Positivo Informática S.A.

Transcription

1 (Convenience Translation into English from the Original Previously Issued in Portuguese) Positivo Informática S.A. Interim Financial for the Quarter ended March 31, 2016 and Independent Account s Review Report Deloitte Touche Tohmatsu Auditores Independentes

2 (Convenience Translation into English from the Original Previously Issued in Portuguese) POSITIVO INFORMÁTICA S.A. AND SUBSIDIARIES INCOME STATEMENT FOR THE QUARTER ENDED IN MARCH 31, 2016 AND 2015 (All amounts in thousands of reais) 2

3 Deloitte Touche Tohmatsu Rua Pasteur, 463-5º andar Curitiba PR Brasil Tel: + 55 (41) Fax:+ 55 (41) (Convenience Translation into English from the Original Previously Issued in Portuguese) REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION To the Board of Directors and Stockholders Positivo Informática S.A. Curitiba PR Introduction We have reviewed the accompanying interim financial information, individual and consolidated of Positivo Informática S.A. ("Company"), included in the Interim Financial Information Form (ITR) for the quarter ended in March 31, 2016, which comprises the balance sheet in March 31, 2016 and the respective income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows for the three-month period then ended, including the explanatory notes. The Company s management is responsible for the preparation of the individual and the consolidated interim financial information in accordance with the Technical Pronouncement CPC 21 (R1) - Interim Financial Reporting and IAS 34 Interim Financial Reporting, issued by International Accounting Standards Board (IASB), as well as for the presentation of such information in accordance with the standards issued by the Brazilian Securities Commission (CVM), applicable to the preparation of Interim Financial Information (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of review We conducted our review in accordance with Brazilian and international standards on review of interim financial information (NBC TR 2410 and ISRE Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the 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. Deloitte refers to one or more entities of Deloitte Touche Tohmatsu Limited, a private company with limited liability established in the United Kingdom ("DTTL"), its network of member firms, and entities related to it. The DTTL and each of its member firms are legally separate and independent entities. the DTTL (also called "Global Deloitte") does not provide services to clients. See for a detailed description of DTTL and its firmas- member Deloitte Touche Tohmatsu. All rights reserved

4 Deloitte Touche Tohmatsu Conclusion of interim financial information Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the ITR referred anteriorly is not prepared, in all material respects, in accordance with CPC 21(R1) and IAS 34 applicable to the preparation of Interim Financial Information (ITR) and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission. Other matters Statements of value added We have also reviewed the individual and consolidated interim statements of value added ( DVA ) for the three-month period ended March 31, 2016, prepared under the responsibility of company s Management, the presentation of which is required by the standards issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of Interim Financial Information (ITR) and is considered as supplemental information for IFRSs, that does not require the presentation of a DVA. These statements were subject to the same review procedures described above and, based on our review, nothing has come to our attention that causes us to believe that they are not prepared, in all material respects, in relation to the interim financial information taken as a whole. Curitiba, April 28, DELOITTE TOUCHE TOHMATSU Auditores Independentes CRC n.º 2 SP /O-8 F-PR Cosme dos Santos Engagement Partner CRC nº. 1 RJ /O Deloitte Touche Tohmatsu. All rights reserved. 2

5 (Convenience Translation into English from the Original Previously Issued in Portuguese) POSITIVO INFORMÁTICA S.A. AND SUBSIDIARIES BALANCE SHEET AS AT MARCH 31, 2016 AND DECEMBER 31, 2015 (All amounts in thousands of reais) Parent com pany Consolidated Parent company Consolidated ASSET S Note 03/31/ /31/ /31/ /31/2015 LIABILIT IES AND EQUIT Y Note 03/31/ /31/ /31/ /31/2015 CURRENT ASSETS Cash and cash equivalents 5 482, , , ,886 CURRENT LIABILITIES Deriv ative financial instruments , ,067 Trade payables , , , ,081 Trade receivables 6 237, , , ,7 84 Loans - third parties , , , ,97 6 Inventories 7 366, , , ,7 09 Derivative financial instruments 31 43,363-43,363 - Related parties 10 9,263 8,548 29,711 32,970 Salaries and social charges payable 18,982 17,506 18,982 17,506 Taxes recov erable , , , ,606 Provision ,054 97,218 82, ,434 Sundry advances 30,352 30, , ,696 Provision for tax, labor and civil risks 21 5,17 3 5,500 5,17 3 5,500 Other receivables 9 26,801 27,893 26,801 27,893 Tax es payable ,923 11,353 11, ,410 1,323,47 0 1,497,47 8 1,37 1,7 35 1,550,611 Dividends payable 22.e Deferred revenue 8 e 19 11, ,834 11,304 12,834 Related parties 10 2,420 2,164 1,551 1,295 Other payables 3,048 5,113 3,088 5, ,691 1,045, ,51 6 1,1 01,281 NON-CURRENT ASSETS NON-CURRENT LIABILITIES Long-term receivables Loans - third parties , , , ,604 Taxes recoverable 8 118, , , ,465 Provision 17 18,239 18,244 19,389 19,394 Deferred taxes , , , ,07 3 Provision for tax, labor and civil risks 21 36, , ,029 38,07 1 Other receivables 9 14, ,335 14,681 14,426 Net capital deficiency in subsidiaries , , , ,964 Other payables 1,644 1,939 1,615 1, , , , ,364 T OT AL LIABILIT IES 1,143,357 1,285,117 1,196,603 1,342,645 Investments in subsidiaries 11 12, , TOTAL LIABILITIES Investment in joint venture 12 61,313 40,322 64,380 41,521 Capital 22.a 389, , , ,000 Property, plant and equipment 13 51,624 53,203 51,624 53,203 Capital reserve 22.b 121, , , ,201 Intangible assets 14 49,298 55,568 63, ,7 41 Carrying value adjustment (20,042) (12,7 85) (20,042) (12,7 85) 17 4, , , ,465 Revenue reserve 22.d 116, , , ,446 Loss for the Period (10,409) - (10,409) - Treasury shares 22.f (37,467 ) (37,467 ) (37,467 ) (37,467 ) 37 8, , , , , , , ,395 T OT AL ASSET S 1,7 02,159 1,861,512 1,7 55,405 1,919,040 T OT AL LIABILIT IES AND EQUIT Y 1,7 02,159 1,861,512 1,7 55,405 1,919,040 The accompanying notes are an integral part of these interim financial information. 3

6 (Convenience Translation into English from the Original Previously Issued in Portuguese) POSITIVO INFORMÁTICA S.A. AND SUBSIDIARIES INCOME STATEMENT FOR THE QUARTER ENDED IN MARCH 31, 2016 AND 2015 (All amounts in thousands of reais) The accompanying notes are an integral part of these interim financial information. 4

7 (Convenience Translation into English from the Original Previously Issued in Portuguese) POSITIVO INFORMÁTICA S.A. AND SUBSIDIARIES STATEMENT OF COMPREHENSIVE INCOME FOR THE QUARTER ENDED IN MARCH 31, 2016 AND 2015 (All amounts in thousands of reais) Parent com pany Consolidated Note 03/31/ /31/ /31/ /31/2015 Profit (Loss) For T he Period (10,409) 11,511 (10,409) 11,511 Other com prehensiv e incom e e (loss) Item s that can be reclassified subsequently to incom e statem ent Exchange difference on translation of foreign operations Foreign exchange variations on foreign investments Crounal S.A./Musfer S.A. 11 (51) (581) (51) (581) Informática Fueguina S.A. 12 (10,17 5) 2,167 (10,17 5) 2,167 Positivo Inf. da Bahia/PBG Rwanda Limited 11 (301) (301) Cash Flow Hedges Fair value of financial instrument cash flow hedge 31.c 3,27 0-3, (7,257 ) 1,586 (7,257 ) 1,586 Com prehensiv e incom e for the period (17,666) 13,097 (17,666) 13,097 The accompanying notes are an integral part of these interim financial information. 5

8 (Convenience Translation into English from the Original Previously Issued in Portuguese) POSITIVO INFORMÁTICA S.A. AND SUBSIDIARIES STATEMENT OF CHANGE IN SHARHOLDERS EQUITY FOR THE QUARTER ENDED IN MARCH 31, 2016 AND 2015 (All amounts in thousands of reais) The accompanying notes are an integral part of these interim financial information. 6

9 (Convenience Translation into English from the Original Previously Issued in Portuguese) POSITIVO INFORMÁTICA S.A. AND SUBSIDIARIES STATEMENT OF CASH FLOWS FOR THE QUARTER ENDED IN MARCH 31, 2016 AND 2015 (All amounts in thousands of reais) Parent company Consolidated 03/31/ /31/ /31/ /31/2015 CASH FLOWS FROM OPERATING ACTIV ITIES (Loss) Profit for the period (10,409) 11,511 (10,409) 11,511 Reconciliation of profit (loss) to cash prov ided by (used in) operating activities: Depreciation and amortization 24 13,111 11,600 13,111 12,497 Equity in the results of investees 1 1 e 12 (28,1 46) 4,37 1 (28,67 9) (2,053) Fair value gain (loss) 83,014 (32,290) 83,014 (32,290) Provision for tax, labor and civil risks (1,369) 795 (1,369) 794 Allowance for doubtful accounts 6 1,298 1,265 1,298 1,342 Prov ision (reversal) for inventories, net (5,402) 3,243 (5,402) 3,217 Stock options Interest on borrowings 26 25,957 15, , ,403 Foreign exchange v ariation (64,686) 9,824 (7 4,689) 12,180 Restatement (4,081 ) - (4,081 ) - Income tax and social contribution ,360 25,720 (7 42) 22,957 (Increase) decrease in assets: Trade receivables 37,909 60, , ,500 Inventories 33,418 (36,341 ) 31,1 56 (43,383) Taxes recoverable 22,07 4 (17,610) 22,196 (19,494) Sundry advances 437 (2,096) 1,931 (2,122) Other receivables 838 (2,330) 7 86 (5,220) Increase (decrease) in liabilities: Trade payables (28,27 2) 25,534 (24,985) 25,7 08 Provisions and deferred income (16,699) (9,7 08) (16,699) (1,385) Tax obligations 57 0 (6,025) 569 (4,928) Other payables (884) 7,032 (7 7 0) 6,417 Interests over borrowings paid (23,129) (19,950) (23,129) (19,960) 26,262 (1,019) 14,799 22,133 Net cash provided by operating activities 35,622 24,701 14,057 45,090 CASH FLOWS FROM INVESTING ACTIVITIES Increase in capital - joint venture 1 2 (300) - (300) - Purchases of property, plant and equipment 13 (2,056) (1,137 ) (2,056) (1,607 ) Increase in intangible assets 1 4 (4,440) (4,084) (4,440) (5,586) Net cash used in inv esting activities (6,796) (5,221) (6,796) (7,193) CASH FLOWS FROM FINANCING ACTIV ITIES New borrowings 136, , , ,564 Borrowings from the National Bank for Economic and Social Development (BNDES) 1,637 45,473 1,637 47,657 Repayment of borrowings (214,810) (134,231 ) (214,810) (134,290) Related parties (459) 13,419 3,259 (11,112) Net cash provided by (used in) financing activities (7 7,440) 59,554 (7 3,722) 41,819 (REDUCT ION) INCREASE IN CASH AND CASH EQUIVALENT S (48,614) 7 9,034 (66,461) 7 9,716 Cash and cash equivalents at the beginning of the period. 530, , , ,361 Exchange variation on cash and cash equivalents - - (2,142) - Cash and cash equivalents at the end of the period. 482, , , ,077 (REDUCT ION) INCREASE IN CASH AND CASH EQUIVALENT S (48,614) 7 9,034 (64,319) 7 9,716 The accompanying notes are an integral part of these interim financial information. 7

