Rodobens Negócios Imobiliários S.A.

Transcription

1 Rodobens Negócios Imobiliários S.A. Quarterly information - ITR (A free translation of the original report in Portuguese) KPDS

2 Contents Report on the review of quarterly information - ITR 3 Balance sheets 5 Statements of income 6 Statements of comprehensive income 7 Statements of changes in shareholders' equity - Parent company and 8 Statements of cash flows 9 Statements of added value 10 Notes to the quarterly information - ITR 11 2

3 KPMG Auditores Independentes Passeio das Castanheiras, Salas 407 a 411 Condomínio Tríade - Torre Nova York - Parque Faber Castell São Carlos/SP - Brasil Caixa Postal CEP São Carlos/SP - Brasil Telefone +55 (16) , Fax +55 (16) Report on the review of quarterly information - ITR To the Shareholders and Management of Rodobens Negócios Imobiliários S.A. São José do Rio Preto - SP Introduction We have reviewed the interim, individual and consolidated financial information of Rodobens Negócios Imobiliários S.A. ("Company"), contained in the Quarterly Information - ITR Form for the quarter ended, which comprise the balance sheet as of and related statements of income and comprehensive income for the three and six-months period then ended andof changes in shareholders' equity and of cash flows for the six-month period then ended, including the explanatory notes. Company s Management is responsible for the preparation of the individual interim accounting information in accordance with Technical Pronouncement CPC 21(R1)- Interim statements, and of consolidated interim accounting information in accordance with CPC 21(R1) and IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), which considers OCPC 04 Guidance on the application of Technical Interpretation ICPC 02 to Real Estate Development Entities in Brazil issued by the Accounting Pronouncements Committee (CPC) and approved by the Brazilian Securities Commission (CVM) and the Federal Accounting Council (CFC), as well as for the presentation of this information in a manner consistent with the standards issued by the Securities Commission, applicable to the preparation of the Quarterly Information - ITR. Our responsibility is to express a conclusion on these interim financial information based on our review. Scope of review We conducted our review in accordance with the Brazilian and international review standards for interim information (NBC TR Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists in asking questions, chiefly to the persons in charge of financial and accounting affairs, and in applying analytical procedures and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Brazilian and International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. KPMG Auditores Independentes, uma sociedade simples brasileira e firmamembro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative ( KPMG International ), uma entidade suíça. KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. 3

4 Conclusion on the individual interim information Based on our review, we are not aware of any facts that would lead us to believe that the individual interim financial information included in the quarterly information referred to above was not prepared, in all material respects, in accordance with CPC 21 (R1) applicable to the preparation of Quarterly Information - ITR, and presented in a manner consistent with the standards issued by the Securities Commission. Conclusion on consolidated interim information prepared in accordance with IAS 34, which considers OCPC 04 Guideline on the application of Technical Interpretation ICPC 02 to Real Estate Development Entities in Brazil, issued by the Accounting Pronouncements Committee (CPC) and approved by the Brazilian Securities and Exchange Commission (CVM) and the Federal Accounting Council (CFC) Based on our review, we are not aware of any facts that would lead us to believe that the consolidated interim financial information included in the quarterly information referred to above was not prepared, in all material respects, in accordance with IAS 34, which considers OCPC 04 Guidance on the application of Technical Interpretation ICPC 02 to the Brazilian Real Estate Development Entities issued by the Accounting Pronouncements Committee (CPC) and approved by the Securities Commission (CVM) and Federal Accounting Council (CFC), applicable to the preparation of Quarterly Information - ITR, and presented in a manner consistent with the standards issued by the Brazilian Securities Commission. Emphasis of matter As described in note 2.1, individual and consolidated interim financial information have been prepared in accordance with accounting practices adopted in Brazil (CPC 21(R1)). interim financial information was prepared in accordance with IFRS applicable to real estate development entities also consider OCPC 4 Guideline issued by the Accounting Pronouncements Committee. This guideline addresses income recognition of this industry and involves matters related to the meaning and application of the risk and benefit continuous transfer concept and of the control on sale of real estate units concept, as further described in Note 23. Our conclusion is not qualified in this respect. Other issues Statements of added value We also reviewed the individual and value-added statements for the six-month period ended on, prepared by the Company's management, whose presentation in the interim information is required according to the standards issued by the CVM - Securities and Exchange Commission, applicable to the preparation of Quarterly Information - ITR and considered supplementary information by the IFRS, which do not require the presentation of the SVA. These statements were subjected to the review procedures previously described and, based on our review, we are not aware of any other event that make us believe that those were not prepared, in all material respects, in accordance with the individual and consolidated interim accounting information taken as a whole. São Carlos, August 10, 2016 KPMG Auditores Independentes CRC 2SP014428/O-6 Original report in Portuguese signed by Rafael Henrique Klug Accountant CRC 1SP246035/O-7 KPMG Auditores Independentes, uma sociedade simples brasileira e firmamembro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative ( KPMG International ), uma entidade suíça. KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. 4

5 Balance sheets at and December 31, 2015 Amounts expressed in thousands of Reais Parent company Parent company Assets Note 06/30/ /31/ /30/ /31/2015 Liabilities Note 06/30/ /31/ /30/ /31/2015 Cash and cash equivalents 3 71, , , ,919 Suppliers 1,415 2,324 31,397 30,775 Trade receivables 4 15,403 19, , ,455 Loans and financing 10 49,507 99, , ,836 Accounts receivable from sale of lands 5 3,479 21,332 26,455 37,312 Debentures 11 52,351 53,604 52,351 53,604 Property for sale 6 2, , ,789 Social charges and labor legislation obligations 5,379 4,240 9,695 7,918 Accounts receivable from sales of corporate quotas 1, , Taxes payable ,761 7,345 Third-party receivables 13 55,350 79,519 55,492 63,940 Funds from partners 13 1,094 1,737 1,664 1,733 Expenses to be transferred to SPEs 1,018 1,424 1,018 1,424 Accounts payable for acquisition of real estate 14-3,045 15,892 27,301 Unearned sales expenses - - 5,926 7,320 Deferred taxes ,082 30,282 35,804 Prepaid expenses 1,420 2,605 1,607 2,611 Provision for guarantee ,773 13,541 Clients - Co-obligations ,074 3,258 Clients - Co-obligations ,074 3,258 Dividends receivable 7.a 67,062 5, Debts with related parties Other receivables 16,667 4,384 26,665 26,390 Provision for losses in investees 7 6,590 7,080 2,643 2,083 Provision for profit sharing - 2,258-2,258 Total current assets 236, ,848 1,024,658 1,142,891 Minimum compulsory dividends payable - 1,603-1,603 Accounts payable from acquisition of interest and anticipation of condominiums 12 14,698 12,333 14,698 12,333 Interest earning bank deposits 3 11,896 9,449 22,453 9,520 Advances from clients ,867 60,637 Trade receivables 4 7,051 7, , ,505 Other accounts payable 1,052 3,101 15,855 18,901 Accounts receivable from sale of lands 5 39,410 21, , ,829 Property for sale 6 34,770 34, , ,845 Total current liabilities 135, , , ,720 Judicial deposits 2,123 2,384 5,050 5,015 Related party credits 15 6,107 7, ,373 Deferred taxes ,716 11,285 Loans and financing 10 44, , ,895 Investments: Debentures 11 49,844 99,751 49,844 99,751 Investments in subsidiaries and joint ventures 7 677, ,971 75,705 32,477 Provision for tax, labor and civil risks 18 2,261 1,464 21,884 17,227 Property, plant and equipment 8 18,932 21,495 25,333 28,300 Accounts payable for acquisition of real estate ,671 14,392 Intangible assets Accounts payable from acquisition of interest and anticipation of condominiums 9 5,834 6,257 18,981 19, ,223-2,223 - Total non-current assets 803, , , ,683 Total non-current liabilities 99, , , ,550 Shareholders' equity 20 Capital 512, , , ,438 Legal reserve 27,140 27,140 27,140 27,140 Profit retention 286, , , ,068 Treasury shares (16,020) (13,196) (16,020) (13,196) Accumulated losses (4,730) - (4,730) - Shareholders' equity attributable to controlling shareholders 805, , , ,450 Non-controlling interest in investees ,129 33,854 Total shareholders' equity 805, , , ,304 Total liabilities 234, , , ,270 Total assets 1,039,739 1,114,332 1,651,641 1,705,574 Total liabilities and shareholders' equity 1,039,739 1,114,332 1,651,641 1,705,574 See the accompanying notes to the quarterly financial information. 5

6 Statements of income Three and six-month periods ended and 2015 Amounts expressed in thousands of Reais, except net earnings per share - basic and diluted Parent company Note 06/30/ /30/ /30/ /30/ /30/ /30/ /30/ /30/2015 Current quarter Current accumulated Prior quarter Accumulated prior year Current quarter Current accumulated Prior quarter Accumulated prior year Net income from joint ventures sold 23 2,557 2,649 (16) (16) 75, , , ,987 Cost of joint ventures sold 24 (2,659) (2,696) - - (66,298) (137,413) (106,847) (201,154) Gross (loss) / income (102) (47) (16) (16) 8,884 26,718 39,187 74,833 Operating (expenses) income Commercial and sales 24 (861) (1,764) (1,152) (2,554) (8,695) (16,649) (13,180) (26,287) General and administrative 24 (11,096) (21,529) (11,626) (26,110) (17,967) (33,725) (19,110) (40,210) Other operating income and expenses, net (217) (51) (2,277) (6,154) (1,535) (1,737) Appraisal result at fair value - - (1,754) (4,076) - - (1,754) (4,076) (12,174) (23,344) (14,505) (32,445) (28,939) (56,528) (35,579) (72,310) Income (loss) before net financial income (expenses) and taxes (12,276) (23,391) (14,521) (32,461) (20,055) (29,810) 3,608 2,523 Net financial income (expenses) Net monetary variations , ,766 8,350 2,323 4,801 Financial income 25 3,622 8,364 5,584 12,417 12,033 26,975 17,499 35,216 Financial expenses 25 (10,002) (20,932) (10,315) (22,752) (13,921) (28,328) (12,660) (26,882) (5,611) (11,204) (4,624) (9,913) 878 6,997 7,162 13,135 Equity in income of subsidiaries 7 2,437 36,407 19,946 44,215 5,574 27, ,378 Provision for unsecured liability in investees 7 (1,766) (6,542) 1, (162) (685) (369) (327) Profit sharing of investees by the equity method and allowance for unsecured liabilities, net of taxes ,865 21,253 44,761 5,412 26, ,051 (Loss) income before taxes (17,216) (4,730) 2,108 2,387 (13,765) 3,635 11,102 16,709 Income and social contribution taxes Current (4,201) (9,967) (5,689) (12,151) Deferred , ,072 (Loss) net income for the period (17,216) (4,730) 2,108 2,387 (17,208) (4,307) 5,816 6,630 (Loss) net income attributed to: Controlling interest (17,216) (4,730) 2,108 2,387 (17,216) (4,730) 2,108 2,387 Non-controlling interest in investees ,708 4,243 (17,216) (4,730) 2,108 2,387 (17,208) (4,307) 5,816 6,630 Earnings per share Basic and diluted (Reais per share) (0.397) (0.112) (0.397) (0.109) See the accompanying notes to the quarterly financial information. 6

7 Statements of comprehensive income Three and six-month periods ended and 2015 Amounts expressed in thousands of Reais Parent company 06/30/ /30/ /30/ /30/ /30/ /30/ /30/ /30/2015 Current Current Prior Accumulated Current Current Prior Accumulated quarter accumulated quarter prior year quarter accumulated quarter prior year (Loss) net income for the period (17,216) (4,730) 2,108 2,387 (17,208) (4,307) 5,816 6,630 Other comprehensive income Comprehensive income (loss) for the period (17,216) (4,730) 2,108 2,387 (17,208) (4,307) 5,816 6,630 Comprehensive income attributed to: Controlling interest (17,216) (4,730) 2,108 2,387 (17,216) (4,730) 2,108 2,387 Non-controlling interest in investees ,708 4,243 (17,216) (4,730) 2,108 2,387 (17,208) (4,307) 5,816 6,630 See the accompanying notes to the quarterly financial information. 7

8 Statements of changes in shareholders' equity - Parent company and Six-month periods ended and 2015 Amounts expressed in thousands of Reais Attributable to controlling shareholders Note Profit reserves Capital Legal reserve Profit reserves Treasury shares Retained earnings/losses Total Interest of noncontrolling shareholders in investees Total shareholders' equity Balances at December 31, ,438 26, , ,260 87, ,941 Purchase of shares to hold them in treasury (18,006) - (18,006) - (18,006) Exercised stock options - - 1, ,637-1,637 Reversal of exercised stock options - - (954) - - (954) - (954) Net income for the period ,387 2,387 4,243 6,630 Changes in shareholders equity of non-controlling interests in investees Capital increase from non-controlling shareholders ,499 4,499 Capital decrease from non-controlling shareholders (7,150) (7,150) Sale of corporate quotas by non-controlling shareholders (8,201) (8,201) Proposal for the use of net income of non-controlling shareholders: Income distributed to non-controlling shareholders (5,651) (5,651) Balances at June 30, ,438 26, ,702 (18,006) 2, ,324 75, ,745 Balances at December 31, ,438 27, ,068 (13,196) - 818,450 33, ,304 Purchase of shares to hold them in treasury (461) - (461) - (461) Exercised stock options Cancelamento opções de ações - - 2,363 (2,363) Approved additional dividends pursuant to Annual/Special Shareholders Meeting on April 26, (8,397) - - (8,397) - (8,397) Loss for the period (4,730) (4,730) 423 (4,307) Changes in shareholders equity of non-controlling interests in investees Capital increase from non-controlling shareholders Capital decrease from non-controlling shareholders (5,258) (5,258) Proposal for the use of net income of non-controlling shareholders: Income distributed to non-controlling shareholders (4,945) (4,945) Balances at 512,438 27, ,330 (16,020) (4,730) 805,158 24, ,287 See the accompanying notes to the quarterly financial information. (43,267) 8

