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 June 30, 2016 and Independent Account s Review Report Deloitte Touche Tohmatsu Auditores Independentes

2 Deloitte Touche Tohmatsu Rua Pasteur, 463 1º andar cj. 101 e 103 e 5 andar Bairro Batel 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 June 30, 2016, which comprises the balance sheet in June 30, 2016 and the income statement, statement of comprehensive income, for the three and six-month period then ended and the statement of changes in equity and statement of cash flows for the six-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 of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL ), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global ) does not provide services to clients. Please see for a more detailed description of DTTL and its member firms. Deloitte provides audit, consulting, financial advisory, risk management, tax and relates services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500 companies through a globally connected network of member firms in more than 150 countries bringing world-class capabilities, insights, and high-quality service to address clients` most complex business challenges. To learn more about how Deloitte`s approximately 225,000 professionals make an impact that matters, please connect with us on Facebook, LinkedIn ou Twitter Deloitte Touche Tohmatsu. All rights reserved.

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4 (Convenience Translation into English from the Original Previously Issued in Portuguese) POSITIVO INFORMÁTICA S.A. AND SUBSIDIARIES BALANCE SHEET AS AT JUNE 30, 2016 AND DECEMBER 31, 2015 (All amounts in thousands of reais) Parent company Parent company ASSETS Note 06/30/ /31/ /30/ /31/2015 LIABILITIES AND EQUITY Note 06/30/ /31/ /30/ /31/2015 CURRENT ASSETS Cash and cash equivalents , , , ,886 CURRENT LIABILITIES Derivative financial instruments 31-41,067-41,067 Trade payables , , , ,081 Trade receivables 6 380, , , ,784 Loans - third parties , , , ,976 Inventories , , , ,709 Derivative financial instruments 31 86,426-86,426 - Related parties 10 8,588 8,548 10,927 32,970 Salaries and social charges payable 21,243 17,506 21,243 17,506 Taxes recoverable 8 137, , , ,606 Provision ,421 97, ,637 97,434 Sundry advances 33,087 30,789 33,460 32,696 Provision for tax, labor and civil risks 21 5,182 5,500 5,182 5,500 Other receivables 9 19,659 27,893 19,659 27,893 Taxes payable 18 15,642 11,353 15,697 11,410 1,426,702 1,497,478 1,434,555 1,550,611 Dividends payable 22.e Deferred revenue 8 and 19 9,806 12,834 9,806 12,834 Related parties 10 2,551 2,164 1,682 1,295 Other payables 3,373 5,113 3,409 5,243 1,048,847 1,045,225 1,072,813 1,101,281 NON-CURRENT ASSETS NON-CURRENT LIABILITIES Long-term receivables Loans - third parties , , , ,604 Taxes recoverable 8 126, , , ,465 Provision 17 13,969 18,244 15,119 19,394 Deferred taxes ,073 71,073 71,073 71,073 Provision for tax, labor and civil risks 21 35,816 37,771 36,116 38,071 Other receivables 9 14,806 14,335 14,897 14,426 Net capital deficiency in subsidiaries , , , ,964 Other payables 4,106 1,939 4,106 1, , , , ,364 TOTAL LIABILITIES 1,245,636 1,285,117 1,271,052 1,342,645 Investments in subsidiaries 11 13,603 11, TOTAL LIABILITIES Investment in joint venture 12 54,312 40,322 71,214 41,521 Capital 22.a 389, , , ,000 Property, plant and equipment 13 56,141 53,203 56,141 53,203 Capital reserve 22.b 121, , , ,201 Intangible assets 14 42,912 55,568 57,085 69,741 Carrying value adjustment (31,237) (12,785) (31,237) (12,785) 166, , , ,465 Revenue reserve 22.d 116, , , ,446 Profit for the Period 2,229-2,229 - Treasury shares 22.f (37,467) (37,467) (37,467) (37,467) 379, , , , , , , ,395 TOTAL ASSETS 1,805,946 1,861,512 1,831,362 1,919,040 TOTAL LIABILITIES AND EQUITY 1,805,946 1,861,512 1,831,362 1,919,040 The accompanying notes are an integral part of these interim financial information. 3

