UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C. 20549 ________________________________________________ FORM 20-F/A Amendment no. 1  ̈

   REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934ORx

   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

   THE SECURITIES EXCHANGE ACT OF 1934

   For the fiscal year ended December 31, 2013OR ̈

   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

   THE SECURITIES EXCHANGE ACT OF 1934OR ̈

   SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  Commission File Number 1-14626 ________________________________________________ COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO (Exact Name of Registrant as Specified in its Charter) BRAZILIAN DISTRIBUTION COMPANY (Translation of Registrant’s name into English) THE FEDERATIVE REPUBLIC OF BRAZIL(Jurisdiction of incorporation or organization) ________________________________________________ Christophe Hidalgo, Chief Financial Officer Phone:  +55 11 3886-0421 Fax:  +55 11 3884-2677 gpa.ri@gpabr.com Avenida Brigadeiro Luiz Antonio, 3,142 01402-901 São Paulo, SP, Brazil (Address of principal executive offices) ________________________________________________ Securities registered or to be registered pursuant to Section 12(b) of the Act. Title of each class

   Name of each exchange on which registeredPreferred Shares, without par value*

   New York Stock Exchange**American Depositary Shares (as evidenced by American Depositary Receipts), each representing one Preferred Share

   New York Stock Exchange
 ____________________ *The Preferred Shares are non-voting, except under limited circumstances. **Not for trading purposes, but only in connection with the listing on the New York Stock Exchange of American Depositary Shares representing those Preferred Shares. Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None






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Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the period covered by the annual report:

99,679,851 Common Shares, no par value per share

165,243,572 Preferred Shares, no par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.

xYes ̈No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

 ̈YesxNo

Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

xYes ̈No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 ̈YesxNo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non‐accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.  (Check one):

Large Accelerated FilerxAccelerated Filer ̈Non-accelerated Filer ̈

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ̈

   International Financial Reporting Standards as issued by the International Accounting Standards Boardx

   Other ̈


If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 ̈Item 18 ̈

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 ̈YesxNo
















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EXPLANATORY NOTE  The Company is amending its annual report on Form 20-F for the year ended December 31, 2013 (the “Annual Report”) as originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 30, 2014 to:  (i) revise the disclosure in the Annual Report to correct an editorial error and refer to December 31, 2013 instead of December 31, 2012 in the first paragraph under Item 15. Controls and Procedures, page 96;  (ii) correct certain editorial errors in the names of the financial statements in the headings of the pages of the audited consolidated financial statements for the years ended December 31, 2013 and 2012 (the “Revised Financial Statements”) and to make the corresponding revisions to the references to the financial statements in the reports of Deloitte Touche Tohmatsu Auditores Independentes (the “Revised Deloitte Reports”); and  (iii) include, after the consolidated financial statements for the years ended December 31, 2013 and 2012,  the audit report of Ernst & Young Terco Auditores Independentes S.S. for the year ended December 31, 2011 (the “E&Y Report”).  This Form 20-F/A consists ofa cover page, this explanatory note, Item 15. Controls and Procedures, the Revised Financial Statements, the Revised Deloitte Reports, the E&Y Report, the signature page, the exhibit index and the required certifications of the principal executive officer and principal financial officer of the Company.  Other than as set forth above, this Form 20-F/A does not, and does not purport to, amend, update or restate the information in any other item of theAnnual Report as originally filed with the SEC. As a result, this Form 20-F/A does not reflect any events that may have occurred after the Annual Report was filed on April 30, 2014.


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ITEM 15.CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures.  The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in reports that it files or submits, under the Securities Exchange Act of 1934, was recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and to provide reasonable assurance that information required to be disclosed by us in such reports is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.  The Company’s Chief Executive Officer and Chief Financial Officer, with the participation and assistance of other members of management, have evaluated the effectiveness, as of December 31, 2013, of the Company’s “disclosure controls and procedures,” as that term is defined in Rule 13a‐15(e) under the Securities and Exchange Act of 1934, as amended (“the Exchange Act”).  Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that the disclosure controls and procedures as of December 31, 2013, are effective at the reasonable assurance level. Management’s Report on Internal Control over Financial Reporting.  Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934.  Our internal control over financial reporting is designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and of financial statements for external purposes in accordance with generally accepted accounting principles.  Our internal control over financial reporting did not undergo significant changes in its design or operation during the year. All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation and presentation. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2013.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework.  Based on this assessment, management believes that, as of December 31, 2013, our internal control over financial reporting is effective based on those criteria.  For our management’s report on internal control over financial reporting, see page F-1 of this annual report. The effectiveness of internal controls over financial reporting as of December 31, 2013 has been audited by Deloitte Touche Tohmatsu Auditores Independentes, the independent registered public accounting firm who also audited our consolidated financial statements, as stated in their report appearing on page F-2 of this annual report.









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Companhia Brasileira de Distribuição

   Consolidated Financial Statements for the Year Ended December 31, 2013 and 2012


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Companhia Brasileira de Distribuição  Consolidated Financial Statements  Years ended December 31, 2013, 2012 and 2011   Contents Management ́s Report on Internal Control over Financial Reporting

   F-1Report of Independent Registered Public Accounting Firm

   F-2  Consolidated financial statements   Consolidated Statements of income and comprehensive income

   F-5Consolidated Balance sheets

   F-6Consolidated Statements of changes in shareholders ́ equity

   F-8Consolidated Statements of cash flows

   F-9Notes to the consolidated financial statements

   F-11


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Management ́s Report on Internal Control over Financial Reporting The management of Companhia Brasileira de Distribuição is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.  The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.  Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2013 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission  (COSO) in Internal Control (1992) Integrated Framework. Management's assessment included documenting, evaluating and testing of the design and operating effectiveness of its internal control over financial reporting. Based on that assessment, management believes that, as of December 31, 2013, the Company’s internal control over financial reporting is effective based on those criteria.  The effectiveness of internal controls over financial reporting as of December 31, 2013 has been audited by Deloitte Touche Tohmatsu Auditores Independentes, the independent registered public accounting firm who also audited the Company’s consolidated financial statements. Deloitte’s attestation report on the Company’s internal controls over financial reporting is included herein.   /s/ Ronaldo Iabrudi dos Santos Pereira Ronaldo Iabrudi dos Santos Pereira Chief Executive Officer

   /s/ Christophe José Hidalgo

   Christophe José Hidalgo

   Chief Financial Officer  Date: April 24, 2014


F-1

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Companhia Brasileira de Distribuição and Subsidiaries São Paulo, Brazil We have audited the accompanying consolidated balance sheets of Companhia Brasileira de Distribuição and subsidiaries (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of income and comprehensive income, changes in shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2013. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the consolidated financial position of Companhia Brasileira de Distribuição and subsidiaries as of December 31, 2013 and 2012 and the consolidated results of their operations and their cash flows for each of the two years in the period ended December 31, 2013, in conformity with International Financial Reporting Standards - IFRS, issued by the International Accounting Standards Board - IASB. As discussed in Note 2 to the financial statements, the consolidated balance sheet as of December 31, 2012 and the consolidated statement of cash flows for the year ended December 31, 2012 have been restated to correct the classification of accountsreceivables related to commercial agreements with suppliers (bonuses), whose contract terms provide for the right of offset against accounts payable to suppliers. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company ́s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control-Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report datedApril 24, 2014, expressed an unqualified opinion on the Company’s internal control over financial reporting. /S/ DELOITTE TOUCHE TOHMATSU DELOITTE TOUCHE TOHMATSU Auditores Independentes São Paulo, Brazil April 24, 2014


F-2

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Companhia Brasileira de Distribuição and Subsidiaries São Paulo, Brazil We have audited the internal control over financial reporting of Companhia Brasileira de Distribuição and subsidiaries (the “Company”) as of December 31, 2013, based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission - COSO. The Company ́s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on Company ́s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A Company’s internal control over financial reporting is a process designed by, or under the supervision of, the Company ́s principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


F-3

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control - Integrated Framework (1992) issued by Committee of Sponsoring Organizations of the Treadway Commission – COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Company as of December 31, 2013, and the related consolidated statements of income and  comprehensive income, changes in shareholders' equity, and cash flows for the year then ended and our report dated April 24, 2014, included an explanatory paragraph regarding reclassifications made by the Company in the comparative information presented. /S/ DELOITTE TOUCHE TOHMATSU DELOITTE TOUCHE TOHMATSU Auditores Independentes São Paulo, Brazil April 24, 2014


F-4

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Companhia Brasileira de Distribuição  Consolidated Statements of income and comprehensive income Years ended December 31, 2013, 2012 and 2011 (In thousands of reais, except earnings per share)   Notes

   

   2013

   

   2012

   

   2011Net sales

   28

   

   57,730,262

   

   50,924,461

   

   46,594,486Cost of sales

   29

   

   (42,704,079)

   

   (37,167,548)

   

   (33,935,134)Gross profit

   

   

   15,026,183

   

   13,756,913

   

   12,659,352Operating expensesSelling expenses

   29

   

   (9,180,009)

   

   (8,360,114)

   

   (7,936,647)General and administrative

   29

   

   (1,484,734)

   

   (1,753,859)

   

   (1,683,097)Depreciation and amortization

   

   

   (787,405)

   

   (751,538)

   

   (678,377)Other operating expenses, net

   30

   

   (673,106)

   

   (33,014)

   

   (258,693)Operating profit

   

   

   2,900,929

   

   2,858,388

   

   2,102,538Net financial expenses

   31

   

   (1,193,449)

   

   (1,192,873)

   

   (1,332,708)Equity in an associate

   14

   

   47,310

   

   10,819

   

   34,825Profit before income and social contribution taxes

   

   

   1,754,790

   

   1,676,334

   

   804,655Income and social contribution taxes

   22

   

   (358,583)

   

   (519,898)

   

   (84,999)Net income and comprehensive income

   

   

   1,396,207

   

   1,156,436

   

   719,656Attributable to equity holders of the parent

   

   

   1,052,495

   

   1,051,181

   

   718,219Attributable to noncontrolling interest

   

   

   343,712

   

   105,255

   

   1,437Net income and comprehensive income

   

   

   1,396,207

   

   1,156,436

   

   719,656Earning per ordinary share

   32Basic earnings per share attributable to ordinary equity holders of the parent

   

   

   3.75

   

   3.78

   

   2.61Diluted earnings per share attributable to ordinary equity holders of the parent

   

   

   3.75

   

   3.78

   

   2.61Earnings per preferred non-voting shareBasic earnings per share attributable to ordinary equity holders of the parent

   

   

   4.13

   

   4.15

   

   2.87Diluted earnings per share attributable to ordinary equity holders of the parent

   

   

   4.11

   

   4.12

   