10 (Convenience Translation into English from the Original Previously Issued in Portuguese) POSITIVO INFORMÁTICA S.A. AND SUBSIDIARIES STATEMENT OF VALUE ADDED FOR THE QUARTER ENDED IN MARCH 31, 2016 AND 2015 (All amounts in thousands of reais) Parent com pany Consolidated 03/31/ /31/ /31/ /31/2015 Revenue Sales of goods and services 37 7, , , ,405 Returns and commercial discounts (18,67 1) (11,7 68) (18,67 1) (12,551 ) Allowance for doubtful accounts (1,298) (1,265) (1,298) (1,342) Other revenues 6,863 1,612 6,863 1, , , , ,132 Inputs acquired by third parties Cost of sales and services rendered (235,826) (313,235) (27 3,599) (363,147 ) Materials, electricity, outsourced services and other (32,340) (7,7 23) (32,735) (8,451 ) Commissions (4,974) (7,229) (4,974) (7,7 76) Marketing (1 3,849) (8,953) (1 3,849) (13,636) (286,989) (337,140) (325,157 ) (393,010) Gross v alue added 7 7, , ,609 83,122 Depreciation and am ortization (13,111) (11,600) (13,111) (12,497 ) Net value added generated by the entity 64,596 62,953 64,498 70,625 Value added received through transfer Equity in the results of investees 28,146 (4,371) 28,679 2,053 Finance income 53, ,289 53, ,642 82, ,918 82,602 81,695 T otal v alue added to distribute 146, , , ,320 Distribution of value added Personnel Salaries and social charges 23,648 34, ,648 36,210 Benefits 2,893 4,959 2,893 5,540 Government Severance Indemnity Fund for Employees 2,464 3,383 2,464 3,538 29,005 43,110 29,005 45,288 T axes, fees and contributions Federal 32,927 27, ,927 32,446 State 401 1, ,532 Municipal ,468 29,536 33,468 34,216 T hird-party capital remuneration Interest and finance costs 32,667 23, ,056 25,457 Rentals 3,27 8 3,203 3,27 8 3,548 Foreign exchange variation 58,656 26,037 58, ,300 94,601 52, ,036 61,305 Remuneration of own capital Div idends Retained earnings (loss) (10,409) 11,511 (10,409) 11,511 (10,409) 11,511 (10,409) 11,511 T otal v alue added distributed 146, , , ,320 The accompanying notes are an integral part of these interim financial information. 8

11 (Convenience Translation into English from the Original Previously Issued in Portuguese) POSITIVO INFORMÁTICA S.A. AND SUBSIDIARIES NOTES TO THE QUARTERLY INTERIM FINANCIAL INFORMATION FOR THE PERIOD ENDED MARCH 31, 2016 (In thousands of Reais, except where otherwise indicated) 1 GENERAL INFORMATION Positivo Informática S.A. (the Company), founded in 1989, has a technological complex of three units in the municipality of Curitiba, state of Paraná, one unit in the municipality of Ilhéus, state of Bahia. On August 28, 2015, the direct subsidiary Positivo Informática da Amazônia Ltda. was merged into the Company so as to establish a branch in the city of Manaus, State of Amazonas. The Company also has a direct subsidiary in the city of Ilhéus, State of Bahia, and an indirect subsidiary in the city of São Paulo, State of São Paulo. In December 2010, the Company acquired the shared control of Informática Fueguina S.A., in Argentina. In February 2011, the Company acquired the shareholding control of Crounal S.A, in Uruguay, which subsidiary acquired in 2015 an ownership interest of 50% in Companhia Musfer S.A., also based in Uruguay. In April 2012, the Company acquired the direct subsidiary Portal Mundo Positivo Ltda. In May 2014, the Company acquired the jointly-controlled subsidiary BR Code Desenvolvimento de Software S.A. In October 2014, the Company opened the jointly-controlled subsidiary PBG Rwanda Limited. In January 2016, the Company acquired the joint control of investee Hit Tecnologia em Saúde Ltda. The Company is primarily engaged in the manufacture, sale and development of projects in the information technology (IT) area, the manufacture, sale and rental of software and hardware, the sale of IT equipment, pedagogic and school management application systems, technical-pedagogical planning and support, representation, sales, implementation, training and support, technical assistance for equipment and technical, technological and scientific teaching systems in several areas, and other related activities. The products manufactured and sold by the Company include: small and medium-sized computers, portable computers, tablets, monitors, electronic boards, computerized educational desks, servers, mobile phones, smartphones and educational software systems. The shares of Positivo Informática S.A. are listed on the São Paulo Stock Exchange (BM&FBovespa) in the New Market Corporate Governance segment. 9

12 2 PRESENTATION OF INTERIM FINANCIAL INFORMATION OF PARENT COMPANY AND CONSOLIDATED The issue of these interim financial statements was authorized by the Board of Directors on April 28, Basis of preparation The individual and consolidated financial information as of March 31, 2016 has been prepared in accordance with CPC 21 Demonstração Intermediária and IAS 34 Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), and presents selected notes so as to avoid redundancy of information already disclosed in the individual and consolidated financial statements as of December 31, 2015, publicly disclosed on March 23, Accordingly, the individual and consolidated interim financial information as of March 31, 2016 does not include all the notes and disclosures required by accounting standards in preparing annual financial statements and, consequently, should be read together with the individual and consolidated financial statements under CPC and IFRS as of December 31, 2015 The individual and consolidated interim financial information has been prepared consistently with the accounting policies disclosed in note 2 to the consolidated financial statements as of December 31, (a) Parent company financial information The parent company financial information were prepared in accordance with accounting practices adopted in Brazil issued by the CPC. Because the accounting practices adopted in Brazil applied to the parent company's financial statements, as from 2014, do not differ from IFRS applicable to the separate financial statements, since it started to allow the adoption of the equity accounting method in subsidiaries in the separate financial statements, these are also in conformity with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB). These parent company financial statements are disclosed together with the consolidated financial statements. (b) Consolidated financial information The consolidated financial information have been prepared and are being presented in accordance with accounting practices adopted in Brazil, including the pronouncements issued by the CPC, as well as according to International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board IASB. 10

13 (c) Changes in accounting policies and disclosures There are no IFRS standards or IFRIC interpretations that are not yet effective and that could have a material impact on the Company s interim financial information. (d) Statement of value added (DVA) 2.2. Consolidation The presentation of the parent company and consolidated Statement of Value Added is required by the Brazilian corporate legislation and the accounting practices adopted in Brazil applicable to listed companies. IFRS do not require the presentation of this statement. Consequently, according to IFRS, this statement is presented as supplementary information, without prejudice to the financial statements as a whole. The purpose of this statement is to disclose the wealth created by the Company and its distribution during a certain reporting period. The presentation of this statement is required by the Brazilian Corporate Law as an integral part of its individual financial statements and considered additional disclosure in the consolidated financial statements, since this statement is not required by IFRS. The statement of value added has been prepared using information obtained in the same accounting records used to prepare the financial statements and pursuant to the provisions of CPC 09 - Statement of Value Added. The first part of the DVA presents the wealth created by the Company, represented by revenues (gross sales revenue, including taxes levied thereon, other income and the effects of the allowance for doubtful debts), inputs purchased from third parties (cost of sales and purchases of materials, power and outside services, including taxes levied at the time of the purchase, the effects of impairment and recovery of assets, and depreciation and amortization) and the value added received from third parties (share in the profit of subsidiaries, finance income and other income). The second part of the DVA presents the distribution of wealth between personnel, taxes and contributions, lenders and lessors, and shareholders. The following accounting policies are applied in the preparation of the consolidated financial information: (a) Subsidiaries Subsidiaries are all entities (including structured entities) over which the Company has control. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases. 11

14 Transactions, balances and unrealized gains on transactions between companies are eliminated. Unrealized losses are also eliminated, unless the transaction provides evidence of impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company. Ownership interest - % 03/31/ /31/2015 Direct subsidiaries Positivo Informática da Bahia Ltda Portal Mundo Positiv o Ltda Crounal S.A Indirect subsidiaries Investee of Positivo Inform ática da Bahia Ltda. Boreo Comércio de Equipamentos Ltda (b) Joint venture A joint venture is an entity over which the Company shares control with one or more parties. Investments in joint ventures are accounted for using the equity method and are initially recognized at cost. The Company's related share of profit or loss is recognized in the statement of income and its share of reserve movements is recognized in the Company's reserves. When the Company's share of losses in a joint venture equals or exceeds the carrying amount of the investment, including any other receivables, the Company does not recognize further losses, unless it has incurred obligations or made payments on behalf of the joint venture. Unrealized gains on transactions between the Company and its joint venture are eliminated to the extent of the Company's interest. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the joint venture have been changed where necessary to ensure consistency with the policies adopted by the Company. Ownership interest - % 03/31/ /31/2015 Joint venture Informática Fueguina S.A BR Code Desenvolvimento de Software S.A Hit Tecnologia em Saude Ltda Investee of Positivo Inform ática da Bahia Ltda. PBG Rwanda Limited Investee of Positivo Crounal S.A. Musfer S.A

15 3 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS The critical accounting estimates and assumptions used in preparation of theses interim financial information are those described in Note 3 to the company s annual financial statement at December 31, NEW AND REVISED STANDARDS AND INTERPRETATIONS NOT YET EFFECTIVE The following standards were issued by IASB and will be mandatory for subsequent years, with no early adoption by the Company. They will be adopted after the corresponding CPCs are issued and approved by CVM. Management is evaluating the possible impacts of these standards on the financial statements: - IFRS 9 Financial Instruments Issued in July 2014 in final form, effective for periods beginning on or after January 1, 2018, to replace IAS 39 Financial Instruments: Recognition and Measurement and prior IFRS 9 versions. IFRS 9 establishes new requirements for the classification and measurement, impairment and accounting for hedge of financial instruments. - IFRS 15 Revenue from Contracts with Customers Issued in May 2014, effective for periods beginning on or after January 1, 2018, to replace the current standards in IAS 11 Construction Contracts, IAS 18 Revenues, IFRS 15 provides guidance for measurement, recognition and disclosure of revenues. - Amendments to CPC 32 Income Taxes Correlation with International Accounting Standard IAS 12 Issued in January 2016, effective on or after January 1, 2017, the amendments refer to the recognition of deferred tax assets on unrealized losses and clarifies the accounting method of the deferred tax assets relating to the debt instruments stated at fair value. - IFRS 16 Leases Issued in January 2016, effective on or after January 1, 2019, sets forth the principles for recognition, measurement, presentation and disclosure of lease agreements, and the criteria for recognition of assets and liabilities arising from these agreements. There are no other standards and interpretations issued and not yet adopted which, in Management s opinion, may have a significant impact on profit or loss for the quarter or the equity reported by the Company. 13

16 5 CASH AND CASH EQUIVALENTS Parent company Consolidated 03/31/ /31/ /31/ /31/2015 Banks 6, ,623 15, ,828 Financial inv estments linked to the Interbank Deposit Certificate (CDI) rate 47 5, , , , , , , ,886 As at March 31, 2016 and December 31, 2015, short-term investments consist of repurchase transactions and Bank Certificates of Deposit (CDBs) in private securities and local currency, yielding average interest of % of the Interbank Deposit (CDI) rate fluctuation (100.66% in December 31, 2015), which are immediately convertible into a known cash amount and subject to an insignificant risk of change in value. 6 TRADE RECEIVABLES The fair values of trade receivables approximate the balances recorded. Past-due balances mainly refer to products sold to Government agencies, which are received following the respective agencies' internal approval processes. Historically, payment delays are usual in this sales segment and are considered by management in its business strategy; thus, they have not resulted in material losses for the Company. These past-due balances do not represent a significant risk and a provision was recognized only for those cases in which there is likelihood of loss for the Company. The receivables from Government agencies that are past-due in March 31, 2016 amounted to R$ 64,965 (R$ 51,153 at December 31, 2015). The average credit period for sales of products is 71 days, except for certain sales to Government agencies for which the term may extend to 180 days. Criteria for estimating the provision for impairment of trade receivables: - Due to the concentration of sales in a small number of customers (the 20 largest customers represented about 69% of total trade receivables at March 31, 2016, and around 67% at December 31, 2015), the Company evaluates the need for a provision for impairment mainly based on the individual analysis of past-due receivables, and the historical losses on these receivables. At March 31, 2016, the consolidated balance of this provision totaled R$ 24,721 (R$ 23,423 at December 31, 2015). 14

