Disclosure Policies

INTRODUCTION

This Policy on the Disclosure and Use of Information and Trading in Securities issued by PDG Realty S.A. Empreendimentos e Participações was originally approved at a Company Board Meeting held on December 14, 2006, and subsequently altered at a Company Board Meeting held on May 11, 2012, in compliance with the governing law and regulations applicable hereto.

Chapter I - Definitions

When used in this Policy, the terms and expressions listed below will have the following meanings:

Controlling Shareholders” or “Controlling Companies” means the shareholder or group of shareholders linked through a shareholders´ agreement or under common control that holds Power of Control over the Company, pursuant to Law Nº 6,404/76.

Managers” means the Statutory Officers and the full or alternate Members of the Board of the Company.

Material Act or Fact” has the meaning assigned thereto in item 4.3 of this Policy.

Stock Exchanges and Over-the-Counter Market” means stock Exchanges other than the BM&FBOVESPA and organized over-the-Counter market entities on which the Securities issued by the Company are or may be accepted for trading, in Brazil or elsewhere in the world.

BM&FBOVESPA” means the Brazilian Stocks, Commodities and Futures Exchange (BM&FBOVESPA S.A).

Company” means PDG Realty S.A. Empreendimentos e Participações.

Audit Board Members” means the full and alternate Members of the Audit Board of the Company.

CVM” means the Brazilian Securities Commission.

“Investor Relations Officer” means the Company Officer in charge of disclosing information to the investor public, the CVM, the BM&FBOVESPA and, as applicable, stock Exchanges or organized over-the-Counter entities on which the Securities issued by the Company are accepted for trading, in Brazil or elsewhere in the world, as well as for updating the listed company registration data.

Employees and Executives” means the Company’s employees and executives, regardless of their posts, functions or positions.

Former Managers” means the former Officers and former Members (full and alternate) of the Company Board.

Inside Information” or “Material Information” means all information related to the Company able to exert material influence on the prices of the Securities and not yet disclosed to investors.

CVM Instruction Nº 358/02” means Instruction Nº 358, dated January 3, 2002, as altered, which rules on the disclosure and use of information about Material Acts or Facts related to listed companies and trading in securities issued by a listed company while a pending material fact remains undisclosed to the market, among other matters.

Law Nº 6,404/76” means Law Nº 6,404, promulgated on December 15, 1976, as altered.

Entities with Technical or Advisory Functions” means the Company entities established through its By-Laws, with technical or advisory functions for its Managers.

Material Interest” means a holding directly or indirectly corresponding to 5% (five percent) or more of a type or class of shares representing the Company’s capital stock, also encompassing any rights arising from such shares.

Related Persons” means the following persons who have connections with Managers, Audit Board Members and members of Company Entities with Technical or Advisory Functions: (i) spouse, (ii) companion or common-law spouse; (iii) any dependent included in an annual income tax return and (iv) companies directly or indirectly controlled by Managers, Audit Board Members and members of Company Entities with Technical or Advisory Functions or Related Persons.

Power of Control” means (i) the ownership of partner rights that permanently ensure a majority vote in corporate resolutions and the power to elect a majority of the Managers and (ii) the effective use of such power for directing corporate activities and guiding the functioning of Company Entities.

Policy” means this Policy on the Disclosure and Use of Information and Trading in Securities issued by the Company, as approved and altered by the Company Board.

Associated Companies” means companies in which the Company has a material influence.

Controlled or Subsidiary Companies” means companies in which the Company, either directly or through other controlled or subsidiary companies, holds partner rights that permanently ensure a majority vote in corporate decisions and the power to elect a majority of the Managers.

Parent Company” means companies that hold partner rights permanently ensuring a majority vote in corporate decisions and the power to elect a majority of its Managers.

Deed of Compliance” is the document to be executed pursuant to Articles 15, Paragraph 1, item I and 16, Paragraph 1 of CVM Instruction Nº 358/02, in accordance with Exhibit I to this Policy, by which its signatory complies with this Policy.