   2.85
  See accompanying notes.


F-5

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Companhia Brasileira de Distribuição  Consolidated Balance Sheets December 31, 2013 and 2012 (In thousands of reais)   Assets

   Notes

   

   2013

   

   2012

   

   01.01.2012Current

   

   

   

   

   reclassified

   

   reclassifiedCash and cash equivalents

   7

   

   8,367,176

   

   7,086,251

   

   4,969,955Marketable securities

   

   

   24,453

   

   -

   

   -Trade accounts receivable, net

   8

   

   2,515,666

   

   2,646,079

   

   5,111,942Other accounts receivable, net

   10

   

   227,367

   

   211,473

   

   279,621Inventories

   11

   

   6,381,544

   

   5,759,648

   

   5,552,769Recoverable taxes

   12

   

   907,983

   

   871,021

   

   907,702Assets held for sale

   1 (e)

   

   39,133

   

   -

   

   -Other receivables

   

   

   146,413

   

   105,830

   

   128,845Total current assets

   

   

   18,609,735

   

   16,680,302

   

   16,950,834Noncurrent assetsTrade accounts receivable, net

   8

   

   114,899

   

   108,499

   

   110,785Other accounts receivable

   10

   

   629,935

   

   556,397

   

   538,069Inventories

   11

   

   172,280

   

   172,280

   

   14,000Recoverable taxes

   12

   

   1,429,021

   

   1,231,642

   

   729,998Financial Instruments

   20

   

   -

   

   359,057

   

   304,339Deferred income and social contribution taxes

   22

   

   950,757

   

   1,078,842

   

   1,249,687Related parties

   13

   

   172,836

   

   178,420

   

   133,415Restricted deposits for legal proceedings

   24

   

   815,190

   

   952,294

   

   737,688Other receivables

   

   

   49,914

   

   61,892

   

   36,898Investments

   14

   

   309,528

   

   362,429

   

   340,122Property and equipment, net

   16

   

   9,053,600

   

   8,114,498

   

   7,358,250Intangible assets

   17

   

   5,700,657

   

   4,975,556

   

   4,939,361Total noncurrent assets

   

   

   19,398,617

   

   18,151,806

   

   16,492,612Total assets

   

   

   38,008,352

   

   34,832,108

   

   33,443,446
   Certain amounts of 2012 and 01.01.2012 were reclassified  See note 2.  See accompanying notes.


F-6

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Companhia Brasileira de Distribuição  Consolidated Balance Sheets December 31, 2013 and 2012 (In thousands of reais)   Liabilities

   Notes

   

   2013

   

   2012

   

   01.01.2012Current

   

   

   

   

   reclassified

   

   reclassifiedTrade accounts payable

   18

   

   8,547,544

   

   6,240,356

   

   5,953,199Loans and financing

   19

   

   5,171,418

   

   4,211,150

   

   4,917,498Payroll and related charges

   

   

   796,188

   

   728,970

   

   758,663Income and social contribution taxes payable and taxes payable in installments

   21

   

   968,462

   

   806,129

   

   503,628Related parties

   13

   

   32,621

   

   80,399

   

   27,878Dividends payable

   27

   

   151,835

   

   168,798

   

   103,396Payable related to acquisition of non-controlling interest

   

   

   69,014

   

   63,021

   

   54,829Financing related to acquisition of real estate

   

   

   36,161

   

   88,181

   

   14,211Rent payable

   

   

   112,439

   

   51,377

   

   83,779Deferred revenue

   26

   

   114,749

   

   92,120

   

   81,915Pass through liabilities

   

   

   226,008

   

   224,099

   

   158,134Other accounts payable

   

   

   786,315

   

   636,667

   

   518,514Total current liabilities

   

   

   17,012,754

   

   13,391,267

   

   13,175,644Noncurrent liabilitiesLoans and financing

   19

   

   4,321,850

   

   6,281,104

   

   6,240,900Deferred income and social contribution taxes liability

   22

   

   1,060,852

   

   1,137,376

   

   1,114,873Income and social contribution taxes payable and taxes payable in installments

   21

   

   1,072,849

   

   1,204,543

   

   1,291,810Provision for risks

   24

   

   1,147,522

   

   774,361

   

   680,123Acquisition of non-controlling interest

   23

   

   107,790

   

   158,201

   

   188,602Deferred revenue

   26

   

   455,637

   

   471,665

   

   381,406Other accounts payable

   

   

   117,134

   

   345,640

   

   275,663Total noncurrent liabilities

   

   

   8,283,634

   

   10,372,890

   

   10,173,377Shareholders’ equityShare capital

   27

   

   6,764,300

   

   6,710,035

   

   6,129,405Capital reserves

   27

   

   233,149

   

   228,459

   

   384,342Profit reserves

   27

   

   2,485,741

   

   1,556,231

   

   1,111,526Equity attributable to owners of the parent

   

   

   9,483,190

   

   8,494,725

   

   7,625,273Non-controlling interest

   

   

   3,228,774

   

   2,573,226

   

   2,469,152Total sharholders ́equity

   

   

   12,711,964

   

   11,067,951

   

   10,094,425Total shareholders ́ equity and liabilities

   

   

   38,008,352

   

   34,832,108

   

   33,443,446
  Certain amounts of 2012 and 01.01.2012 were reclassified for better presentation and comparison. See note 2.  See accompanying notes.


F-7

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Companhia Brasileira de Distribuição  Consolidated Statements of Changes in Shareholders’ Equity Years ended December 31, 2013, 2012 and 2011 (In thousands of reais)   Capital Reserves

   

   Profit Reserves

   

   

   

   Non-controlling Interest

   

   TotalDescription

   Share capital

   

   Special goodwill reserve

   

   Other equity instruments

   

   Other Reserves

   

   Granted Options

   

   Legal

   

   Expansion

   

   Retained earnings

   

   Equity attributed to owners of the parentBalance at December 31, 2010

   5,579,259

   

   344,605

   

   -

   

   7,398

   

   111,145

   

   212,339

   

   701,922

   

   66,654

   

   7,023,322

   

   2,477,270

   

   9,500,592Capitalization of reserve (note 27 (c) e (e))

   527,175

   

   (105,675)

   

   -

   

   -

   

   -

   

   -

   

   (379,350)

   

   (42,150)

   

   -

   

   -

   

   -Stock option exercised (note 27 (a))

   22,971

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   22,971

   

   -

   

   22,971Recognized granted options (note 27 (d))

   -

   

   -

   

   -

   

   -

   

   26,869

   

   -

   

   -

   

   -

   

   26,869

   

   -

   

   26,869Participation of noncontrolling shareholders

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   (9,555)

   

   (9,555)Gain (loss) in equity interest

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   4,470

   

   4,470

   

   -

   

   4,470Net income for the year

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   718,219

   

   718,219

   

   1,437

   

   719,656Appropriation of net income to reserve (note 27 (e))

   -

   

   -

   

   -

   

   -

   

   -

   

   35,910

   

   460,558

   

   (496,468)

   

   -

   

   -

   

   -Dividends (note 27 (g))

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   (170,578)

   

   (170,578)

   

   -

   

   (170,578)Balance at December 31, 2011

   6,129,405

   

   238,930

   

   -

   

   7,398

   

   138,014

   

   248,249

   

   783,130

   

   80,147

   

   7,625,273

   

   2,469,152

   

   10,094,425Capitalization of reserve (note 27 (c) e (e))

   559,320

   

   (200,905)

   

   -

   

   -

   

   -

   

   -

   

   (322,572)

   

   (35,843)

   

   -

   

   -

   

   -Stock option exercised (note 27 (a))

   21,310

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   21,310

   

   -

   

   21,310Recognized granted options (note 27 (d))

   -

   

   -

   

   -

   

   -

   

   45,022

   

   -

   

   -

   

   -

   

   45,022

   

   -

   

   45,022Gain (loss) in equity interest

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   1,502

   

   1,502

   

   1,051

   

   2,553Net income for the year

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   1,051,181

   

   1,051,181

   

   105,255

   

   1,156,436Appropriation of net income to Reserve reserve (note 27 (e))

   -

   

   -

   

   -

   

   -

   

   -

   

   52,559

   

   674,069

   

   (726,628)

   

   -

   

   -

   

   -Dividends (note 27 (g))

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   (249,655)

   

   (249,655)

   

   (2,232)

   

   (251,887)Unclaimed dividends

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   92

   

   92

   

   -

   

   92Balance at December 31, 2012

   6,710,035

   

   38,025

   

   -

   

   7,398

   

   183,036

   

   300,808

   

   1,134,627

   

   120,796

   

   8,494,725

   

   2,573,226

   

   11,067,951Capitalization of reserve (note 27 (c) e (e))

   38,025

   

   (38,025)

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -Stock option exercised (note 27 (a))

   16,240

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   16,240

   

   -

   

   16,240Recognized granted options (note 27 (d))

   -

   

   -

   

   -

   

   -

   

   42,715

   

   -

   

   -

   

   -

   

   42,715

   

   -

   

   42,715Gain (loss) in equity interest

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   650

   

   650

   

   420

   

   1,070Net income for the year

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   1,052,495

   

   1,052,495

   

   343,712

   

   1,396,207Appropriation of net income to Reserve (note 27 (e))

   -

   

   -

   

   -

   

   -

   

   -

   

   52,624

   

   674,913

   

   (727,537)

   

   -

   

   -

   

   -Dividends (note 27 (g))

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   (249,968)

   

   (249,968)

   

   (185,732)

   

   (435,700)Transactions with Non-controlling (note 27 (h))

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   -

   

   126,333

   

   126,333

   

   497,148

   

   623,481Balance at December 31, 2013

   6,764,300

   

   -

   

   -

   

   7,398

   

   225,751

   

   353,432

   

   1,809,540

   

   322,769

   

   9,483,190

   

   3,228,774

   

   12,711,964
   See accompanying notes.