17 The adjustment to present value of trade receivables is calculated to reflect the present value of future cash flows. The Company considers the payment term of each credit sale and calculates the discount of this transaction by using the CDI (Interbank Certificate of Deposit) rate as reference. Aging of past-due trade receivables not included in the provision for impairment of trade receivables is as follows: Parent company Consolidated 03/31/ /31/ /31/ /31/2015 Up to 30 days 59,833 48,017 59,833 48, to 60 days 25,355 15,092 25,355 15, to 90 days 13,451 8,136 13,451 8, to 180 days 13,617 21,989 13,617 21, to 360 days 10, ,159 10, ,159 Over 361 days 11,610 7,321 11,610 7, , , , ,7 14 Changes in the provision for impairment of trade receivables are as follows: Parent company Consolidated 03/31/ /31/ /31/ /31/2015 Balance at the beginning of period 23,423 16,122 23,423 16,441 Provision - Balance Incorporated Recognized losses - (1,389) - (1,564) Provision for impairment of trade receivables 1,298 8,17 4 1,298 8,546 24, ,423 24, ,423 7 INVENTORIES Parent company Consolidated 03/31/ /31/ /31/ /31/2015 Materials 251, , , ,833 Finished products 99, , , ,853 Imports in progress 7,059 4,57 8 7,059 4,57 8 Advances to suppliers 49,429 27, ,429 27,7 50 Provision for obsolete inventories (40,903) (46,305) (40,903) (46,305) 366, , , ,7 09 The provision for obsolete inventories is set up based on the assessment of raw materials, inventory for resale and finished goods which do not have clear expectations regarding their use and sale. The main basis for this assessment is the inventory turnover, segregating goods for production from those for technical assistance. Management expects inventory to be realized in less than 12 months. 15

18 8 TAXES RECOVERABLE Parent company Consolidated 03/31/ /31/ /31/ /31/2015 ICMS 167, , , ,412 Excise Tax (IPI) 7,603 6,452 7,603 6,452 Social Integration Program (PIS) 7,696 10,87 1 7, ,87 9 Social Contribution on Revenues (COFINS) 41,224 56,354 41,262 56,392 Social contribution 8,854 10,7 40 8,861 10,7 46 Income tax 53,833 54,807 53,964 54,951 Other taxes recoverable 2,559 2,535 3,153 3, , , , ,07 1 Current portion 17 0, , , ,606 Non-current portion 118, , , ,465 Tax credits are realized based on the corporate restructurings occurred in 2015, upon the merger of subsidiary Positivo da Amazônia Ltda. and changes occurred in the federal and state legislation. Such changes had two consequences on the transactions: the first is to reduce the generation of tax credits and the second is the generation of tax debts that will enable the utilization of accumulated tax credits. ICMS The Company has the following benefits of ICMS: (i) (ii) State Law 13,214/2001, confirmed by State Law 15,542/2007, which establishes a reduction to 7% in the tax rate on IT products for sales inside the state. State Decree 5,375/2002, confirmed by the Special Taxation Agreement, which allows utilization of a deemed ICMS tax credit, resulting in a tax rate of 3% for specific products sold by the Company (effective period of Article 3 through July 31, 2011). (iii) State Decree 1,922/2011 which became effective on August 1, 2011, revoking Article 3 of State Decree 5,375/2002, and grants a deemed ICMS credit equivalent to the amount due on the sale, resulting in a tax rate of 0% for specific products sold by the Company. (iv) Paraná State Decree 2,175/2015, effective since September 1, 2015, amended article 1 of Decree 1,922/2011, limiting the deemed credit in an amount not exceeding the establishment s total ICMS debts on the computation period. As a result of the tax benefits above, the Company recorded at March 31, 2016 R$ 41,073 (R$ 47,763 at March 31, 2015) related to investment grants as Sales deductions - taxes on sales with respect to the sale of manufactured goods, and maintained R$ 11,304 in liabilities, under the caption Deferred revenue (R$ 12,834 in December 31, 2015), which will be allocated to the results of operations based on the amortization of the related assets and fulfillment of the obligations required as consideration for this tax benefit, as established in CPC 7 and disclosed in Note 14.a. This tax benefit has an indefinite term. 16

19 IPI The IPI credit is due to the utilization of the tax benefit established by Law 8,248/1991, which granted IPI exemption, later converted into progressive reduction, on the shipment of new equipment, machinery, apparatuses and instruments, including industrial automation and data processing equipment produced in Brazil, combined with the maintenance and utilization of the IPI tax credit, related to raw materials, intermediate products and packaging materials used in the manufacture of goods. The progressive reduction in percentages of the benefit, established by law, follows the schedule below:. Reduction of 95% of the tax due, from January 1, 2004 to December 31, Reduction of 90% of the tax due, from January 1, 2025 to December 31, Reduction of 70% of the tax due, from January 1, 2027 to December 31, 2029, after which the benefit will be abolished. To be eligible for such benefit, the Company must invest annually about 5% of the gross revenue from sales of IT products and services with tax incentives in IT research and development activities calculated in accordance with Law 8,248/1991 and subsequent amendments. The Company must annually present to the Ministry of Science and Technology evidence that it is complying with this investment requirement. 9 OTHER RECEIVABLES Parent company Consolidated 03/31/ /31/ /31/ /31/2015 Prepaid expenses (a) 11,319 10, ,319 10,7 99 Judicial deposits 19, ,569 19,804 19,660 Unearned interest 3,97 7 4,312 3,97 7 4,312 Other 6,381 7,548 6,382 7,548 41,390 42,228 41,482 42,319 Current portion 26,801 27,893 26,801 27,893 Non-current portion 14,589 14,335 14,681 14,426 (a) At March 31, 2016, the Company has credits to be offset against advertising expenses amounting to R$ 8,762 (R$ 10,181 at December 31, 2015), recorded under the caption "Prepaid advertising expenses". ". Management considers that the realization will occur in less than 12 months. 17

20 10 RELATED PARTIES Trading transactions Related party transactions are made at prices and terms in accordance with those practiced in the market. (a) Sale of microcomputers These transactions relate to sales of microcomputers manufactured by the Company, which it sells to all of its related parties. (b) Printing products and services - Gráfica e Editora Posigraf S.A. Refer to purchases of printing products and services and sales of computers and IT equipment produced by the Company. (c) Copyrights - Editora Positivo Ltda. Copyrights refer to permissions by Positivo Informática S.A. for access to the websites named "Portal Positivo" and "Portal Aprende Brasil" and the multimedia platform named Positivo Digital for the customers indicated by Editora Positivo Ltda., access to e-books to the customers of the private education area and access to digital content through links inserted in printed books. Pursuant to agreements entered into The Company permits the access to "Portal Positivo" and e-books for all institutions linked through Editora Positivo to Sistema Positivo de Ensino, and the access to "Portal Aprende Brasil" for all institutions linked through Editora Positivo to Sistema de Ensino Aprende Brasil. 18

21 Pursuant to independent agreements, the Company receives specific remuneration for access to "Portal Positivo" amounting to R$ 3,555 per year, divided into 12 monthly installments, and for access to "Portal Aprende Brasil" at R$ 945 per year, divided into twelve quarterly installments. On July 13, 2015, Editora Positivo Ltda engaged the Company to develop a multimedia platform with educational content called "Positivo Digital". The total contractual amount is R$ 9,390, of which R$ 7,500 for development services (remaining balance - 21 monthly installments of R$ 222) and R$ 1,890 for the transfer of copyrights and asset rights to the contracting party (remaining balance - 09 monthly installments of R$ 63). (d) Publishing services These refer to the contracting of publishing services, which are used in graphics products produced by Gráfica e Editora Posigraf S.A. and other printing firms contracted by the Company. (e) Rental - Rosch Administradora de Bens Ltda. The Company has a lease agreement for manufacturing units with a related party, which expires every six years and specifies a monthly rental of R$ 749, adjusted annually based on the index established in the agreement. The amount can be renegotiated, through an amendment to the agreement, in the event of expansion in the area to increase the production capacity and improvements made by the landlord. (f) Arrangement - Centro de Estudos Superiores Positivo The Company entered into an arrangement with Universidade Positivo related to the cooperation and scientific and technology interchange program, supported by Brazilian legislation (Law 11,077/2004 and Decree 5,906/2006), for the empowerment and competitiveness of the IT industry, encompassing research, development and scientific and technology services activities, human resource development and training, technology absorption and transfer, as well as improvement and optimization of the use of the laboratory infrastructure. (g) Sales The parent company sells inputs for production to its subsidiaries. (h) Purchases The parent company purchases finished products from the subsidiaries for resale to customers. 19

22 (i) Apportionment of expenses Apportionment of administrative expenses and shared services with Sociedade Educacional Positivo Ltda., Gráfica e Editora Posigraf S.A. and Editora Positivo Ltda. These expenses refer to the shared use of the purchasing, personnel and IT departments, and the reimbursement of rental, electricity, water and telephone expenses of the premises where the Educational Technology area operates. The apportionment is calculated based on the actual cost, in accordance with the use of the available resources. (j) Current account - Positivo Informática da Bahia Ltda. The Company has a current account with Positivo Informática da Bahia Ltda., for the purpose of controlling the multiples, credits and debits between the parties arising from trading transactions. Such transactions have not defined maturity, as well as incurred interests. (k) Informática Fueguina S.A. Outstanding balances arise from sales of production inputs, in conformity with the terms of each transaction. (l) Development Services Refer to the contracting of services for the development of software and applications used in production, sale and operating improvements. Management remuneration The amount recognized at the period ended March 31, 2016 as management remuneration was R$ 1,644 (R$ 3,286 at March 31, 2015), relating to short-term benefits. At the Annual General Meeting held on April 29, 2016, the Company's stockholders approved, for 2016, maximum management remuneration of R$ 9,493 (R$ 11,780 in 2015). 11 INVESTMENTS IN SUBSIDIARIES Investim ents At 12/31/2015 Parent company Equity in the results of inv estees Carrying value adjustm ent At 03/31/2016 Portal Mundo Positivo Ltda. (c) Positiv o Informática da Bahia Ltda. (a) 9,314 2,169 (301) 11,182 Crounal S.A. (b) 1,069 (534) (51) ,068 1,635 (352) 12,351 The Company s investments in subsidiaries (direct and indirect) are in the note 2.2(a). 20

23 The Company's investments in assets, liabilities, equity and in the results of the direct and indirect subsidiaries, all of them closely-held, are as follows: (a) Positivo Informática da Bahia Ltda. On April 8, 2008, the Company established the direct subsidiary Positivo Informática da Bahia Ltda., which started operations in In that year, this direct subsidiary acquired Boreo Comércio de Equipamentos Ltda. On September 18, 2015, the Company increased capital of Positivo Informática da Bahia Ltda, by contributing R$11,489 through credits held against the subsidiary. (b) Crounal S.A. In February 2011, the Company acquired the direct subsidiary Crounal S.A., which is headquartered in Montevideo, Uruguay. This subsidiary has the same corporate purpose as the Company. On December 18, 2015, the Company made a capital contribution in the amount of R$ 5,887. (c) Portal Mundo Positivo Ltda. On April 9, 2012, the Company, in partnership with its subsidiary Positivo Informática da Amazônia Ltda., acquired Portal Mundo Positivo Ltda. No goodwill was paid on this acquisition. With the merge of Positivo Informática da Amazônia Ltda. the company holds the whole investment in this company. 12 INVESTMENT IN JOINT VENTURES a) Parent company 21