Securities” means any security issued by the Company, such as shares, debentures, subscription bonds, receipts and subscription rights, promissory notes, commercial papers, stock options issued in compliance with the stock options award plan approved by a General Meeting of the Company, or any other securities or collective investment agreements issued by the Company or referenced thereto, which are legally considered to constitute securities.

Restricted Securities” means all and any derivatives of the Company, such as financial transactions whose trading base is the price of a financial asset of the Company, including but not limited to transactions through futures contracts or on futures markets, through put and call option trades on stock Exchanges and / or swaps, among others, that are fully or partially derived from the value of another financial asset of the Company.

Top

Chapter II - Purpose and Scope

This Policy was prepared with the purpose of establishing high standards of conduct and transparency, with compliance being mandatory for the: (i) Controlling Shareholders, (ii) Managers, (iii) Audit Board Members, (iv) members of other Company Entities with Technical or Advisory Functions, (v) Employees and Executives with access to Material Information and also (vi) by anyone who becomes aware of information through the post, function or position held thereby in the Company, Parent Companies, Controlled, Subsidiary and Associated Companies, including Related Persons, that is related to a Material Act or Fact about the Company, in order to adapt the internal policy of the Company to the principle of transparency and to the good corporate practices for the use and disclosure of Material Information and trading of securities issued by the Company.

Such persons must (i) notify Related Persons who are related thereto of the need to comply with the terms and conditions set forth in this Policy; and (ii) sign the respective Deed of Compliance, which shall remain on file at the Company head offices as long as such persons maintain a connection with the Company and also for at least five (5) years after their departure.

Additionally, the Company will keep an updated list on file at its head offices of persons signing the Deed of Compliance, with their respective identification data, positions or functions, address and Corporate Tax (CNPJ) or Individual Tax (CPF) numbers, both with the Treasury Ministry. This list will always be available to the CVM.

Top

Chapter III - Principles

Everyone complying with this Policy shall guide their conduct by the values of good faith, loyalty and truthfulness, in addition to the general principles set forth herein.

Furthermore, everyone complying with this Policy shall ensure that the Company fulfills with its social responsibilities, especially towards investors, persons working for the Company and the community within which the Company operates.

All efforts fostering market efficiency must focus on ensuring that competition among investors for better returns is based on equal access to information, whereby investor decisions are based on analyses and construal’s of disclosed information, and never on inside information that has not yet been disclosed to the public or that has been received in advance.

The relationship of the Company with players and with opinion-shapers on the securities market must take place in a uniform and transparent manner.

It is an obligation of the persons subject to the provisions of this Policy to ensure that the disclosure of information on the equity and financial condition of the Company is correct, complete and continuous, being handled through managers assigned this function, as set forth in this Policy and in the regulations in effect.

Top

Chapter IV - Policy for Disclosure and use of Iinformation of Material ACT or Fact de Ato ou Fato Relevante

4.1. Investor Relations Officer

The Investor Relations Officer is assigned primary responsibility for the communication and disclosure of any Material Act or Fact related to the Company.

In order to do so, certain persons connected to the Company are bund by this Policy and the regulations in effect, to advise the Investor Relations Officer should they become aware of a Material Act or Fact, so that the necessary steps may be taken thereby, as set forth in this Policy and in the law.

4.2. Purpose

The purpose of disclosing a Material Act or Fact is to ensure that information is available to investors in good time and in an efficient and reasonable manner, as required for their decisions on acquiring, keeping and selling Securities, ensuring the best possible symmetry for the dissemination of such information and thus avoiding the improper use of inside information on the securities market by persons who with access thereto, for their own benefit or that of third parties, at the expense of investors in general, the market and the Company itself.

4.3. Material Act or Fact

Pursuant to Article 155, Paragraph 1 of Law Nº 6,04/76 and Article 2 of CVM Instruction Nº 358/02, a “Material Act or Fact” is deemed to be: (a) any decision taken by the Controlling Shareholder(s), a resolution adopted by the General Meeting or the Company’s management entities; or (b) any other act or fact of a political, administrative, technical, business economic or financial nature that occurs or is related to its businesses and that may materially influence:

(i) Security prices;
(ii) Investor decisions to buy, sell or keep the Securities; or
(iii) Investor decisions on exercising e any rights inherent to their status as stockholders.