F-8

---



Companhia Brasileira de Distribuição  Consolidated Statements of Cash Flows Years ended December 31, 2013, 2012 and 2011 (In thousands of reais)  2013

   

   2012

   

   2011Cash flow provided by operating activities

   

   

   reclassified

   

   reclassifiedNet income for the year

   1,396,207

   

   1,156,436

   

   719,656Adjustment to reconcile net incomeDeferred income tax (note 22)

   89,090

   

   193,348

   

   (57,118)Depreciation and amortization

   865,425

   

   834,109

   

   706,494Equity in an associate (note 14)

   (47,310)

   

   (10,819)

   

   (34,825)Adjustment to present value on trade accounts receivable

   (10,448)

   

   (13,696)

   

   22,427Financial charges

   1,000,252

   

   1,099,034

   

   965,557Provision for risks (note 24)

   249,183

   

   83,477

   

   (4,798)Share-based payment

   42,715

   

   45,022

   

   26,869Barter revenue

   -

   

   (158,280)

   

   -Deferred revenue

   (42,619)

   

   54,418

   

   54,759Gain (loss) on disposal of property and equipment

   44,878

   

   (11,805)

   

   48,820Allowance for doubtful accounts (note 8)

   451,108

   

   340,652

   

   256,371Provision for obsolescence and losses and

   Breakage (note 11)

   (1,110)

   

   (22,683)

   

   23,903Provision for disposals and losses of fixed assets

   -

   

   10,989

   

   9,791Gain in the fair value investment

   (100,007)

   

   -

   

   -Others operating expenses (note 30)

   322,656

   

   (23,021)

   

   -Decrease (increase) in assetsTrade accounts receivable, net

   (333,269)

   

   2,173,848

   

   (1,935,918)Marketable securities

   (24,319)

   

   -

   

   634,978Inventories

   (581,776)

   

   (191,977)

   

   (776,442)Recoverable taxes

   (284,101)

   

   (575,266)

   

   (506,651)Restricted deposits for legal proceedings

   (186,175)

   

   (179,431)

   

   (68,116)Increase (decrease) in liabilitiesTrade accounts payable

   2,270,264

   

   261,097

   

   972,395Payroll, related charges and taxes payable

   59,439

   

   (29,494)

   

   169,477Taxes, contributions payable and taxes

   (128,427)

   

   130,273

   

   -Related parties

   (34,384)

   

   24,530

   

   (189,360)Financial instruments

   -

   

   (50,000)

   

   114,365Other liabilities

   (125,322)

   

   158,494

   

   (24,571)Net cash flow provided by operating activities

   4,891,950

   

   5,299,255

   

   1,128,063


F-9

---



Companhia Brasileira de Distribuição  Consolidated Statements of Cash Flows - Continued Years ended December 31, 2013, 2012 and 2011 (In thousands of reais)   2013

   

   2012

   

   2011Cash flow used in investing activities

   

   

   reclassified

   

   reclassifiedAcquisition of subsidiary

   (211,536)

   

   -

   

   -Acquisition of property and equipment (note 16)

   (1,655,827)

   

   (1,308,951)

   

   (1,262,640)Acquisition of intangible assets (note 17)

   (193,785)

   

   (84,443)

   

   (191,635)Sales of property and equipment

   98,055

   

   87,240

   

   97,892Net cash used by investing activities

   (1,963,093)

   

   (1,306,154)

   

   (1,356,383)Cash flow from financing activitiesCapital increase

   16,240

   

   21,310

   

   22,971Financings:Funding and refinancing

   5,278,000

   

   7,210,792

   

   6,918,179Payments

   (6,519,347)

   

   (7,976,686)

   

   (4,772,162)Interest paid

   (720,506)

   

   (913,098)

   

   (336,126)Sale of noncontrolling interest (note 14 (a)(ii))

   813,782

   

   -

   

   -Acquisition of noncontrolling interest

   (63,437)

   

   (32,729)

   

   (269,113)Dividend paid

   (452,664)

   

   (186,394)

   

   (183,468)Net cash provided by (used in) financing activities

   (1,647,932)

   

   (1,876,805)

   

   1,380,281Net increase in cash and cash equivalents

   1,280,925

   

   2,116,296

   

   1,151,961Cash and cash equivalents at the end of year

   8,367,176

   

   7,086,251

   

   4,969,955Cash and cash equivalents at the beginning of year

   7,086,251

   

   4,969,955

   

   3,817,994
    The main non-cash transactions are disclosed in the Notes 2, 15 (ii), 16 (b) and (e), 22 (a) and 27 (c) (e).   See accompanying notes.


F-10

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 1.Corporate information Companhia Brasileira de Distribuição ("Company" or “GPA”), operates in the food retailing, clothing, home appliances, electronics and other products segment through its chain of hypermarkets, supermarkets, specialized and department stores mainly under the trade names "Pão de Açúcar, "Extra Hiper", “Extra Super”, “Minimercado Extra”, “Assai”, “Ponto Frio” and “Casas Bahia", in addition to the e-commerce platforms “CasasBahia.com,” “Extra.com”, “Pontofrio.com”, “Barateiro.com” and “Partiuviagens.com” and neighborhood shopping mall brand “Conviva”. Its headquarters are located at São Paulo, SP, Brazil. Founded in 1948, the Company has 156 thousand employees, 1,999 stores in 19 Brazilian states and in the Federal District and a logistics infrastructure comprised of 54 distribution centers located in 13 states and Federal District at December 31, 2013, The Company’s shares are listed in the Level 1 Corporate Governance trading segment of the São Paulo Stock Exchange (“BM&FBovespa”), code “PCAR4” and its shares are also listed on the New York Stock Exchange (ADR level III), code “CBD”, The Company is also listed on the Luxembourg Stock Exchange, however, with no shares traded. The Company is controlled by Wilkes Participações S.A. ("Wilkes") that became a controlled company by Casino Guichard Perrachon (“Casino”) on July 2, 2012. a)Casino Arbitration During 2011, Casino filed two arbitration proceedings at the International Arbitration Court of the International Chamber of Commerce against Mr. Abílio dos Santos Diniz, Mrs.Ana Maria Falleiros dos Santos Diniz D’Avila, Mrs. Adriana Falleiros dos Santos Diniz, Mr. João Paulo Falleiros dos Santos Diniz, Mr. Pedro Paulo Falleiros dos Santos Diniz and Península Participações Ltda. (“Península”). On April 5, 2013, the arbitral tribunal decided about the exclusion of the Company from the arbitration procedure and, in September 2013, the parties filed a petition at the International Chamber of Commerce (“ICC”) to conclude the procedures. On September 6, 2013, Groupe Casino and Mr. Abilio dos Santos Diniz, jointly with their related parties, entered into a Private Instrument of Transaction and Waiver of Rights. As a consequence of the agreed-upon transaction, the parties filed a petition at the International Chamber of Commerce (“ICC”) for the conclusion of all arbitration procedures requested by the parties under discussion at the moment. The parties also agreed to conclude any and all disputes against each other and any other third party (related to the parties’ disputes), as well as not to practice any act or file any suit based on rights set forth in any agreements previously entered into between the parties or on the understandings between the parties prior to September 6, 2013. b)    Corporate reorganization At the December 28, 2012 Extraordinary Shareholders’ Meeting a corporate restructuring was approved with the purpose of obtaining administrative, economic and financial benefits for GPA , the base date of the restructuring were the balance sheets of subsidiaries as at December 31, 2012. The restructuring consists of the merger into the Company of the operations of 44 stores of the subsidiary Sé Supermercados Ltda, (“Sé”), with net assets of R$515, and 6 stores of the subsidiary Sendas Distribuidora S.A. (“Sendas”), with net assets of R$504. Additionally, there was a swap of equivalent amounts of shares between the Company and the subsidiary Novasoc Comercial Ltda, (“Novasoc”), in which the Company assigned 17.25% of Barcelona Comércio Varejista e Atacadista S.A. (“Barcelona”), in exchange for 6.9% of Sé. The same meeting also approved a Company’s capital increase of R$557,534 in Barcelona, without issuing new shares, using the Company’s Intercompany amount due by this subsidiary. This transaction was carried out between subsidiaries over which the Company already had 100% interest, directly or indirectly.


F-11

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 1.Corporate information –Continued b)Corporate reorganitazion – Continued The reorganization resulted in the amount of R$7,491of loss for the year ended December 31, 2012, mainly related to the loss of deferred social contribution tax credits in its subsidiaries. At the January 2, 2013 Extraordinary Shareholders’ Meeting, an increase in the Company’s interest in Sendas Distribuidora was also approved in the amount of R$1,100,000, without the issuanceof new shares, using the Company’s intercompany receivables from this subsidiary. c)   Arbitration request by Morzan Pursuant to the Material Fact released on June 15, 2012, the Company announced that it received a letter from the International Chamber of Commerce -ICC notifying it about the request for the filing of an arbitration proceeding (“Proceeding”) submitted by Morzan Empreendimentos e Participações Ltda, (“Morzan”), the former controlling shareholder of Globex Utilidades S.A. (Pontofrio tradename), currently referred to as Via Varejo S.A. (“Via Varejo”).  The Proceeding is associated with issues originating from the Share Purchase Agreement executed between the subsidiary Mandala Empreendimentos e Participações S.A. on June 8, 2009 (“Agreement”) for the acquisition of 86,962,965 registered common shares with no par value, which then represented 70.2421% of the total and voting capital of Via Varejo. The arbitration terms are subject to confidentiality requirements. On July 11, 2012, the Company exercised its right to appoint an arbitrator to compose the arbitration court responsible for conducting the Proceeding. After discussions in the Arbitration Court jurisdiction on October 25, 2013, Morzan filed its arguments, which were answered by the Company, Wilkes and Via Varejo on January 17, 2014. The Company, supported by a favourable position of its external counsel considering the loss to be remote, understands that the request is unfounded, given that the agreement was fully complied with, as it will be proved during the Proceeding. The parties will have the opportunity to request documents from each other and file the due replies before the preliminary hearing, which is scheduled to occur between June 9 to 13, 2014. d)Appraisal of the net assets of the Association between CBD and Casas Bahia (“CB”) The Company conducted internal procedures to evaluate any eventual rights rising from net assets contributed by the parties in the moment of acquisition of NCB by the Company, as well as, any fact that resulted in a right against the another party, as indemnization after the business combination date. The work performed was concluded in October 2013, thereby allowing the Management to conduct negotiations to finalize discussions between the parties.