9 Statements of cash flows Six-month periods ended and 2015 Amounts expressed in thousands of Reais Parent company 06/30/ /30/ /30/ /30/2015 Cash flow from operating activities (Loss) net income for the period: (4,730) 2,387 (4,307) 6,630 Adjustments to reconcile net profit to the net cash from (used in) operating activities: Deferred taxes (57) (57) (5,091) (3,322) Depreciation/amortization 3,123 2,853 3,298 2,996 Stock option plan expenses Equity in income of subsidiaries (36,407) (19,946) (27,133) (1,378) Income from fair value - 4,076-4,076 Allowance for doubtful accounts 84-5,144 - Income (loss) in the disposal of investment Provision for losses in subsidiaries 6,542 (546) Write-offs of property, plant and equipment 140 1, ,937 Provision for tax, labor and civil risks 797 (100) 4,657 4,919 Monetary variations on loans and financing 20,222 22,044 40,197 34,010 Provisions for guarantees (48) - (768) 907 Distribution of profit sharing - (71) - (71) Changes in operating assets Trade receivables 4,766 (9,508) 68,370 14,991 Accounts receivable from sale of lands (430) (1,433) 2,712 1,300 Property for sale (3,217) (183) (66,188) 33,484 Third-party receivables 24, ,215 10,351 2,664 Expenses to be transferred to SPEs 406 (24) 406 (24) Unearned sales expenses - - 1,394 (3,251) Prepaid expenses 1, ,004 (645) Other receivables (12,283) (3,369) (275) (24,045) Clients - Co-obligations 165 5, ,860 Related party credits 1,682 14,980 2,339 4,511 Judicial deposits 261 (129) (35) (586) Variation in operating liabilities Suppliers (909) ,500 Tax and social payable 1, ,645 8,647 Accounts payable for acquisition of real estate (3,045) (3,385) (17,130) (47,930) Advances from clients - - (6,770) 14,417 Funds from partners (643) 278 (69) (4,028) Distribution of profit sharing (2,258) (11,363) (2,258) (11,367) Debts with related parties 18 (7,614) Accounts payable from acquisition of interests 4,588 (5,792) 4,588 (5,792) Other accounts payable (2,049) (315) (3,046) 464 Clients - Co-obligations (165) (5,485) (184) (6,860) Net cash generated in operating activities 3,611 99,997 20,203 47,779 Payment of interest on financing (19,485) (21,381) (36,167) (31,853) Payment of income and social contribution taxes - - (6,452) (9,138) Net cash flow (used in) from operating activities (15,874) 78,616 (22,416) 6,788 Cash flow from investment activities Acquisition of property, plant and equipment and intangible assets (621) (3,524) (1,955) (6,333) Decrease (increase) in investments 51,809 31,846 (16,804) 5,807 Interest earning bank deposits (2,447) 112 (12,933) 102 Cash flow (used in) from investment activities 48,741 28,434 (31,692) (424) Cash flow from financing activities Payment of loans and financing (107,238) (115,686) (162,999) (184,682) Loans and financing 50, , ,933 Payment of repurchase of shares (461) (18,006) (461) (18,006) Income distributed (10,000) (16,240) (10,000) (16,240) Non-controlling Payment of dividends to non-controlling shareholders - - (4,945) (5,651) Capital increase from non-controlling shareholders ,499 Capital decrease from non-controlling shareholders - - (5,258) (7,150) Sale of corporate quotas by non-controlling shareholders (8,201) Net cash flow (used in) from financing activities (67,699) (149,932) (29,262) (110,498) Net decrease in cash and cash equivalents (34,832) (42,882) (83,370) (104,134) Cash and cash equivalents at January 1 106, , , ,510 Cash and cash equivalents on June 30 71, , , ,376 Difference (34,832) (42,882) (83,370) (104,134) See the accompanying notes to the quarterly financial information. 9

10 Statements of added value Six-month periods ended and 2015 Amounts expressed in thousands of Reais Parent company 06/30/ /30/ /30/ /30/2015 Income Income from joint ventures sold 2,410 (18) 167, ,611 Allowance for doubtful accounts (84) - (5,144) - Other income (18) (831) (17) (1,700) Inputs acquired from third parties Cost of joint ventures sold (2,696) - (137,413) (201,154) Materials, energy, outsourced services and other (10,061) (12,875) (34,777) (48,521) Gross added value (10,449) (13,724) (10,255) 31,236 Retentions Depreciation, amortization and depletion (3,123) (2,853) (3,298) (2,996) Net added value produced (13,572) (16,577) (13,553) 28,240 Added value received as transfer Equity in income of subsidiaries 36,407 44,215 27,133 1,378 Income from fair value - (4,076) - (4,076) Provision for losses in subsidiaries (6,542) 546 (685) (327) Financial income (loss) (1,707) 1,499 17,020 25,248 Other income 52 1,126 (993) (37) Total added value payable 14,638 26,733 28,922 50,426 Distribution of added value Personnel Direct remuneration 6,492 9,006 7,411 10,013 Benefits 1,620 1,265 1,750 1,406 F.G.T.S Taxes, rates and contributions Federal 1,363 1,969 13,265 19,260 State Municipal Third-party capital remuneration Interest 9,497 11,412 10,023 12,113 Remuneration of own capital Income (loss) for the period (4,730) 2,387 (4,730) 2,387 Non-controlling interest in retained earnings ,243 Distributed added value 14,638 26,733 28,922 50,426 See the accompanying notes to the quarterly financial information. 10

11 Notes to the quarterly information - ITR (In thousands of Reais) 1 Operations Rodobens Negócios Imobiliários S.A. (the Company ), headquartered in the city of São José do Rio Preto, State of São Paulo, at Avenida Francisco das Chagas de Oliveira, nº 2.500, Higienópolis, CEP , is engaged in the purchase and sale of real estate, parceling or plotting of land, development of real estate and construction of properties for sale, provision of services to third parties and management of own or third-party real estate financing receivables portfolio. With publicly-traded stock since January 2007, recorded under CVM code with shares in the new market with the trading code RDNI3, the Company is part of Empresas Rodobens and its real estate developments are established in the form of SPEs - Special Purpose Entities and can rely on the partnership of local partners through direct interests in the SPEs. The Company has two segments: Stillo Rodobens covers mid- and high-level condominiums designed as private clubs with large common areas and a number of leisure items and Rodobens Urbanismo, with a focus on managing extensive areas intended for property development. The Company s subsidiaries and jointly-controlled subsidiaries are summarized in Note 7. 2 Presentation of interim financial information and main accounting policies 2.1 Preparation basis The interim financial information was prepared in accordance with Technical Pronouncement CPC 21 (R1) - Interim Statement with international standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board - IASB, as well as for the presentation of this information in a manner consistent with the standards issued by the Securities Commission, applicable to the preparation of the Quarterly Information - ITR. The individual interim financial information of the Parent company has been prepared in accordance with BR GAAP, and in the Company s case they differ from the financial statements prepared under IFRS regarding the recognition of equity in net income of subsidiaries in subsidiaries with a negative shareholders equity, pursuant to item 39A of CPC 18. Specifically, the consolidated financial information is in agreement with the International Financial Reporting Standards - IFRS applicable to property development companies in Brazil, including Guidance OCPC 04 - Application of Technical Interpretation ICPC 02 to property development companies in Brazil with regard to revenue recognition in the activity and involving matters related to applying the concept of ongoing risk transfers, benefits and control of property units sold. 11

12 This quarterly information has been prepared according to the basis of preparation and accounting policies consistent with those adopted in preparing the financial statements as of December 31, 2015 and should be read together with such statements. The information on the notes to financial statements that have not been significantly changed or those presenting irrelevant disclosures compared to December 31, 2015 have not been fully repeated in This quarterly information. However, information has been added to explain the main events and transactions occurred, enabling the understanding of changes in the Company s financial position and performance of operations since the publication of the financial statements as of December 31, The preparation of this interim information, Management used judgments, estimates and assumptions that affect the Company s application of accounting principles and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and assumptions are continuously reviewed and there have been no significant changes in the preparation of these interim financial statements in comparison to the financial statements as of December 31, The presentation of the Statement of Added Value (SAV) is required by Brazilian Corporate Law and accounting practices adopted in Brazil applicable to public companies. International Financial Reporting Standards (IFRS) do not require the presentation of this statement. As a result, under IFRS, this statement is presented as supplementary information, without affecting the set of financial statements. These financial statements were approved by the Board of Directors of the Company on August 10, New IFRS and Interpretations of IFRIC (IASB Information Interpretation Committee) applicable to the consolidated financial statements There are no IFRS rules or IFRIC interpretations that have not yet become effective and that are expected to have a significant impact on the Company besides those disclosed in the financial statements as of December 31, Cash and cash equivalents and interest earning bank deposits Parent company 06/30/ /31/ /30/ /31/2015 Current assets Cash and bank deposits (a) 2,152 2,038 49,424 54,982 Interest earning bank deposits (b) 69, , , ,937 Total cash and cash equivalents 71, , , ,919 Non-current assets Financial investments pledged as guarantee of lawsuits 11,896 9,449 22,453 9,520 Total interest earning bank deposits 11,896 9,449 22,453 9,520 (a) (b) A large portion of the balance held at banks is remunerated by the savings indices. Interest earning bank deposits are cash equivalents since they are promptly convertible into a known sum of cash and subject to an insignificant risk of change of value. These short-term investments refer to fixed-income securities 12

13 yielding between 100% and 102% of the Interbank Deposit Certificate (CDI) rate and are available for use in the operations of the Company and its subsidiaries. 4 Trade receivables Receivables from clients, adjusted to present value, are as follows: Parent company 06/30/ /31/ /30/ /31/2015 Credits to be settled with SFH (National Housing System) funds (a) 5,001 6, , ,733 Consumer financing 17,279 20, , ,936 Other credits payable 1,909 1,912 45,780 47,086 (-) Allowance for doubtful accounts (1,735) (1,651) (9,939) (4,795) Total 22,454 27, , ,960 Current assets 15,403 19, , ,455 Non-current assets 7,051 7, , ,505 Total 22,454 27, , ,960 (a) The credits for contracting of financing from the Housing Financial System (SFH) refers to the amount of depreciation that is in the process of analysis before the agent of the Brazilian System of Savings and Loans (SBPE) or before the developer. In transfer process When the Company delivers its projects, most part of clients undergoes a bank financing process (also known as transfer) that is required for the delivery of keys and entering into possession of the unit. Clients that are not approved for bank financing will be analyzed on an individual basis and may be terminated; therefore, they will not receive the keys and will not enter into possession of the real estate. Clients that do not address financing conditions will not receive the units and the Company will return, according to contract, a portion of received balance and will place units for sale again. Maturities of amounts in the process of being transferred refer to the original date included in the purchase and sale agreement, and the Company only changes maturity date upon effective renegotiation with clients. Allowance for doubtful accounts (PCLD) The Company recorded as PCLD the amount of R$1,735 in parent company (R$ 1,651 AS OF December 31, 2015) and R$ 9,939 in consolidated (R$ 4,795 as of December 31, 2015), approximately 91% on balance of Other credits payable of the parent company and 22% of Other credits payable on consolidated balance. Overdue balances refer to pro-soluto cases (cases without appeal); I.e. units that were passed on to customers and have payables to the Company. When recognizing an allowance for doubtful accounts, the Company s management took into consideration analyses of market value of assets pledged in guarantee of accounts receivable, and considered amounts overdue for more than 180 days. For securities overdue below 180 days, the Management believes that there is no risk of loss. The balances of current assets as at and December 31, 2015 are comprised by the following maturities: 13

14 Parent company 06/30/ /31/ /30/ /31/2015 Credits to be settled with SFH (National Housing System) / FGTS funds Consumer financing Other credits payable Total Credits to be settled with SFH (National Housing System) / FGTS funds Consumer financing Other credits payable Total Credits to be settled with SFH (National Housing System) / FGTS funds Consumer financing Other credits payable Total Credits to be settled with SFH (National Housing System) / FGTS funds Consumer financing Other credits payable Total Overdue - in days: 3,674 8, ,624 6,866 10, ,153 44,134 62,167 3, , ,851 34,255 3, ,609 Up to ,704 4, ,725 14,406 3, , ,131 9, ,155 13,387 1, , ,828 3, ,085 9, , ,270 1, ,976 11, ,796 >121 3,670 8, ,151 6,086 9, ,787 29,201 42,831 2,028 74, ,558 27,570 1, ,567 Falling due - in days: 1,327 1, , , , ,807 91,225 13, , ,214 76,060 16, ,846 Up to 30 1, , ,485 10,268 1,447 73,200 15,293 3,444 1,543 20, ,788 5,220 1,124 26,132 16,228 1,825 1,502 19, ,609 55,049 1,081 81,739 24,023 2,269 1,448 27, ,873 2,330 1,060 34,263 6,598 2,016 1,414 10, , ,139 96,052 18,358 8, , ,072 66,506 10, ,243 Total 5,001 10, ,403 7,432 11, , , ,392 17, , , ,315 20, ,455 The balances of non-current assets as at and December 31, 2015 are comprised by the following maturities: Parent company 06/30/ /31/ /30/ /31/2015 Credits to be settled with SFH (National Housing System) / FGTS funds Consumer financing Other credits payable Total Credits to be settled with SFH (National Housing System) / FGTS funds Consumer financing Other credits payable Total Credits to be settled with SFH (National Housing System) / FGTS funds Consumer financing Other credits payable Total Credits to be settled with SFH (National Housing System) / FGTS funds Consumer financing Other credits payable Total Year of maturity , ,426 1,824 10,583 6,250 18,657 4,564 18,894 12,215 35, , ,150-1, ,295 5,459 18,085 9,841 33, ,047 8,249 26, ,065-1,065-1, , ,688 2,468 19, ,908 1,750 18, ,062-1,062-1,256-1, , , , ,072 After ,139-3,139-2,587-2, , , , ,711 Total - 7, ,051-7, ,806 7, ,860 18, ,867 4, ,621 22, ,505 14

15 The balances of trade receivables are adjusted for inflation based on the indexes below in conformity with contractual clauses: (i) (ii) Until delivery of the real estate units sold, based on the national civil construction index (INCC), and; After delivery of the real estate units sold, based on the variation of the general market price index (IGP-M) or the managed prime rate (TR). When the client does not get the mortgage with a financial institution, the respective unit is untreated and this time the accounting treatment is the reversal of the balance of the client by deducting the income for the period recorded in the income statement under the caption Net income from joint ventures sold "by contrast is reversed and also the cost of this unit under the caption cost of joint ventures sold against the stock of the Company. 5 Accounts receivable from sale of lands The Company and its subsidiaries carried out sales of land that are segregated dates as described in the contracts of purchase and sale. These operations were conducted with the commitments of payments in currency, payment in kind of units and Global Value Sales with guaranteed minimum. As of and December 31, 2015, the balances are represented as follow: Parent company Joint venture 06/30/ /31/ /30/ /31/2015 Parent company Land - Ponta Grossa 19,290 18,689 19,290 18,689 Land - Palhoça (*) 15,000 15,000 15,000 15,000 Land - Cascavel II 6,454 6,426 6,454 6,426 Land - C&S 2,113 2,299 2,113 2,299 Land - Rio Preto VIII Subsidiaries Rodobens Administradora 414 Ltda. (*) ,543 50,006 Rodobens Urbanismo Ltda (*) ,190 49,797 Rodobens Malls Administração de Shopping Center Ltda ,046 - Sistema Fácil - São Paulo II - SPE Ltda ,988 Terra Nova Rodobens Incorporadora Imobiliária - Residence IV - SPE Ltda Sistema Fácil Incorporadora Imobiliária Campos dos Goytacazes I SPE Ltda Total 42,889 42, , ,141 Total current assets 3,479 21,332 26,455 37,312 Total non-current assets 39,410 21, , ,829 Receipts by currency 2,113 2,299 23,866 27,955 Receipts by payment in kind of units ,988 Receipts by VGV 40,776 40, , ,198 (*) Such SPEs have an estimated term to make the payment of general sales value (VGV). 15