4.4. Material Act or Fact - Examples and Interpretation

Examples of a Material Act or Fact are:

(i) execution of an agreement or contract on the transfer of Company ownership, even under suspensive or terminatory conditions;

(ii) alteration to Company control, including through the execution, amendment or termination of a shareholders ´ agreement;

(iii) execution, amendment or termination of a shareholders´ agreement to which the Company is party or an intervening party, or that has been registered in the Company’s records.

(iv) admission or withdrawal of a partner who has an operating, financial, technological or management agreement or cooperation arrangement with the Company;

(v) authorization for trading the Securities on any domestic or foreign market;

(vi) decision to undertake the cancellation of the registration as a listed company;

(vii) acquisition, merger or spilt involving the Company or related companies;

(viii) acquisition or divestment of assets of material value;

(ix) transformation or dissolution of the Company;

(x) alteration to the structure of Company assets;

(xi) alteration to the accounting criteria;

(xii) acceptance, settlement in advance or renegotiation of debts;

(xiii) approval of a stock option award plan;

(xiv) alteration to the rights and advantages of Securities;

(xv) stock split or reverse split or bonus attribution;

(xvi) acquisition of Company shares to be held in treasury or cancelled, and sale of shares so acquired;

(xvii) Company profits or losses and allocation of dividends or interest on company capital or any other cash benefits;

(xviii) signature or termination of an agreement, or unsuccessful execution thereof, when expectations of success are widely known;

(xix) approval, alteration or withdrawal from a project or delays in its implementation;

(xx) start, resumption or halt in the fabrication or sale of a product or service;

(xxi) discovery, alteration or development of technology or resources by the Company;

(xxii) modifications to projections disclosed by the Company;

(xxiii) approval by the Company’s management entities of a public offering that requires CVM registration;

(xxiv) acquisition of stock control of a listed company; and

(xxv) filing under Chapter 11, applying for entry into receivership, or petition or admission of bankruptcy or filing a law a suit that might affect the economic and financial status of the Company.

Ranking an event as a Material Act or Fact must take place after its material status has been analyzed within the context of the regular activities and scope of the Company, as well as information disclosed previously, but never in the abstract, in order to avoid the banalization of disclosures of Material Acts or Facts that might undermine the quality of the analyses by the market of the Company’s prospects.

4.5. Internal Procedures for Notifying and Disclosing a Material Act or Fact

The Investor Relations Officer is in charge of (i) notifying the CVM and BM&FBOVESPA, as well as Stock Exchanges and Over-the-Counter Markets, if applicable, in addition to (ii) issuing Announcements to the Market disclosing Material Acts or Facts related to the Company.

The Controlling Shareholders, Managers, Audit Board Members, Employees and Executives with access to Material Information and also the members of any Entities with Technical or Advisory Functions in the Company must immediately notify the Investor Relations Officer of any Material Act or Fact of which they may become aware.

Meetings with professional associations, investors, analysts or with selected publics in Brazil or elsewhere in the world, related to any matter that might constitute Material Information, must be attended by the Investor Relations Officer or another person appointed thereby for this purpose. Otherwise, content that might constitute Material Information must be reported to the Investor Relations Officer in advance, so that the possible Material Information is disclosed simultaneously to the market and it is not restricted or becomes known earlier to persons attending such meetings.

4.6. Liability for Omissions

Should the Investor Relations Officer fail to fulfill the duty of communicating and disclosing any Material Act or Fact (when not subject to a decision on confidentiality adopted in compliance with Article 6 of CVM Instruction Nº 358/02), the Controlling Shareholders, Managers, Audit Board Members, Employees and Executives with access to Material Information or any persons with other Company Entities with Technical or Advisory Functions with personal knowledge of the Material Act or Fact who note such omission, will be exempt from liability only if they immediately notify the CVM of such Material Act or Fact.