5 (Convenience Translation into English from the Original Previously Issued in Portuguese) POSITIVO INFORMÁTICA S.A. AND SUBSIDIARIES INCOME STATEMENT FOR THE THREE AND SIX-MONTH PERIOD ENDED AT JUNE 30, (All amounts in thousands of reais) Note Semester ended in Quarter ended in Parent company Parent company 06/30/ /30/ /30/ /30/ /30/ /30/ /30/ /30/2015 NET REVENUE , , , , , , , ,067 COST OF SALES AND SERVICES RENDERED 24 (655,863) (624,042) (699,496) (7 21,989) (399,930) (314,491) (405,7 89) (363,7 83) GROSS PROFIT 240, , , , ,563 72, ,720 88,284 Selling expenses 24 (152,953) (128,256) (152,953) (149,97 0) (93,213) (59,392) (93,213) (7 2,239) General and administrative expenses 24 (48,7 87) (47,041) (49,344) (50,938) (25,450) (20,67 3) (25,612) (22,27 7) Other operating income, net 7 62 (202) 7 62 (202) 436 (508) 436 (508) Equity in the results of investees 11 and 12 28,456 (290) 29,355 2, , (17 2,522) (17 5,7 89) (17 2,180) (198,222) (117,917) (7 6,492) (117,7 13) (94,189) OPERATING PROFIT BEFORE FINANCE RESULTS 67,638 (21,495) 68,433 (16,139) 40,646 (4,228) 41,007 (5,905) Finance income 26 47,960 22, ,960 25,648 25,196 11,420 25,196 12,944 Finance costs 26 (68,554) (51,7 36) (69,349) (55,57 2) (35,887) (29,639) (36,248) (31,492) Foreign exchange variations, net 26 (44,815) 22,364 (44,815) 18,107 (17,317) (17,159) (17,317) (15,153) (65,409) (6,600) (66,204) (11,817) (28,008) (35,37 8) (28,369) (33,7 01) PROFIT (LOSS) BEFORE TAXATION 2,229 (28,095) 2,229 (27,956) 12,638 (39,606) 12,638 (39,606) Income tax and social contribution (139) (139) PROFIT (LOSS) FOR THE PERIOD 2,229 (28,095) 2,229 (28,095) 12,638 (39,606) 12,638 (39,606) EARNINGS (LOSS) PER SHARE - R$ Basic (0.3296) N/A N/A (0.4647) N/A N/A Diluted (0.3296) N/A N/A (0.4647) The accompanying notes are an integral part of these interim financial information. 4

6 (Convenience Translation into English from the Original Previously Issued in Portuguese) POSITIVO INFORMÁTICA S.A. AND SUBSIDIARIES STATEMENT OF COMPREHENSIVE INCOME FOR THE THREE AND SIX-MONTH PERIOD ENDED AT JUNE 30, 2016 (All amounts in thousands of reais) Semester ended in Quarter ended in Parent company Parent company Note 06/30/ /30/ /30/ /30/ /30/ /30/ /30/ /30/2015 Profit (Loss) For T he Period 2,229 (28,095) 2,229 (28,095) 12,638 (39,606) 12,638 (39,606) Other comprehensive income e (loss) Items that can be reclassified subsequently to income statement Exchange difference on translation of foreign operations Foreign exchange variations on foreign investments Crounal S.A./Musfer S.A. 11 (7 0) (428) (7 0) (428) (19) 153 (19) 153 Informática Fueguina S.A. 12 (15,814) 7 15 (15,814) 7 15 (5,639) (1,452) (5,639) (1,452) Positivo Inf. da Bahia/PBG Rwanda Limited 11 (7 09) (145) (7 09) (145) (408) (145) (408) (145) Cash Flow Hedges Fair value of financial instrument cash flow hedge 31.c (1,859) (1,215) (1,859) (1,215) (5,129) (1,215) (5,129) (1,215) (18,452) (1,07 3) (18,452) (1,07 3) (11,195) (2,659) (11,195) (2,659) Comprehensive income for the period (16,223) (29,168) (16,223) (29,168) 1,443 (42,265) 1,443 (42,265) The accompanying notes are an integral part of these interim financial information. 5