F-12

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 1.Corporate information –Continued d)Appraisal of the net assets of the Association between CBD and Casas Bahia (“CB”) – Continued After detailed analysis conducted by Management on all corporate, legal and economic aspects, the Company, CB and Via Varejo signed a Private Transaction Agreement that determined the irrevocable settlement of the matters related to those procedures. As a result Via Varejo and the Company recognized in the 2013 income statement the effects of the issues included into External consultants reports (note 30); additionaly Via Varejo received indemnifications from CB amounting R$85,000, comprising R$27,700 related to accounts receivable recorded by Via Varejo and R$57,300 related to receivables considered as contingent until then and, therefore, not recorded. It was also wrote off receivables considered as not refundable by the parties totaling R$54,667 and recognized other impacts by the Company of R$8,307. Consequently, there will be no additional accounting adjustments in relation to this matter and the amounts receivable from CB of R$134,111 (note 13) on December 31, 2013 are expressly considered as refundable in the association agreement. e)   Performance Commitment Agreement Via Varejo, the Company, CB (“Casas Bahia”) and the Brazilian antitrust agency ("CADE") entered into the Performance Commitment Agreement ("TCD"), for the approval of the Association Agreement between the Company and CB  dated December 4, 2009, and amended at July 1, 2010, which aims to establish actions that: (i)prevent the unification of operations involving substantial elimination of competition; (ii)ensure conditions for the existence of effective competition in the markets affected by the transaction; (iii)ensure conditions for fast and efficient entry of competitors in these markets; (iv)ensure that the benefits of the association are distributed fairly among the participants on the one hand, and final consumers, on the other, in those specific markets.  In order to fulfill the objectives of the TCD, Via Varejo and its shareholders have a primary obligation to sell 74 stores, located in 54 cities distributed in six States and the Federal District, which together represent approximately 3% of consolidated gross sales of Via Varejo at December 31, 2013 (3% at December 31, 2012). At December 31, 2013, a total of 35 stores had been sold . Until the authorization date of these financial statements, the precedent conditions set forth in the agreement defined at the TCD have not been approved by CADE and may impact the sale of the remaining stores.  At December 31, 2013, a provision of R$30,435 for the remaining 39 stores to besold was recorded, which covers their fixed assets and the penalty that may be imposed to the Company by CADE if they are not sold. CADE has inspected the obligations of the TCD, being the Company subject to present data and information that the authority considers necessary. f)     Acquisition of interest in Nova Pontocom On October 17, 2013, the subsidiary Via Varejo sold 6.20% of Nova Pontocom’s capital stock to the parent company CBD, thus, changing Via Varejo’s interest from 52.10% to 43.90%. The amount paid by CBD to Via Varejo was R$80,000, paid in cash, which effects were eliminated in the consolidated financial statements. In addition, CBD bought 1.95% interest in Nova Pontocom held by noncontrolling shareholders for R$25,294, being R$7,330 offsetting balances due by noncontrolling shareholders and the remaining in cash. After the transaction, the Company owns 47.21% of direct interest plus 23.88% indirectly.


F-13

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 1.Corporate information –Continued f)     Acquisition of interest in Nova Pontocom – Continued The aforementioned transactions were classified as “capital transaction” and their effects were recorded directly in equity attributable to owners of the parent, in the total amount of (R$73,265), and under non-controlling interest, in the amount of R$23,617. On this same date, a new shareholders’ agreement of Nova Pontocom was signed, which stablished new corporate governance rules. g)   Bartira transaction Until October 31, 2013, the subsidiary Via Varejo held a 25% direct interest in Bartira, a joint operation (as defined by IFRS 11),  with Casas Bahia,  (remaining 75%) through an Association Agreement which established the joint control over this entity’s operating activities. The Company had recorded the interest on Bartira using the proportional consolidation method. In the Company’s financial statements,  the Company consolidated proportionally each asset, liability, revenues and expenses related in the financial statements of the joint operation. The financial statements of Bartira were prepared for the same period and under the same accounting policies adopted by the Company.   As per the Association Agreement,, the subsidiary Via Varejo exercised its option to acquire the remaining 75% of interest in Bartira, as described in Note 15 (b).   The main lines of Bartira’s condensed financial statements are shown below for 2012 and until October 31, 2013, date when Bartira’s classification changed from joint operation to subsidiary.  10.31.2013

   12.31.2012100%

   100%Income:Net sales and/or services

   450,919

   464,048Profit (losses) before income and social contribution taxes

   (40,828)

   5,516Net (loss) income

   (30,987)

   68Current assets

   79,525

   157,196Noncurrent assets

   92,465

   73,244Total assets

   171,990

   230,440Current liabilities

   91,097

   111,500Noncurrent liabilities

   9,451

   16,440Shareholders’ equity

   71,442

   102,500Total liabilities and Shareholders’ Equity

   171,990

   230,440


F-14

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 2.Basis of preparation The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the “International Accounting Standards Board (“IASB”). The financial statements have been prepared on the historical cost basis except for certain financial instruments measured at their fair value. The consolidated financial statements are presented in Brazilian Reais, which is the functional and reporting currency of the Company and its subsidiaries.  The consolidated financial statements for the year ended December 31, 2013 were approved by the Board of Directors at April 24, 2014.  Management reclassified the balances of receivables from commercial agreements with suppliers (bonuses), whose contract allows for compensation of the receivables with the balance to be paid to their suppliers. This change aims to present such receivables consistently with its realization. The following balances at December 31, 2012 and January 1, 2012, were reclassified:   Previously reported balance

   Commercial agreements reclassification

   Reclassified balanceBalance at 2012Assets:Accounts receivable

   

   3,208,963

   (562,884)

   2,646,079Liabilities:Suppliers

   

   6,803,240

   (562,884)

   6,240,356
   Previously reported balance

   Commercial agreements reclassification

   Reclassified balanceBalance at January 1, 2012Assets:Accounts receivable

   

   5,437,500

   (325,558)

   5,111,942Liabilities:Suppliers

   

   6,278,757

   (325,558)

   5,953,199
  The impact in the cash flow statement is limited to a reclassification between lines of the operating activities.


F-15

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 3.     Basis for consolidation a)   Interest in subsidiaries, associated companies and joint operations: Investment interest - %2013

   2012Companies

   Company

   Indirect interest

   Company

   Indirect interestSubsidiariesNovasoc Comercial Ltda. (“Novasoc”)

   10.00

   -

   10.00

   -Sé Supermercados Ltda. (“Sé”)

   100.00

   -

   100.00

   -Sendas Distribuidora S.A. (“Sendas”)

   100.00

   -

   100.00

   -PA Publicidade Ltda. (“PA Publicidade”)

   100.00

   -

   100.00

   -Barcelona Comércio Varejista e Atacadista S.A. (“Barcelona”)

   82.75

   17.25

   82.75

   17.25CBD Holland B.V.

   100.00

   -

   100.00

   -CBD Panamá Trading Corp.

   -

   100.00

   -

   100.00Xantocarpa Participações Ltda. (“Xantocarpa”)

   -

   100.00

   -

   100.00Vedra Empreend. e Participações S.A.

   99.99

   0.01

   99.99

   0.01Bellamar Empreend. e Participações Ltda.

   100.00

   -

   100.00

   -Vancouver Empreend. e Participações Ltda.

   100.00

   -

   100.00

   -Bruxellas Empreend. e Participações S.A.

   99.99

   0.01

   99.99

   0.01Monte Tardeli Empreendimentos e Participações S.A.

   99.91

   0.09

   99.91

   0.09GPA Malls & Properties Gestão de Ativos e Serviços Imobiliários Ltda. (“GPA Malls”)

   100.00

   -

   100.00

   -GPA 2 Empreend. e Participações Ltda.

   99.99

   0.01

   99.99

   0.01GPA 4 Empreend. e Participações S.A.

   99.91

   0.09

   99.91

   0.09GPA 5 Empreend. e Participações S.A.

   99.91

   0.09

   99.91

   0.09GPA 6 Empreend. e Participações Ltda.

   99.99

   0.01

   99.99

   0.01ECQD Participações Ltda.

   100.00

   -

   100.00

   -API SPE Planej. e Desenv. de Empreend. Imobiliários Ltda.

   100.00

   -

   100.00

   -Posto Ciara Ltda.

   -

   100.00

   -

   100.00Auto Posto Império Ltda.

   -

   100.00

   -

   100.00Auto Posto Duque Salim Maluf Ltda.

   -

   100.00

   -

   100.00Auto Posto Duque Santo André Ltda.

   -

   100.00

   -

   100.00Auto Posto Duque Lapa Ltda.

   -

   100.00

   -

   100.00Duque Conveniências Ltda.

   -

   100.00

   -

   100.00Lake Niassa Empreend. e Participações Ltda.

   -

   43.35

   -

   52.41Via Varejo S.A.

   43.35

   -

   52.41

   -Indústria de Móveis Bartira Ltda. (“Bartira”)

   

   43.35

   -

   -Globex Administração e Serviços Ltda. (“GAS”)

   -

   43.35

   -

   52.41Nova Casa Bahia S.A. (“NCB”)

   -

   -

   -

   52.41Ponto Frio Adm. e Importação de Bens Ltda.

   -

   43.34

   -

   52.41Rio Expresso Com. Atacad. de Eletrodoméstico Ltda.

   -

   43.35

   -

   52.41Globex Adm. Consórcio Ltda.

   -

   43.35

   -

   52.41PontoCred Negócio de Varejo Ltda.

   -

   43.35

   -

   52.41Nova Extra Eletro Comercial Ltda.

   0.10

   43.31

   0.10

   52.36Nova Pontocom Comércio Eletrônico S.A. (“Nova Pontocom”)

   47.21

   23.88

   39.05

   31.11E-Hub Consult. Particip. e Com. S.A.

   -

   71.09

   -

   70.16Nova Experiência Pontocom S.A.

   -

   71.09

   -

   70.16Sabara S.A

   -

   43.35

   -

   52.41Casa Bahia Contact Center Ltda.

   -

   43.35

   -

   52.41Globex - Fundo de Investimentos em Direitos Creditórios (“Globex FIDC”)

   -

   -

   -

   52.41Associated companiesFinanceira Itaú CBD S.A. - Crédito. Financiamento e Investimento (“FIC”)

   -

   41.93

   -

   43.22Dunnhumby Brasil Cons. Ltda.

   -

   -

   2.00

   -Banco Investcred Unibanco S.A. (“BINV”)

   -

   21.67

   -

   26.21FIC Promotora de Vendas Ltda.

   -

   41.93

   -

   43.22Joint operationIndústria de Móveis Bartira Ltda. (“Bartira”)

   -

   -

   -

   13.10
 All interests were calculated considering the percentages held by the GPA or its subsidiaries. The consolidation not necessarily reflects these percentages, as some companies have shareholders’ agreement in which the Company has control and therefore allows the full consolidation, which is the case of Novasoc, discussed below.


F-16

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 3.Basis for consolidation–Continued b)   Subsidiaries The consolidated financial statements include the financial information of all subsidiaries over which the Company exercises control directly or indirectly. Subsidiaries are all entities over which the Company has the control. The Company controls an entity when it is exposed, or has rights to variable returns as a result of its involvement with the investee and when the returns of the investor due to their involvement has the potential to vary as a result of the performance of the investee. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control and they are excluded from consolidation, when applicable, considering the date in which control ceases. The financial statements of the subsidiaries are prepared on the same reporting date as those of the Company, using consistent accounting policies. All intragroup balances, including income and expenses, unrealized gains and losses and dividends resulting from intragroup transactions are fully eliminated in consolidation.. Gains or losses resulting from changes in equity interest in subsidiaries, not resulting in loss of control are directly recorded in equity. Losses are attributed to the non-controlling interest, even if it results in a deficit balance. The main subsidiaries included in the consolidation and the Company’s interests comprise: (i)Novasoc Although the Company’s interest in Novasoc represents 10% of its shares units, Novasoc is included in the consolidated financial statements, as the Company controls 99.98% of the Novasoc’s voting rights, pursuant to the shareholders’ agreement. Moreover, under the Novasoc shareholders’ agreement, the allocation of its profit does not require to be proportional to the interest held in the company, or, 99.98%. (ii)Via Varejo The Company holds 43.35% of Via Varejo’s total shares and holds 62.3% of Via Varejo’s voting shares, giving the control of this subsidiary and consolidating fully its financial statements. Via Varejo sells home applicances products, under the trade names “Pontofrio” and “Casas Bahia”. See Note 14 (a) (ii). At the Extraordinary Shareholders’ Meeting on January 2, 2013, the merger of the subsidiary NCB into its parent company Via Varejo was approved. With this merger, there no no impact on the consolidated financial statements. The merger of NCB into Via Varejo aims to streamline the organizational and corporate structure of the entities, thus, providing a reduction of administrative and operating expenditures. (iii)Sendas The Company holds 100.00% of the capital of Sendas, which operates in the Food retail   segment, mainly in the State of Rio de Janeiro.