24 b) Consolidated The investments in joint ventures are demonstrated in the note 2.2(b). (a) Informática Fueguina S.A. On December 3, 2010, the Company established a joint venture with the Argentine company BGH Sociedad Anónima (BGH), to manufacture and sell IT products (desktops, notebooks, all-in-ones, e-books and tablets) in Argentina and Uruguay. In order to establish the joint venture, the Company acquired 50% of the share capital of the Argentine company Informática Fueguina S.A., which was directly and indirectly owned by BGH. The amount paid on the acquisition was R$ 21 without payment of any premium. (b) BR.Code Desenvolvimento de Software S.A. On May 23, 2014, the Company acquired an 100% equity interest in BR Code Desenvolvimento de Software S.A., whose capital amounts to R$ 50 and which is engaged in the development of software, maintenance and updating of software, and the licensing and assignment of rights to the use of software. No goodwill was paid on this acquisition. In October 2014, a stockholders' agreement with shared control with BORQS Group, and therefore, the investee's investment became an investment in a joint venture. (c) PBG Rwanda Limited On October 10, 2014, the Company established, in partnership with BGH Group, the jointly-controlled subsidiary PBG Rwanda Limited. On November 15, 2014, the jointly-controlled subsidiary entered into an agreement with the Government of Rwanda to produce and sell educational devices under the Positivo BGH brand in the local market. 22

25 (d) HIT Tecnologia em Saúde Ltda. On January 4, 2016, the Company acquired 50% interest in Hit Tecnologia em Saúde Ltda., in the amount of R$300. Upon acquisition, the Company obtained a bargain purchase gain (negative goodwill) based on the fair value of the investee's property, plant and equipment and intangible assets, in the amount of R$4,242. The gain was recorded in profit and loss for the period, as set forth in CPC 15 Business Combinations. The Company's interest in the assets, liabilities, equity and results of the joint ventures is as follows: 13 PROPERTY, PLANT AND EQUIPMENT Parent Com pany 12/31/2014 Additions T ransfer/ Low Incorporation 12/31/2015 Additions T ransfer 03/31/2016 Cost Machinery and equipment 58,131 1,47 2 (1,568) 1, , ,912 Leasehold improvements 18, ,184 20,591 - (1,187 ) 19,404 Hardware 35,491 1,662 (27 1) , ,168 39,680 Furniture and fittings 6, , ,933 Industrial facilities 6,97 4 7,398-1, ,133 1, ,008 Buildings 2, , ,000 Other property, plant and equipme 1,100 2,399 (233) 5 3, (2,168) 1, ,650 13,948 (1,067 ) 5, ,17 1 2,056 (1,187 ) 148,040 Depreciation Machinery and equipment (29,435) (7,7 56) 7 64 (589) (37,016) (1,849) - (38,865) Leasehold improvements (8,504) (2,498) 36 (405) (11,37 1) (423) 1,187 (10,607 ) Hardware (32,804) (3,7 92) 2,320 (468) (34,7 44) (7 31) - (35,47 5) Furniture and fittings (4,395) (621) 31 (147 ) (5,132) (17 1) - (5,303) Industrial facilities (3,939) (1,033) 26 (239) (5,185) (456) - (5,641) Buildings (547 ) (467 ) - - (467 ) Other property, plant and equipme (30) (21) - (2) (53) (5) - (58) (7 9,654) (1 5,7 21) 3,257 (1,850) (93,968) (3,635) 1,187 (96,416) Net amount 48,996 (1,773) 2,190 3,790 53,203 (1,579) - 51,624 23

26 At March 31, 2016 and December 31, 2015, the Company did not have property, plant and equipment items given in guarantee of borrowings. 14 INTANGIBLE ASSETS (a) Project development costs The Company benefits from tax incentives granted for the IT and automation segments by Law 8,248/1991, known as the Information Technology Law, regulated by Decree 792 of October 23, This law was amended by Law 10,176 of January 11, 2001, regulated by Decree 3,800 of April 20, 2001, which was amended again in 2004 by Law 11,077 of December 30, 2004, regulated by Decree 5,906/2006 of September 26,

27 To be entitled to these benefits, a company engaged in the development or sale of IT products and services must invest a minimum percentage to be invested is calculated based on 5% of the gross revenue from sales in the domestic market of IT products and services entitled to the incentives pursuant to the law, after deducting from gross revenue the resale of products, the related taxes, and the purchase costs of products entitled to the incentives. The percentages to be invested have their basis reduced by 20% until 2029, complemented by the additional reduction of 25% at December 31, The investment obligation related to 2016 is R$ 56,183. From January to March 2016, R$ 8,440 was invested and the total amount of the obligations must be fulfilled up to the first quarter of The amounts are invested in the improvement of existing products and development of new products and comprise basically: direct and indirect labor, payroll charges, software, consulting services, materials, infrastructure, travel and other related costs. The amortization period was set at three years based on the projects' recoverability history. The amortization of these projects was recorded under cost of sales. (b) Goodwill In December 2009, the subsidiary Positivo Informática da Bahia Ltda. completed the acquisition of Boreo Comércio de Equipamentos Ltda., generating goodwill of R$ 14,173, recorded in the books of the acquirer and based on expected future earnings. The recoverable amount of the goodwill is determined on the basis of its value in use derived from cash flow projections based on a financial budget of five years approved by management and the discount rate of 16.41% per year. 15 TRADE PAYABLES Copyrights and licenses payable represent obligations for the acquisition of Microsoft Corporation software licenses. These licenses are supported by license agreements entered into between the parties and are renewed periodically. The average payment term for trade payables is 53 days. The adjustment to present value of trade payables is calculated based on the future payment of cash flows discounted to present value. The Company considers the payment term of each credit sale and calculates the discount of this transaction by using the CDI ( Interbank Certificate of Deposit) rate as reference. 25

28 16 BORROWINGS The borrowings and financing agreements entered into by the Company and its subsidiaries do not contain any covenants requiring the achievement of financial ratios. The Company's loan and financing book values approximate their fair values, except for the credit lines obtained from BNDES, which have specific conditions regarding their terms and costs. (a) BNDES In 2010, the Company entered into an agreement for special credit lines with BNDES in the amount of up to R$ 147,000, which were fully obtained and used in innovative activities. During 2013 the Company obtained a new financing facility from BNDES, at an amount of up to R$ 173,093 with a total repayment term of six years. The funds will be mainly used for the Company's innovation plan, focused on research and development activities, new products, digital convergence and smartphones. Additionally, some of these funds will be used for the modernization of the industrial and IT structures of the Company. The funds were fully released in tranches, in accordance with the progress of the projects and related support filed with BNDES, with a grace period during the first 24 months. During the period ended at March 31, 2016, R$ 1,637 was released. 26

29 (b) Securitization of trade payables Comprises the payor risk, which consists of the prepayment by suppliers of outstanding securities, where the bank advances the amount to the supplier on the request date and subsequently receives on the maturity date the amount due by the Company. As at December 31, 2015, all outstanding transactions were settled in the first quarter of The maturities of the long-term borrowings are as follows: 17 PROVISION Parent Company Consolidated 03/31/ /31/ /31/ /31/2015 Current liabilities Provision for warranties and technical assistance (a) 44,084 52,846 44,300 53,062 Provision for commissions (c) 17, , , ,7 30 Provision for freight (284) 151 (284) 151 Provision for rebates (d) 2,480 2,613 2,480 2,613 Provision for cooperative advertising (b) 11,652 9,699 11,652 9,699 Other provision 6,950 13,17 9 6,950 13, ,054 97,218 82, ,434 Non-current liabilities Provision for warranties and technical assistance (a) 18,239 18,244 19,389 19, , , , ,828 (a) Provision for warranties and technical assistance Based on the number of computers under warranty and the warranty period for such equipment, as well as the recent history of service frequency per machine and the average cost per technical assistance service, an estimate was made at the end of the reporting period of the provision required to settle the total obligation assumed in respect of the equipment under warranty. (b) Provision for cooperative advertising (VPC) The amounts provided for cooperative advertising are calculated based on the percentages agreed between the parties and refer to promotion and advertising of the Company's products. The percentages are negotiated individually with each customer. 27

30 (c) Provision for commissions The provision for commissions is calculated based on the individual percentage of commission recorded in the sales orders. (d) Provision for rebates The amounts provided for rebates are calculated based on historical percentages and other factors, negotiated individually with each customer. These amounts represent adjustments to the price, stimulating the retail sales. 18 TAXES PAYABLE 19 DEFERRED REVENUE This refers to the portion of the investment grant for which the investment obligation has not yet been fulfilled, as mentioned in Note 8. As a result of the use of the ICMS tax benefits for the year ended March 31, 2016 and December 31, 2015, the Company recorded the amount in liabilities, under the caption "Deferred revenue", which will be allocated to the results of operations according to the amortization of the related assets and fulfillment of the obligations required as consideration for such tax benefit, as established in CPC 7 and disclosed in Note 14.a. 28

31 20 INCOME TAX AND SOCIAL CONTRIBUTION (a) Deferred Deferred income tax and social contribution assets and liabilities were calculated at the rates in effect at March 31, 2016 and December 31, 2015 and are comprised as follows: The recognition of the tax credit is supported by the Company's business plans, which consider the expansion of business activities, management's decision to distribute dividends in Brazil and taxable profits in jointly controlled companies abroad in levels of amounts distributed historically, using part of the grant revenue for investment also in reducing the premise of the effect of the subsidy for investment in the Company's results, the changes in corporate law and reorganization incurred in 2015, which will generate sufficient taxable income to offset such tax credit deferred. Technical feasibility studies, analyzed and approved by the Board of Directors, indicate the full recovery of the amounts of deferred taxes recognized, as defined in CVM Instruction 371, of June 27, 2002, and refer to management's best estimates of the future evolution of the Company and the market in which it operates. The expected realization of tax credits is as follows: Parent com pany and Consolidated Expected realization T otal Income tax 5,382 7,362 7,483 7,067 6,550 6,051 5,587 5,158 1,632 52,272 Social contribution 1,938 2,650 2,694 2,544 2,358 2,17 8 2,011 1, ,801 T otal 7,320 10,012 10,17 7 9,611 8,908 8,229 7,598 7,015 2, ,07 3 Management reviews the actual results of these business plans for the generation of taxable profits each year and, accordingly, reassesses the expected realization of these tax credits. 29