4.7. Disclosure

Whenever possible, the disclosure of a Material Act or Fact shall take place before the start or after the close of trading on the BM&FBOVESPA and, if applicable, Stock Exchanges and Over-the-Counter Markets. Should such times be incompatible, the trading hours of the Brazilian market shall prevail.

The Investor Relations Officer shall:

(i) communicate and disclose the Material Act or Fact that took place or was related to the Company’s businesses immediately after the occurrence thereof;

(ii) disclose concurrently to the entire market the Material Act or Fact to be announced through any means of communication, including press releases or meetings of professional associations, investors, analysts or selected segments of the public, in Brazil or elsewhere in the world; and

(iii) assess the need to request, always simultaneously, the BM&FBOVESPA, Stock Exchanges and Over-the-Counter Markets, if applicable, the suspension of trading in Securities for the length of time needed for the adequate dissemination of the Material Information, should it be necessary to disclose a Material Act or Fact during trading hours.

4.8. Communication

Information on a Material Act or Fact shall be forwarded simultaneously to:

(i) the CVM;

(ii) the BM&FBOVESPA;

(iii) Stock Exchanges and Over-the-Counter Markets, if applicable.

4.9. Forms of Disclosure

It is imperative that the disclosure of a Material Act or Fact involving the Company is effected through publication in large-circulation newspapers normally used by the Company.

The Company may decide to disclose each Material Act or Fact in a summarized manner through newspapers, provided that the respective announcement contains the minimum elements required for its understanding. In this case, the announcements must give the Internet address(es) where full information is available to all investors, whose contents are at least identical to the statements submitted to the CVM, the BM&FBOVESPA and Stock Exchanges and Over-the-Counter Markets, if applicable.

4.10. Duty of Confidentiality

The duty of confidentiality is established for the Controlling Shareholders, Managers, Audit Board Members, Employees and Executives with access to Material Information or members of other Company Entities with Technical or Advisory Functions, as well as any person who, due to the post, function or position held thereby in the Parent Companies and the Controlled, Subsidiary and Associated Companies, has signed the Deed of Compliance, thereby having the duty to:

(i) keep information confidential when related to a Material Act or Fact to which they have privileged access, until its disclosure to the market, and

(ii) strive to ensure that their subordinates and trusted third parties also keep such information confidential, being jointly liable for any non-compliance with the duty of confidentiality.

Whenever any uncertainty arises regarding the material status of Inside Information, the Company’s Investor Relations Officer must be contacted in order to clarify such doubts.

4.11. Exception to Disclosure

Although the general rule on any Material Act or Fact requires its immediate notification and disclosure, this Policy also establishes, exceptionally, that a Material Act or Fact need not be disclosed immediately, as set forth in this item.

In exceptional cases where the indiscriminate disclosure of Inside Information constituting a Material Act or Fact might jeopardize the legitimate interests of the Company, non-disclosure will be addressed by a decision taken by the Controlling Shareholders or the Managers of the Company, as applicable.

Even if the Managers and Controlling Shareholders decide not to disclose a Material Act or Fact, it is their duty to disclose the Material Act or Fact immediately, either directly or through the Investor Relations Officer, should such information be leaked or in case of an atypical variation in the stock prices or traded quantities of the Securities issued by the Company.

The Controlling Shareholders or Managers may submit to the CVM their decision to keep Material Acts or Facts confidential, on an exceptional basis, when the disclosure thereof might jeopardize the legitimate interests of the Company.

4.12. Duty to Notify Trading by Managers and Related Persons, Among Others

The Managers, Audit Board Members and members of Entities with Technical and Advisory Functions in the Company shall disclose their ownership of Securities issued by the Company, whether held in their own name or on their behalf by Related Persons, as well as any alterations in these positions.

Such notifications must be submitted to the Company’s Investor Relations Officer, who will forwarded them to the CVM, the BM&FBOVESPA and, if applicable, Stock Exchanges and Over-the-Counter Markets, in compliance with the model forms in Exhibits II and III to this Policy.