F-17

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 3.Basis for consolidation–Continued b)   Subsidiaries - Continued (iv)GPA Malls GPA Malls manages and operates the Company’s real estate assets. (v)Nova Pontocom As described in Note 1 (f), on October 17, 2013, the Company increased its direct l investment in  Nova Pontocom, an e-commerce company that sells products of any type to final customers through the websites: www.extra.com.br, www.pontofrio.com.br, www.casasbahia.com.br, www.barateiro.com.br and www.partiuviagens.com.br. c)   Associated Companies - BINV and FIC Associated Companies are entities over which the Company has significant influence, but not control, over their activities. The investment is initially recognized at cost or fair value, according to each case, and results are recognized using the equity method.  The income statement reflects the Company ́s interest of the in the results of operations of the entity. Changes recognized directly in the equity of the associated company are recognized by the Company as its interest in those changes and discloses it in the statement of changes in equity, as appropriate.  Gains and losses resulting from transactions between the Company and its associated companiesare eliminated according to the Company ́s interest in the associated company.  The financial statements of the associates are prepared using the same reporting date as the Company and when necessary, adjustments are made to reflect consistency with  the Company ́s accounting policies.  After applying the equity method, the Company determines whether it is necessary to recognize an impairment loss related to the Company’s investment in associated companies. On each reporting date, the Company determines whether there is any evidence that its investments in associated companies will not be recoverable. If applicable, the Company calculates the impairment amount as the difference between the investment’s recoverable amount and its carrying amount and records this loss in the income statement for the year.  The Company’s investments in its associated companies FIC and BINV, both entities who finance sales directly to GPA and Via Varejo customers, result from an association between Banco Itaú Unibanco S.A. (“Itaú Unibanco”) with GPA and Via Varejo. These investments are accounted for under the equity method because these are entities over which the Company exercises significant influence, but not control, since the operation and financial decisions of FIC and BINV   reside with Itaú Unibanco. BINV is a non-operational entity.  The Company has significant influence in operating decisions of FIC through the Board of Directors of this entity.


F-18

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 3.Basis for consolidation–Continued c)   Associated Companies - BINV and FIC - Continued FIC’s summarized financial statements are as follows: 2013

   2012Income statement:Revenues

   895,101

   897,814Operating income

   157,764

   66,671Net income

   87,939

   39,268Current assets

   3,521,684

   3,384,723Noncurrent assets

   32,209

   43,171Total assets

   3,553,893

   3,427,894Current liabilities

   2,826,367

   2,768,570Noncurrent liabilities

   23,192

   18,710Shareholder’s Equity

   704,434

   640,614Total liabilities and Shareholder’s Equity

   3,553,893

   3,427,894
  For the purposes of calculating the investment, the investee’s equity should be deducted from the special goodwill reserve, which is the exclusive right of Itaú Unibanco. 4.     Significant accounting policies a)Financial instruments  Financial instruments are recognized on the trade date and recorded at fair value plus transaction costs directly attributable to their acquisition or issue. Their subsequent measurement occurs at the end of each reporting period according to the rules established for each category of financial assets and liabilities.  Note 20 include an analysis of the fair value of the financial instruments and provides additional details on their measurement.  (i)Financial assets  Initial recognition and measurement  The financial assets held by the Company and its subsidiaries within the scope of IAS 39 are classified according the purpose for which they were acquired or contracted within the following categories: (i) assets measured at fair value through profit or loss; (ii) loans and receivables, and (iii) investments held to maturity. The Company determines the classification of their financial assets at inception.  Financial assets are initially recognized at fair value, and transaction costs are expensed in the income statement. Loans and receivables are accounted for at amortized cost.  Purchases or sales of financial assets that require the assets to be delivered within a time frame established by regulations or market conventions (negotiations under regular conditions) are recognized on the trade date, i.e., on the date that the Company commits to purchase or sell the asset.  The financial assets of the Company include cash and cash equivalents, trade accounts receivable, related-party receivables, restricted deposits for legal proceedings and derivative financial instruments.


F-19

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 4.    Significant accounting policies– Continued  a)Financial instruments– Continued (i)Financial assets– Continued  Subsequent measurement ·Financial assets measured at fair value through profit or loss: represent assets acquired for short-term realization purposes and are measured at fair value at the end of the reporting period. Interest rates, monetary restatement, exchange rate variation and variations arising from fair value measurements are recognized in the income statement for the year as financel income or expense, as incurred. ·Loans and receivables: represent non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, they are measured at amortized cost using the effective interest method. Interest income, monetary restatement, exchange rate variation, less any impairment loss, as applicable, are recognized in the income statement as finance income or expense, when incurred; and ·Held-to-maturity financial assets and liabilities:represent financial assets and liabilities that cannot be classified as loans and receivables (as they are quoted in an active market), and are acquired with the intent and ability to hold to maturity. They are stated at their acquisition cost plus income earned which is recorded as finance income or expense ofit or loss for the year using the effective interest rate method.  Derecognition of financial assets  A financial asset (or, as applicable, a part of a financial asset or a part of a group of similar financial assets) is derecognized when: ·Its right to receive cash flows has expired; or ·The Company has transferred their rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full to a third party under an onlending agreement; and (a) the Company has transferred substantially all the risks and rewards related to the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards related to the assets, but has transferred its control.  When the Company has transferred its rights to receive cash flows from an asset or has entered into an onlending agreement, and has neither transferred nor retained substantially all the risks and rewards related to the asset or transferred control of the asset, the asset is maintained and an associated liability is recognized. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations retained by the Company.  Impairment of financial assets  At the end of the reporting periods, the Company assess whether there is any indication of impairment of a financial asset or group of financial assets. The impairment of a financial asset or group of financial assets is only considered when there is objective evidence resulting from one or more events that have occurred after the asset’s initial recognition (“loss event”), and if said event affects the estimated future cash flows of the financial asset or group of financial assetsthat can be reliably estimated.The evidence of impairment may include indications that debtors (or group of debtors) are going through relevant financial constraints, moratorium or default in the amortization of interest or principal; likelihood that they will file for bankruptcy or another type of financial reorganization; and when this data indicates a measurable decrease in future cash flows, such as default interest variations or economic conditions related to default.


F-20

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 4.    Significant accounting policies– Continued  a)Financial instruments– Continued (i)Financial assets– Continued  Specifically in relation to financial assets held to maturity, the Company, firstly, verify whether there is objective evidence of impairment individually for financial assets that are individually significant, or collectively for assets that are not individually significant, Should the Company determine the nonexistence of objective evidence of impairment of a financial asset measured individually – whether or not this significant loss – the Company classifies it in a group of financial assets with similar credit risk characteristics which are evaluated collectively. The assets individually assessed as to impairment, or for which the impairment is (or continues to be) recognized, are not included in the collective assessment of the loss.  Impairment is measured as the difference between the carrying amount of an asset and the present value of the estimated future cash flows (excluding future credit losses that have not been incurred) discounted by the original effective interest rate of the financial asset. The asset’s carrying amount decreases through the use of a provision and the impairment loss is recognized in the income statement, Interest revenue is recorded in the financial statements as part of finance income, In the case of loans or investments held to maturity with a variable interest rate, the Company measures the non-recovery based on the fair value of the instrument adopting an observable market price.  If, in a subsequent period, impairment decreases and this reduction can be objectively associated with an event that has occurred after the recognition of the provision (such as an improvement in a debtor’s credit rating), the reversal of the previously recognized impairment loss is recognized in the income statement, If a write-off is later recovered, this recovery is also recognized in the income statement.  (ii)Financial liabilities  The financial liabilities under the scope of IAS 39 are classified as loans, borrowings or derivative financial instruments designated as hedge instruments in an effective hedge relationship, as applicable. The Company defines the classification of its financial liabilities at initial recognition.  All financial liabilities are initially recognized at fair value and, in the case of loans and borrowings, plus directly attributable transaction costs.  The Company’s financial liabilities include loans and financing, debentures and derivative financial instruments.  Subsequent measurement  After initial recognition, interest-bearing loans and financings are subsequently measured at amortized cost using the effective interest rate method. Gains and losses are recognized in the income statement for the year when the liabilities are written off, or through amortization according to the effective interest rate method.  Derecognition of financial liabilities  A financial liability is derecognized when the underlying obligation is settled, cancelled or expired.


F-21

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 4.    Significant accounting policies– Continued  a)Financial instruments– Continued  (ii)Financial liabilities– Continued  When an existing financial liability is replaced by another from the same lender, on substantially different terms, or the terms of an existing liability are substantially modified, this replacement or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in income.  Offsetting of financial instruments  Financial assets and liabilities are offset and stated net in the financial statements only if there is a currently enforceable legal right to offset the recognized amounts and there is an intention of settling them on a net basis or realizing the assets and settling the liabilities simultaneously.  b)Foreign currency transactions  Foreign currency transactions are initially recognized at market value of the corresponding currencies on the date the transaction is qualified for recognition.  Monetary assets and liabilities denominated in foreign currencies are translated to the Real according to the market price at the end of the reporting periods. Differences arising on payment or translation of monetary items are recognized as financial income or expense.  c)Hedge accounting  The Company uses derivative financial instruments such as interest rate and exchange rate swaps. These derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value at the end of each reporting period. Derivatives are accounted for as financial assets when their fair value is positive and as financial liabilities when their fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are directly recorded in the income statement.  At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which it wishes to apply hedge accounting and its objective and risk management strategy for contracting the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the Company will assess the effectiveness of the changes in the hedging instrument’s fair value in offsetting the exposure to changes in the fair value of the hedged item or cash flow attributable to the hedged risk. These hedges are expected to be highly effective in offsetting changes in the fair value or cash flow and are assessed on an ongoing basis to determine if they actually have been highly effective throughout the periods for which they were designated.  For the purposes of hedge accounting, these are classified as fair value hedges when hedging the exposure to changes in the fair value of a recognized asset or liability.  The following are recognized as fair value hedges, in accordance with the procedures below:  ·The change in the fair value of a derivative financial instrument classified as interest rate hedging is recognized as financial result. The change in the fair value of the hedged item is recorded as a part of the carrying amount of the hedged item and is recognized in the income statement;