7 (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 SIX-MONTH PERIOD ENDED AT JUNE 30, 2016 (All amounts in thousands of reais) Parent company e Capital Reserve Carrying Revenue reserve Capital Tax Options value Tax Legal Treasury Profit/Loss Total Note incentive reserves granted adjustments incentive reserves reserve shares for the period equity AT DECEMBER 31, , ,305 2,084 (7,489) 196, (37,467) - 660,756 Loss for the period (28,095) (28,095) Other comprehensive income (loss): Hedges of cash flow (1,215) Cumulative translation adjustment 11 and Total comprehensive income (loss) (1,07 3) (28,095) (29,168) Options granted (stock options) AT JUNE 30, , ,305 2,509 (8,562) 196, (37,467) (28,095) 632,013 AT DECEMBER 31, , ,305 2,896 (12,785) 116, (37,467) - 576,395 Profit for the period ,229 2,229 Other comprehensive income (loss): Cumulative translation adjustment 31.c (1,859) (1,859) Total comprehensive income (loss) 11 and (16,593) (16,593) Constituição reserva de capital - stock options (18,452) ,229 (16,223) Options granted (stock options) 22.b and AT JUNE 30, , ,305 3,034 (31,237) 116, (37,467) 2, ,310 The accompanying notes are an integral part of these interim financial information. 6

8 (Convenience Translation into English from the Original Previously Issued in Portuguese) POSITIVO INFORMÁTICA S.A. AND SUBSIDIARIES STATEMENT OF CASH FLOWS FOR THE SIX-MONTH PERIOD ENDED AT JUNE 30, 2016 AND 2015 (All amounts in thousands of reais) Parent company 06/30/ /30/ /30/ /30/2015 CASH FLOWS FROM OPERATING ACTIVITIES (Loss) Profit for the period 2,229 (28,095) 2,229 (28,095) Reconciliation of profit (loss) to cash provided by (used in) operating activities: Depreciation and amortization 24 25,823 23,829 25,823 25,756 Equity in the results of investees 11 and 12 (28,456) 290 (29,355) (2,888) Fair value gain (loss) 121,393 (17,77 5) 121,393 (17,775) Provision for tax, labor and civil risks (2,273) 42 (2,27 3) 42 Allowance for doubtful accounts 6 2,693 2,492 2,693 2,557 Provision (reversal) for inventories, net 1,536 (9,881) 1,536 (10,116) Stock options Interest on borrowings 26 51,576 41, , ,386 Foreign exchange variation (122,601) (4,703) (118,297) (6,591) Restatement (7,307) - (7,307) - Income tax and social contribution ,751 8,387 48,952 9,840 (Increase) decrease in assets: Trade receivables (106,438) 69,052 (106,203) 64,115 Inventories 19,234 (52,164) 19,504 (75,994) Taxes recoverable 50,7 67 (47,87 6) 50,957 (48,105) Sundry advances (2,298) (3,529) (7 64) (3,538) Other receivables 4,873 2,532 4, Increase (decrease) in liabilities: Trade payables 83, ,931 61,048 91,910 Provisions and deferred income (1,100) (20,67 0) (1,100) (19,482) Tax obligations 4,289 (5,220) 4,287 (5,021) Income tax and social contribution paid (139) Other payables 1,383 (2,616) 1,654 (3,952) Interests over borrowings paid (29,096) (26,031) (30,125) (26,658) 25,161 (11,591) 4,061 (26,181) Net cash provided by (used in) operating activities 69,912 (3,204) 53,013 (16,341) CASH FLOWS FROM INVESTING ACTIVITIES Recebimento de dividendos 12-5,704-5,704 Increase in capital - joint venture 12 (300) - (6,7 65) - Purchases of property, plant and equipment (6,734) (3,234) (6,7 34) (3,784) Increase in intangible assets 14 (8,218) (6,67 9) (8,218) (8,198) Net cash used in investing activities (15,252) (4,209) (21,717) (6,278) CASH FLOWS FROM FINANCING ACTIVITIES New borrowings 27 8, , , ,227 Borrowings from the National Bank for Economic and Social Development (BNDES) 1,637 52,661 1,637 54,542 Repayment of borrowings (392,673) (185,060) (401,935) (185,431) Related parties 347 (18,416) 16,309 (347) Net cash provided by (used in) financing activities (112,307) 127,663 (105,607) 147,991 (REDUCTION) INCREASE IN CASH AND CASH EQUIVALENTS (57,647) 120,250 (74,311) 125,372 Cash and cash equivalents at the beginning of the period. 530, , , ,361 Exchange variation on cash and cash equivalents - - 4,304 - Cash and cash equivalents at the end of the period. 473, , , ,733 (REDUCTION) INCREASE IN CASH AND CASH EQUIVALENTS (57,647) 120,250 (78,615) 125,372 The accompanying notes are an integral part of these interim financial information. 7