16 6 Property for sale Represented by properties for sale and land for future developments as follows: Parent company 06/30/ /31/ /30/ /31/2015 Property concluded 2,653-22,694 10,896 Property under construction , ,417 Lands for future developments ,785 28,476 Total current assets 2, , ,789 Land for future developments (*) 34,770 34, , ,845 Total non-current assets 34,770 34, , ,845 (*) Land with launches scheduled for The book value of the land for a joint venture is transferred to line item "Units under construction" when the joint venture is launched. At the balance sheet dates presented, have not been identified indicative of loss, and thus there was no need to register a provision for reduction of the values of stocks. Compound interest Interest capitalized for the period ended totals R$ 18,097 (R$ 12,192 as of June 30, 2015) in the consolidated. 7 Investments in subsidiaries and jointly controlled entities Under the terms of CPC 45 / IFRS 12, the Company opted to add the information from the subsidiaries and jointly-controlled subsidiaries with a balance of investments greater than R$5,000. Investments in subsidiaries and jointly-controlled subsidiaries with balance of investments above R$5,000 are presented below by entity: 16

17 Income (loss) for the Equity in net income of Equity in net income of % RNI % RNI Total assets Shareholders' equity Net income period Investments Investments subsidiaries subsidiaries Positive investments June 2016 Dec 2015 June 2016 June 2016 June 2016 June 2016 June 2016 Dec 2015 Jun 2016 Jun 2015 Rodobens Administradora 414 Ltda % % 64,829 55, ,495 55,961 57,624 1, Rodobens Administradora 432 Ltda % 50.00% 11,942 10, (196) 5,221 5,719 (98) 439 Rodobens Incorporadora Imobiliária SPE Ltda % % 90,870 23,438 14,121 3,013 23,548 34,230 3,143 7,521 Rodobens Incorporadora Imobiliária SPE Ltda % % 98,585 23,147 19, ,147 32, ,337 Rodobens Incorporadora Imobiliária SPE Ltda % 75.00% 52,345 15,234 (3,009) (949) 11,426 11,972 (711) 4,739 Rodobens Incorporadora Imobiliária SPE Ltda % % 52,608 10,712 6,129 (1,113) 10,712 11,893 (1,113) 1,678 Rodobens Incorporadora Imobiliária SPE Ltda % % 8,901 6,822 - (1) 6,822 5,603 (1) - Rodobens Incorporadora Imobiliária SPE Ltda % % 11,902 9,147 - (1) 9,147 7,509 (1) - Rodobens Incorporadora Imobiliária SPE Ltda % % 10,048 9,980 - (1) 9,980 9,761 (1) (1) Rodobens Malls Administração de Shopping % % 18,661 17,761 9,960 3,624 13,086 10,108 3, Rodobens Malls Incorporadora Imobiliária SPE Ltda % % 11,425 9,680 - (1) 9,680 9,469 (1) (10) Rodobens Malls Incorporadora Imobiliaria SPE Ltda % % 16,143 15,367 - (15) 15,367 14,918 (15) (37) Rodobens Moradas - Pacatuba II - SPE Ltda % 55.00% 17,581 10,277 1, ,652 12, ,910 Rodobens Urbanismo S.A % % 279, ,872 25,433 42, , ,335 42,961 17,776 Sistema Fácil Alvorada IV SPE Ltda % % 8,493 5, (750) 5,956 5,558 (750) (635) Sistema Fácil Campos dos Goytacazes I SPE Ltda % % 10,513 9,369 1,510 (136) 9,369 14,320 (136) 214 Sistema Fácil Cuiabá III SPE Ltda % % 14,376 7,157 2, ,157 10, (1,557) Sistema Fácil São Paulo II SPE Ltda % 50.00% 12,435 11,252 1,640 (571) 5,626 7,161 (285) 84 Sistema Fácil Tamboré 7 SPE Ltda % % 21,270 19,239 (412) (154) 19,239 20,892 (154) 1,026 Sistema Fácil Tamboré 8 SPE Ltda % % 18,002 11, ,728 16, Sistema Fácil Tamboré Houses II SPE Ltda % % 18,214 17,686 (936) (183) 17,686 19,569 (183) 10 Terra Nova Rodobens Presidente Prudente I SPE Ltda % % 18,634 9,750 (1,023) (1,106) 9,750 12,898 (1,106) (345) Terra Nova Rodobens Residence IV SPE Ltda % % 18,333 18, ,321 18, Other (*) 552, ,640 96,517 (10,627) 151, ,330 (12,451) 5,108 Total 1,438, , ,809 37, , ,412 36,407 44,215 Goodwill in investment acquisitions Panamby 49.99% 50.00% 8,714 8, Rodobens Administradora 414 Ltda % % Sistema Fácil Tamboré 8 SPE Ltda % % 4,212 4, Santa Rita Loteadora Imobiliária SPE Ltda % 0.00% 3, Fazenda Desengano Loteadora Imobiliária SPE Ltda % 0.00% 2, Sítio do Morro Loteadora Imobiliária SPE Ltda % 0.00% 1, Total subsidiaries and jointly-controlled subsidiaries: 21,149 13, Total investments 677, ,971 36,407 44,215 Changes in consolidated investments: Elimination of consolidated amount 588, ,935 9,274 42,837 Transfer of goodwill to intangible assets 13,144 13, Balance of consolidated investments 75,705 32,477 27,133 1,378 Disinvestments Other (*) 36,801 (8,633) 3,784 (6,508) (6,590) (7,080) (6,542) 546 Total 36,801 (8,633) 3,784 (6,508) (6,590) (7,080) (6,542) 546 Total investments (6,590) (7,080) (6,542) 546 Changes in consolidated investments: Elimination of consolidated amount 3,947 4,997 5,857 (873) Balance of consolidated investments (2,643) (2,083) (685) (327) (*) Include companies with a balance of Investments below R$5,

18 The goodwill recognized is attributed to expected future profitability calculated on the additional interest acquired in these SPEs. In the consolidated financial statements goodwill is classified in intangible assets, according to note 9.1. a. Dividends receivable On January 4, 2016, the distribution of subsidiaries dividends to the Company was carried out, regarding the retained earnings up to December 31, 2015, as per the "Dividends receivable" account. The Management estimates the receipt of dividends up to the end of Invested 06/30/ /31/2015 Rodobens Incorporadora Imobiliária 304 SPE Ltda 14,000 - Terra Nova Rodobens Incorporadora Imobiliária Presidente Prudente I SPE Ltda 7,130 - Rodobens Incorporadora Imobiliária 325 SPE Ltda 5,000 - Terra Nova Rodobens Incorporadora Imobiliária Feira De Santana III SPE Ltda. 4,790 - Rodobens Incorporadora Imobiliária 324 SPE Ltda 3,670 - Sistema Fácil Incorporadora Imobiliária Uberlândia IV SPE Ltda. 3,640 - Sistema Fácil Tamboré 8 Villaggio SPE Ltda. 3,450 - Sistema Fácil Incorporadora Imobiliária Cuiabá III SPE Ltda. 2,900 - Sistema Fácil Incorporadora Imobiliária Uberaba III SPE Ltda. 2,400 - Terra Nova Incorporadora Imobiliária Aracatuba II SPE Ltda. 2,400 - Rodobens Incorporadora Imobiliária 323 SPE Ltda 2,330 - Rodobens Incorporadora Imobiliária 348 SPE Ltda 2,300 - Rodobens Malls Incorporadora Imobiliária 414 Ltda 1,790 - Sistema Fácil Incorporadora Imobiliária Cuiabá V SPE Ltda. 1,650 - Terra Nova Rodobens Incorporadora Imobiliária Pelotas III SPE Ltda 1,600 - Sistema Fácil Incorporadora Imobiliária Uberlândia II SPE Ltda. 1,335 - Terra Nova Rodobens Incorporadora Imobiliária Palhoça III SPE Ltda. 1,260 - Sistema Fácil Incorporadora Imobiliária São Carlos III SPE Ltda. 1,220 - Sistema Fácil Incorporadora Imobiliária Porto Alegre II SPE Ltda. 1,200 - Terra Nova Rodobens Incorporadora Imobiliária Feira De Santana II SPE Ltda Sistema Facil Gravatai II SPE Ltda Sistema Fácil Incorporadora Imobiliária Cuiabá I SPE Ltda Terra Nova Rodobens Marajo Incorporadora Imobiliária Londrina I SPE Ltda Sistema Facil Santa Maria I SPE Ltda Sistema Fácil Tamboré 7 Villaggio SPE Ltda Sistema Fácil Incorporadora Imobiliária Alvorada IV SPE Ltda Terra Nova Rodobens Incorporadora Imobiliária Santa Maria III SPE Ltda Sistema Fácil Incorporadora Imobiliária Cuiabá IV SPE Ltda Rodobens Urbanismo Ltda - 4,554 Sistema Fácil Incorporadora Imobiliária Porto Alegre I SPE Ltda ,062 5,251 18

19 8 Property, plant and equipment Parent company Description 12/31/2014 Additions Decreases 06/30/2015 Cost Machinery and tools 37, (935) 36,250 Computers and peripherals 3, ,331 Furniture and fixtures 2, (5) 2,602 Buildings 3, ,573 Facilities ,004 Improvements in third-party property 1, (89) 1,776 Others (216) ,296 1,245 (1,245) 49,296 Accumulated depreciation Machinery and tools (18,577) (2,012) 225 (20,364) Computers and peripherals (1,785) (207) - (1,992) Furniture and fixtures (783) (115) 5 (893) Buildings (506) (74) - (580) Facilities (337) (63) - (400) Improvements in third-party property (392) (122) - (514) Others (33) (64) 5 (90) (22,413) (2,657) 235 (24,833) 26,883 (1,412) (1,009) 24,463 Parent company Description 12/31/2014 Additions Decreases 12/31/2015 Additions Decreases 06/30/2016 Cost Machinery and tools 37, (946) 36,239 - (55) 36,184 Computers and peripherals 3, , ,317 Furniture and fixtures 2, (100) 2, (7) 2,528 Buildings 3, , ,573 Facilities , ,060 Improvements in third-party property 1, (500) 1, ,776 Others (493) ,296 1,645 (2,039) 48, (62) 48,921 Accumulated depreciation Machinery and tools (18,577) (4,003) 225 (22,355) (1,975) 27 (24,303) Computers and peripherals (1,785) (394) - (2,179) (196) - (2,375) Furniture and fixtures (783) (246) 40 (989) (113) 3 (1,099) Buildings (506) (150) - (656) (75) - (731) Facilities (337) (128) - (465) (64) - (529) Improvements in third-party property (392) (265) - (657) (143) - (800) Others (33) (122) 49 (106) (46) - (152) (22,413) (5,308) 314 (27,407) (2,612) 30 (29,989) 26,883 (3,663) (1,725) 21,495 (2,531) (32) 18,932 19

20 Description 12/31/2014 Additions Decreases 06/30/2015 Cost Sales stand 14,882 1,922 (973) 15,831 Machinery and tools 37, (939) 36,265 Computers and peripherals 3, (96) 3,827 Furniture and fixtures 5, (764) 5,507 Buildings 3, ,573 Facilities 1, (47) 1,171 Improvements in third-party property 1, (89) 1,880 Others (216) ,930 4,017 (3,124) 68,823 Accumulated depreciation Sales stand (6,195) (1,817) 15 (7,997) Machinery and tools (18,581) (2,015) 226 (20,370) Computers and peripherals (2,229) (304) 67 (2,466) Furniture and fixtures (2,288) (655) 355 (2,588) Buildings (506) (74) - (580) Facilities (386) (83) 8 (461) Improvements in third-party property (496) (121) - (617) Others (42) (64) 6 (100) (30,723) (5,133) 677 (35,179) 37,207 (1,116) (2,447) 33,644 Description 12/31/2014 Additions Decreases 12/31/2015 Additions Decreases 06/30/2016 Cost Sales stand 14,882 1,977 (2,479) 14,380 1,187-15,567 Machinery and tools 37, (950) 36,254 - (55) 36,199 Computers and peripherals 3, (115) 3, ,794 Furniture and fixtures 5, (962) 5, (8) 5,346 Buildings 3, , ,573 Facilities 1, (47) 1, ,227 Improvements in third-party property 1, (500) 1, ,880 Other (502) ,930 4,468 (5,555) 66,843 1,415 (63) 68,195 Accumulated depreciation Sales stand (6,195) (3,861) 1,328 (8,728) (1,426) - (10,154) Machinery and tools (18,581) (4,008) 226 (22,363) (1,975) 27 (24,311) Computers and peripherals (2,229) (501) 86 (2,644) (202) - (2,846) Furniture and fixtures (2,288) (946) 483 (2,751) (285) 3 (3,033) Buildings (506) (150) - (656) (75) - (731) Facilities (386) (156) 8 (534) (72) - (606) Improvements in third-party property (496) (265) - (761) (142) - (903) Other (42) (122) 58 (106) (172) - (278) (30,723) (10,009) 2,189 (38,543) (4,349) 30 (42,862) 37,207 (5,541) (3,366) 28,300 (2,934) (33) 25,333 20

21 9 Intangible assets Parent company Description 12/31/2014 Additions Decreases 06/30/2015 Cost Software licenses 20,628 2,279 (493) 22,414 Other ,896 2,279 (493) 22,682 Accumulated amortizations Software licenses (15,817) (885) 1 (16,701) Other (106) (12) - (118) (15,923) (897) 1 (16,819) 4,973 1,382 (492) 5,863 Parent company Description 12/31/2014 Additions Decreases 12/31/2015 Additions Decreases 06/30/2016 Cost Software licenses 20,628 4,203 (13,516) 11, (111) 11,748 Other ,896 4,203 (13,516) 11, (111) 12,016 Accumulated amortizations Software licenses (15,817) (1,775) 12,396 (5,196) (843) - (6,039) Other (106) (24) - (130) (13) - (143) (15,923) (1,799) 12,396 (5,326) (856) - (6,182) 4,973 2,404 (1,120) 6,257 (312) (111) 5,834 Description 12/31/2014 Additions Decreases 06/30/2015 Cost Goodwill on acquisition of quotas 14, ,410 Software licenses 20,908 2,315 (508) 22,715 Other ,586 2,315 (508) 37,393 Accumulated amortizations Software licenses (16,086) (930) 18 (16,998) Other (106) (12) - (118) (16,192) (942) 18 (17,116) 19,394 1,373 (490) 20,277 Description 12/31/2014 Additions Decreases 12/31/2015 Additions Decreases 06/30/2016 Cost Goodwill on acquisition of quotas 14,410 - (851) 13,559 - (414) 13,145 Software licenses 20,908 4,204 (13,757) 11, (111) 11,788 Other ,586 4,204 (14,608) 25, (526) 25,201 Accumulated amortizations Software licenses (16,086) (1,598) 12,451 (5,233) (844) - (6,077) Other (106) (24) - (130) (13) - (143) (16,192) (1,622) 12,451 (5,363) (857) - (6,220) 19,394 2,582 (2,157) 19,819 (313) (526) 18,981 21