F-22

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 4.    Significant accounting policies– Continued  c)Hedge accounting- Continued  ·For fair value hedges relating to items accounted for at amortized cost, the adjustment to the carrying amount is amortized in profit or loss over the remaining term to maturity. Effective interest rate amortization may begin as soon as an adjustment exists and shall begin no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the hedged risk;  ·If the hedge item is derecognized, the unamortized fair value is immediately recognized in profit or loss; and  ·In order to calculate the fair value, debts and swaps are measured through rates disclosed in the financial market and projected up to their maturity date. The discount rate used in the calculation by the interpolation method for borrowings loans denominated in foreign currency is arrived at through DDI curves, clean coupon and DI x Yen, indices disclosed by the BM&FBovespa (the Brazilian Securities, Commodities and Futures Exchange), whereas for loans denominated in reais, the Company uses the DI curve, an index published by the CETIP and calculated through the exponential interpolation method.  d)Cash and cash equivalents  Cash and cash equivalents consist of cash, bank  accounts and highly liquid short-term investments that are readily convertible into a known cash amount, and are subject to an insignificant risk of change in value, with intention and possibility to be redeemed in the short term, up to 90 days.  e)Trade accounts receivable  Trade receivables are stated and maintained in the balance sheet at their nominal sales amounts less an allowance for doubtful accounts, which is recorded based on historical loss experience and  risk analysis of the entire customer portfolio and the respective likelihood of collection.  Trade accounts receivables refers to non-derivative financial assets with fixed payments or which may be calculated, without quotation in an active market. After the initial measurement, these financial assets are subsequently measured at amortized cost according to the effective interest method (“EIM”), less impairment. The amortized cost is calculated taking into account eventual discounts or premiums over the acquisition and tariffs or costs comprising the EIM.The EIM amortization is included in net finance income (costs) in the income statement. Impairment expenses are recognized in the income statement.  At the end of each reporting period, the Company assesses if the financial assets or group of financial assets are impaired.  Impairment of receivables are based on historical rates observed in the last 24 months, besides observation of economic events like unemployment rates, consumer trends and past due receivables in the portfolio.  Receivables are considered uncollectable, therefore, written off definitely after 180 days past due.


F-23

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 4.    Significant accounting policies– Continued  f)Inventories  Inventories are accounted for at cost or net realizable value, whichever is lower. Inventories purchased are recorded at average cost, including warehouse and handling costs, to the extent these costs are necessary to make inventories available for sale in the stores, less bonuses received from suppliers.  Net realizable value is the selling price in the ordinary course of business, less the estimated costs necessary to make the sale.  Inventories are reduced by an allowance for losses and breakage, which is periodically reviewed and evaluated as to it is adequacy.  g)Supplier Bonuses  Bonuses received from suppliers are measured and recognized based on contracts and agreements signed, and recorded in income insofar as the corresponding inventories are sold, and include purchase volume agreement, logistics services and specific negotiations to recompose margin or marketing agreements, among others, and are deducted from payables to the respective suppliers, once the Company is contractually entitled to settle trade payables net of amounts receivable by way of bonus (note 2).  h)Present value adjustment of assets and liabilities  Current monetary assets and liabilities, when relevant, and long-term assets and liabilities are adjusted to their present value. The present value adjustment is calculated taking into account contractual cash flows and the respective explicit or implied interest rates.  Interest rates embedded in revenue, expenses and costs associated with said assets and liabilities are adjusted for appropriate recognition in conformity with the accrual basis of accounting. The present value adjustment is recorded in those items, against the financial result.   i)Impairment of non-financial assets  Impairment testing is designedso that the Company can present the net realizable value of an asset. This amount may be realized directly or indirectly, respectively, through the sale of the asset or the cash generated by the use of the asset in the Company.  The Company tests its tangible or intangible assets for impairment annually or whenever there is internal or external evidence that they may be impaired.  An asset’s recoverable amount is defined as the asset’s fair value or the value in use of its cash generating unit (CGU), whichever is higher, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.


F-24

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 4.    Significant accounting policies– Continued  i)Impairment of non-financial assets– Continued  If the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and an allowance for impairment is recorded to adjust its carrying amount to its recoverable amount, In assessing the recoverable amount, the estimated future cash flows are discounted to present value using a pre-tax discount rate that represents the Company’s weighted average cost of capital (“WACC”), reflecting current market assessments of the time value of money and the risks specific to the asset.  Impairment losses are recognized in profit or loss for the year in expense categories consistent with the function of the respective impaired asset. Previously recognized impairment losses are only reversed in case of change in the assumptions used to determine the asset’s recoverable amount at its initial or most recent recognition, except for goodwill, which cannot be reversed.  j)Property and equipment  Property and equipment is stated at cost, net of accumulated depreciation and/or impairment losses, if any.This cost includes the cost of acquisition of equipment and financing costs for long-term construction projects, if the recognition criteria are met. When significant components of property and equipment are replaced, they are recognized as individual assets with specific useful lives and depreciation. Likewise, when a major replacement is performed, its cost is recognized at the carrying amount of the equipment as a replacement, if the recognition criteria are met. All other repair and maintenance costs are recognized in profit or loss for the year as incurred.   Asset category

   Average annual depreciation rateBuildings

   2.50%Improvements

   4.43%Data processing equipment

   20.14%Software

   12.78%Facilities

   8.04%Furniture and fixtures

   9.92%Vehicles

   23.81%Machinery and equipment

   9.30%Decoration

   20.00%
  Property and equipment items and eventual significant parts are written off when sold or when no future economic benefits are expected from its use or sale. Any aventual gains or losses arising from the write off of the assets are included in profit or loss for the year.  The residual value, the useful life of assets and the depreciation methods are reviewed at the end of each financial year end and adjusted prospectively, if applicable. The Company reviewed the useful lives of fixed and intangible assets in fiscal year 2013 with no significant changes.  k)Capitalization of interest  Interest on loans directly attributable to the acquisition, construction or production of an asset that requires a substantial period of time to be prepared for its intended use or sale (qualifying asset) are capitalized as part of the cost of the respective assets during its construction phase. From the date that the asset is placed in operation, capitalized costs are depreciated over the estimated useful life of the asset.


F-25

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 4.    Significant accounting policies– Continued  l)Intangible assets  Intangible assets acquired separately are measured at cost at initial recognition, less amortization and eventual impairment losses. Internally generated intangible assets, excluding capitalized software development costs, are reflected in the income statement in which they were incurred.  Intangible assets consist mainly of software acquired from third parties, software developed for internal use, commercial rights (stores’ rights of use), customer lists, advantageous lease agreements, advantageous furniture supply agreements and brands.  Intangible assets with definite useful lives are amortized by the straight-line method. The amortization period and method are reviewed, at least, at the end of each year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting assumptions.  Software development costs recognized as assets are amortized over their 10-year definite useful lives.  Intangible assets with indefinite useful lives are not amortized, but tested for recovery at the end of each year or whenever there are indications that their carrying value may be impaired either individually or at the level of the cash generating unit. The assessment is reviewed annually to determine whether the indefinite life assumption remains valid. Otherwise, the useful life is changed prospectively from indefinite to definite.  Where applicable, gains or losses arising from the derecognition of an intangible asset are measured as the difference between the net proceeds from the sale of the asset and its carrying amount, any gain or loss being recognized in the income statement in the year when the asset is derecognized.  m)Classification of assets and liabilities as current and noncurrent  Assets (except for deferred income and social contribution taxes) that are expected to be realized in or are intended for sale or consumption within twelve months as of the end of the reporting periods are classified as current assets. Liabilities (except for deferred income and social contribution taxes) that are expected to be settled within twelve months as of the end of the reporting periods are classified as current, All other assets and liabilities (including deferred tax assets and liabilities) are classified as “noncurrent”.  The deferred tax assets and liabilities are classified as “noncurrent”, net by entity, according to the related accounting standard.  n)Leases  The definition of an agreement as lease is based on its initial date, i.e., if compliance with the arrangement depends on the use of a specific asset or assets or the arrangement transfers the right to use the asset.


F-26

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 4.    Significant accounting policies– Continued  n)Leases-Continued  Company as a lessee  Financial lease agreements, which transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the commencement of the lease at the fair value of the leased property or at the present value of the minimum lease payments, whichever is lower. Lease payments are allocated between financial charges and reduction of lease liabilities so as to achieve a constant interest rate in the remaining balance of liabilities. Financial charges are recognized as an expense in the year.  Leased assets are depreciated over their useful lives. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over its estimated useful life or the lease term, whichever is shorter. The leasehold improvements and rebuildings also follow the some rule.  Lease agreements are classified as operating leases when there is no transfer of risk and benefits incidental to ownership of the leased item.  The installment payments of leases (excluding service costs, such as insurance and maintenance) classified as operating lease agreements are recognized as expenses, on straight-line basis, during the lease term.  Contingent rentals are recognized as expenses in the years they are incurred.  Company as a lessor  Lease agreements where the Company does not transfer substantially all the risks and benefits incidental to ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized over the agreement term on the same basis as rental income.  Contingent rentals are recognized as revenue in the years in which they are earned.  o)Provisions  Provisions are recognized when the Company has a present obligation (legal or not formalized) as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and the obligation can be reliably estimated. Where the Company and its subsidiaries expect a provision to be fully or partially reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to the eventual provision is recognized in profit or loss for the year, net of any reimbursement. In cases of attorney’s fees in favorable court decisions, the Company’s policy is to make a provision when fees are incurred, i.e., upon final judgment on lawsuits, as well as disclose in notes the percentages and amounts involved in lawsuits in progress. p)Dividend distribution  Dividend distribution to the Company’s shareholders is recognized as a liability at the year-end, based on the minimum mandatory dividends established by the Bylaws. Exceeding amounts are only recorded at the date on which said additional dividends are approved by the Company’s shareholders.