9 (Convenience Translation into English from the Original Previously Issued in Portuguese) POSITIVO INFORMÁTICA S.A. AND SUBSIDIARIES STATEMENT OF VALUE ADDED FOR THE SIX-MONTH PERIOD ENDED AT JUNE 30, 2016 AND 2015 (All amounts in thousands of reais) Parent company 06/30/ /30/ /30/ /30/2015 Revenue Sales of goods and services 993, ,460 1,037, ,405 Returns and commercial discounts (40,217) (23,7 00) (40,217) (23,966) Allowance for doubtful accounts (2,693) (2,492) (2,693) (2,557) Other revenues 6,463 1,57 4 6,463 1, , ,842 1,001, ,464 Inputs acquired by third parties Cost of sales and services rendered (610,041) (563,537) (653,67 2) (651,545) Materials, electricity, outsourced services and other (7 9,7 57) (7 2,165) (80,315) (83,945) Commissions (11,890) (11,7 7 1) (11,890) (13,27 9) Marketing (42,401) (19,7 32) (42,401) (29,7 63) (744,089) (667,205) (788,278) (778,532) Gross value added 213, , , ,932 Depreciation and amortization (25,823) (23,829) (25,823) (25,756) Net value added generated by the entity 187, , , ,176 Value added received through transfer Equity in the results of investees 28,456 (290) 29,355 2,888 Finance income 99, ,036 99, , , , , ,227 Total value added to distribute 315, , , ,403 Distribution of value added Personnel Salaries and social charges 50,853 69, , ,500 Benefits 6,482 5,312 6,482 6,67 4 Government Severance Indemnity Fund for Employees 5,567 7,653 5,567 7,960 62,902 82,669 62,902 91,134 T axes, fees and contributions Federal 7 6,269 55, ,269 67,059 State 1, ,047 1, ,915 Municipal ,700 58,173 78,700 69,348 T hird-party capital remuneration Interest and finance costs 68,554 51, ,333 55,57 2 Rentals 6,536 6,17 1 6,536 6,860 Foreign exchange variation 96,313 90,900 96, , , , , ,016 Remuneration of own capital Retained earnings (loss) 2,229 (28,095) 2,229 (28,095) 2,229 (28,095) 2,229 (28,095) Total value added distributed 315, , , ,403 The accompanying notes are an integral part of these interim financial information. 8

10 (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 JUNE 30, 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 Company 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

11 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 July 28, Basis of preparation The individual and consolidated financial information as of June 30, 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 June 30, 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) 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