22 Expenses on amortization of intangible assets are recognized in line item "General and administrative expenses" in the statement of income for the period. 10 Loans and financing 10.1 Breakdown of loans Parent company 06/30/ /31/ /30/ /31/2015 Current liabilities: Real estate credit (a) ,613 88,104 Bank Credit Note - CCB (b) 49,507 99,526 49,507 99,732 49,507 99, , ,836 Non-current liabilities: Real estate credit (a) , ,943 Bank Credit Note - CCB (b) 44,678-44,678 4,952 44, , ,895 Total 94,185 99, , ,731 a. Real estate credit Mortgage loans, which are collateralized by mortgage on properties in local currency, are obtained from the National Housing System (SFH) to finance the construction of properties, with interest between 8% and 10% per year, indexed to the TR (managed prime rate) and payable in monthly installments through On August 25, 2015, the Company held fundraising with the financial institution, through a CCB estate, issued by the subsidiary, Rodobens Incorporadora Imobiliária 363 SPE Ltda valued at R$22,000, subject to compensatory interest rate of 11.5% per annum + TR, with a maturity of five years and payment will occur on August 6, 2020 and collateralized by fidejussory guarantee of the Company, as guarantor of the transaction, as co- obligor, jointly with the issuer for all obligations assumed by it. The proceeds from this transaction will be used solely as a means of financing projects in the housing sector. On August 28, 2015, the Company held fundraising with the financial institution, through a CCB estate, issued by the subsidiary, Terra Nova Rodobens Incorporadora Imobiliária Feira de Santana V SPE Ltda valued at R$11,000, subject to compensatory interest rate of 11.5% per annum + TR, with a maturity of five years and payment will occur on September 09, 2020 and collateralized by fidejussory guarantee of the Company, as guarantor of the transaction, as co- obligor, jointly with the issuer for all obligations assumed by it. The proceeds from this transaction will be used solely as a means of financing projects in the housing sector. On January 20, 2016, the Company held fundraising with the financial institution, through a CCB estate, issued by the subsidiary, Terra Nova Rodobens Incorporadora Imobiliária - Presidente Prudente II - SPE Ltda valued at R$ 18,085 subject to compensatory interest rate of 14.85% per annum, with a maturity of five years and payment will occur on January 5, 2021 and collateralized by fidejussory guarantee of the Company, as guarantor of the transaction, as coobligor, jointly with the issuer for all obligations assumed by it. The proceeds from this transaction will be used solely as a means of financing projects in the housing sector. 22

23 The balances of mortgage loans refer to amounts already released by financial institutions, and total loans approved and contracted for the construction of the joint ventures are distributed as follows: Contracted credit Debit balance Joint venture 06/30/ /31/ /30/ /31/2015 Rate of Interest Subsidiaries Sistema Fácil Marília III SPE Ltda. 27,424 27,424 1,435 1,794 8% Sistema Fácil, Incorp Imob - São José do Rio Preto XX SPE Ltda. 19,828 19, % Terra Nova Rodobens Dourados I - SPE Ltda. 37,769 37,769 1,034 1,388 8% Sistema Fácil Santa Maria I SPE Ltda. 17,465 17, % Terra Nova Rodobens Alvorada IV - SPE Ltda. 30,223 30, % Sistema Fácil Incorporadora Imobiliária Cuiabá IV - SPE Ltda. 40,796 40, ,645 8% Sistema Fácil Incorporadora Imobiliária Cuiabá VI - SPE Ltda. 45,244 45,244 1,414 2,091 8% Sistema Fácil Incorporadora Uberaba III SPE Ltda. 46,867 46,867 1,436 1,981 8% Sistema Fácil Cuiabá III SPE Ltda. 28,919 28,919 2,255 8,267 9% Sistema Fácil Cuiabá V SPE Ltda. 48,917 48, % Terra Nova Rodobens - Presidente Prudente I - SPE Ltda. 65,620 65,620-4,487 10% Rodobens Incorporadora Imobiliária SPE Ltda. 16,510 16,510-4,508 10% Rodobens Incorp. Imob SPE Ltda. 39,613 39,613 3,134 3,572 8% Rodobens Incorp. Imob SPE Ltda. 68,640 68,640 51,912 57,174 9% Rodobens Incorporadora Imobiliária SPE Ltda. 69,430 31,435 29,550 22,073 9% Rodobens-Stefani Nogueira Incorporadora Imobiliária SPE Ltda. 40,049 34,574 32,765 30,135 9% Rodobens Moradas - Pacatuba II - SPE Ltda. 38,424 38,424 2,466 5,147 8% Terra Nova Rodobens Incorp Imob Feira de Santana III SPE Ltda. 44,003 44, % Rodobens Incorporadora Imobiliária SPE Ltda. 69,864 69,864 4,609 6,123 9% Rodobens Incorporadora Imobiliária SPE Ltda. 69,430 69,430 60,242 37,498 9% Rodobens Incorporadora Imobiliária SPE Ltda. 48,400 48,400 44,957 36,993 9% Rodobens Incorporadora Imobiliária SPE Ltda. 40,614 40,614 1,664 5,856 8% Rodobens Incorporadora Imobiliária SPE Ltda. 25,441 25,441 9,528 4,765 10% Rodobens Incorporadora Imobiliária SPE Ltda. 10,400 10,400 3,503 1,868 10% Rodobens Incorporadora Imobiliária SPE Ltda. 94,688 94,688 23,157 16,772 10% Rodobens Incorporadora Imobiliária SPE Ltda. 74,110 74,110 54,525 37,737 9% Rodobens Incorporadora Imobiliária SPE Ltda. 22,000 22,000 22,535 22,310 12% Terra Nova Rodobens Incorp Imob Feira de Santana V SPE Ltda. 11,000 11,000 11,273 11,153 12% Terra Nova Rodobens Incorp Imob Pres Prudente II SPE Ltda. 18,085-18,413-15% 1,209,773 1,148, , ,047 b. Bank Credit Bill (CCB) On September 18, 2013, the Company held fund-raising with Banco Safra S.A, through a CCB estate valued at R$100,000, subject to post-fixed compensatory interest rate of 1.10% per annum + CDI, with a maturity of three years and maturity will occur on September 18, The proceeds from this transaction will be used solely as a means of financing projects in the housing sector. On November 21, 2014, the Company held fund-raising with Banco Safra S.A, through a CCB estate valued at R$70,000, subject to post-fixed compensatory interest rate of 1.40% per annum + CDI, with a maturity of three years and maturity will occur on November 25, The proceeds from this transaction will be used solely as a means of financing projects in the housing sector. In January 2016, the Company held fund-raising with Banco Votorantim S.A, through a CCB estate valued at R$50,000, subject to post-fixed compensatory interest rate of 2.30% per annum + CDI, with a maturity on July 27, The proceeds from that bond will be allocated for the financing of real estate construction of housing units and/or residential developments currently undertaken by the SPEs investees. The Issuer s obligations contained in these Certificates may be declared due in advance and immediately enforceable by Banco Votorantim S.A. and/or by the Creditor, regardless of notice, court summons or extrajudicial notification, upon the occurrence of the events established below: (i) Protests of bills against the Issuer and/or Guarantor and/or its subsidiaries, the individual amounts of which exceed R$5,000, or R$30,000 in the aggregate, where the appropriate and timely proof 23

24 of stay of protest, cancellation, suspension of the effects or payments is not submitted to the Creditor within 15 (fifteen) business days from receipt of the notification of protest. (ii) (iii) Capital decrease of the Issuer in an amount above 10% (ten percent), except in cases of capital decrease performed with the objective of absorbing losses, under the terms of article 173 of law no. 6,404/76. Noncompliance, by the Issuer, with the Financial Ratios, as indicated below, at the related closing dates of the quarterly information and annual financial statements. Ratio 1 (Net Debt + Land Payable - Land Receivable - SFH and FGTS Debt) = 0.7 Shareholders' equity Ratio 2 (Total receivables + Finished inventory) = < 0 or 1.3 (Net Debt + Land Payable - Land Receivable + Unrecognized costs and expenses on sold properties - SFH and FGTS debt) As of, all the contractual clauses were duly complied with. Expenses incurred and acquaintances with these borrowings were R$ 4,295, including fees, commissions and other costs and expenses. On, the remaining balance is R$ 1,346. These amounts were accounted rectifying the liability and are amortized in the income statement in accordance with the amortization term debts. As of, the balances presented in current and non-current liabilities are recorded net of such costs. Schedule of debt expiration: Years: Period ended Up to Total Loans and financing 168, ,694 28, ,268 Years: December 31, 2015 Up to Total Loans and financing 187, ,145 26, ,731 24

25 11 Debentures The Company s debentures are comprised as follow: Debentures Issuance Quantity issued Active quantity Maturity Interest Remuneration 06/30/ /31/2015 3rd Issuance 04/15/ /29/2018 CDI + spread of 1.60% p.a. Semi-annual 102, ,355 Current liabilities 52,351 53,604 Non-current liabilities 49,844 99,751 3rd Issuance The resources obtained in the 3 rd issue were set aside to improve the current debt profile of the Issuer and for other corporate uses. Expenses incurred and known with the 3rd issue totaled R$995, including fees, commissions and other costs and expenses. These amounts were accounted rectifying the liability and will be amortized in the income statement in accordance with the amortization term debts. The 3rd issue debentures are subject to certain restrictive covenants requiring that the Company and its subsidiaries comply with certain financial and operating ratios as shown below: (a) (b) (c) (d) (e) Protests of bills against the Issuer or its subsidiaries, the individual or joint amounts of which exceed R$5,000 (five million reais), or R$30,000 in the aggregate, where the appropriate and timely proof of stay of protest, cancellation, suspension of the effects or payments is not submitted to the Trustee within 15 (fifteen) business days from receipt of the notification of protest. Capital decrease of the Issuer in an amount above 10% except (i) in cases of capital decrease performed with the objective of absorbing losses, under the terms of Article 173 of the Brazilian Corporation Law; or (ii) if previously authorized by at least 75% (seventy-five percent) of the holders of the outstanding debentures gathered together at a General Debentureholders Meeting. Payment of dividends, interest on shareholders equity or any other profit sharing provided for in the Issuer s Bylaws, if the Issuer is at default with the pecuniary obligations described in the Indenture, except, however, for the payment of the compulsory minimum dividend provided for in article 202 of the Brazilian Corporation Law. If the risk rating originally assigned to the Issuer is downgraded to a level below that equivalent to the "BBB+" rating by Standard & Poor's or by Fitch Ratings, or its equivalent by Moody's. Noncompliance, by the Issuer, with the Financial Ratios, as indicated below, at the related closing dates of the quarterly information and annual financial statements. Ratio 1 Ratio 2 Ratio 3 Net debt - SFH and FGTS debt = 0.7 Total receivables + finished inventory = 1.3 EBITDA = 1.2 Shareholders' equity Net debt - SFH and FGTS debt Net financial expense Or Or Total receivables + finished inventory = 0 EBITDA = < 0 (i.e. EBITDA>0) Net debt - SFH and FGTS debt Net financial expense As of, the Company is compliant with all restrictive covenants. 25

26 Schedule of debt expiration: Years: Up to Total Debentures 52,351 49, ,195 Years: December 31, 2015 Up to Total Debentures 53,604 99, , Accounts payable for acquisition of interests and advanced dissolution of condominiums (Parent Company) As of December 27, 2013, in view of the intention to extinguish certain consortia, the Company took over control of the aforesaid consortia and condominiums, assuming part of their rights and obligations through the total payment of R$23,000 which will be paid in 4 (four) installments of R$5,750 restated by the CDI up to the date of the effective payment, and three installments were paid on January 6, December 20, 2014 and 2015, and the remaining matures in December 20, 2015 and December 20, Such balance is recorded under current liabilities in caption Accounts payable for acquisition of interest and anticipation of condominiums. As of November 3, 2015, the Company acquired an additional interest of 50% from capital quotas concerning the corporations: Sistema Fácil Incorporadora Imobiliária - Santa Cruz do Sul I - SPE Ltda., Terra Nova Rodobens Incorporadora Imobiliária Pelotas II SPE Ltda., Terra Nova Rodobens Incorporadora Imobiliária Pelotas III SPE Ltda., Terra Nova Rodobens Incorporadora Imobiliária Pelotas IV SPE Ltda., Terra Nova Rodobens Incorporadora Imobiliária Santa Maria I SPE Ltda., Terra Nova Rodobens Incorporadora Imobiliária Santa Maria II Ltda., Terra Nova Rodobens Incorporadora Imobiliária Santa Maria III Ltda., Sistema Fácil Incorporadora Imobiliária Porto Alegre I SPE Ltda., Sistema Fácil Incorporadora Imobiliária Porto Alegre II SPE Ltda., Terra Nova Incorporadora Imobiliária Gravataí II SPE Ltda., Sistema Fácil Incorporadora Imobiliária Alvorada I SPE Ltda., Terra Nova Rodobens Incorporadora Imobiliária Alvorada II SPE Ltda., Sistema Fácil Incorporadora Imobiliária Alvorada III SPE Ltda., Terra Nova Rodobens Incorporadora Imobiliária Alvorada IV SPE Ltda., Rodobens Incorporadora Imobiliária 303 SPE Ltda., Rodobens Incorporadora Imobiliária 307 SPE Ltda., Rodobens Incorporadora Imobiliária 317 SPE Ltda., Rodobens Incorporadora Imobiliária 334 SPE Ltda., Rodobens Incorporadora Imobiliária 335 SPE Ltda., Rodobens Incorporadora Imobiliária 336 SPE Ltda., Rodobens Incorporadora Imobiliária 337 SPE Ltda., Rodobens Incorporadora Imobiliária 338 SPE Ltda., Rodobens Incorporadora Imobiliária 339 SPE Ltda., Rodobens Incorporadora Imobiliária 340 SPE Ltda., Rodobens Incorporadora Imobiliária 345 SPE Ltda., for total amount of R$25,160, being R$15,056 through offset of loans, R$5,104 paid after five days counted as of contract signature, and R$5,000 to be paid in 10 monthly and successive installments of R$500 each, with first one maturing on December 20, 2015 and the others on the same day of subsequent months. With this acquisition, the Company now holds 100% interest in these SPEs. 26