32 As the taxable basis for income tax and social contribution on net income arises not only from the profit that may be generated, but also from the existence of non-taxable revenues, non-deductible expenses, tax incentives and other variables, there is no immediate correlation between the Company's and its subsidiaries' profit and the income tax and social contribution expense. Therefore, the expected utilization of tax credits should not be taken as the sole indication of the future profitability of the Company and its subsidiaries. Deferred tax liabilities refer to: (i) the deferral of receivables from Government agencies, and (ii) the tax incentives introduced by Law 10,637/2002 and subsequently amended by Law 11,196/2006, which allows the deductibility of expenses on development projects on a cash basis for income tax and social contribution purposes. This incentive is applicable to the Company's business activity and relates to expenses for product development projects that are recorded in intangible assets. The amount of deferred taxes will be reversed as the projects are amortized. (b) Tax benefit (expense) in the statement of income Reconciliation of the income tax and social contribution benefit (expense) is as follows: 21 PROVISION FOR TAX, LABOR AND CIVIL RISKS The Company has contingencies that are being discussed in court, including tax, labor and civil lawsuits. The Company's management believes that the outcome of these lawsuits will not have an effect significantly different from the amount provided for, which corresponds to the amounts of lawsuits considered "probable losses". These basically refer to: Parent Company Consolidated Civil T ax Labor T otal Civ il T ax Labor T otal At Decem ber 31, ,553 17,202 17,142 44,897 10,553 17,502 17,142 45,197 Provision recorded 3,014 4,635 2, ,120 3,014 4,635 2, ,120 Reduction through pay ments (5,7 04) (3,186) (2,856) (11,7 46) (5,7 04) (3,186) (2,856) (11,7 46) At Decem ber 31, ,863 18,651 16,757 43,271 7,863 18,951 16,757 43,571 Provision recorded , ,07 1 Reduction through pay ments (957 ) (7 19) (7 64) (2,440) (957 ) (7 19) (7 64) (2,440) At March 31, ,043 18,418 16,441 41,902 7,043 18,718 16,441 42,202 Current 5,17 3 5,17 3 Non-Current 36, ,029 30

33 The amount recorded at the Parent Company, in current liabilities was R$5,173 (R$5,500 as of December 31, 2015) and that recorded in noncurrent liabilities was R$36,729 (R$37,771 as of December 31, 2015). The amount recorded at the Consolidated, in current liabilities was R$5,173 (R$5,500 as of December 31, 2015) and that recorded in noncurrent liabilities was R$36,029 (R$38,071 as of December 31, 2015). Civil The Company is a party to lawsuits of a commercial and civil nature relating to consumers complaints about products and services provided by the Company. There is not any individual relevant lawsuit. Tax Administrative proceedings and lawsuits discussing the legality or constitutionality of municipal, state and federal taxes, contributions and fees. There is not any individual relevant lawsuit. Labor Lawsuits discussing employer-employee relationship issues. There is not any individual relevant lawsuit. Possible losses The amounts of contingencies assessed as possible losses by the Company's legal counsel, for which no provision was recorded in accordance with the accounting practices adopted, are as follows: Tax (a) ICMS The Company takes ICMS credits on shipments of products by taxpayers located in tax-incentive areas to the Curitiba unit, pursuant to Articles 22 and 23 of the Paraná State ICMS Regulation, approved by State Decree 1,980/2007. The Company, together with its legal counsel, believes that there are strong legal arguments to sustain the taking of credits in accordance with prevailing legislation and prior court decisions in the event of challenge by the tax authorities. 31

34 (b) Tax Other (principal in the total amount of R$ 123,671): (i) (ii) Economic Intervention Contribution (CIDE) - Tax assessment notice requiring the payment of the CIDE on remittances overseas of amounts related to royalties on software made in Import tax (II) and IPI - Tax assessment notice claiming differences of Import and Excise taxes, arising from the reclassification of the Mercosur Common Nomenclature (MCN) on imports of microprocessors carried out by the Company in the last five years. This reclassification arose from the change in tax classification criteria by the Federal Revenue Service. (iii) II and IPI - Tax assessment notice relating to differences of Import and Excise taxes, arising from the reclassification of the MCN on imports of LCD screens carried out by the Company's branch located in Ilhéus, State of Bahia, in the last three years. This reclassification arose from the change in tax classification criteria by the Federal Revenue Service. (iv) IRPJ and CSLL tax assessment notice discussing the grant of the State of Paraná and requiring the disallowance of tax losses related to No impact on the breakdown of the balance in the table above, since it will not give rise to the payment of taxes and impact profit or loss. (c) Labor Employees: Lawsuits discussing labor amounts and indemnities. (d) Civil (principal in the total amount of R$ 5,901) (i) Government agencies: Federal Audit Court: Audit of Accounts Process in which the Federal Audit Court analyzes the legality or not of the economic and financial rebalancing granted by Companhia de Correios e Telégrafos ECT (the Brazilian Postal Service) to the Alpha Consortium, formed by the Company and Novadata Sistemas e Computadores S.A. Public Prosecution Office of Araras, State of São Paulo: Administrative Misconduct Lawsuit filed by the Public Prosecution Office of the State of São Paulo, challenging the legality of the Administrative Act issued by the Municipal Mayor of Araras, State of São Paulo, related to the acquisition of Interactive Educational Boards through an Onsite Bidding process. São Paulo State Audit Court (TCE-SP): Audit of Accounts Process in which TCE-SP analyzes the legality or not of the agreement entered into at March 2008 with the Education Development Foundation also involving the Data Processing Company of the City of São Paulo (PRODAM). 32

35 TCE-SP: Administrative procedure related to the adhesion of the city of São Bernardo do Campo to the One Computer per Student Program (PROUCA) in connection with the acquisition of Positivo Informática S.A. educational laptops for Government-funded schools in the states, Federal District and cities. TCE-SP: Administrative procedure related to the contracting of computers by Casa Foundation - Foundation Center of Social and Educational Service to the Adolescent - through adhesion to the minutes of PRODAM. TCE-SP: Administrative procedure relating to the contracting of educational laptops by the Municipal Authorities of the city of Cubatão, in the state of São Paulo, through adhesion to the Ministry of Education's PROUCA. Federal Public Prosecution Office: Administrative Misconduct Lawsuit filed by the Federal Public Prosecution Office claiming that the fifth amendment to contract 13,346/2002, entered into between Novadata and Positivo with the Brazilian Postal Service, be considered invalid, and also that the amounts paid as financial and economic rebalancing be returned. Administrative proceeding in connection with the supply of equipment to the State of Pernambuco Infrastructure Department for Digital Inclusion (DEID) under agreement 02/2007/STE-MC. (ii) Consumers: These are administrative procedures and lawsuits related to end consumers' complaints about products sold and services provided by the Company, claiming the replacement of the product or the refund of amounts paid. In the case of administrative procedures, these are filed by consumer protection agencies, with analysis of the existence of infringements of consumer relations and the possibility of receiving fines as determined in Decree 2,181/ EQUITY (a) Share capital The Company's share capital at March 31, 2016 and December 31, 2015 amounted to R$ 389,000. The Company's shares total 87,800,000, all of them common shares, and are held as follows: Num ber of shares (in units) Stockholders 03/31/ /31/2015 Controlling interests and related parties 62,093,094 62,093,094 Non-controlling interests, related parties and officers 32,225 32,225 Treasury shares 2,57 0,608 2,57 0,608 Shares outstanding in the market 23,104, ,104, ,800,000 87,800,000 33

36 Based on the Minutes of the Stockholders' Meeting held on August 17, 2006, the Company is authorized to increase its capital, regardless of amendment to the bylaws and stockholders' resolution, upon determination of the Board of Directors, up to the limit of the Company's authorized capital of 4,500,000 new common shares, without par value. The Company's direct controlling stockholders are as follows: Num ber of com m on shares (in units) Direct controlling stockholders 03/31/ /31/2015 Hélio Bruck Rotenberg 12,418,619 12,418,619 Cixares Líbero Vargas 12,418,618 12,418,618 Isabela Cesar Formighieri Mocelin 4,139,540 4,139,540 Daniela Cesar Formighieri Rigolino 4,139,540 4,139,540 Sofia Guimarães Von Ridder 4,139,540 4,139,540 Samuel Ferrari Lago 4,139,540 4,139,540 Paulo Fernando Ferrari Lago 4,139,540 4,139,540 Rodrigo Cesar Formighieri 4,139,539 4,139,539 Lucas Raduy Guimarães 4,139,539 4,139,539 Giem Raduy Guimarães 4,139,539 4,139,539 Thais Susana Ferrari Lago 4,139,539 4,139,539 Oriovisto Guimarães ,093,094 62,093,094 (b) Capital reserve - tax incentives Refers to tax incentives of the Company, which were recorded in this account up to December 31, After Law 11,638/07, these benefits started to be recorded in the caption "Revenue reserves". Parent Com pany Consolidated 03/31/ /31/2015 Stock option benefit reserve 2,969 2,896 Investment subvention reserve 118, , , ,201 (c) Purchase option granted under the employee stock option plan On November 27, 2014, the Board of Directors meeting approved a Program that totals up to 1,756,000 stock options divided into two equal batches. Currently, the plan has 1,416,000 stock options. Purchase options granted under the employee stock option plan do not grant voting rights or dividends. Further details on the employee stock option plan is described in Note 32 to this financial information. (d) Revenue reserve Parent Com pany Consolidated 03/31/ /31/2015 Tax incentiv e reserve and retained earnings 116, ,365 Legal reserve , ,446 34

37 (i) Tax incentive reserve As mentioned in Note 8, the amounts recorded in this account relate to the ICMS tax incentive, in conformity with State Decree 5,375/2002 (the effective period of Article 3 runs through to July 31, 2011), and State Decree 1,922/2011 effective from August 1, Pursuant to income tax legislation, this tax incentive reserve can only be utilized to increase capital and loss absorption, and cannot be distributed as dividends since it relates to a benefit granted by the State to the Company for a specific activity. (ii) Legal reserve The purpose of the legal reserve is to ensure the integrity of capital and it can be used only to offset losses and increase capital. The legal reserve is credited annually, provided that the balance of this reserve, plus the amount of capital reserves, does not exceed 30% of the share capital, with allocation of 5% of the profit for the year and cannot exceed 20% of the capital. (e) Dividends According to the minutes of the Annual and Extraordinary General Meeting of stockholders held on March 25, 2008, the Company may prepare semiannual or interim financial statements; decide on the distribution of dividends as a charge to the account of profit determined in these financial statements; declare interim dividends as a charge to retained earnings or to the revenue reserves existing in these financial statements or in the last annual financial statements; may pay or credit interest on capital, subject to approval at the Annual General Meeting that approves the financial statements for the year in which such interest was paid or credited, and interim dividends and interest on capital shall always be attributed to the mandatory dividend. (f) (g) Treasury shares To comply with the stock option plan for executives, the Company holds a total of 2,570,608 treasury shares, purchased under the repurchase program, at an average price of R$ in amount of R$ 37,467. If the shares were sold for R$ 1.48 at March 31, 2016 (price at the date), the effect on equity would be a loss of R$ 33,649 (loss of R$ 33,084 at December 31, 2015). Other comprehensive income The Company recognized in this line item the effect from exchange rate changes on investments in foreign subsidiaries, actuarial gains and losses arising from the employee benefit plan and gain (loss) on cash flow hedge transactions. For exchange rate changes, the accrued effect is reversed to profit or loss for the year either as gain or loss only in case of disposal or write-off of the investment. For actuarial gains and losses, amounts are recognized when the actuarial liability is remeasured. Cash flow hedge transactions will be transferred to profit or loss for the year if an ineffective portion is identified and/or upon the end of the hedge relationship. 35

38 23 REVENUE The analysis of the Company's revenue in the periods ended March 31, 2016 and March 31, 2015 is as follows: Parent Company Consolidated 03/31/ /31/ /31/ /31/2015 Revenue from sale of products 368, , , ,498 Revenue from services 9,260 13,354 9,260 14,906 Gross rev enue 37 7, , , ,404 Less: Taxes on sales and services (62,67 4) (67,527 ) (62,67 4) (81,027 ) Investment grant 41, , , ,17 9 Returns and rebates (18,67 1) (11,7 68) (18,67 1) (12,551) Returns and rebates 337, , , ,005 The reconciliation between gross and net sales revenue reported in the interim statements of income for March 31, 2015 and 2014 is as follows: 24 EXPENSES BY NATURE The Company classified expenses according to their function in the statement of income. The information on the nature of these expenses recorded in the statement of income is as follows: Depreciation of property, plant and equipment items and amortization of intangible assets were charged as follows: 36