Such notifications must be issued (i) immediately after induction into office, as applicable, and (ii) within no more than 10 (ten) days after the end of the month in which an alteration occurs in the positions held, indicating the balance of the position for the period.

4.13. Acquisition or Divestment of Material Interest

The direct or indirect Controlling Shareholders, as well as shareholders electing Company Board Members and shareholders electing the Audit Board members shall notify and disclose information on the acquisition or divestment of any Material Interest.

The acquisition or divestment of any Material Interest shall be submitted to the CVM, the BM&FBOVESPA and Stock Exchanges and Over-the-Counter Markets, if applicable, with the information presented as set forth in the model given in Exhibit III to this Policy.

Notifications forwarded to the CVM, the BM&FBOVESPA and Stock Exchanges and Over-the-Counter Markets shall be submitted immediately after the Material Interest is reached. Such disclosure shall take place in compliance with Item 4.9 of this Policy.

Top

Chapter V - Policy for Trading of Securities of the Company

5.1. Financial Black-Out Period

The periods of time are hereby defined, during which the Company, its direct or indirect Controlling Shareholders, Managers, Audit Board Members, Employees and Executives with access to Material Information and persons in other Entities with Technical and Advisory Functions of the Company, must refrain from trading in its Securities (“Financial Black-Out Period”), as set forth below:

(i) From February 1 each year (inclusive) through to the disclosure of the annual information in the Standardized Financial Statements (DFP) issued by the Company for the previous financial year;

(ii) From April 1 each year (inclusive) through to the disclosure of the Quarterly Information Reports (ITRs) issued by the Company for the first quarter of the financial year;

(iii) From July 1 each year (inclusive) through to the disclosure of the Quarterly Information Reports (ITRs) issued by the Company for the second quarter of the financial year; and

(iv) From October 1 each year (inclusive) through to the disclosure of the Quarterly Information Reports (ITRs) issued by the Company for the third quarter of the financial year.

5.2. Black-Out Period for the Comprehensive Earnings Statement (DRI)

Furthermore, the Investor Relations Officer is granted the prerogative of establishing additional periods of time during which the Company, its direct or indirect Controlling Shareholders, Managers, Audit Board Members, Employees and Executives with access to Material Information and persons in other Entities with Technical and Advisory Functions of the Company, must refrain from trading in its Securities (“Financial Black-Out Period fort Comprehensive Earnings Statement - DRI”).

The Investor Relations Officer is not required to disclose the decision on determining the Black-Out Period for the Comprehensive Earnings Statement (DRI), which must be handled confidentially by the recipients thereof.

The same obligations will be applicable to any person becoming aware of information related to a Material Act or Fact about the Company through the post, function or position held thereby in the Parent Companies, Controlled, Subsidiary and Associated Companies, who has signed the Deed of Compliance.

5.3. Ban on Trading in Restricted Securities

It is hereby established that the Company, its direct or indirect Controlling Shareholders, Managers, Audit Board Members, Employees and Executives with access to Material Information and persons in other Entities with Technical and Advisory Functions of the Company, and also any person signing the Deed of Compliance due to the post, function or position held thereby in the Parent Companies, and the Controlled, Subsidiary and Associated Companies, will be forbidden to trade in the Restricted Securities as long as such persons remain legally connected to the Company.

5.4. Constraints on Trading Pending the Disclosure of a Material Act or Fact

In the hypotheses described below, trading in Securities is banned by the Company, Managers, Direct or indirect Controlling Shareholders, Audit Board Members, Employees and Executives with access to Material Information and those involved with other Company Entities with Technical or Advisory Functions, and also by any person signing the Deed of Compliance due to the post, function or position held thereby in the Parent Companies, and the Controlled, Subsidiary and Associated Companies, who becomes aware of information related to Material Act or Fact about the Company:

(i) whenever a Material Act or Fact occurs in the Company businesses of which the above-mentioned persons are aware;

(ii) whenever there is an intention of undertaking an acquisition, total or partial spilt, merger, corporate restructuring or transformation; and

(iii) only for the direct or indirect Controlling Shareholders and Managers, whenever an option or power of attorney is in effect or has been issued for the acquisition or divestment of shares issued by the Company and undertaken by the Company itself, its Controlled, Subsidiary and Associated Companies or other company under common control.