27 As of November 27, 2015, the Company acquired an additional interest of 33% from quotas concerning the corporations: Sistema Fácil Incorporadora Imobiliária São José do Rio Preto I SPE Ltda., Sistema Fácil Incorporadora Imobiliária São José do Rio Preto II SPE Ltda., Sistema Fácil Incorporadora Imobiliária São José do Rio Preto III SPE Ltda., e. a participação adicional de 50% das quotas sociais Terra Nova Rodobens Incorporadora Imobiliária XVI SPE Ltda., Sistema Fácil Incorporadora Imobiliária São José do Rio Preto XVII SPE Ltda., Terra Nova Rodobens Incorporadora Imobiliária XXI SPE Ltda. and Terra Nova Rodobens Incorporadora Imobiliária XXII SPE Ltda., for the value of a single installment of R$500 and will be paid in up to three days after registration of contract changes with São Paulo State Board of Trade. With this acquisition, the Company now holds 100% interest in these SPEs. Such balances are recorded under current and non-current liabilities in caption Accounts payable for acquisition of interest and anticipation of condominiums. 13 Receivables from third parties (current assets) and funds from partners (current liabilities) Parent company Assets - Third-party receivables 06/30/ /31/ /30/ /31/2015 Advances (a) 28,893 49,010 10,087 11,438 Advances to third-parties (b) 4,634 5,225 17,526 20,480 Sundry debtors (c) 11,636 11,211 10,217 8,835 Recoverable taxes 5,884 9,699 12,965 18,144 Notes receivable (d) 4,049 4,037 4,049 4,037 Advance to employees Consortiums acquired ,350 79,519 55,492 63,940 (a) (b) (c) (d) Advances made to SPEs for the purpose of supporting operations. Advances mainly to suppliers for acquisition of inputs and land. Receivables from expenses and/or costs paid by the parent company and subsidiaries passed on to joint ventures and others. Loan agreements with unrelated parties. Parent company Liabilities - Funds from partners 06/30/ /31/ /30/ /31/2015 Advances Sundry creditors (a) 1,084 1,706 1,149 1,483 Accounts payable - sundry ,094 1,737 1,664 1,733 (a) Expenses and/or costs passed on to joint ventures to the parent company and joint operations. 27

28 The Company takes part in real estate development joint ventures together with other partners directly or through related parties, ownership interest or consortiums. The management of these projects and cash management are centralized in the joint venture's leading company, which inspects the progress of the construction work and budgets. Therefore, the joint venture's leader ensures that the necessary funds are used and allocated as planned. The sources and uses of the joint venture's funds are reflected in these balances, considering the related ownership interest percentage, which are not subject to adjustment for inflation or financial charges and do not have a pre-established maturity date, as established in the participation agreements. 14 Accounts payable for acquisition of real estate They are commitments assumed in the purchase of land recorded under Real estate for sale for real estate development, which will be paid off as follows: (a) with the transfer of a percentage of the Total Potential Sales Value (VGV) of the respective joint ventures, generally ranging between 4% and 35%, as the moneys are received; (b) in national currency according to the conditions listed in the contracts of purchase and sale (not considered in the VGV category) and/or (c) by means of exchange value of real estate units. These commitments are discounted to present value and are comprised as follow: Parent company Joint venture 06/30/ /31/ /30/ /31/2015 Parent company Land - Zona Sul (SJRP - SP) - 3,045-3,045 Subsidiaries Rodobens Incorporadora Imobiliária SPE Ltda ,921 7,532 Rodobens Incorporadora Imobiliária SPE Ltda ,503 6,503 Rodobens Incorporadora Imobiliária SPE Ltda ,996 3,902 Rodobens Incorporadora Imobiliária SPE Ltda ,769 3,457 Rodobens Incorporadora Imobiliária SPE Ltda ,654 1,654 Rodobens Incorporadora Imobiliária SPE Ltda ,489 2,667 Rodobens Incorporadora Imobiliária SPE Ltda ,193 2,539 Rodobens Incorporadora Imobiliária SPE Ltda Terra Nova Rodobens Inc Imob Feira de Santana III - SPE Ltda Rodobens Moradas Incorporadora Imobiliária Pacatuba II - SPE Ltda ,025 Camargo Corrêa Rodobens Emp. Imob SPE Ltda Rodobens Incorporadora Imobiliária SPE Ltda Rodobens Administradora 432 Ltda Terra Nova Rodobens Inc Imob Feira De Santana I - SPE Ltda Terra Nova Rodobens Inc Imob Feira De Santana II - SPE Ltda Sistema Fácil Incorp. Imob. Cascavel SPE Ltda CCDI JAW Holding Participações Ltda Rodobens Moradas Incorporadora Imobiliária Pacatuba I - SPE Ltda Rodobens Incorporadora Imobiliária SPE Ltda. - 3,593 Terra Nova Rodobens Incorporadora Imob Dourados I - SPE Ltda ,126 Terra Nova Rodobens Inc Imob Pres. Prudente I - SPE Ltda Total - 3,045 24,563 41,693 Total current liabilities - 3,045 15,892 27,301 Total non-current liabilities - - 8,671 14,392 Payments by currency 1,240 3,045 12,197 20,015 Payments by payment in kind of units - - 1,880 5,473 Payments by VGV ,486 16,205 28

29 The balance payable is adjusted under the same conditions of the purchase and sale agreements of the units subject or not to passing on the VGV percentage. 15 Related parties The Company, its controlling shareholders and subsidiaries and jointly-controlled subsidiaries carry out trading and financial transactions among them under prices, terms, finance charges and other conditions considered by Management as usual in the real estate development. These transactions include the provision of funds for projects, service agreements, controlling shareholders' guarantees for financing agreements, and installment sale of residential units to some of the current jointly controlling shareholders. The balances of transactions between related parties were eliminated in the consolidation. The balances of trading and financial transactions, represented by intercompany loan agreements are as follows: Parent company Assets 06/30/ /31/ /30/ /31/2015 Associated companies, subsidiaries and jointlycontrolled operations: SPEs 6,107 7, ,373 Banco Rodobens S.A. 13,346 21,027 13,346 21,027 19,453 28,816 13,380 23,400 Parent company Liabilities 06/30/ /31/ /30/ /31/2015 Jointly-controlled subsidiaries and operations: SPEs Parent company Current Current Prior Accumulated Current Current Accumulated quarter accumulated quarter prior year quarter accumulated Prior quarter prior year 06/30/ /30/ /30/ /30/ /30/ /30/ /30/ /30/2015 Income Associated companies, subsidiaries and jointly-controlled operations: SPEs , Banco Rodobens S.A Marans Holdings S.A Joint venture partners: Capa Engenharia Ltda Construtora Nogueira Porto Ltda Romeu Chap Chap Desenvolvimento e Consultoria Ltda ,268 2, ,286 29

30 Parent company Current Current Prior Accumulated Current Current Accumulated quarter accumulated quarter prior year quarter accumulated Prior quarter prior year Expenses 06/30/ /30/ /30/ /30/ /30/ /30/ /30/ /30/2015 Associated companies and jointly-controlled operations: SPEs (605) (1,303) (503) (957) (605) (1,303) (503) (957) (605) (1,303) (503) (957) (605) (1,303) (503) (957) Intercompany balances recognized in liabilities and expenses refer basically to loan agreements of the parent company with its subsidiaries and jointly-controlled subsidiaries, which are substantially remunerated at CDI - Interbank Deposit Certificate. On, there are 4 subsidiaries with a balance (5 on December 31, 2015), while the most representative asset balances are as follows: Rodobens Incorporadora Imobiliária 369 SPE Ltda - R$ 5,949 (R$ 5,306 as of December 31, 2015). Intercompany balances recognized in liabilities and expenses with related parties refer basically to loan agreements entered into with Rodobens Group Companies and partners in joint ventures related to jointly-controlled subsidiaries and operations. The balances of trading and financial transactions, represented by intercompany loan agreements are as follows: Parent company Current Current Prior Accumulated Current Current Prior Accumulated quarter accumulated quarter prior year quarter accumulated quarter prior year 06/30/ /30/ /30/ /30/ /30/ /30/ /30/ /30/2015 Income from services rendered Subsidiaries and jointly-controlled subsidiaries SPEs 1,081 1,953 1,007 1, , ,081 1,953 1,007 1, , Expenses from services rendered Rodobens Group Companies Management remuneration The purpose of the remuneration policy for statutory officers and members of the Board of Directors is to attract and retain the best talents to work as administrators. Members of the Executive Board are entitled to a fixed and a variable remuneration. The fixed and variable remuneration adopted is approved by the Board of Directors and ratified at the Annual General Meeting. The Company offers to its directors a profit sharing plan linked to the achievement of budget goals and operating goals. 30

31 Independent members of the Board of Directors are entitled only to a fixed monthly remuneration, regardless of the number of summons. The Board of Directors members indicated by controlling shareholders is not entitled to remuneration. In addition, effective members of the Board of Directors are entitled only to fixed remuneration, established within the limits provided for in applicable law. As of and 2015, the Company and its subsidiaries bookkept expenses with remuneration of its management in the amount of R$ 2,924 (R$ 7,588 in 2015), including seven statutory officers (four statutory officers in 2015), six members of the Board of Directors (seven members of the Board of Directors in 2015), three members of the Supervisory Board (three members of the Supervisory Board in 2015) and three of the Audit Committee. Of this amount, R$ 628 (R$ 4,784 in 2015) correspond to the variable compensation plan. 16 Deferred taxes 16.1 Deferred taxes Deferred income tax, social contribution on profit and PIS and COFINS are calculated based on income recognized during the year that were not financially realized. Payment will be made as revenues are earned, pursuant to the tax criterion adopted by the Company. The tax basis for the years, under prevailing tax legislation, is as follows: Liabilities 06/30/ /31/2015 Income recognized under the percentage-of-completion method and not financially realized 874,624 1,008,353 Deferred income tax 13,966 15,260 Deferred social contribution 7,253 7,958 Deferred Tax for social security finance - COFINS 17,083 19,618 Deferred Employees profit participation program - PIS 3,696 4,253 41,998 47,089 Current liabilities 30,282 35,804 Non-current liabilities 11,716 11, Reconciliation of Income tax and Social contribution The income tax and social contribution are reconciled to the tax rate, as follows: 41,988 47,089 31

32 Parent company 06/30/ /30/ /30/ /30/ /30/ /30/ /30/ /30/2015 Current Current Prior Accumulated Current Current Prior Accumulated quarter accumulated quarter prior year quarter accumulated quarter prior year Income (loss) before income and social contribution taxes (17,216) (4,730) 2,108 2,387 (13,765) 3,635 11,102 16,709 Exclusion of equity in net income of subsidiaries and fair value ,865 19,499 40,685 5,412 26,448 (1,422) (3,025) Adjusted income (loss) before income and social contribution taxes (17,887) (34,595) (17,391) (38,298) (19,177) (22,813) 12,524 19,734 Income tax at statutory rate - 34% 6,082 11,762 5,913 13,021 6,520 7,756 (4,258) (6,710) Net effect of companies taxed based on deemed profit (3,443) (3,936) 4,885 9,652 Effect of the deferred income and social contribution taxes when is not formed on timing differences and tax losses (6,082) (11,762) (5,913) (13,021) (6,082) (11,762) (5,913) (13,021) Income tax and social contribution for the period (3,443) (7,942) (5,286) (10,079) Current portion (4,201) (9,967) (5,689) (12,151) Deferred portion , , (3,443) (7,942) (5,286) (10,079) 32

33 16.3 Income tax loss and negative basis of social contribution The deductible temporary differences, accumulated tax losses and negative basis of social contribution do not lapse pursuant to the tax legislation in force. Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profits will be available so that the Company can utilize the benefits of these. The total tax losses from income tax and negative basis of social contribution accumulated on at the parent company are R$ 61,762 and R$ 62,126 respectively (R$ 44,563 and R$ 44,927 on December 31, 2015) Segregation of assets of the development All of the Company s joint ventures are included in Asset Segregation structures set up in the form of SPEs (Special Purpose Entities). On, the Company consists of the Parent Company and the consolidation of 206 SPEs. Of the Company s 206 SPEs with active projects, 65 opted for RET Special Taxation System, and established the Termo de Patrimônio de Afetação (Related Property Term). The gross operating income for the year of the SPEs classified under RET in relation to the consolidated gross operating income for the period, are presented as follows: companies Special Taxation Regime (RET) companies % of RET on Total Gross operating income (loss) Net income from joint ventures sold 164, ,522 75% Cost of properties sold (137,413) (112,431) 82% Gross income 26,718 10,091 38% 17 Provision for guarantee Parent company 06/30/ /31/ /30/ /31/2015 Provision for Guarantee ,773 13,541 This provision is set up by applying a percentage between 1% and 2% on the cost of units sold. This percentage was determined by Management based on the Company's historical losses on the repair of properties sold. The provision for warranty is set up to cover the correction of structural (up to five years) and material defects and apparent defects (up to two years). Changes in the provision for contingencies are as follows: Parent company Balance at December 31, ,659 Provisioned in the period - 2,859 Consumed in the period - (1,952) Balance at June 30, ,566 33

34 Parent company Balance at December 31, ,541 Provisioned in the period Consumed in the period (48) (1,755) Balance at - 12, Provision for tax, labor and civil risks The Company has lawsuits and administrative proceedings in progress of a labor and civil nature. The provision formation policy adopted by the Company is related to the procedural stage of lawsuits effectively filed by the plaintiffs, so that the probability of loss is changed, after announcement of the court decision, from "possible" to "probable", on which occasion provision is formed in the amount determined for the award. As of, the Company recognized a provision for contingencies in an amount considered sufficient to cover lawsuits and litigations that, in the opinion of Management and its legal advisors, may have unfavorable outcomes. Parent company 06/30/ /31/ /30/ /31/2015 Labor/ civil (a) 2,261 1,464 21,884 17,227 (a) Refer mainly to litigations involving labor and social security claims and compensation for loss and damage arising from consumption relationships not supported by insurance coverage. Changes in provisions for the period are as follow: Parent company Labor/Civil Labor/Civil Balance at December 31, ,535 Provisioned in the period ,291 Reversed in the period (216) (6,372) Balance at June 30, ,454 Parent company Labor/Civil Labor/Civil Balance at December 31, ,464 17,227 Provisioned in the period 1,286 10,130 Reversed in the period (489) (5,473) Balance at 2,261 21,884 In addition, according to the opinion of the Company s legal advisors, there are other civil, labor and tax lawsuits with possible risk in the amount of R$ 1,529 (R$ 1,493 as of December 31, 2015) in parent company and R$ 23,473 (R$ 20,379 as of December 31, 2015) in consolidated. 34

35 The Management of the Company and its subsidiaries understands that there are no future significant risks not covered by sufficient provisions in their financial statements. The Company's income tax returns are open to review and final approval by tax authorities for five years. Other tax and social security charges are also open to review and final approval by tax authorities for varying statutory periods. 19 Clients - Co-obligations In the quarter ended December 31, 2010, the Company also entered into two agreements with Brazilian Securities Companhia de Securitização, whereby it is jointly liable for these receivables. These agreements establish that, over the portfolio term, the Company and its subsidiaries are required to repurchase all the assigned receivables having three, consecutive or not, installments past-due. 20 Shareholders' equity - Parent company 20.1 Capital As of, subscribed and paid-up capital is R$512,438, represented by 43,769,808 nominative common shares (same as of December 31, 2015) with no par value Legal reserve Recognized at 5% of the profit for the year, within the limit established by law Profit retention As of December 31, 2015, profit reserves have been reclassified in the shareholders equity from accumulated earnings to retained earnings after recording of legal reserve and distribution of minimum mandatory dividends and have been available to shareholders for future allocation Treasury shares On January 07, 2015, the Company approved the 6 th stock purchase program to be held in treasury and subsequently sold or canceled, under the terms of Article 20, subparagraph o, of the Company s Bylaws, of Instruction CVM no. 10/80, as amended, and of Article 30 of Law 6,404/76. This program has a validity period of 365 days and buyback limited to the maximum quantity of 1,871,273 nominative common shares. On November 9, 2015, a Board of Directors meeting approved cancellation of 500,000 common shares issued by the Company and held in treasury, without changing capital value. Number of common shares, all of them nominative, registered and with no par value was 44,269,808 and went to 43,769,808. The Company holds in treasury 1,580,963 preferred shares of its own issue, acquired in the market up to for R$ 16,020 for future disposal or cancellation. The market value as at corresponds to R$ 11,067 (R$ 7.00 per share). 35