12 (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

13 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 -% 06/30/ /31/2015 Direct subsidiaries Positivo Informática da Bahia Ltda Portal Mundo Positivo Ltda Crounal S.A Indirect subsidiaries Investee of Positivo Informática 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 -% 06/30/ /31/2015 Joint venture Informática Fueguina S.A BR Code Desenvolvimento de Software S.A Hit Tecnologia em Saude Ltda Investee of Positivo Informática da Bahia Ltda. PBG Rwanda Limited Investee of Positivo Crounal S.A. Musfer S.A

14 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 six-month period or the equity reported by the Company. 13

15 5 CASH AND CASH EQUIVALENTS Parent company 06/30/ /31/ /30/ /31/2015 Banks 13,962 10,623 17,199 34,828 Financial investments linked to the Interbank Deposit Certificate (CDI) rate 459, , , , , , , ,886 As at June 30, 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 Parent company 06/30/ /31/ /30/ /31/2015 Falling due 306, , , ,445 Past-due up to 30 days 22,009 48,017 22,009 48,017 Overdue from 31 to 60 days , ,092 Overdue from 61 to 90 days 2,903 8,136 2,903 8,136 Overdue from 91 to 180 days 36,669 21,989 36,669 21,989 Overdue from 181 to 360 days 12,412 22,903 12,412 22,903 Overdue for more than 361 days 30, ,000 30, ,000 (-) Provision for impairment of trade receivables (26,116) (23,423) (26,116) (23,423) (-) Adjustment to present value (5,454) (2,37 5) (5,454) (2,37 5) 380, , , ,784 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 June 30, 2016 amounted to R$ 49,999 (R$ 51,153 at December 31, 2015). The average credit period for sales of products is 78 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 78% of total trade receivables at June 30, 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 June 30, 2016, the consolidated balance of this provision totaled R$ 26,116 (R$ 23,423 at December 31, 2015). 14

16 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 06/30/ /31/ /30/ /31/2015 Up to 30 days 22,009 48,017 22,009 48, to 60 days , , to 90 days 2,903 8,136 2,903 8, to 180 days 36,669 21,989 36,669 21, to 360 days 11,367 18,159 11,367 18,159 Over 361 days 5,207 7,321 5,207 7,321 78, ,714 78, ,714 Changes in the provision for impairment of trade receivables are as follows: Parent company 06/30/ /31/ /30/ /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 2,693 8,17 4 2,693 8,546 26,116 23,423 26,116 23,423 7 INVENTORIES Parent company 06/30/ /31/ /30/ /31/2015 Materials 231, , , ,833 Finished products 104, , , ,853 Imports in progress 24,225 4, ,225 4,57 8 Advances to suppliers 62, , , ,7 50 Provision for obsolete inventories (47,841) (46,305) (47,841) (46,305) 374, , , ,709 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

17 8 TAXES RECOVERABLE Parent company 06/30/ /31/ /30/ /31/2015 ICMS 165, , , ,412 Excise Tax (IPI) 8,144 6,452 8,144 6,452 Social Integration Program (PIS) 5,878 10,871 5,886 10,879 Social Contribution on Revenues 56,354 56,392 (COFINS) 28,862 28,901 Social contribution 6,374 10,740 6,380 10,746 Income tax 46,667 54,807 46,720 54,951 Other taxes recoverable 2,571 2,535 3,175 3, , , , ,071 Current portion 137, , , ,606 Non-current portion 126, , , ,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 the six-month period ended June 30, 2016 R$ 105,368 (R$ 87,802 at June 30, 2015) related to investment grants as Sales deductions - taxes on sales with respect to the sale of manufactured goods, and maintained R$ 9,806 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

18 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 com pany 06/30/ /31/ /30/ /31/2015 Prepaid expenses (a) 9, ,7 99 9, ,7 99 Judicial deposits 20,200 19,569 20,291 19,660 Unearned interest 534 4, ,312 Other 4,455 7,548 4,455 7,548 34,465 42,228 34,556 42,319 Current portion 19,659 27,893 19,659 27,893 Non-current portion 14,806 14,335 14,897 14,426 (a) At June 30, 2016, the Company has credits to be offset against advertising expenses amounting to R$ 5,607 (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