39 25 SEGMENT INFORMATION To manage its business and make decisions, the Company uses information that focuses on product and service sales channels, which are the basis on which it reports primary information by segment. The Company's main operating segments are: retail sales and sales to Government entities. The information by reportable segment of these units is presented below: Revenue and profit (loss) by segment The reconciliation between the revenue of reportable segments and the Company and its subsidiaries' total revenue is as follows: The reconciliation between profit of the reportable segments and the Company and its subsidiaries' total results is as follows: The revenue of the segments presented above does not include the revenue generated by subsidiaries. The relevant accounting policies for reportable segments are the same as those of the Company. The profit or loss of the segments corresponds to that of each segment, after allocation of all revenues, costs and expenses. 37

40 (a) Revenue from main products and services Breakdown of net revenue by product is as follows: (b) Assets and liabilities per segment Although the Company's assets and liabilities are allocated to certain segments, they are not managed independently as they relate mainly to the production of IT equipment and mobile for the designated sales segments. (c) Geographical information In the period ended at March 31, 2016, the Company and its subsidiaries recorded sales to the foreign market of R$ (R$ 15,358 at March 31,2015). The remaining sales were made to the domestic market. (d) Information on major customers Three of the Company's customers represented more than 39% of the total net revenue at March 31, FINANCE RESULTS 38

41 Below is the cash effect of the exchange rate changes during the first quarter of 2016, in consolidated: Consolidated NDF / Options 03/31/ /31/2015 (+) Opening Balance 11,944 3,41 2 (+) Gain / (Loss) recognized in proft or loss (33,27 6) 66,938 (-) Closing balance (25,67 9) 37,366 (=) Cash effect 4,347 32,984 Foreign variation payments (+) Opening Balance (6,7 48) (6,966) (+) Gain / (Loss) recognized in proft or loss 5,7 7 8 (32,282) (-) Closing balance 4,7 28 (19,146) (=) Cash effect (5,698) (20,102) Gain (Loss) recognized (27,498) 34,656 Net effect cash - Increase / (decrease) (1,351) 12, INSURANCE - CONSOLIDATED At March 31, 2016, the insurance cover established by the Company's management to cover losses and civil liability can be summarized as follows: The risk assumptions adopted, given their nature, are not part of the scope of the audit of financial statements, and therefore were not examined by our independent auditors. 28 EARNINGS (LOSS) PER SHARE Basic earnings per share are calculated by dividing the profit or loss attributable to stockholders of the Company by the weighted average number of common shares in power of the stockholders, excluding common shares purchased by the Company and held as treasury shares. 39

42 Diluted earnings (loss) per share is calculated based on the adjustment of profit attributable to the Company s shareholders, as well as the weighted average number of total shares held by shareholders (outstanding), so as to reflect the effects of all dilutive common shares. Parent company 03/31/ /31/2015 Basic Basic numerator Profit (loss) allocated to common shares (10,409) 11,511 Basic denominator Weighted average number of common shares (in thousands) 85,229 85,229 Basic earnings (loss) per share (0.1221) Diluted Diluted numerator Profit (loss) allocated to common shares (10,409) 11,511 Diluted denominator Weighted average number of common shares (in thousands) 84,157 85,229 Basic earnings per share (0.1237) The weighted average number of common shares used in the calculation of basic earnings (loss) per share is reconciled to the weighted average number of common shares used in the calculation of diluted earnings (loss) per share as follows: Parent company 03/31/ /31/2015 Weighted average number of common shares used in the calculation of basic earnings per share 85,229 85,229 Weighted average number of common shares used in the calculation of diluted earnings per share 84,229 85,229 The following potential common shares are anti-dilutive and, therefore, have been excluded from the weighted average number of common shares for the calculation of the diluted earnings per share: Parent company 03/31/ /31/2015 Employee options 1,416 1,626 40

43 29 FINANCIAL RISK MANAGEMENT 29.1 Financial risk factors The Company's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk), credit risk and liquidity risk. The Company manages the global risks relating to the unpredictability of financial markets and seeks to minimize potential adverse effects on its financial performance. The Company uses derivative financial instruments to hedge certain risk exposure, without the purpose of speculation to leverage its finance results. The quantitative information regarding each type of risk arising from financial instruments is described in the sections below, which represent the concentrations of risk monitored by the Company's management. Risk management is carried out by the Company's treasury department, following guidelines determined by the Company's officers and Board of Directors. (a) Market risk (i) Foreign exchange risk The Company mainly operates in the domestic market, but carries out significant imports of input materials from the foreign market, being therefore exposed to foreign exchange risk basically with regard to the U.S. Dollar. The main transactions relate to payables to foreign suppliers (Note 15) and working capital loan operations (Note 16). Management has established a policy to require the Company to manage its foreign exchange risk against its functional currency. The Company is required to hedge its foreign exchange risk exposure in accordance with the guidelines of the finance department. Its main objective is to hedge its U.S. Dollar-denominated commitments against future price fluctuations, so as to provide greater predictability in its operations. The Company enters into U.S. Dollar options and also non-deliverable forwards (NDFs) to hedge against exchange rate fluctuations, covering only the foreign exchange exposure over the payment term granted by suppliers for the purchase of imported components. Additionally, the Company carries out swap operations to hedge its borrowing in foreign currency against the fluctuations in future prices. The main analyses made by the finance department to contract derivative financial instruments are: Based on the analysis of payables for imports, either in regard to materials already in inventory or materials in transit, the derivative contracts are reviewed and/or changed on a weekly basis. The amount and type to be contracted are defined in light of the specifics of each in relation to the volatility of the U.S. Dollar and the future prospects of the economy. Based on the sensitivity analysis of U.S. Dollar volatility against the 41

44 types of hedge contracted over the months, it is possible to measure the possible cash requirements to cover the results of NDF transactions. Parent Company March 31, 2016 Consolidated Foreign currency Real Foreign currency Real Assets Trade and other receivables U.S. Dollar Liabilities Trade payables - foreign market U.S. Dollar (43,7 02) (155,532) (43,702) (130,625) Borrowings U.S. Dollar (99,235) (353,167 ) (99,235) (353,167 ) Derivative financial instrum ents Swap - U.S. Dollar 99, ,167 99, ,167 NDFs - U.S. Dollar 82, ,364 82, ,364 Call options - U.S. Dollars 15,097 53,729 15,097 53,729 Net exposure 1 54, ,979 54, ,886 Government projects U.S. Dollar (57,47 7 ) (204,554) (57,47 7 ) (204,554) Net exposure 2 (2,972) (10,575) (2,972) 14,332 Parent Com pany March 31, 2015 Consolidated Foreign currency Reais Foreign currency Reais Assets Trade and other receivables U.S. Dollar 382 1, ,491 Liabilities Trade payables - foreign market U.S. Dollar (49,432) (193,024) (49,432) (193,024) Borrowings U.S. Dollar (111,802) (436,564) (111,802) (436,564) Derivativ e financial instrum ents Swap - U.S. Dollar 111, , , ,564 NDFs - U.S. Dollar 69, , , ,747 Call options - U.S. Dollars 14,526 56, ,526 56,7 21 Net exposure 1 35, ,935 35, ,935 Government projects U.S. Dollar (42,37 8) (165,47 8) (42,378) (165,47 8) Net exposure 2 (7,309) (28,543) (7,309) (28,543) Net exposure 1 - refers to an exposure in foreign currency, considering the foreign exchange assets and liabilities held by the Company and accounted for in the balance sheet, net of derivative financial instruments contracted to hedge these liabilities. Net exposure 2 - refers to an exposure in foreign currency, considering the foreign exchange assets and liabilities held by the Company and accounted for in the balance sheet and the future commitments arising from the Government Projects, net of derivative financial instruments contracted to hedge these liabilities. Government Projects refer to the Company's winning bids to provide computers in the next months. For this reason, the Company calculates the exposure to which it will be exposed with the acquisition of inputs abroad in order to meet these commitments. (ii) Cash flow and fair value interest rate risk The Company has no significant interest-earning assets, except the balance of financial investments. 42

45 The Company's interest rate risk arises from long-term borrowings, as detailed in Note 16. Borrowings at floating rates expose the Company to cash flow interest rate risk. Borrowings at fixed rates expose the Company to fair value interest rate risk. At March 31, 2016 and December 31, 2015, the Company's borrowings at variable rates were denominated in reais and U.S. Dollars. The sensitivity analysis with the projected scenarios and related impacts on equity and results are presented in item "d" of this Note. (b) Credit risk Credit risk is managed on a corporate basis. Credit risk arises from cash and cash equivalents, derivative financial instruments, as well as credit exposure to customers in the Government and retail segments. For banks and other financial institutions, only independently rated parties usually classified as first-tier entities are accepted. The financial institutions with which the Company operates are evaluated by the rating agencies as a low risk. For the customers, the credit analysis area evaluates the quality of the customer's credit, taking into consideration financial position, past experience and other factors, as detailed in Note 6, which also discloses the customer's credit risk. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilization of credit limits is regularly monitored. Sales to retail customers are settled in cash. No credit limits were exceeded during the reporting period, and management does not expect any losses from non-performance by these counterparties. (c) Liquidity risk The final responsibility for the liquidity risk management lies with the Board of Directors, which prepared an appropriate liquidity risk management model to manage funding requirements and short-, medium- and long-term liquidity. The Company manages liquidity risks by maintaining adequate reserves, bank credit lines and other credit lines for obtaining borrowings, as deemed appropriate, through ongoing monitoring of forecast and actual cash flows, as well as through the combination of maturity profiles for financial assets and liabilities. The following tables show details of the contractual maturity terms remaining for the Company's non-derivative financial liabilities. The tables were prepared according to the undiscounted cash flow method for financial liabilities based on the closest date in which the Company should settle the respective obligations. The tables include interest and principal cash flows. To the extent that the interest flows are at floating rates, the undiscounted amount was obtained based on the interest curves at the end of the reporting period. The contractual maturity is based on the most recent date on which the Company should settle the respective obligations. 43

46 Financial liabilities Financial assets 44

47 (d) Additional sensitivity analysis required by the Brazilian Securities Commission (CVM) The table below presents the impacts that would arise from changes in significant risk variables to which the Company is exposed at the end of the period. The risk variables significant to the Company, taking into consideration a period of up to 12 months for this analysis, are its exposure to foreign currency fluctuations, mainly the U.S. Dollar, and its exposure to interest rate fluctuation. Management believes that the probable scenario reflects the Brazilian Central Bank s expectations of U.S. Dollar exchange rates and the CDI interest rate for the period ended March 31, The other risk factors were considered immaterial to the results of the financial instruments. Net exposure 1 - refers to an exposure in foreign currency, considering the foreign exchange liabilities held by the Company and accounted for in the balance sheet, net of derivative financial instruments contracted to hedge these liabilities. Net exposure 2 - refers to an exposure in foreign currency, considering the foreign exchange liabilities held by the Company and accounted for in the balance sheet and the future commitments arising from the Government Projects, net of derivative financial instruments contracted to hedge these liabilities. Government Projects refer to the Company's winning bids to provide computers in the next months. For this reason, the Company calculates the exposure to which it will be exposed with the acquisition of inputs abroad in order to meet these commitments Financial Risk Factors The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for stockholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. 45