36 21 Earnings per share Reconciliation of income (loss) for the period and weighted average value per share used to calculate basic and diluted earnings are as follows: Parent company 06/30/ /30/2015 Income (loss) for the period - continued operations (4,730) 2,387 Number of shares during the year (thousand) 42,294 43,334 Net income/(loss) per share - basic and diluted (0,112) 0,055 For the period ended, the Company did not have potential dilutive common shares and, accordingly, diluted earnings per share is equivalent to basic earnings per share, as shown above. 36

37 22 Financial instruments a. Accounting classification and fair values Statement of financial instruments and their respective category classification The following table shows the book and fair values of financial assets and liabilities, including their fair value hierarchy. It does not include information on the fair value of financial assets and liabilities not measured at fair value if the book value is a reasonable approximation of fair value: Parent company Book value Fair value Designated at fair value Loans and receivables Held to maturity Other financial liabilities Total Level 1 Level 2 Level 3 Total Financial assets measured at fair value Interest earning bank deposits 11, ,896-11,896-11,896 Total 11, ,896-11,896-11,896 Financial assets not measured at fair value Cash and cash equivalents - 71, , Trade receivables - 22, , Third-party receivables - 55, , Other receivables - 16, , Related party credits - 6, , Total - 172, ,

38 Parent company Book value Fair value Designated at fair value Loans and receivables Held to maturity Other financial liabilities Total Level 1 Level 2 Level 3 Total Financial liabilities not measured at fair value Supplier ,415 1, Loans and financing ,185 94,185-94,185-94,185 Debentures , , , ,195 Funds from partners ,094 1, Debts with related parties Accounts payable from acquisition of interests ,921 16, Other accounts payable ,052 1, Total , , , ,380 38

39 Parent company December 31, 2015 Book value Fair value Designated at fair value Loans and receivables Held to maturity Other financial liabilities Total Level 1 Level 2 Level 3 Total Financial assets measured at fair value Interest earning bank deposits 9, ,449-9,449-9,449 Total 9, ,449-9,449-9,449 Financial assets not measured at fair value Cash and cash equivalents - 106, , Trade receivables - 27, , Third-party receivables - 79, , Other receivables - 4, , Related party credits - 7, , Total - 225, , December 31, 2015 Book value Fair value Designated at fair value Loans and receivables Held to maturity Other financial liabilities Total Level 1 Level 2 Level 3 Total Financial liabilities not measured at fair value Suppliers 2,324 2, Loans and financing ,526 99,526-99,526-99,526 Debentures , , , ,355 Funds from partners ,737 1, Accounts payable for acquisition of real estate ,045 3, Debits with related parties Accounts payable from acquisition of interests ,333 12, Other accounts payable ,101 3, Total , , , ,881 39

40 Book value Fair value Designated at fair value Loans and receivables Held to maturity Other financial liabilities Total Level 1 Level 2 Level 3 Total Financial assets measured at fair value Interest earning bank deposits 22, ,453-22,453-22,453 Total 22, ,453-22,453-22,453 Financial assets not measured at fair value Cash and cash equivalents - 201, , Trade receivables - 656, , Third-party receivables - 55, , Other receivables - 26, , Related party credits Total - 940, , Book value Fair value Designated at fair value Loans and receivables Held to maturity Other financial liabilities Total Level 1 Level 2 Level 3 Total Financial liabilities not measured at fair value Suppliers ,397 31, Loans and financing , , , ,301 Debentures , , , ,195 Funds from partners ,664 1, Accounts payable for acquisition of real estate ,563 24, Debits with related parties Accounts payable from acquisition of interests ,921 16, Other accounts payable ,855 15, Total , , , ,496 40

41 Book value Fair value December 31, 2015 Designated at fair value Loans and receivables Held to maturity Other financial liabilities Total Level 1 Level 2 Level 3 Total Financial assets measured at fair value Interest earning bank deposits 9, ,520-9,520-9,520 Total 9, ,520-9,520-9,520 Financial assets not measured at fair value Cash and cash equivalents - 284, , Trade receivables - 729, , Third-party receivables - 63, , Other receivables - 26, , Related party credits - 2, , Total - 1,107, ,107, December 31, 2015 Book value Fair value Designated at fair value Loans and receivables Held to maturity Other financial liabilities Total Level 1 Level 2 Level 3 Total Financial liabilities not measured at fair value Suppliers 30,775 30, Loans and financing , , , ,629 Debentures , , , ,355 Funds from partners ,733 1, Accounts payable for acquisition of real estate ,693 41, Debits with related parties Accounts payable from acquisition of interests ,333 12, Other accounts payable ,901 18, Total , , , ,984 41

42 b. Measurement of fair value The book values referring to the financial instruments contained in the balance sheet, when compared with the amounts that could be obtained in their trading in an asset market or, in the absence hereof, with the net present value adjusted with a basis on the current interest rate in the market, are substantially close to their corresponding market values. Therefore, the fair value of accounts such as credit with clients is estimated as the present value based on the average offer rate of the Company minus the Amplified Consumer Price Index (IPCA) or at the rates of remuneration of government bonds (NTN-B), whichever is higher. The fair value of loans is estimated by method of discounted future cash flow, by using rates available for similar debt and terms. On the Company had total indebtedness of R$ 579,463 of which R$ 383,083 is related to Real Estate Credits with a weighted average remuneration of 9.5%. Considering that 31% of this debt is in the short term, and that the risk-free projected Interbank Deposit Certificate (CDI) is approximately 14% given the average period of indebtedness, Management understands that the fair value effects would not be representative, as the projected CDI should also be increased by the rate of risk. c. Financial risk management Overview The Company is exposed to the following risks resulting from financial instruments: (i) (ii) (iii) (iv) Credit risk; Liquidity risk; Market risk; and Operating risk. This note presents information on the Company's exposure to each of the risks above, the Company's objectives, measurement policies, and the Company's risk and capital management proceedings. Risk management framework The Company's management has a policy of managing its risks, which considers the adoption of procedures that involve all its critical areas, ensuring that business conditions are risk-free real. The Company, its subsidiaries and jointly controlled entities enter into transactions involving financial instruments in order to finance their activities or invest their available funds. The management of these risks is performed through the definition of conservative strategies aiming at liquidity, profitability and safety. The control policy consists of ongoing monitoring of contracted rates against market rates. 42

43 Credit risks The Company restricts its exposure to credit risks associated to banks and short-term investments by investing with reputable financial institutions. With respect to trade receivables, the Company restricts its exposure to credit risks by selling to a broad client base and through ongoing credit analyses. As of, there was no significant concentration of credit risk associated with clients. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of bank balances, short-term investments and trade receivables. The balance of accounts receivable is spread out over a number of clients, with tangible guarantees consisting in the respective properties. Credit risk exposure The carrying amounts of financial assets classified as loans and receivables represent the maximum credit exposure. The maximum credit risk exposure on balance sheet date was: Book value Parent company 06/30/ /31/ /30/ /31/2015 Cash and cash equivalents 71, , , ,919 Interest earning bank deposits 11,896 9,449 22,453 9,520 Trade receivables 22,454 27, , ,960 Accounts receivable from sale of lands 42,889 42, , ,141 Accounts receivable from sales of corporate quotas 1, , Clients - Co-obligations ,074 3,258 Third-party receivables 55,350 79,519 55,492 63,940 Other receivables 16,667 4,384 26,665 26,390 Related party credits 6,107 7, , , ,739 1,116,199 1,272,974 Liquidity risk Liquidity risk is the risk of the Company encountering difficulties in performing the obligations associated with its financial liabilities that are settled with cash payments or with another financial asset. The Company's approach in liquidity management is to guarantee, as much as possible, that it always has sufficient liquidity to perform its obligations upon maturity, under normal and stress conditions, without causing unacceptable losses or with a risk of sullying the Company's reputation. In subsidiaries, this risk is eliminated due to the compatibility of terms and amortization flows between issued securities and acquired backing. As regards the parent company, funds were raised for investment in new joint ventures, whose future flow of real estate development operations will back settlement of loans. The Company manages liquidity risk by managing cash flows and maintaining a capital structure supported by financial assets, real estate receivables and real estate units, which allows a high level of leverage. In addition, the Company monitors assets and liabilities in order to mitigate risks of occasional mismatches. 43

44 No cash flow expected, included in the analysis of the maturation of the Company, may occur significantly sooner or in amounts significantly different. The maturities of the financial instruments of loans, financing, debentures and suppliers are as follow: Years: Period ended Up to Total Loans and financing 168, ,694 28, ,268 Debentures 52,351 49, ,195 Debts with related parties Accounts payable from acquisition of interest 14,698 2,223-16,921 Suppliers 31, , , ,761 28, ,577 Years: Year ended December 31, 2015 Up to Total Loans and financing 187, ,145 26, ,731 Debentures 53,604 99, ,355 Debts with related parties Accounts payable from acquisition of interest 12, ,333 Suppliers 30, , , ,896 26, ,984 Market risk Market risk is the risk that alterations in market prices, such as interest rates, have in the Company's earnings, or in the value of its holdings of financial instruments. The objective of market risk management is to manage and control exposures to market risks, within acceptable parameters, and at the same time to optimize the return. In general, loans are denominated in currencies equal to the cash flows generated by the Company's basic operations, mainly in Brazilian reais. This provides a protection to business without contracting derivatives, and hedge accounting is not applied under such circumstances. Foreign exchange risk On, the Company had no other debts or amounts receivable denominated in foreign currency. Moreover, none of the Company s relevant costs are in foreign currency. Accordingly, the Company did not have any foreign exchange exposure on that date. Interest rate risk The Company is exposed to floating interest rates, mainly: Variations in the CDI rate applied to short-term investments. Client portfolio and costs to incur, adjusted at INCC. 44

45 Client portfolio adjusted at IGPM or TR, after handing over the keys. The compensation on loans receivable contracted at rate from 100% to 120% of CDI. Interest on the CCBs funding as of August 25, 2015 at the fixed interest rate of 11.5 % p.a. + TR (reference rate) Interest on the CCBs funding as of January 20, 2016 at the fixed interest rate of % p.a. + TR (reference rate) Interest on loans contracted with the National Housing System between TR + 8.0% p.a. to 10% p.a. Interest on the debentures - third issue - CDI % p.a. Interest on the CCB imobiliária (real estate bank credit note) of Banco Safra S.A as of September 18, 2013 at the post-fixed interest rate of CDI % p.a. Interest on the CCB imobiliária (real estate bank credit note) of Banco Safra S.A as of November 21, 2014 at the post-fixed interest rate of CDI % p.a. Interest on the CCB with Banco Votorantim S.A., as of January 29, CDI % % p.a. According to the interest rate risks above, the exposed balances are shown as follows: Parent company Financial assets 06/30/ /31/ /30/ /31/2015 Cash and cash equivalents (a) 71, , , ,919 Interest earning bank deposits 11,896 9,449 22,453 9,520 Trade receivables 22,454 27, , ,960 Accounts receivable from sale of lands 42,889 42, , ,141 Accounts receivable from sales of corporate quotas 1, , Clients - Co-obligations ,074 3,258 Related party credits 6,107 7, ,373 Total 156, ,836 1,034,042 1,182,644 Parent company Financial liabilities 06/30/ /31/ /30/ /31/2015 Loans and financing 94,185 99, , ,731 Debentures 102, , , ,355 Debts with related parties Total 197, , , ,876 (a) Considering only the money market investments that are classified as Cash and cash equivalents, according to note 3. Sensitivity analysis on interest rate exposure Most of the Company's costs and all the portfolio of receivables from uncompleted projects are adjusted for inflation based on the National Civil Construction Index (INCC). As the balance of the receivables portfolio is higher than the costs to be incurred, the impact would occur in the event of a negative INCC index. 45

46 All the Company's short-term investments and approximately 34% of its total indebtedness are tied to the CDI rate (43% as of December 31, 2015). As the balance of investments is lower than the balance of indebtedness, an increase of one percentage point in the CDI average rate for the period ended would represent an decrease in the Company's net income of R$ 310 (decrease in R$ 202 at December 31, 2015). The following tables show the sensitivity analysis prepared by Company s management and the effect of the transactions on : Loss scenario Probable scenario Gain scenario 50% decrease 25% decrease 25% increase 50% increase INCC 3.20% 4.79% 6.39% 7.99% 9.59% Gain scenario Probable scenario Loss scenario CDI 7.13% 10.69% 14.25% 17.81% 21.38% TR 1.00% 1.51% 2.01% 2.51% 3.01% Net assets (and liabilities) Effect Result expected 25% decrease 50% decrease with probable index 25% increase Effect 50% increase CDI 5,520 6,624 (4,416) (5,520) (6,624) INCC (2,134) (2,561) 1,707 2,134 2,561 TR 9,611 11,533 (7,688) (9,611) (11,533) Impact on shareholders equity and income (loss) 12,997 15,596 (10,397) (12,997) (15,596) Operating risks Operating risk is the risk of direct or indirect losses arising from different causes related to the Company's processes, personnel, technology and infrastructure and external factors, except credit, market and liquidity risks, as those arising from legal and regulatory requirements and from generally accepted corporate behavior standards. The operating risk management aims at monitoring: (i) of the construction agreement, in relation to the quoted maximum construction work cost; (ii) of works, while we have engineers allocated to all the projects to supervise the services rendered by outsourced workers (quality and physical and financial schedule of the works); (iii) of the financial and accounting audits carried out by the main independent audit firms; (iv) of documentation and legal risks; and (v) of the credit risk of the buyers of units through the active management of the receivables of the joint ventures. 46

47 Risk control system In order to effectively manage the risk control system, the Company exercises the operating control over all projects of its portfolio, which allows, for example, reducing the construction cycle of projects, in order to reduce its risk exposure in certain joint ventures. This reduction generally occurs through the development of new construction technologies, development and training of construction teams, use of inputs and pre-processed materials, etc. The risk control comprises the individual analysis of the risk of each joint venture and the analysis of the risk of our investment portfolio. In the model, potential losses are calculated in a stress scenario for each individual joint venture and for the portfolio as a whole, as well as the maximum cash exposure required by the portfolio. Loss risk control The risk of a new joint ventures is calculated considering how much a company may lose, in the extreme event that it decides to settle this investment. To this end a winding up price is defined, which may be estimated only in markets in which price formation is consistent, this consistency being defined as demand sensitivity to changes in price. The maximum loss expected in each project is calculated and a portion of company capital is allocated to support this risk. The Company s total risk consists in the sum of each project's individual risks. After launching, the joint venture risk is reduced to the extent of the disposal of the units. The Company seeks to obtain maximum efficiency for its capital, and believes that such efficiency is reached when the sum of the risk of individual projects is close to the total of its available capital. Control over maximum cash exposure The risk control system monitors the future cash requirement to develop the scheduled projects in our portfolio, based on the economic feasibility study of each joint venture and the need of individual cash flows in relation to the projected cash flow of the portfolio as a whole. This projection assists in the definition of its financing strategy and in the decision-making as to which joint ventures should be included in the portfolio. Operation in a liquid market Through its market knowledge and with the assistance of partners, the Company is able to define the need for new joint ventures in different regions, as well as the income bracket of targeted potential purchasers. It concentrates its projects in accordance with the liquidity of each geographic location, i.e., the potential of each region to absorb a given number of real estate and react to price fluctuations. The Company does not intend to act in markets in which there are no data available and in which there are no partners with specific expertise on such markets. Accordingly, it believes that it reduces the risk of its investments since it operates in liquid regions based on known market data and associates with local partners. 47

