental ones;
transformation into a limited-liability company;
non-compliance with final and unappealable court decisions ;
reduction of the capital stock not destined to absorb losses;
transfers or assignments of share control;
changes in the shareholding structure, such as mergers, spin-offs and
incorporations in transactions exceeding 10% of shareholders’ equity;
These contractual clauses were fully complied with in the year ended on
December 31, 2007.
17. Shareholders’ equity
(a) Capital stock
The capital stock is R$445,117 on December 31, 2007 and 2006,
represented by 78,851,814 registered common shares. The authorized capital
stock is 100,000,000 common shares.
In the first quarter of 2006, the Company went public by means of the issue
of 30,500,000 non-par, registered common shares at an issue value of R$25
per share, of which R$214,385 was destined to capital stock and R$548,115
to capital reserves, in a share premium account. The cost to place these
shares on the market was R$49,876, classified under non-operating expenses.
b) Treasury Shares
On December 31, 2007, 756,100 common shares had been acquired and
remained in treasury, in the amount of R$17,269. The minimum weighted
average and maximum cost per share are, respectively, R$15.96, R$23.60
and R$25.32 and the market value of such shares was R$45.50 per registered
common share as of December 31, 2007.
c) Appropriation of the net income for the year
The year’s net income, after compensations and deductions set forth by Law
and pursuant to the statutory provision, will be allocated as follows:
5% to the legal reserve, up to the limit of 20% of the paid-up capital stock;
25% of the balance, after allocation to the legal reserve, will be allocated to
the payment of minimum mandatory dividends to all shareholders.
A legal reserve of R$6,566 was established, equivalent to 5% of the year’s
net profit, in conformity with legal and statutory provisions.
30/37
The calculation of proposed dividends corresponding to 2007 is as follows:
Net profit in the year - parent company
Appropriation of legal reserve
Balance available for distribution
Minimum percentage
Minimum annual dividend proposed
Dividends proposed per share, in Reais
2007
131,315
(6,566)
124,749
25%
31,188
0.39935
The Company’s Board of Directors will propose the Annual General Meeting to
approve the allocation of retained earnings, in the amount of R$93,561, to
retain profits for reinvestment in its operations, according to the investment
plan.
18. Deferred taxes
taxes and contributions
contributions
Deferred taxes and contributions (parent company and consolidated) derive
from balances of tax losses and social contribution negative basis, and from
temporary non-deductible expenses at assets, and difference in the practice of
recognition of profits in the real estate activity for tax purposes (cash basis)
and accounting purposes (accrual basis) in liabilities. The management of the
Company and of its subsidiaries, based on the future results projections,
estimate realization within five years.
31/37
The balances of assets and liabilities are presented below:
2007
20
07
Parent company
Base
Deferred
Assets
Deferred income tax and social
contribution tax
Tax losses
Social contribution tax negative
basis
Temporary non-deductible
expenses
113,814
28,454 147,042
36,761
116,004
10,440 149,234
13,431
7,173
46,067
8,501
58,693
21,097
Current
Non--current
Non
Liabilities
Companies taxed by actual
profit
Income tax and social
contribution tax
117,839
COFINS and PIS
72,256
Companies taxed by the
“presumed profit system”
Income tax and social
contribution
COFINS and PIS
Current
Non--current
Non
Consolidated
Base
Deferred
-
25,004
14,389
31,678
19,363
39,330
40,065 147,701
6,684 85,849
46,749
50,218
7,941
58,159
- 418,219
- 416,868
46,749
14,602
32,147
12,881
15,216
28,097
86,256
28,130
58,126
The Company’s management prepared an estimate for the generation of future
results, which shall be taxed, based on the expected result of operations,
discounted at present value at the rate of 1% per month for the next years.
Said technical study is approved by the Executive Board and the Board of
32/37
Directors and presupposes the realization of deferred income tax and social
contribution in the following years:
Yearss
Year
Nominal amounts on December 31, 2007
2008
2009
2010
2011
2012
Deferred taxes on tax losses carryforward
Deferred taxes on temporary differences (*)
Total
(*)
Parent company
4,615
16,076
33,275
17,293
(32,365)
38,894
7,173
46,067
Consolidated
Conso
lidated
4,615
16,076
33,275
17,293
(21,067)
50,192
8,501
58,693
These shall be realized upon the conclusion of challenges in
court under progress as outlined in Note 14.