F-27

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 4.    Significant accounting policies– Continued  q)Deferred Revenue  The Company records deferred revenue related to amounts received from business partners for the exclusivity intermediation services of additional or extended warranties, recognized in income by evidence of the service rendered in the sale of these warranties jointly with the business partners.  r)     Equity  Common and preferred shares are classified as equity.  When any related party purchases shares of the Company’s equity share capital (treasury shares), the remuneration paid, including any directly attributable incremental costs, is deducted from equity,and are recorded as treasury shares until the shares are cancelled or reissued. When these shares are subsequently reissued, any remuneration received, net of any directly attributable incremental transaction costs, is included in equity. No gain or loss is recognized on the purchase, sale, issue or cancellation of the Company’s own equity instruments. Any difference between the carrying amount and the remuneration is recognized in other capital reserves.  s)Share-based payment  Employees (including senior executives) receive compensation in the form of share-based payment, whereby employees render services in exchange for equity instruments (“equity-settled transactions”).  Equity-settled transactions  The cost of equity-settled transactions is recognized as an expense in the year, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are met. Cumulative expenses recognized for equity instruments at each reporting date until the vesting date reflect the extent to which the vesting period has expired and the Company’s best estimate of the number of equity instruments that will ultimately vest.  Each year’s expenses or income represent the change in the cumulative expenses recognized at the beginning and the end of that year. No expense is recognized for services that will not complete the vesting period, except for equity-settled transactions where vesting is conditional upon a market or non-vesting condition, which are treated as vested irrespective of whether or not the market or non-vesting condition is met, provided that all other performance and/or service conditions are met.  Where an equity instrument is modified, the minimum expense recognized is the expense that would have been incurred if the terms had not been modified, An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction or is otherwise beneficial to the employee, as measured at the date of modification.  When an equity instrument is cancelled, it is treated as fully vested on the date of cancellation, and any expense not yet recognized related to the premium are immediately recognized in profit or loss for the year, This includes any premium whose non-vesting conditions within the control of either the Company or the employee are not met. However, if the cancelled plan is replaced by another plan and designated as a replacement grants on the date that it is granted, the cancelled grant and the new plan are treated as if they were a modification of the original grant, as described in the previous paragraph. All cancellations of equity-settled transactions are treated equally.  The dilutive effect of outstanding options is reflected as an additional share dilution in the calculation of diluted earnings per share (See Note 32).


F-28

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 4.    Significant accounting policies– Continued  t)Earnings per share  Basic earnings per share are calculated based on the weighted average number of outstanding shares of each category during the year, and treasury shares.  Diluted earnings per share are calculated as follows:  ·numerator: profit for the year; and ·denominator: the number of shares of each category adjusted to include potential shares corresponding to dilutive instruments (stock options), less the number of shares that could be bought back at market, if applicable.  Equity instruments that will or may be settled in Company’s shares are only included in the calculation when said settlement has a dilutive impact on earnings per share.  u)Determination of net income  Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company, and it can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, and sales taxes or duty.  The Company assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. The Company has concluded that it is acting as a principal in all of its revenue arrangements, except for those referring to extended warranties and insurance policy brokerage. Specifically in these cases, the Company operates as an agent, and revenue is recognized on a net basis, which reflects the commission received from insurance companies, The following specific recognition criteria must also be met before revenue is recognized:  (i)Revenue  a)Sale of goods  Revenue from sale of goods are recognized at their fair value and, when all the risks and benefits inherent to said good are transferred to the buyer, the Company and its subsidiaries cease to hold control or responsibility for the goods sold and the economic benefits generated to the Company and its subsidiaries are probable. No revenue is recognized if their realization is uncertain.  b)Service revenue  Due to the Company's action as  agent in insurance extended warranty, financial protection insurance, personal accident insurance, sales agent in technical assistance and mobile phone recharge, revenues earned are presented net of related costs and recognized in profit or loss when probable that the economic benefits will flow to the Company and their values can be measured reliably.   c)Finance service revenue  As the activity of customer financing is an important part of the Company’s business, for all financial instruments measured at amortized cost, revenue is recorded using the effective interest rate, which discounts exactly the estimated future cash receipts through the expected life of the financial instrument, or a shorter period of time, where applicable, to the net carrying amount of the asset, Interest income is included under financial services, composing the Company's gross profit in the income statement.


F-29

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 4.    Significant accounting policies– Continued  u)Determination of net income– Continued  (i) Revenue -Continued  d)Interest income  For all financial instruments measured at amortized cost, interest income is recorded using the effective interest rate, which is the rate that discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability, Interest income is included in the financial result in the income statement for the year.  e)Barter revenue  Revenues are recognized: (i) at the time of conclusion of the swap of land owned by GPA Malls at the fair value of the consideration received on the barter date, (ii) upon delivery of the units sold by GPA Malls. The cost of the units sold comprises the fair value of the initially recognized barter.  f)Returns and cancellations  Returns and cancellations are recognized when incurred.   (ii)Cost of goods sold  The cost of goods sold comprises the cost of purchases net discounts and bonuses received from vendors, changes in inventories and logistics costs.  Bonuses received from suppliers are measured based on contracts and agreements signed with them.  The cost of sales includes the cost of logistics operations managed or outsourced by the Company, comprising warehousing, handling and freight costs incurred until the goods are available for sale. Transport costs are included in the acquisition costs.  (iii)Selling expenses  Selling expenses comprise all store expenses, such as salaries, marketing, occupancy, maintenance, expenses with credit card companies, etc.  Marketing expenses refer to advertising campaigns for each segment in which the Company operates. The main media used by the Company are: radio, television, newspapers and magazines. These expenses are recognized in profit or loss for the year at the time of realization, net of amounts received from suppliers joining the campaigns.  (iv)General and administrative expenses  General and administrative expenses correspond to overhead and the cost of corporate units, including the purchasing and procurement, IT and financial areas.  (v)Other operating expenses, net  Other operating income and expenses correspond to the effects of major events occurring during the year that do not meet the definition for the other income statement lines.


F-30

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 4.    Significant accounting policies– Continued  u)Determination of net income– Continued  (vi)Financial result  Financial expenses include substantially all expenses generated by net debt and receivables sade during the year, offset by capitalized interest, losses related to the measurement of derivatives at fair value, losses on disposals of financial assets, financial charges on lawsuits and taxes and interest charges on financial leases, as well as discount charges.  Financial income includes income generated by cash and cash equivalents and restricted deposits, gains related to the measurement of derivatives at fair value.  v)Taxation  Current income and social contribution taxes  Current income and social contribution tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from or paid to the tax authorities. The tax rates and tax laws used to calculate taxes are those in force or substantially in force at the end of the balance sheet dates.  Income taxes comprise Corporate Income Tax (“IRPJ”) and Social Contribution on Net Income (“CSLL”), calculated based on taxable income (adjusted income), at the applicable rates set forth in the legislation in force: 15% on taxable income plus a 10% surtax on annual taxable income exceeding R$240 for IRPJ, and 9% for CSLL.  Defered income and social contribution taxes  Deferred income and social contribution taxes are generated by temporary differences at the end of the reporting periods between the tax basis of assets and liabilities and their carrying amounts.  Deferred income tax and social contribution tax assets are recognized for all deductible temporary differences and unused tax loss carryforwards to the extent that it is probable that taxable income will be available against which to deduct temporary differences and unused tax loss carryforwards, except where the deferred income and social contribution tax assets relating to the deductible temporary difference arise from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting profit nor tax income or losses.  Deferred income and social contribution tax liabilities are recognized for all temporary taxable differences, except when the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in an transaction other than a business combination and which, at the time of the transaction, affects neither accounting profit nor tax losses,  With respect to deductible temporary differences associated with investments in subsidiaries and associates, deferred income and social contribution taxes are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable income will be available against which the temporary differences can be utilized,  The carrying amount of deferred income and social contribution tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred income and social contribution taxes to be utilized. Unrecognized deferred income and social contribution tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that future taxable income will allow these assets to be recovered.


F-31

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 4.    Significant accounting policies– Continued  v)Taxation– Continued  Deferred income and social contribution tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) in effect or substantively in effect at the end of the reporting period.  Deferred taxes related to items directly recognized in equity are also recognized in equity and not in the income statement.  Deferred income and social contribution tax assets and liabilities are offset if there is a legal or contractual right to offset tax assets against income tax liabilities, and the deferred taxes refer to the same taxpayer entity and to the same tax authority.  Other taxes  Revenue from sales of goods and services are subject to taxation by State Value-Added Tax (“ICMS”) and Services Tax (“ISS”), calculated based on the rates applicable to each region, as well as contribution for the Social Integration Program (“PIS”) and contribution for Social Security Financing (“COFINS”), and are presented net of sales revenue.  Revenue and expenses are recognized net of taxes, except where the sales tax incurred on the purchase of assets or services is not recoverable from the tax authority, in which case the sales tax is recognized as part of the cost of acquisition of the asset or as part of the expense item, as applicable.  w)Business combinations and goodwill  Business combinations are recorded using the acquisition method. The cost of an acquisition is measured as the sum between the consideration transferred, measured at fair value on the acquisition date, and the remaining amount of non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree at fair value or through the proportional interest in the acquiree identifiable net assets. The acquisition costs incurred are treated as an expense and included in administrative expenses.  When the Company acquires a business, it assesses its financial assets and liabilities in order to appropriately classify and designate them in accordance with contractual terms, economic circumstances and relevant conditions on the acquisition date. This includes the separation of derivatives embedded in agreements by the acquiree.  If the business combination occurs in phases, the fair value on the acquisition date of the interest previously held by the acquirer in acquiree is adjusted to fair value on the acquisition date through profit or loss.  Any contingent payment to be transferred by the acquirer will be recognized at fair value on the acquisition date, Subsequent changes in the fair value of the contingent payment considered as an asset or liability will be recognized through profit or loss or as a change in other comprehensive income.  Goodwill is initially measured at cost and is the excess between the consideration transferred and the non-controlling interest in assets and assumed liabilities, If this payment is lower than the fair value of the acquiree’s net assets, the difference is recognized in profit or loss as bargain purchase gain.


F-32

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 4.    Significant accounting policies– Continued  w)Business combinations and goodwill- Continued  After initial recognition, goodwill is measured at cost, less any impairment losses. For impairment testing purposes, the goodwill acquired in a business combination is, as of the acquisition date, allocated to the operating segment level that will benefit from the business combination, regardless of whether other assets or liabilities of the acquire will be assigned to these units.  When goodwill is part of a cash generating unit and part of the operation at this unit is sold, the goodwill related to the sold operation is included in the book amount of the operation when calculating profit or loss from the sale of the operation. This goodwill is then measured based on the relative amounts of the sold operation and part of the cash generating unit which was maintained.  x)Pension plan  The pension plan is funded through payments to insurance companies, which are classified as a defined contribution plan according to IAS 19. A defined contribution plan is a pension plan whereby the Company pays fixed contributions to a separate legal entity. The Company has no legal or constructive obligation to pay additional contributions in relation to the plan’s assets.  y)Customer loyalty programs  These are used by the Company to provide incentives to its customers in the sale of products or services. If customers buy products or services, the Company grants them credits. Customers may redeem the credits free of charge as a discount in the amount of products or services, in next purchases.  The Company estimates the fair value of the points granted according to the “Programa Mais” customer loyalty plan, by applying statistical techniques, considering the two-year expiration of the plan defined in the regulations,the percentages of points conversion, and the cost of conversion, which starts by converting 3,000 points into twenty reais (R$20.00) in products.  The Company recognizes the points initially granted and the reversal of points expired under net sales.