48 Capital management The Company manages its capital to ensure the continuity of its regular activities and, at the same time, maximizes return to all stakeholders or parties involved in its operation, through debt and equity balance optimization. The capital structure of the Company is formed by liabilities, deducted of cash and bank balances, divided by the capital plus reserves. The Company is not subject to any external requirement on capital. The net financial debt as defined and used by the Company corresponds to the bank indebtedness, including loan with the controlling shareholder, less cash and cash equivalents and short-term investments. 06/30/ /31/2015 Total bank indebtedness 579, ,086 (-) Cash and cash equivalents and interest earning bank deposits (224,002) (294,439) (=) Net debt (A) 355, ,647 Shareholders equity (b) 829, ,304 Net debt ratio (A) / (B) Net income from joint ventures sold Parent company Current Current Prior Accumulated quarter accumulated quarter prior year 06/30/ /30/ /30/ /30/2015 Revenue from real estate development 2,598 2, Returns of gross income (7) (188) (18) (18) Sales tax: Current (276) (384) (110) (240) Deferred Net operating income 2,557 2,649 (16) (16) Current Current Prior Accumulated quarter accumulated quarter prior year 06/30/ /30/ /30/ /30/2015 Revenue from real estate development 163, , , ,538 Returns of gross income (86,404) (128,819) (43,635) (114,927) Sales tax Current (2,872) (6,634) (3,801) (8,482) Deferred 1,160 3, ,858 Net operating income 75, , , ,987 48

49 The practices adopted for the determination and appropriation of the result and record the values in the income accounts of joint ventures sold, properties for sale, for real estate clients and advances received from clients follow the procedures and guidelines established by the Guideline OCPC 04 of Pronouncements Committee statements, which addresses the application of Interpretation ICPC 02, the Brazilian real estate development entities, approved by CVM Resolution 653/10, which are: (i) (ii) For sales of uncompleted units, income is recorded based on the following criteria: Sales income, costs of land and construction inherent to the respective developments are recognized in income as the construction progresses, once the transfer of risks and benefits occurs continuously. Thus, the method adopted is called "POC", "percentage of completion or completion percentage" for each joint venture, i.e. the recognition of income and costs occur as the construction progresses. The POC method is done using the ratio of costs incurred to total estimated cost of the respective joint ventures on contracted sales; and Calculated sales income, according to item (i), including monetary restatement, net of installments received are accounted as receivables or advances from clients, according to the relationship between recorded income and the amounts received. In the credit sales of concluded units, the result is allocated when the sale is consummated, regardless of the period of receipt of the contractual amount. The updates and the present value adjustments are recognized in income, on income heading of joint ventures sold in pre-keys period, and updates under financial income on post-key period observing the accrual basis, regardless of their receipt. Income and expenses are recognized in income under the accrual method. When the client does not get the mortgage with a financial institution, the respective unit is untreated and the accounting treatment adopted by the Company is the reversal of the balance of the client by deducting the income recorded in the statement of income for the period under the caption Net income from joint ventures sold by contrast is reversed and also the cost of this unit under the caption "cost of joint ventures sold against the inventory of the Company. a. Income from exchange of land Income from exchange of land comes from the exchange of land for built units and thus is measured at fair value, i.e., the sales value of units to be built and delivered. The sales income of these units is recognized in income by the percentage of completion (POC) method and also by their respective constructive costs. 49

50 The table below shows the sum of income from this transaction, as provided for in item 35 of CPC 30 (R1) / IAS 18, following the criteria stipulated in items 21 and 22 of OCPC 01 (R1). Current quarter Current accumulated Prior quarter Accumulated prior year 06/30/ /30/ /30/ /30/2015 Income from exchange of land b. Information on construction in progress The result of property sales, which includes sales income, costs of land and construction costs and inherent in their real estate, is appropriate to the result using the method of percentage of completion of each project, and this percentage is measured based on the cost incurred in relation to total estimated contract cost for the joint venture in accordance with the criteria established in OCPC 04, applicable to real estate entities. Amounts receivable arising from sales of units under construction, are presented under the same completion percentage, with amounts received in excess of these receivables recorded in current liabilities as Advances from clients". Due to the accounting recognition described above, the balances of gross income not accounted for in real estate sales transactions already contracted, including its financial income, and costs to be incurred (or construction commitments) are not reflected in the financial statements for the conditions described above, as applicable, related to uncompleted properties, are as follows: Units in construction Accumulated balances at Contracted sales income (accumulated up to 06/30/2016) 3,392,722 Recognized sales income ( ) Unearned gross sales: 228,821 Current assets 84,581 Non-current assets 90,373 Advances from clients 53,867 Budged costs of units sold (2,200,750) Incurred cost of units sold (accumulated up to 06/30/2016) 2,050,439 Budgeted costs to be realized/construction commitments (a) (150,311) Income/loss in the sale of property to be appropriated (b) 78,510 Gross margin 34% (a) (b) (c) Represent the estimated costs to be incurred in respect of construction in progress units already sold, deducted costs already incurred during the construction process. The financial costs of financing the construction and the costs of guarantees are not included in this statement. The net results on sale of properties consists of unrealized client credit subtracted from the balance of construction commitment. The advances from clients are recorded in current liabilities as Advances from clients", where receipts are due to higher receivables from clients recorded as percentage of completion of work. 50

51 24 Information on nature of expenses recognized in the statement of income The Company presented the income statement using a classification of operating expenses based on their function. The information on the nature of these expenses recognized in the income statement is as follows: Parent company Current quarter Current accumulated Prior quarter Accumulated prior year Current quarter Current accumulated Prior quarter Accumulated prior year 06/30/ /30/ /30/ /30/ /30/ /30/ /30/ /30/2015 Cost of joint ventures sold Labor (1,064) (1,079) - - (26,519) (54,965) (42,739) (80,462) Inputs (1,596) (1,618) - - (33,877) (69,798) (58,483) (111,064) Financial cost (5,902) (12,650) (5,625) (9,628) Total (2,660) (2,697) - - (66,298) (137,413) (106,847) (201,154) Expenses, by nature: Commissions (15) (15) (67) (75) (4,187) (7,616) (5,603) (10,095) Marketing and advertising (846) (1,749) (1,085) (2,479) (4,508) (9,033) (7,577) (16,192) Personnel expenses (5,440) (9,625) (5,250) (12,091) (5,995) (10,886) (5,905) (13,372) Other taxes and rates (81) (191) (58) (183) (432) (1,117) (422) (944) Professional services contracted (1,000) (1,729) (694) (1,415) (1,311) (2,340) (1,453) (2,953) Traveling (149) (305) (254) (470) (172) (351) (317) (563) Use and consumption (2,866) (6,556) (3,972) (9,098) (8,412) (15,733) (9,541) (19,382) Depreciation/amortization (1,560) (3,123) (1,398) (2,853) (1,645) (3,298) (1,472) (2,996) Total (11,957) (23,293) (12,778) (28,664) (26,662) (50,374) (32,290) (66,497) Classified as: Commercial and sales (861) (1,764) (1,152) (2,554) (8,695) (16,649) (13,180) (26,287) General and administrative (11,096) (21,529) (11,626) (26,110) (17,967) (33,725) (19,110) (40,210) Total (11,957) (23,293) (12,778) (28,664) (26,662) (50,374) (32,290) (66,497) 25 Financial income (loss) Parent company Current Current Current Current Current Current Current Current quarter accumulated quarter accumulated quarter accumulated quarter accumulated 06/30/ /30/ /30/ /30/ /30/ /30/ /30/ /30/2015 Asset monetary variation 1,543 2, ,856 3,731 10,235 3,410 6,602 Liability monetary variation (774) (1,417) (817) (1,434) (965) (1,885) (1,087) (1,801) Net monetary variations 769 1, ,766 8,350 2,323 4,801 Interest received from clients (128) (38) ,878 11,347 8,744 18,029 Financial income on loan agreement ,184 2, ,283 Yields from interest earning bank deposits 3,951 8,873 4,089 9,428 8,113 17,609 7,546 16,292 Adjustment to present value - Urbanization portfolio (500) (998) Taxes (468) (1,029) (73) (185) (543) (1,180) (158) (462) Other financial income Financial income 3,622 8,364 5,584 12,417 12,033 26,975 17,499 35,216 Financial expense on loan agreement (30) (62) (82) (189) (26) (54) (14) (36) Interest/charges on funding (9,589) (20,276) (10,000) (22,136) (10,180) (20,906) (10,160) (22,411) Discounts granted (199) (250) (7) (17) (1,944) (2,685) (122) (491) Other financial expenses (184) (344) (226) (410) (1,771) (4,683) (2,364) (3,944) Financial expenses (10,002) (20,932) (10,315) (22,752) (13,921) (28,328) (12,660) (26,882) 51

52 26 Share based payment - Parent company a. Description of share-based payment agreements As of, the Company had the following share-based payment agreements: On March 19, 2014, the Company approved the "Variable Remuneration Plan" authorizing the issuance of Company s shares to be delivered to its employees and officers, subject to the terms and limits set out in the Guidelines for Stock Option Plans, in particular to the provisions of Article 168, paragraph 3 and Article 171, paragraph 3 of Law 6404/76. The strike price of these options was R$ On April 7, 2014, an option to purchase 517,000 common shares of the Company in the amount of R$ 5,827 was exercised. The fair value of these stock options is calculated by the average price of treasury shares on the date of purchase option. This amount is being amortized over the vesting period. Amortization expenses of stock options, recorded under caption Personnel expenses (Note 24) for the period ended June 30, 2016 was R$ 295. The balances to be recognized in the Company s income (loss), considering the plan, are as follows: Stock options expenses , , Total 3,464 The main terms and conditions regarding the granting of the stock option program are presented below: Grant date / beneficiaries Granting of options to key management personnel Number of shares (in thousands) April 07, April 7, April 7, Conditions for right acquisition It shall be automatically terminated if the beneficiary fails to render service to the Company in up to 2 years. It shall be automatically terminated if the beneficiary fails to render service to the Company in up to 3 years. It shall be automatically terminated if the beneficiary fails to render service to the Company in up to 4 years. Contractual life of the option 2 years 3 years 4 years Total stock options Segment information The Company reviewed the way to evaluate its business, and believes that its activities are now split into merger and allotment. Hence, information by operating segments have been disclosed for this quarter based on its relevance, as follows: 52

53 06/30/ /30/2015 Urbanism RNI Total Urbanism RNI Total Net income from joint ventures sold 25, , ,131 42, , ,987 Cost of joint ventures sold (8,977) (128,436) (137,413) (22,284) (178,870) (201,154) Gross income 16,456 10,262 26,718 20,480 54,353 74,833 Operating (expenses) income 23,580 (53,660) (30,080) (4,453) (66,806) (71,259) Gross income/ (loss) before financial income 40,036 (43,398) (3,362) 16,027 (12,453) 3,574 Net financial income (expenses) 4,609 2,388 6,997 3,199 9,936 13,135 Income (loss) before taxes 44,645 (41,010) 3,635 19,226 (2,517) 16,709 Income and social contribution taxes (1,669) (6,273) (7,942) (1,450) (8,629) (10,079) Net income (loss) for the period 42,976 (47,283) (4,307) 17,776 (11,146) 6,630 Total assets 279,890 1,371,751 1,651, ,654 1,658,769 1,826,423 Total liabilities 80, , ,354 33, , ,678 Shareholders' equity 199, , , , , ,745 Information on main clients In view of the residential real estate and plotting activity, the Company does not have any client that individually accounts for more than 10% of the total consolidated income. 28 Insurance coverage As of, the insurance coverage for the parent company and consolidated, was R$ 30,000 for civil liability, operating risks, material damage, bodily injury and/or pain and suffering and R$ 10,000 for assets. * * * Board of Directors Waldemar Verdi Júnior Aymar Ferreira de Almeida Junior Milton Jorge de Miranda Hage Alcides Lopes Tápias Mailson Ferreira da Nóbrega Roberto de Oliveira Lima Giuliano Finimundi Verdi Board Members Marco Antônio Bacchi da Silva Roberto Lopes de Souza Junior Gustavo Adolfo Traub Flávio Leme Ferreira Filho Salim Furukawa Godoi Raymundo de Souza Neto 53

54 Executive Board Mauro Pereira Bueno Meinberg Flávio Vidigal De Capua Carlos Bianconi Clóvis Antônio Sant anna Filho Alexandre Firmo Mangabeira Albernaz César Augusto Signorini Faim Sabrina Gonçalves Ribeiro José Walter Ferreira Junior Accountant Paulo Sergio Baldissera CRC - 1SP O/3 54

55 2Q16 Earnings Release Rodobens Reports 2Q16 Results São Paulo, August 11, 2016: Rodobens Negócios Imobiliários (BM&FBovespa: RDNI3), a residential real estate developer and builder, announces today its audited results for the second quarter of 2016 (2Q16). The following financial and operating information is presented on a consolidated basis in accordance with generally accepted accounting practices in Brazil based on Brazilian Corporation Law, International Financial Reporting Standards (IFRS) and the rules issued by the Brazilian Accounting Pronouncements Committee (CPC). Recovery in Launch Volume: R$169 million in 1H16, compared to R$98 million in 1H15. In 2Q16, we launched our first development project in Sinop with total PSV of R$82 million. Gross Sales: R$110 million in 2Q16. Strong sales volume growth in Stillo segment, to R$64 million, which was 2.2 times higher than sales volume in 1Q16. Transfers: R$36 million in 2Q16, up 65% from 1Q16, with transfers in the SBPE system of R$19 million. Reduction in corporate debt: from R$298 million in 1Q16 to R$196 million in 2Q16. Net Debt (ex-production debt/equity): -3.3% in 2Q16, one of the lowest levels in the industry. Solid cash position: cash (R$224 million) plus performed receivables free of debt (R$207 million) represented 2.19 times the Company's corporate debt at end-2q16. Conference Call to discuss the 2Q16 Results: Portuguese (with simultaneous translation into English) August 12, at 15:00 p.m. (Brasília time) /14:00 p.m. (New York time) Brazil: +55 (11) Replay in Portuguese: +55 (11) USA: +1 (646) Code: Rodobens Other countries: +1 (646) Replay in English: +55 (11) Code: Rodobens Code: Rodobens *Excluding legal expenses Page 1 of 26