19 10 RELATED PARTIES Trading transactions Parent company Assets Liabilities Sales and services Purchases and services 06/30/ /30/ /30/ /31/ /30/ /31/ /30/ /30/2015 Current Centro de Estudos Superiores Positivo Ltda (a) ,167 (f) (f) Sociedade Educacional Positivo Ltda (a) (i) Editora Positivo Ltda. 2,743 3,128 (c) ,415 6, (d) (d) (c) 46 Gráfica e Editora Posigraf S.A (a) 5 15 (b) (a) 2 54 (b) Positivo Educacional Ltda. - - (a) (i) Rosch Administração de Bens Ltda ,328 5,798 (e) Positivo Informática da Bahia Ltda (j) Boreo Com. de Equipamentos Ltda 3,867 3,860 (j) Informática Fueguina S.A (k) Portal Mundo Positivo Ltda Crounal S.A ,059 (g) BR Code Desenvolvimento de Software S.A (l) ,475 (l) Hit Tecnologia em Saúde Ltda (m) (m) Positivo Informática da Amazônia Ltda - Incorporated at 08/28/ ,257-14,625 (h) (g) 8,588 8,548 2,551 2,164 4,833 93,719 6,859 29,041 Assets Liabilities Sales and services Purchases and services 06/30/ /31/ /30/ /31/ /30/ /30/ /30/ /30/2015 Current Centro de Estudos Superiores Positivo Ltda (a) ,167 (f) (f) Sociedade Educacional Positivo Ltda (a) Editora Positivo Ltda. 2,743 3,128 (c) (d) 4,415 6,048 (c) (d) Gráfica e Editora Posigraf S.A (a) (a) 2 54 (b) Positivo Educacional Ltda. - - (a) (i) Rosch Administração de Bens Ltda ,328 5,798 (e) BR CodeDesenvolvimento de Software S.A ,475 (l) PBG Rwanda Limited 6,218 17,513 (g) ,848 4,111 (g) - - Hit Tecnologia em Saúde Ltda (m) (m) Informática Fueguina S.A ,791 (k) 9-10,302 13,626 (g) ,927 32,970 1,682 1,295 36,981 25,199 6,859 9,357 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 products and services 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

20 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 monthly 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 - 18 monthly installments of R$ 222) and R$ 1,890 for the transfer of copyrights and asset rights to the contracting party (remaining balance - 06 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$ 721, 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

21 (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. (m) Development of healthcare systems and technology Refers to the engagement of healthcare software, hardware, application, and equipment development technical services. Management remuneration The amount recognized at the six-month period ended June 30, 2016 as management remuneration was R$ 3,494 (R$ 4,429 at June 30, 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 Equity in the results of investees Parent company Carrying value adjustment At 06/30/2016 At 12/31/2015 Investiments Portal Mundo Positivo Ltda. (c) Positivo Informática da Bahia Ltda. (a) 9,314 3,842 (7 09) 12,447 Crounal S.A. (b) 1,069 (528) (7 0) ,068 3,314 (779) 13,603 The Company s investments in subsidiaries (direct and indirect) are in the note 2.2(a). 20

22 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: Assets Liabilities Equity Net revenue Profit (loss) At June 30,2016 Positivo Informática da Bahia Ltda. 18,530 6,083 12,447-3,842 Portal Mundo Positivo Ltda Crounal S.A. 24,426 23, ,085 (528) Boreo Comércio de Equipamentos Ltda ,093 (5,978) - - At December 31,2015 Positivo Informática da Amazônia Ltda ,961 (8,964) Positivo Informática da Bahia Ltda. 15,396 6,082 9,314 1,387 2,111 Portal Mundo Positivo Ltda Crounal S.A. 57,042 55,97 3 1, ,366 (1,084) Boreo Comércio de Equipamentos Ltda ,093 (5,97 8) - - (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. (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. (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 Joint venture Parent company Equity in the results of At 12/31/2015 Share capital Gain purchase investees Carrying value adjustment At 06/30/2016 Informática Fueguina S.A. (a) 40, ,263 (15,814) 49,771 Hit Tecnologia em Saude Ltda (d) , ,541 40, ,241 25,263 (15,814) 54,312 Provision for net capital deficiency Parent company Equity in the results of At 12/31/2015 investees At 06/30/2016 BR Code Desenvolvimento de Software S.A. (b) (334) (122) (456) (334) (122) (456) 21