The amounts of income tax and social contribution stated in the result present
the following conciliation in their values at nominal rate:
Result before taxation
Rate in force
Income tax and social contribution
estimate
Equity accounting
Effect of the result of subsidiaries taxed
by the “presumed profit system”
Other permanent differences
Parent company
2007
2006
152,630
39,984
34%
34%
Consolidated
2007
2006
166,706
45,805
34%
34%
(51,894)
56,035
(13,595)
15,984
(56,680) (15,574)
-
(15,951)
(11,810)
1,328
3,717
10,795
24,771
(21,114)
6,190
10,961
1,577
The Company appropriated R$8,239 (R$22,379 - consolidated) to the 2007
results related to deferred PIS and COFINS.
33/37
19. Real estate development and sale operations
The Company and its subsidiaries have adopted the procedures and rules set
forth by CFC Resolution no. 963 for accounting recognition of income earned
from real estate operations. As a result, the balances of budgeted costs of
units sold and the income from unearned real estate sales, in addition to the
full balance of accounts receivable from sale agreements, derived from the
projects, are not recorded at the financial statements:
(a) Amounts receivable from clients
2007
Parent Company
Clients by real estate development
Allowance for doubtful accounts
Unearned income
Current
282,583
(848)
(22,003)
259,,732
259
2006
Non-Non
Current
620,271
(48,441)
571,,830
571
Total
902,854
(848)
(70,444)
831,,562
831
Current
202,766
(15,080)
187,,686
187
Non-Non
Current
294,332
(21,891)
272,,441
272
Total
497,098
(36,971)
460,,127
460
Current
2006
Non-Non
Current
Current
Total
579,437
(21,891)
557,,546
557
941,537
(43,013)
898,,524
898
2007
Consolidated
Clients by real estate
development
Allowance for doubtful accounts
Unearned income
Current
Non-Non
Current
565,201 1,366,251 1,931,452
(848)
(848)
(33,500)
(81,100) (114,600)
530,,853 1,285
285,,151 1,816
816,,004
530
362,100
(21,122)
340,,978
340
(b) Costs budgeted to be incurred
Parent company
2007
2006
151,055
75,665
Consolidated
2007
2006
291,165
143,074
176,245
24,933
352,233
88,283
12,489
176,437
338,529
47,905
677,599
166,348
23,540
332,962
Current
203,907
104,698
366,436
200,726
NonNon-Current
148,326
71,739
311,163
132,236
Materials
Sub-contractors and
third-party services
Own labor
34/37
(c) Income from real estate sales to appropriate
Parent company
2007
2006
Revenues from real
estate sales
Building costs
Land
Selling and trade
expenses
Financing interest
rates
Net income to
appropriate
552,464
(348,939)
(3,294)
Consolidated
2007
2006
254,232 1,050,104
517,433
(171,389) (664,375) (319,694)
(5,049)
(13,224)
(13,268)
(41,445)
(14,841)
(90,725)
(37,917)
(1,316)
(685)
(1,710)
(844)
157,470
62,268
280,070
145,710
20. Financial instruments
The Company and its subsidiaries participate in operations involving financial
instruments with a view to finance its activities or apply its available funds.
The management of such risks is carried out by defining conservative
strategies, aiming liquidity, profitability and safety. The control policy consists
of permanently following-up rates contracted versus those prevailing in the
market. Operations involving financial instruments with speculation purposes
are not carried out.
The financial instruments are recorded in equity accounts and are represented
by financial investments (Note 4), accounts receivable from clients (Note 5),
loans and financing (Note 11), debentures (Note 16) and treasury shares (Note
17), whose estimated market values are substantially similar to their
respective book values.
On December 31, 2007, there are no current agreements related to derivative
and hedge operations in the Company.