56 2Q16 Earnings Release OPERATING AND FINANCIAL HIGHLIGHTS The complete consolidated financial statements for 2Q16, accompanied by the respective notes, can be found in the Quarterly Information (ITR) report, which is available on our Investor Relations website ( and on the website of the Securities and Exchange Commission of Brazil - CVM ( Page 2 of 26

57 2Q16 Earnings Release CONTENTS MESSAGE FROM MANAGEMENT... 4 LAUNCHES... 6 CONTRACTED SALES... 7 Inventory Turnover Ratio INVENTORY* PROJECTS DELIVERED TRANSFER TO BANKS OF CLIENT BALANCES / OFF-PLAN PROPERTIES LANDBANK - DEVELOPMENT LANDBANK - SUBDIVISION FINANCIAL PERFORMANCE INCOME STATEMENT Cash Position Trade Accounts Receivable Borrowings RDNI3 Stock Performance Balance Sheet Statement of Income Cash Flow APPENDIX A: Supplementary Operating Data Launches *Inventory net of commissions Page 3 of 26

58 2Q16 Earnings Release MESSAGE FROM MANAGEMENT We ended the first half of the year more optimistic. We believe that the worst is now behind us; during the second quarter, the economy began to show signs of a recovery, which included an increase in consumer confidence, which could help support a recovery in our sales volume. In view of this more favorable environment, we opted to resume launches, with a focus on unique products in less competitive markets in which the group enjoys expertise and strong brand recognition. In 1H16, total potential sales value (PSV) launched stood at R$169 million, which corresponds to 71% of the volume launched in 1H15. For the next semester, our new business area continues to work on the approval of projects in our landbank, especially in the Subdivision segment, which has a longer approval cycle. This will ensure the sustainability of our business and a pipeline of projects ready for launch. Gross sales of Stillo products in 2Q16 were 2.2 times higher than in 1Q16, with Total Gross PSV of R$64 million, and returned to the sales levels observed in late For the second half of the year, we are planning to deliver six SBPE projects that were launched in 2012 and 2013, with combined total PSV of R$544 million. Given the more restrictive posture adopted by banks for approving mortgage loans, we believe that some of our customers will be unable to obtain a mortgage loan to settle their unit, leading to a higher volume of cancellations for the company in the Stillo segment. To minimize this impact, we are giving incentives to clients who settle their units in full by working with partner banks to accelerate transfers and mapping the client portfolio, already canceling the agreements of clients who have lost the capacity to obtain loans from financial institutions or offering new units that are compatible with their new borrowing capacity. Of the total cancellations of R$53 million in the SBPE system in 2Q16, R$40 million involved units scheduled for delivery by year-end. In line with our plan to monetize non-strategic assets, we divested in the quarter eight commercial properties from the landbank of Rodobens Malls for the aggregate amount of R$11 million. Moreover, as already announced, we are in the advanced stages of negotiations for the sale of four development properties located in the city of São Paulo. In 2Q16, we reduced our corporate debt by R$104 million, as follows: R$59 million with the payment of debentures and R$45 million with the amortization of the outstanding balance on the Real Estate Credit Notes (CCB Imobiliária). We ended the quarter with a ratio of net debt (excluding production debt) to equity of -3.3% and a solid cash position of R$224 million. Page 4 of 26

59 2Q16 Earnings Release To strengthen the company s cash balance to support a new cycle of launches, we are constantly analyzing options for financing our projects, especially in the subdivision segment. The Management Page 5 of 26

60 2Q16 Earnings Release LAUNCHES In line with our strategy of concentrating launches in the Development segment in the country s Midwest and in the interior of São Paulo state, where our brand is well-known and competition is lower, in April 2016 we launched in Sinop, Mato Grosso, the Allegro project, with total PSV of R$82 million (RNI s interest 100%). In the first half of the year, we launched two projects with total PSV of R$169 million (RNI s interest 74%), with one in the Development segment and the other in the Subdivision segment (Recanto das Emas in Goiânia, Goiás). %RNI 59% N/A N/A 50% 100% 59% N/A 74% Page 6 of 26

61 2Q16 Earnings Release CONTRACTED SALES Gross sales amounted to R$110 million in 2Q16, with RNI s interest 87%. In the SBPE segment, gross sales were R$64 million, an increase of 122% from 1Q16. The highlight was the launch in Sinop, Mato Grosso, which already has sold 25% of units for gross sales of R$22 million. In 1H16, gross sales amounted to R$240 million. Subdivision sales amounted to R$96 million, in line with the first half of last year. * %RNI Vendas Líquidas 87% 86% 70% 59% 63% 86% 80% 60% * Excludes the nonrecurring cancellation from the Ilumina project (R$11.8 million) Page 7 of 26

62 2Q16 Earnings Release %RNI Vendas Brutas 84% 85% 86% 71% 87% 85% 85% 78% * Page 8 of 26

63 2Q16 Earnings Release * * Excludes the nonrecurring cancellation from the Ilumina project (R$11.8 million) As already mentioned, we are constantly monitoring our customer portfolio to anticipate cancellations of customers who lost their capacity to obtain mortgage loans from financial institutions in order to avoid high concentrations of cancellations when the projects are delivered. The increase in cancellations in the SBPE segment in 2Q16 is due to this effort to map/manage the portfolio of projects expected to obtain certificates of occupancy in the second half of Page 9 of 26

64 2Q16 Earnings Release Inventory Turnover Ratio The Inventory Turnover Ratio for launches stood at 26% in 2Q16. The Inventory Turnover Ratio in the quarter stood at 3%. INVENTORY* On, the total market value of our inventory stood at R$681 million, represented by 2,072 units. The share of finished units in the Company s total inventory increased from 9% in 1Q16 to 10% in 2Q16 due to the cancellations of finished units that returned to inventory at market value. The change in the PSV of the SBPE inventory is mainly due to the launch of the project in Sinop in the period, which added 212 units to inventory with total PSV of R$59 million. Page 10 of 26

65 2Q16 Earnings Release The highest concentration of inventory is in the states of São Paulo and Mato Grosso, which together account for 72% of total PSV. *Inventory net of commissions PROJECTS DELIVERED In 2Q16, we delivered only two phases (420 units) of an MHML project in Feira de Santana, Bahia, which combined represent PSV of R$50 million. Page 11 of 26

66 2Q16 Earnings Release TRANSFER TO BANKS OF CLIENT BALANCES / OFF-PLAN PROPERTIES Transfers of client balances and off-plan properties amounted to R$36 million in 2Q16. Of the total amount transferred, R$19 million was classified under the SBPE system. The increase in transfers in this segment compared to 1Q16 was due to the transfer of units from the Madison project in São Jose do Rio Preto, São Paulo, whose certificate of occupancy should be issued in 3Q16. Page 12 of 26

67 2Q16 Earnings Release LANDBANK - DEVELOPMENT The potential sales value of the landbank for residential projects (acquired or secured by purchase options) reached R$2.3 billion. Of this amount, R$2.1 billion (91% of the total) was in properties effectively acquired and R$0.2 billion (9% of the total) was in properties secured by purchase options, which were distributed across 13 cities in five states. The variation in the acquired landbank in the quarter was mainly due to: (i) the acquisition of one property in the interior of São Paulo state, with PSV of R$101 million; (ii) the launch of the project in Sinop, Mato Grosso with PSV of R$82 million; and (iii) the elimination of a property in the state of Mato Grosso, which generated a loss of R$2.2 million in the quarter, as recorded under other operating expenses. In the case of properties secured by purchase options, we eliminated two properties, with one in the interior of São Paulo state and the other in the state of Mato Grosso do Sul, with combined PSV of R$435 million. Page 13 of 26

68 2Q16 Earnings Release LANDBANK - SUBDIVISION The following table shows the landbank for subdivision properties. The only change in the subdivision landbank in the period was the option on a property in the state of Goiás with PSV of R$42 million. Page 14 of 26

69 2Q16 Earnings Release FINANCIAL PERFORMANCE INCOME STATEMENT Net Revenue amounted to R$75.2 million in 2Q16, compared to R$89.0 million in 1Q16 and R$146.0 million in 2Q15. The variation in revenue in 2Q16 compared to 1Q16 was mainly due to the higher volume of cancellations of finished units or units in the advanced stage of construction. Meanwhile, the variation compared to 2Q15 was due not only to cancellations, but also to the reduction in the number of active construction sites, from 29 at the end of 2Q15 to 21 at the end of 2Q16. Gross Margin from Development in 2Q16 stood at 2.8%. The 11.4% decline in margin compared to 1Q16 was mainly due to: (i) the lower dilution of costs with the technical department due to the lower number of active construction sites for apportionment; (ii) the discounts granted in the period on the sale of MHML and Stillo units that are completed or whose certificate of occupancy should be issued in 2016, in line with our strategy of monetizing assets. In 1H16, Gross Margin from Development stood at 7.4%, compared to 23.3% in 1H15. Page 15 of 26

70 2Q16 Earnings Release Gross Margin from Subdivision increased by 9.2 p.p., from 61.1% in 1Q16 to 70.3% in 2Q16, driven by the project Jardim dos Buritis in São José do Rio Preto, which has a margin higher than that of other projects and 95% of which has already been sold. In 1H16, Gross Margin from Subdivision stood at 64.7%, increasing 16.6 p.p. from 47.9% in 1H15. Including 100% of the revenue from the launch of the subdivision project Recanto das Emas and other nonconsolidated projects, net revenue in 2Q16 would be R$97.9 million, with gross margin of 23.3%. The following table provides a detailed reconciliation of revenue and gross margin from nonconsolidated projects. Selling expenses amounted to R$8.6 million in 2Q16, compared to R$8.0 million in 1Q16. This 9% increase in the period is mainly due to the higher volume of cancellations, which led to the immediate apportionment of sales commissions that before would have been recognized in accordance with the percentage of completion. Compared to 2Q15, selling expenses decreased by 34%. In 1H16, Selling Expenses amounted to R$16.6 million, decreasing 37% from 1H15. In 2Q16, General and Administrative Expenses amounted to R$12.3 million, up 11% from 1Q16. This increase is due to wage increases under the collective bargaining agreement and to higher expenses with property tax (IPTU) and condominium fees of finished units due to the lower inventory turnover ratio in the year. In 1H16, general and administrative expenses amounted to R$23.5 million, down 24% from 1H15. The main reason for the decrease was the optimization of the administrative structure carried out during Legal Expenses came to R$5.6 million in 2Q16, compared to R$4.6 million in 1Q16. Page 16 of 26

71 2Q16 Earnings Release * EBITDA: net income from the period plus income tax, financial expenses net of financial income, and depreciation, amortization and depletion. Adjusted EBITDA refers to the adjustment of expenses with capitalized interest, given the operational nature of this expense. Adjusted EBITDA came to negative R$7.1 million in 2Q16, due to the lower revenue in the period. In 1H16, Adjusted EBITDA came to R$12.6 million, with Adjusted EBITDA margin of 7.7%. The Net Financial Income (Expense) in 2Q16 corresponded to income of R$0.9 million, compared to income of R$6.1 million in the previous quarter. Backlog Margin ended 2Q16 at 34.3%, in line with 1Q16. Note that the amounts recorded in Backlog Margin have not yet been subjected to PIS/COFINS taxes and do not include the financial expenses related to COGS. Page 17 of 26

72 2Q16 Earnings Release BALANCE SHEET: Main items Cash Position RNI ended 2Q16 with a cash position of R$224 million. The main cash outflows during 2Q16 were: (i) amortization of the balance of Real Estate Credit Notes (CCB Imobiliária) - R$45 million; (ii) payment of debentures - R$59 million; (iii) payment of dividends - R$10 million; and (iv) payment of properties - R$7 million. The reduction in cash burn between 2Q16 and 1Q16 was due to higher amounts received from clients in the period. Excluding the amounts related to payments for properties (R$7 million), cash burn in the quarter was R$6 million. In the second half of the year, we plan to deliver six SBPE projects with combined lauched PSV of around R$544 million and consequently to monetize/transfer a significant portion of the portfolios of these projects with the settlement of the balance of debt from business plans and the potential for cash generation. Page 18 of 26

73 2Q16 Earnings Release Trade Accounts Receivable The balance of Trade Accounts Receivable stood at R$831 million on, of which R$656 million is recorded on the balance sheet with the associated revenue already recognized. Of this amount, R$448 million is recorded in current assets and R$208 million in non-current assets, as shown in the following table. Credits not yet recorded on the balance sheet and whose revenue has not yet been recognized in the income statement using the percentage of completion (PoC) method amounted to R$175 million on. The difference between the R$229 million recognized under Backlog and the amount of R$175 million refers to advances from clients, which amounted to R$54 million at the end of 2Q16. The performed receivables portfolio amounted to R$242 million on. The following table provides a breakdown and the status of performed receivables classified by phase and order of monetization: The following table shows the changes in the performed receivables portfolio: Page 19 of 26

74 2Q16 Earnings Release Borrowings An analysis follows of the Company's debt position in relation to its Cash Balance and Shareholders' Equity. In 2Q16, we amortized R$104 million of the balance of corporate debt, with R$45 million from the balance of Real Estate Credit Notes and R$59 million from the payment of debentures. On, the Net Debt/Equity ratio (excluding SFH/SFI) stood at -3.3%, compared to -4.7% on March 31, Net debt increased from R$333 million in 1Q16 to R$355 million in 2Q16, due to the increase of R$10 million in the balance of Construction Financing and the payment of dividends of R$10 million. The cash position of R$224 million plus the R$207 million in performed receivables not linked to any construction financing corresponds to 2.19 times the Company's total corporate debt and to 0.74 times its total debt. Our debt maturity schedule is shown below: Page 20 of 26

75 2Q16 Earnings Release The Company's debt is divided into three types of credit facilities, as follows: The following chart shows the evolution of construction debt and the average interest rate weighted by the share of the outstanding balance of each project in the total. Page 21 of 26

76 2Q16 Earnings Release RDNI3 Stock Performance The following chart shows the performance of RDNI3 stock in the last 12 months, in terms of price and trading volume. The stock's closing quote on was R$7.00. *Index composed of the stocks CYRE3, DIRR3, EVEN3, EZTC3, GFSA3, HBOR3, JHSF3, MRVE3, PDGR3, RDNI3, RSID3, TCSA3, TRIS3 and VIVR3 weighted by market capitalization. Base /30/2016 Source: Bloomberg DISCLAIMER The statements contained herein regarding the business prospects, projections of financial and operating results and growth prospects that affect the operations of RODOBENS, as well as any other forward-looking statements regarding the Company s business are merely estimates and as such are subject to risks and uncertainties and therefore are not guarantees of future results. These forward-looking statements depend substantially on market conditions, government regulations, competitive pressures, performance of the industry and the Brazilian economy and other factors, and therefore are subject to change without prior notice. Page 22 of 26

77 2Q16 Earnings Release Balance Sheet Page 23 of 26

78 2Q16 Earnings Release Statement of Income Page 24 of 26

79 2Q16 Earnings Release Cash Flow Page 25 of 26

80 2Q16 Earnings Release APPENDIX A: Supplementary Operating Data Launches Page 26 of 26