48 In order to maintain or adjust the capital structure of the Company, management can make, or may propose to the stockholders when their approval is required, adjustments to the amount of dividends paid to stockholders, return capital to stockholders, issue new shares or sell assets to reduce, for example, debt. Controladora Consolidado 03/31/ /31/ /31/ /31/2015 Net Debt Debt Loans - third parties 693, , , ,580 Derivative - Swap 17,239 (29,123) 17,239 (29,123) Cash and cash equivalents (482,067 ) (530,681) (490,567 ) (554,886) Net Debt (a) 228, , , ,57 1 Debt Loans - third parties 693, , , ,580 Derivative - Swap 17,239 (29,123) 17,239 (29,123) (-) Derivative Options and NDF 25,67 9 (11,944) 25,67 9 (11,944) Cash and cash equivalents (482,067 ) (530,681) (490,567 ) (554,886) Net Debt (b) 254, , , ,627 Equity (c) 558, , , ,395 Net debt Index (a) Net debt Index (b) (a) (b) (c) The net debt is defined as short- and long-term borrowings, less cash and receivable and/or payable from swap derivative transactions (borrowing agreement hedge). The net debt is defined as short- and long-term borrowings, less cash and receivable and/or payable from swap derivative transactions (borrowing agreement hedge) and Options/NDF (payables hedge). The equity include all capital and reserves of the Company, managed as capital Fair value estimation The carrying values of trade receivables and payables, less impairment provision in the case of trade receivables, are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Company for similar financial instruments. The fair value of derivative instruments is calculated based on quoted prices. When these prices are not available, an analysis of the cash flow discounted through the yield curve is used, applicable over the life of the instruments for derivatives without options. Foreign exchange futures contracts are measured using foreign exchange rates and yield curves obtained based on quotations and for the same maturities of contracts. Swaps are measured at the present value of estimated future cash flows and discounted based on applicable yield curves, on the basis of interest rate quotations. For the Company's derivative financial instruments (currency futures contracts and cross-currency interest rate swaps) fair value measurements of Level 2 are used, through variables other than quoted prices included in Level 1, which are observable for the asset or liability directly (that is, as prices) or indirectly (that is, based on prices). 46

49 30 FINANCIAL INSTRUMENTS BY CATEGORY Parent Company Consolidated Assets at fair value Liabilities at fair value Assets at fair value Liabilities at fair value through profit or loss through equity Loans and receiv ables through profit or loss through equity Loans and receivables March 31, 2016 Assets per balance sheet Derivative financial instruments Trade and other receivables, excluding prepay ments , ,224 Related parties - - 9,263-29,7 11 Cash and cash equivalents , , , ,502 Decem ber 31, 2015 Assets per balance sheet Derivative financial instruments 11,944 29,123-11,944 29, Trade and other receivables, excluding prepay ments , ,103 Related parties - - 8,548-32,97 0 Cash and cash equivalents , ,886 11,944 29, ,812 11,944 29, , DERIVATIVE FINANCIAL INSTRUMENTS The Company operates with derivative financial instruments exclusively to hedge against certain exposure to risks, and therefore without any speculative purpose. (a) Forward foreign exchange contracts To protect itself against the volatility of the liability exposures in U.S. Dollars, due to the total exposure (cash flows), up to March 31, 2016, the Company entered into NDF contracts, in U.S. Dollars, in the following amounts and conditions: 47

50 At March 31, 2016 the Company recognized R$ 29,236 as a net loss in the results, referring to settled contracts in the period (March 31, gain of R$ 39,163). (b) US dollar option purchase agreements Also to hedge foreign currency-denominated transactions carried out with foreign suppliers against the US dollar volatility, the Company contracted US dollar purchase options. The outstanding notional amount as of March 31, 2016 was US$ 15,097. Agreements will be settled on the respective maturity dates, in the following amounts and under the following conditions: Net loss of R$ 4,040 was recognized in the period ended March 31, 2016 (gain of R$ 27,775 at March 31, 2015). (c) Interest rate swaps - CDI x US$ Interest rate swaps are settled according to their maturities stipulated in the contracts. The swapped interest rate is in line with the CDI rate. At March 31, 2016, the contracted average rate of CDI was % (at December 31, 2015, %). The Company will settle the contracts for the net value of the difference between swapped interest rates and the foreign exchange variations. Derivatives designated for hedge accounting Beginning June 1, 2015, the Company formally designated for hedge accounting the derivatives used to hedge foreign currency-denominated loans, comprising all swap contracts, including the following information: Hedge relationship; The Company s risk management purpose and strategy related to the hedge; Financial instrument identification; Hedged item or transaction; Hedged risk nature; Hedge relationship description; Hedge and hedged item correlation, when applicable; and Prospective hedge effectiveness. 48

51 As of March 31, 2016, the outstanding position of the derivatives designated as cash flow hedge is broken down as follows: Instrument designated as cash flow hedge parent / consolidated (1) The market value calculation method adopted by the Company consists of calculating the future value based on the contractual conditions and determining the present value based on the market curves reported by BM&FBOVESPA. The Company designates as cash flows hedge those derivatives used to offset fluctuations arising from exchange rate exposure, stated at the fair value of the contracted debts, other than the functional currency. Changes in the fair value of derivatives designated as cash flow hedge are recognized in equity as Other comprehensive income and reclassified to profit or loss for the periods in which the hedged transaction is carried out. When a hedge instrument ceases to satisfy the hedge accounting criteria, the gain or loss accumulated in equity will be fully reversed to profit or loss if the expected transaction is also recognized in profit or loss. As of March 31, 2016, instruments designated as cash flow hedge totaled US$99,235 relating to a notional amount of R$ 353,167. A gain of R$ 3,270 was recognized in Other comprehensive income and a loss on financial result of R$46, STOCK OPTION PLAN On November 3, 2006, the Company's stockholders approved at the Extraordinary General Meeting the general conditions of the Company's Share Option Plan (the Plan), as detailed below. The Plan established that the beneficiaries of the Plan may be the managers, employees and service providers of the Company (the Beneficiaries). It was also determined that the options granted will not exceed 3,5% of the total share capital of the Company existing on the date of their concession, plus the existing shares had all of the options granted under the terms of the Plan been exercised. Once the options have been exercised by the Beneficiary, the corresponding shares are issued by means of a capital increase. Treasury share options may also be offered. 49

52 The plan is administered by the Board of Directors or, at its option, by a Committee consisting of three members, of which at least one would be on the Board of Directors (a member or an alternate). The Board of Directors or Committee, according to the circumstances, will have full powers, provided that the terms of the Plan are followed, and, in the case of the Committee, the guidelines of the Company's Board of Directors for the organization and management of the Plan and of the grants of options. It may also, at any time: (i) alter or extinguish the Plan; (ii) establish the regulations applicable to unforeseen circumstances; (iii) postpone, but never anticipate, the deadline for the exercise of the options in effect; and (iv) anticipate the vesting period of the options in effect. The Board of Directors or the Committee, as the case may be, may periodically create Share Option Programs (Programs) for the Company, in which the following will be defined: (i) beneficiaries; (ii) total number of the Company's shares granted; (iii) acquisition price; (iv) the initial vesting period during which the option cannot be exercised; (v) the terms and deadlines for the exercise of the option, as well as the dates on which the rights resulting from the option will expire, subject to the Plan regulations; (vi) possible restrictions to the shares received upon the exercise of the option; and (vii) provisions on penalties. When options are granted under the Plan, each Beneficiary should enter into, with the Company, a Share Option Agreement, which has the specific and individual conditions of each grant, such as the quantity of shares to which the Beneficiary is entitled to acquire upon the exercise of the option, the exercise price and the terms within which the options can be exercised. On November 27, 2014, the Board of Directors meeting approved a Program that totals up to 1,756,000 options divided into two equal batches. Currently the plan contain 1,416,000 options. The Company acquired share to Program 2014 by average price of R$ The first lot can be exercised on the period of January 1 until December 31, 2016 and the second lot can be exercised on the period of January 1 until December 31, The exercise price of the first and second lots, was defined at R$ 2.51, adjusted based on the IGPM index from November 27, If the options were exercised at March 31, 2016, the effect on equity and profit or loss would be an expense of R$ 8,758 for each lot, as shown below: As the Company purchased shares to cover options eventually exercised, there will be no dilution of stockholders' interest upon the exercise of options. 50

53 Positivo Informática records net revenue growth of 151% from mobile phones Curitiba, May 13, 2016 Positivo Informática S.A. (BM&FBOVESPA: POSI3) announces today its results for the first quarter of 2016 (1Q16). The following financial and operating information refers to the consolidated results of Positivo Informática S.A. and is presented in IFRS and in Brazilian reais (R$). All comparisons herein refer to 1Q15, except where otherwise indicated. 1Q16 HIGHLIGHTS Strong growth of mobile phone sales, with volume of 388 thousand devices, already representing 20% of consolidated net revenue; Expansion of 266% of PC sales under the Positivo BGH brand, boosted by deliveries of new educational projects of the joint venture in Africa and Argentina; Continuous capture of post-sales efficiency; Normalized level of margins in Brazil, resuming levels last seen before the crisis; General and administrative expenses reduction of 30%, even in an environment of high inflation and the collective bargaining agreement; Adjusted EBITDA of R$30 million (+4.3%); Adjusted Net Income of R$16.1 million, reversing the negative adjusted result recorded in 1Q15; Good evolution of the excess inventory reduction project; Monetization of R$22 million in tax assets, reflecting the relocation of production to Manaus; Reduction in net debt to R$244.7 million, the lowest quarterly close since 2Q13, lowering the Net Debt/Adjusted EBITDA ratio to 2.7x.

54 1) FINANCIAL HIGHLIGHTS Income Statement Highlights % Chg. % Chg. (R$ million) 1Q15 4Q15 1Q16 1Q16 X 1Q15 1Q16 X 4Q15 Net Revenue Adjusted EBITDA Net Income (Loss)* 11.5 (53.0) (10.4) Income (Loss) Net Adjusted** (10.2) (49.8) Adjusted EBITDA Margin 6.3% 2.3% 7.9% +1.6 p.p p.p. Multiple Net Debt - end of the period Adjusted EBITDA - LTM Net Debt Multiple / Adjusted EBITDA 2.1x 2.9x 2.7x * Adjusted for the cash effect of the foreign exchange hedge on inputs, for the addition of 50% of the EBITDA from the IFSA joint venture and for non-recurring items registered in the 1Q15 and 4Q15 results. More details in section 4.3) EBITDA. ** Adjusted for the cash effect of the foreign exchange variation with no cash effect. 2) HARDWARE INDUSTRY AND POSITIVO INFORMÁTICA CURRENT SCENARIO Demand for hardware devices in Brazil remained sluggish in 1Q16, due to the background context of higher unemployment rates, recession and the low consumer confidence index that reached, in the early months of 2016, its historical low since the beginning of the ICC-FGV series, lowering retail sales. The government and corporate markets also started the year slowly, reflecting the expenditure restraint by public bodies and the postponement of investment by companies, who are waiting for an outcome of the political scenario and signs of recovery of economic activity. According to IDC, the PC market decline has reached 48% compared to 1Q15, during which the reduction in demand has not yet been as profound as that observed from April. In fact, 1Q15 had the highest quarterly volume in the Brazilian PC market last year. Given these indicators, there is an important factor that has mitigated the impact of the scenario: unlike what happened in 2015, in 2016, the participants of the hardware market could better scale inventories and production, reaching a significantly healthier balance between supply and demand, therefore, recovering industry margin levels in relation to the low levels of the last quarters in Brazil. Positivo Informática continued focusing on revenue diversification, profitability recovery and increased cash generation. The Management believes that this strategy is key to sustainable long-term development of the company s business. Regarding these strategic pillars, we highlight the following progress in 1Q16: Revenue diversification Mobile Phones: The company achieved a new record revenue from mobile phones in 1Q16, with net revenue of R$75 million (+151%), boosted by the sale of smartphones. Additionally, the company believes it is able to maintain a triple-digit annual growth rate in this segment in the coming quarters, judging by the large volume of orders generated by the acceptance of the product line and the entry of new customers, which has enabled a fast market share growth in the Brazilian market. International operations in joint venture (Positivo BGH): in 1Q16, sales under the Positivo BGH brand showed strong growth, totaling 140,000 PCs (+266%). This result was achieved due to the delivery of large volumes of computers to educational projects in Argentina and Rwanda. It is worth highlighting that according to accounting regulations (IFRS 11 Joint Arrangements), this revenue is not consolidated in 2