23 b) Joint venture Equity in the results of At 12/31/2015 Share capital Gain purchase investees Carrying value adjustment At 06/30/2016 Informática Fueguina S.A. (a) 40, ,263 (15,814) 49,771 PBG Rwanda Limited (c ) 1, ,842 (709) 4,332 Musfer S.A. (e) - 12, ,570 Hit Tecnologia em Saude Ltda (d) , ,541 41,521 12,499 4,241 29,476 (16,523) 71,214 Provision for net capital deficiency At 12/31/2015 Equity in the results of investees At 06/30/2016 BR Code Desenvolvimento de Software S.A. (b) (334) (122) (456) (334) (122) (456) 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

24 (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$ 4,241. The gain was recorded in profit and loss for the period, as set forth in CPC 15 Business Combinations. (e) Musfer S/A. On August 20, 2015 the Company, through subsidiary Crounal S/A, subscribed 50% of Musfer S/A trading shares, and paid in its shares on June 28, 2016 for R$ 12,199, of which R$ 6,465 in cash and R$ 5,734 through the assignment of receivables. The Company's interest in the assets, liabilities, equity and results of the joint ventures is as follows: Assets Liabilities Equity Net revenue Profit (loss) At June 30,2016 Informática Fueguina S.A. 87, ,932 49, ,806 25,263 BR Code Desenvolvimento de Software S.A (456) 184 (122) PBG Rwanda Limited 25,304 20,97 2 4,332 33,67 6 3,842 Hit Tecnologia em Saúde 5, , Musfer S.A. 21,460 8,890 12, , At December 31,2015 Informática Fueguina S.A. 167, ,535 40, ,382 6,654 BR Code Desenvolvimento de Software S.A (334) 2,105 (93) PBG Rwanda Limited 20,200 19,001 1,199 28,418 1, PROPERTY, PLANT AND EQUIPMENT Parent company 12/31/2014 Additions Transfer/Low Incorporation 12/31/2015 Additions Transfer/Low 06/30/2016 Cost Machinery and equipment 58,131 1,472 (1,568) 1,789 59, ,946 Leasehold improvements 18, ,184 20,591 3,667 (1,187) 23,071 Hardware 35,491 1,662 (271) , ,210 39,798 Furniture and fittings 6, , ,935 Industrial facilities 6,974 7,398-1,761 16,133 6,136-22,269 Buildings 2, , ,000 Other property, plant and equipme 1,100 2,399 (233) 5 3, (2,210) 1, ,650 13,948 (1,067) 5, ,171 10,138 (1,187) 156,122 Depreciation Machinery and equipment (29,435) (7,756) 764 (589) (37,016) (3,692) - (40,708) Leasehold improvements (8,504) (2,498) 36 (405) (11,371) (846) 1,187 (11,030) Hardware (32,804) (3,792) 2,320 (468) (34,744) (1,370) - (36,114) Furniture and fittings (4,395) (621) 31 (147) (5,132) (336) - (5,468) Industrial facilities (3,939) (1,033) 26 (239) (5,185) (946) - (6,131) Buildings (547) (467) - - (467) Other property, plant and equipme (30) (21) - (2) (53) (10) - (63) (79,654) (15,721) 3,257 (1,850) (93,968) (7,200) 1,187 (99,981) Net amount 48,996 (1,773) 2,190 3,790 53,203 2,938-56,141 23