The period covered by the ban set forth above is called the “Disclosure Black-Out Period”.

The bans established in sub-items “i” and “ii” above will no longer be effective once the Company discloses the Material Act or Fact to the market, unless trading in Company shares by the above-mentioned persons after the disclosure of the Material Act or Fact might interfere in the conditions of the Company’s businesses, to the detriment of the its shareholders or of the Company itself.

5.5 Ban on the Resolution on the Acquisition or Divestment of Shares Issued by the Company

The Company Board may not decide on the acquisition or divestment of shares issued by the Company as long as information on the following matters is not disclosed through the publication of a Material Act or Fact addressing the:

(i) execution of any agreement or contract on transfer of Company ownership; or

(ii) granting an option or issuing a power of attorney for the purpose of transferring stock control of Company ownership; or

(iii) existence of an intention to undertake a acquisition, total or partial spilt, merger, corporate restructuring or transformation.

5.6 Ban on Trading by Former Managers

Former Managers withdrawing from the Company before the public disclosure of a matter or fact that began during their terms of office may not trade in the Securities of the Company:

(i) for 6 (six) months after their departure; or

(ii) until the disclosure by the Company of the Material Act or Fact to the market, unless trading in Company shares after the disclosure of the Material Act or Fact might, in the latter case, interfere in the conditions of the referred matters, to the detriment of the Company’s shareholders or the Company itself.

The event occurring first will always prevail between the alternatives listed above.

Top

Chapter VI - Final Provisions

6.1. Indirect and Direct Trading

The bans on trading established through this Policy apply to trading conducted directly or indirectly by the Controlling Shareholders, Managers, Audit Board Members, Employees and Executives with access to Material Information and those involved with other Company Entities with Technical or Advisory Functions, as well as by any person who becomes aware of information related to Material Act or Fact about the Company due to the post, function or position held thereby in the Parent Companies and the Controlled, Subsidiary and Associated Companies, even if trading by such persons is conducted through:

(i) a company controlled thereby;

(ii) third parties with whom a trust agreement or stock and portfolio management contract has been signed.

Trading conducted by investment funds in which the persons mentioned in the above item are quotaholders is not considered indirect, provided that:

(i) the investment funds are not exclusive; and

(ii) the trading decisions of the investment fund administrator or manager are not influenced by the quotaholders.

6.2. Responsibility of the Investor Relations Officer

The Investor Relations Officer of the Company is in charge of the implementation and oversight of Policies on the disclosure and use of information and trading in securities issued by the Company.

In addition to complying with the obligations and constraints laid down by this Policy, the law and the rules in effect, any trading in Securities must be notified to the Investor Relations Officer with advance notice of at least 2 (two) business days by an e-mail message sent to: ri@pdg.com.br.

6.3. Non-Compliance with this Policy

In addition to the penalties established by law and the rules applicable hereto, non-compliance with this Policy will be deemed to constitute valid justification for dismissal with just cause by the Company, terminating the legal relationship between the Company and its Employees and Executives with access to Material Information and those involved with other Company Entities with Technical or Advisory Functions, as well as any person who becomes aware of information related to Material Act or Fact about the Company due to the post, function or position held thereby in the Parent Companies and the Controlled, Subsidiary and Associated Companies, (noting that if such non-compliance is perpetrated by a Related Persons, such penalties will be imposed on the person to whom such related person is connected).

6.4. Amendment to this Policy

Any amendment or review of this Policy must be submitted to the Company Board, in order to be deemed valid and effective.

6.5. Amendment to the Policy Trading with Pending Disclosure

The policy on trading set forth herein may not be amended as long as the disclosure of a Material Act or Fact remains pending.

6.6 Third Party Liability

The provisions set forth in this Policy do not eliminate liabilities arising from legal and regulatory provisions addressing third parties not directly connected to the Company and who trade in Securities issued by the Company, having become aware of a Material Act or Fact.

Fechar