55 % 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% the revenue calculation disclosed by the company and its result is reflected only in the Equity Income line. In 1Q16, the equity income line recorded a net income of R$29 million (+1,297%), boosted by the expansion of international operations. Premium brands Quantum and VAIO: in 1Q16, the company recognized new revenues from the sale of recently introduced brands in its portfolio, non-existent in 1Q15. In September 2015, the company introduced the Quantum business unit, focused on the direct sale of high-performance smartphones. Since then, Quantum products have been sold via its own e-commerce ( marketplaces and kiosks. In October 2015, sales begun for the VAIO brand. It was the first international partnership in this format announced by VAIO Corporation. Since then, the company has started operating in the high-premium notebook segment, which is less susceptible to market fluctuations. The entrance of the new portfolio does not represent an increase in the company's structure, as VAIO remains responsible for product development. Profitability In recent quarters, the company has implemented a series of measures focused on the improvement of its results. In early 2016, in parallel with the normalization of inventory levels in the industry, the company has captured operational efficiency gains and accrued the benefits of reducing fixed costs, enabling the profitability recovery. Normalization of inventory levels in the company and in the market: the company has strongly managed the purchase of inputs with the objective of eliminating the generation of excess inventories. These measures contribute to the improvement of the contribution margin by reducing the need to offer trade discounts in order to accelerate the flow of slow-moving items in the inventory. Additionally, since the re-balance between supply and demand in Brazil, the domestic market has been operating at normalized price levels. Reduction of costs with technical assistance and warranties: operating changes were made, generating unit gains of 25% in the company's post-sales costs. Among the measures, we highlight the revision of the logistics for spare parts, the highest concentration of repair services in locations closer to large consumer centers and the implementation of additional quality inspection in Asia. Reduction of fixed costs: throughout 2015, the company made expenditure and personnel cuts, in order to adjust the size of its administrative structure to lower revenues. The following charts show the company s margin recovery in 1Q16, already above the level observed before the promotional sales period in the second half of The 17% reduction in one year represents a real gain of approximately 25%, given the high inflation between periods. Sales Margin¹ (%of Net Revenue) General and Administrative Expenses (R$ million) 8.0% 7.8% -17% % 1Q15 4Q15 1Q16 ¹Calculated from net revenue less costs, selling expenses and depreciation 1Q15 4Q15 1Q16 3

56 Cash Generation Tax Assets Monetization Plan (Manaus Project): In November 2015, the company relocated the entire production of PCs and tablets from Curitiba to Manaus as part of the tax assets monetization plan, disclosed to the market in August As detailed at the time, the new plants arrangement will provide significant cash inflow in the coming years. The objective is the deferral of the payment of taxes on the purchase of inputs for production in the Manaus Free Zone, which is now paid when finished products are sold. Thus, we expect a significant reduction in the generation of new tax credits and, therefore, an acceleration of the consumption of the federal taxes to be recovered. As an effect of the plan, in 1Q16 the company monetized R$22 million of tax credits, as observed by the reduction of the same amount in the Recoverable Taxes line. The monetization in the quarter represents 27.5% of the total simulated for one year in the table below, even considering it has been a quarter of low revenue. Tax Efficiency Simulation¹ Cash R$ million Recoverable Taxes Simulation - Year 1 st Quarter Q15 (71) 80 (19) R$ 151 MM vs Q16 +R$ 41 MM vs. 1Q15 ¹Simulation based on the repetition of the 2015 revenue profile in the coming years, within the new plant arrangement Reduction of excess inventory: in June 2015, the company started an action plan with the goal of reducing excess inventory, and, particularly, avoiding its recurrence. In addition, there were sales promotions for products that had been held longer in inventory, mostly in the second half of At the close of 1Q16, the company maintained its conservative criteria regarding inventory management and was able to keep the excess inventory downward trend, ending the period at R$83 million, down 43% compared to the end of 1Q15. 4

57 Actions to reduce excess inventory Excess Inventory (over 54 production days)* R$ million Dec-14 Mar-15 Jun-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 * For reporting purposes, we consider excess inventory to be that which exceeds 54 production days, which represents the average time from the entry of materials into inventory to the release of the finished products. Cash Position and Net Debt: the cash generation initiatives and the strong working capital discipline contributed to the net debt reduction, which ended 1Q16 at R$245 million, the lowest quarterly close since 2Q13. Also as part of its conservative financial strategy, the company has maintained a high cash position at the end of 1Q16, with total cash availability of R$491 million. Outlook The company started the year with an encouraging outlook for business development. The key factors of the results improvement outlook for 2016 listed in the previous earnings release have been higher than expected. Below, we highlight the main points that are contributing to the improvement of the company's results for the year: Mobile Phones: the maturing of the mobile phones operation will be the main achievement of The progress in sales to new customers and the good acceptance of the new product line has been remarkable. As mentioned, the sales and order volume acceleration has the potential to maintain the current triple-digit annual growth rate in the coming quarters, as well as a significant market share growth in the Brazilian market. Market Share - Positivo Mobile Phones (Brazil) Brazilian Market Projections - PCs and Mobile Phones (US$ billion 2016) Source: IT Data Source: IDC 5

58 Tax assets plan monetization: the company will accelerate the monetization of tax credits with the relocation of part of the mobile phones production to the new plant in Manaus, from May If strong sales growth of devices is confirmed, the project s cash generation must overcome the R$80 million simulated for one year in Reduction of excess inventory: profitability in 2016 is expected to be favored by the continued downward curve of excess inventory. The Company closed 1Q16 with R$83 million in excess inventory, 67% less than the peak recorded in September More Conservative approach to the Brazilian PC operation: the Company has adopted strict controls in its computer operation, especially in the retail market, in order to minimize the remaining inventory risk and protect profitability. These initiatives include prioritizing margins to the detriment of volume and adopting a more streamlined portfolio. Continuation of the fixed cost reduction plan: in April 2016, the revision and restructuring of management positions was concluded, culminating in a 20% reduction of the organization's leadership positions. The effect of the project should be reflected in the results from 2Q16. Resumption of sales in the Brazilian government market: after a slow start of the year, sales to government clients in Brazil should be resumed from 2Q16. The company has a portfolio of deliveries in Brazil about 200,000 pieces of equipment, with strong configurations and high average prices, of which only 35,000 were delivered in 1Q16. The foreign exchange risk hedge on these sales has been largely covered, significantly mitigating the margin deterioration risk at revenue recognition. Expansion of international operations: international operations under the Positivo BGH brand, the company's joint venture with the Argentine group BGH, should be expanded in Since the beginning of deliveries to an educational project in Rwanda, the company has prospected opportunities in other African countries with a good response. Currently, the company is in advanced stage of negotiations about new large contracts for the supply of PCs and tablets for students to other countries in the region. 3.1) VOLUME 3) VOLUME AND REVENUE In 1Q16, the sale of PCs recorded a volume of 313,600 units, practically stable year on year. Computer sales in Brazil fell by 37.7%, following the market downturn due to the economic crisis and did not represent a change in market share. Sales in Argentina and Rwanda, under the Positivo BGH brand, increased 265.6%, driven by the delivery of large projects involving educational notebook. Mobile phones showed strong growth, closing 1Q16 with a total of 388,400 devices sold, almost double compared to last year. Sales growth was boosted by the good performance of smartphones, with an increase of 149.7%, and the good performance of the retail market, distributors and new direct sales channels (e-commerce, marketplaces and kiosks). Sales of tablets was reduced by 79.2% compared to 1Q15, mainly due to the company's decision to restrict the sale of this form factor in Brazil. The Company decided to sell tablets in the retail only in specific projects. In the corporate and government markets, the Company continues to operate normally. This decision to operate more restricted in the retail was due to the low competitiveness of companies 6

59 participating in the official market at entry level, which is the bulkiest one, given the dominance of companies operating unorthodoxly, from a tax perspective, the so-called grey market. Hardware Sales % Chg. % Chg. Volume (units) 1Q15 4Q15 1Q16 1Q16 X 1Q15 1Q16 X 4Q15 PCs 316, , , Desktops 121, ,499 65, Notebooks 195, , , Channel 316, , , Retail 193, , , Government 85, , , Corporate 38,377 20,783 13, Brand 316, , , Positivo 278, , , Positivo BGH (Joint Ventures) 38,346 74, , Mobile Phones 197, , , Smartphones 76, , , Feature Phones 120, , , Tablets 118,207 87,751 24, Positivo 97,158 49,514 6, Positivo BGH (Joint Ventures) 21,049 38,237 18, Devices Share in Sales (units) PCs and Tablets Mobile Phones 7.3% 27.2% 25.2% 27.6% 20.4% 44.9% 48.3% 50.4% 50.3% 73.3% 61.1% 63.5% 46.9% 52.8% 50.6% 27.9% 26.5% 22.0% 29.2% 19.5% 38.9% 36.5% 53.1% 47.2% 49.4% 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15 3Q15 4Q15 1Q16 Tablets Notebooks Desktops Feature Phones Smartphones 7

60 Breakdown of Hardware Net Revenue NB 35.2% Others 8.7% Product Others 12.3% NB 33.4% Gov. 41.6% Channel Gov. 32.0% TB 9.4% DT 40.1% MB 6.6% TB 0.6% MB 19.9% DT 33.8% Retail 43.4% Corp. 15.0% Corp. 8.1% Retail 59.9% 1Q15 1Q16 1Q15 1Q16 NB: Notebooks TB: Tablets DT: Desktops MB: Mobile Phones Corp : Corporate Gov.: Government Retail: 59.9% of net revenue in 1Q16 R$221.3 million (+14.6%) Retail sales totaled 135,700 PCs in 1Q16, a decrease of 29.8% compared to 1Q15. The volume was represented by 100,800 notebooks (-28.7%) and 34,900 desktops (-32.7%). This reduction is in line with the unfavorable performance of the market, given the economic downturn and the Brazilian consumer confidence, as well as the poor turnover of products in stores during the fourth quarter of 2015, inhibiting the replenishment of channels in January and February. Sales of mobile phones grew by 96.9% in 1Q16, totaling 388,400 units. The volume increase was generated by higher deliveries in the retail market, distributors and new direct sales channels (ecommerce, marketplaces and kiosks). For the coming quarters, the Company expects a strong acceleration of sales, with a significant market share increase. Sales of tablets, in turn, fell by 41.7%, with a volume of 22,700 units. This decrease was due to the company's decision to restrict the sale of this format in retail, preserving its profitability. Government: 32.0% of net revenue in 1Q16 R$118.1 million (-36.3%) Deliveries to the government market registered growth in 1Q16, totaling 164,500 PCs (+93.5%). The volume increase was boosted by large deliveries of educational notebook in international operations through a joint venture under the Positivo BGH brand to projects in Argentina and Rwanda, represented by 91,500 and 37,300 units, respectively. In Brazil, a total of 35,600 PCs (-50.7%) was delivered delivery portfolio: the company is starting the year with a portfolio of projects of 500,000 PCs and tablets for delivery in Brazil, Argentina, Uruguay and Rwanda, under the Positivo and Positivo BGH brands. Corporate: 8.1% of net revenue in 1Q16 R$29.8 million (-55.4%) Corporate sales in 1Q16 showed a reduction of 72.5% compared to 1Q15, totaling 15,100 PCs and tablets. This volume is represented by 20,800 PCs (-52.9%) and 7,900 tablets (-2.4%). PC sales were affected by postponements of investments by companies due to the adverse economic scenario. 8