21. Employees and managers’
managers’ profit
profit sharing
Employees’ profit sharing, pursuant to the provisions of the legislation in
force, may occur based on spontaneous programs maintained by the
companies or in agreements with the employees or union entities and was
resolved at a Board of Executive Officers’ meeting.
Managers’ profit sharing shall be purpose of resolutions at the General
Meeting, pursuant to the provisions in item XV of article 21 of the Company’s
Bylaws.
Thus, in 2007, the Company provisioned R$9,505 of employees and
managers’ profit sharing.
35/37
22. Insuran
Insurance
The Company and its subsidiaries adopted the policy of taking out insurance
coverage for assets subject to risks at amounts deemed as sufficient by the
management to cover eventual claims, taking into consideration its activity.
The policies are effective and the premiums were duly paid. We consider we
have a risk management program with a view to setting out risks, seeking on
the market coverage compatible with our size and operations, and our
insurance coverage is consistent with other similar sized-companies operating
in the industry. Below, the insurance coverage:
Engineering risks - (R$758
(R$758,
758,570)
570)
i) Civil liability - coverage for property and bodily damage involuntarily caused
to third parties resulting from the execution of work, facilities and setting
up at the site, purpose of insurance;
ii) Physical damages to real estate (housing credit) - coverage for damages,
losses and property damage derived from sudden and unforeseen accidents
to real estate.
Fire - (R$57,569) lightning and explosion at headquarters and regional offices.
Building conclusion insurance - (R$115,003) it ensures the surrender of
building to committed purchasers.
The assumptions of risks adopted, given their nature, are not included in the
scope of audit of the financial statements, and therefore they were not
audited by our independent auditors.
23. Subsequent events
a)
Changes in the Brazilian Corporate Law
On December 28, 2007, Law 11,638/07 was enacted, which amends certain
provisions of the Brazilian Corporate Law (Law 6,404, as of December 15,
1976). In general terms, the new Law requires the harmonization of the
accounting practices adopted in Brazil with certain international accounting
standards derived from rules issued by the IASB - International Accounting
Standard Board, with effect as of January 1, 2008.
Among the amendments required in the accounting practices adopted in Brazil
are the following: substitution of the statement of changes in financial position
for the statement of cash flows, the addition of the value-added statement,
the creation of new account subgroups, the segregation of tax and market
records and the introduction of new criteria for the classification and
assessment of financial instruments, appreciation of certain assets at market
value, and the concept of adjustment to present value for long-term operations
with assets and liabilities, and for material short-term operations.
36/37
The Company chose to present the statement of cash flows as supplementary
information to these financial statements, and is analyzing possible impacts of
the other changes introduced by Law 11,638/07 to its financial statements,
which, if necessary, will be recognized throughout 2008, and in connection
with normative rulings to be issued by CVM, as per its Technical Notice on
January 14, 2008.
b)
Primary public offering
offering of common shares
On January 15, 2008, the company registered at CVM the requirement of
primary public offering of common shares issued by the Company (“Offering”).
The Offering shall be carried out in the Brazilian non-organized over-thecounter market pursuant to CVM Instruction no. 400/03 and, also, with
efforts for placements abroad based on registration exemptions determined by
the U.S. Securities Act of 1933, as amended. No registry of the Offering or of
the Shares will be submitted to agencies or regulatory bodies of any country’s
capital markets other than Brazil. The share issue price shall be settled by
means of a bookbuilding procedure, pursuant to article 44 of CVM Instruction
no. 400/03. The implementation of the offering is subject to the favorable
conditions of the domestic and international capital markets.
When current conditions are maintained, a notice to the market shall be timely
disclosed, pursuant to the provisions in article 53 of CVM Instruction no.
400/03, containing information on: (i) other characteristics of the Offering; (ii)
places where to obtain the preliminary prospect; (iii) the estimated dates and
places for the disclosure of the Offering; and (iv) the conditions, the
procedure, the reserves period and the bookbuilding period. The Offer shall
take force after the appropriated registry is granted by CVM.
37/37

2007 Financial Statements - Rossi Residencial

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