F-33

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 5.    Adoption of new standards, amendments to and interpretations of existing standards issued by the IASB and standards issued but not yet effective  Adoption of new standards, amendments and interpretations of pronouncements issued by the IASB  The following new standards, changes and interpretations of pronouncements, applicable to the Company were issued by the IASB and will enter into effect as of January 1, 2013.  ·IFRS 10: Consolidated Financial Statements–  IFRS 10 replaced SIC 12 and IAS 27 and includes a new definition of control that applies to the financial statements when one entity controls one or more entities. The Company evaluated if the conclusion on the consolidation of its subsidiaries under IFRS 10 is different from the one adopted by the Company on January 1, 2012 and December 31, 2012, pursuant to IAS 27 and SIC 12. The Company concluded that the adoption of IFRS 10 does not change the consolidation of its subsidiaries and, therefore, does not impact the financial statements for the fiscal year ended December 31, 2013. ·IFRS 11: Joint Arrangements –IFRS 11 replaced SIC 13 and IAS 31 and applies to the jointly controlled businesses and contracts. In accordance with this standard, businesses and contracts controlled jointly with other shareholders are classified as joint arrangements. The accounting treatment will depend on the classification of the joint arrangements and may be recognized under the equity method (joint ventures) or through the consolidation of its interest in the assets, liabilities, revenue and expenses contributed to the joint operation (joint operation). The Company evaluated if the conclusion on the accounting treatment of its joint arrangements under IFRS 11 is different from the one adopted by the Company on January 1, 2012 and December 31, 2012, pursuant to IAS 31 and SIC 13. Under IRFS 11, joint arrangements recognition follows the same accounting treatment adopted for the consolidated financial statements for the fiscal year ended December 31, 2012. The adoption of IFRS 11 has no impact on the financial statements for the fiscal year ended December 31, 2013. ·IFRS 12: Disclosure of Interests in Other Entities– IFRS 12 deals with the disclosure of interests in other entities, whose purpose is to inform users of the risks, nature and effects of these interests on the financial statements. The disclosures requirements are implemented. ·IFRS 13: Fair Value Measurement– IFRS 13 applies when other IFRS pronouncements require or permit fair value measurements or disclosures (and measurements, such as fair value less costs to sell, based on fair value or disclosures about those measurements). The disclosures requirements are implemented.  There are no other standards and interpretations issued and in effect that have a significant impact on the profit/loss or equity disclosed by the Company.  Standards issued but not yet effective  The Company has not adopted the following new and revised IFRSs that have been issued and are not yet in effect:


F-34

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 5.    Adoption of new standards, amendments and interpretations to existing standards issued by the IASB and standards issued but not yet effective -Continued  ·IFRS 9 – Financial Instruments - Classification and Measurement– introduces new requirements for the classification and measurement of financial assets and financial liabilities. IFRS 9 uses a simple approach to determine if a financial asset is measured at amortized cost or fair value, based on the way an entity manages its financial instruments (its business model) and the characteristic contractual cash flow of the financial assets. The standard also requires the adoption of only one method to determine asset impairment losses and the recognition of the change in the fair value of financial liabilities attributable to changes in the credit risk of these liabilities under “Other comprehensive income”, pursuant to certain criteria. This standard will be in effect for the fiscal years beginning as of January 1, 2015, and the Company will carry out a detailed review of its financial liabilities recorded at fair value to assess the effects of this adoption. ·Amendments toIAS 32 – Financial Instruments – Presentation– it adds guidance on the offset between financial assets and financial liabilities, whose amendments will take effect in the fiscal years beginning on or after January 1, 2014, and the Company does not expect any significant impact as a result of their adoption. The IASB has issued clarifications and amendments to standards and interpretations of IFRS. Below we describe the main changes, which are not yet effective: ·Changes toIFRS 10, IFRS 12 and IAS 27– these define an investment entity and require that the reporting entity classified as an investment entity does not consolidate its subsidiaries, but, instead, measures its subsidiaries at fair value through profit or loss in its separate and consolidated financial statements, in addition to reporting requirements. This change will enter into effect for the fiscal years beginning on or after January 2014 and the Company does not expect any impacts as a result of its adoption. ·IAS 36 – Impairment of Assets– adds guidance on the disclosure of the recoverable amounts of non-financial assets, whose change will enter into effect for the fiscal years beginning on or after January 2014, and the Company is assessing the impacts its adoption will have on disclosure. ·IAS 39 – Financial Instruments: Recognition and Measurement– adds guidance clarifying that there is no need to discontinue hedge accounting if the derivative instrument is renewed, provided that certain criteria are met. This change will enter into effect for the fiscal years beginning on or after January 2014 and the Company does not expect any significant impacts as a result of its adoption. ·IFRIC 21 - Levies– provides guidance on when a liability arising from fees imposed by the government should be recognized, in effect as of January 1, 2014, and the Company is assessing the impacts of its adoption on disclosure. There are no other standards and interpretations issued and not yet in effect, which, according to Management, may have a significant impact on the financial statements.


F-35

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 6.    Significant accounting judgments, estimates and assumptions Judgments, estimates and assumptions The preparation of the consolidated financial statements requires Management to make judgments, estimates and assumptions that impact the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the year; however, uncertainty about these assumptions and estimates could result in outcomes that require material adjustments to the carrying amount of the asset or liability impacted in future years, In the process of applying the Company’s accounting policies, Management has made the following judgments, which have the most significant impact on the amounts recognized in the parent company and consolidated financial statements:  a)Operational lease commitments – Company as a lessee  We have entered into commercial property leases as part of the operation. We consider  the lease as operational, based on the agreed terms and conditions, when do not retain all the significant risks and rewards of ownership of these properties.  b)Impairment  According to the method disclosed in note 4 (i), the Company performed test to verify that the assets might not be recoverable and the year ended December 31, 2013, based on those tests, there was no need for the provision.  The procedure for verification of non-recoverability of property and equipments, consisted in allocating operating assets and intangible assets (such as Commercial rights) directly attributable to the Cash Generanting Units – UGC (stores), The steps of the test were as follows:  ·Step 1: compared the carrying amount of CGUs with a multiple of sales (15% to 30%), representing transactions between Food Retail companies, For UGCs multiple-valued lower than the carrying amount, we come to a more detailed method, described in Step 2;  ·Step 2: we prepare the discounted cash flow of CGU, using sales growth between 6.6%  and 6.7% until the 5th year, and growth above inflation for the 6th year onwards, The discount rate used was 10.8%.  For the purposes of impairment test, goodwill acquired through business combinations and licenses with indefinite life was allocated to 4 cash generating units, which are also operating segments that disclose financial information, being Food Retail, Home Appliances, Cash and Carry and E-commerce. Segments’ recoverable value is calculated using the value in use based on estimated cash flows approved by senior management for the following three years. The discount rate before income tax on cash flow projections is 10.8% (10.8% on December 31, 2012), and the cash flows exceeding three years are extrapolated using a growth rate of 6.5% (6.7% on December 31, 2012). Based on this analysis, a provision for impairment was not necessary. The “Cash and Carry” refers to “ASSAI”, and the “home appliance” refers to brands “PONTO FRIO” and “CASAS BAHIA”. These brands were recorded due to the business combinations with companies that held right over them.


F-36

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 6.    Significant accounting judgments, estimates and assumptions -Continued Judgments, estimates and assumptions– Continued b)Impairment - Continued  The amount was tested for impairment based on the income approach methodology - relief from royalty, which consists of determining the asset value by measuring the fair value of future benefits. Given the brand’s indefinite useful life, we considered a perpetuity growth rate of 6.5% during the preparation of the discounted cash flow. The royalty rate used was 0.4% for “ASSAI” brand, 0.7% for “PONTO FRIO” and 0.9% for “CASAS BAHIA”.  c)Income taxes  Given the nature and complexity of the Company’s business, the differences between actual results and assumptions, or future changes to such assumptions, could result in future tax impacts to already recorded tax revenue and expenses. The Company records provisions, based on reasonable estimates, for the eventual consequences of audits by the tax authorities of the respective countries in which it operates. The amount of these provisions is based on various factors, such as previous tax audits and different interpretations of tax regulations by the taxpayer and the appropriate tax authority, Such differences in interpretation may refer to a wide range of issues, depending on the conditions prevailing in the respective entity's domicile.  Deferred income and social contribution tax assets are recognized for all unused tax loss loss carryforwards to the extent that it is probable that taxable income will be available against which to offset the tax credits. Significant Management judgment is required to determine the amount of deferred income and social contribution tax assets that can be recognized, based on income estimates and future taxable income, based on the annual business plan approved by the Board of Directors.  The Company had tax loss carryforwards amounting to a net tax benefit of R$793,633 recorded at December 31, 2013 (R$796,771 at December 31, 2012). These tax loss carryforwards do not expire; however, their use is limited by law to 30% of taxable income for each year. The amounts relate to the Company and its subsidiaries and consider its balances recoverable.  Further details on taxes are disclosed in Note 22.  d)Fair value of derivatives and other financial instruments  When the fair value of financial assets and liabilities recorded in the financial statements cannot be obtained in active markets, it is determined according to the hierarchy set by technical pronouncement, which establishes certain valuation techniques, including the discounted cash flow model. The data for these models are obtained, whenever possible, from observable markets or from information on comparable operations and transactions in the market. The judgments include the analyses of data, such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors may affect the reported fair value of financial instruments.  The fair value of financial instruments actively traded on organized markets is determined based on market quotes, at the end of the reporting periods, without deducting transaction costs. For financial instruments not actively traded, the fair value is based on valuation techniques defined by the Company and compatible with usual market practices. These techniques include the use of recent market arm’s length transactions, the benchmarking of the fair value of similar financial instruments, the analysis of discounted cash flows or other valuation models.


F-37

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 6.    Significant accounting judgments, estimates and assumptions -Continued Judgments, estimates and assumptions- Continued   e)Share-based payments  The Company measures the costs of transactions with employees eligible to share-based remuneration based on the fair value of the equity instruments on the grant date. Estimating the fair value of share-based payment transactions requires determining the most appropriate valuation model, which depends on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs for the valuation model, including the expected useful life of the stock options, volatility and dividend yield, as well as making assumptions about them. The assumptions and models used to estimate the fair value of share-based payment transactions are disclosed in Note 27 (f).  f)Provision for risks (lawsuits)  The Company is party to several judicial and administrative proceedings see note n° 24. Provisions for legal claims are recognized for all cases representing reasonably estimated probable losses. The assessment of the likelihood of loss takes into account available evidence, the hierarchy of laws, former court decisions and their legal significance, as well as the external legal counsel’s opinion.  g)    Provision for losses on accounts receivable  The subsidiary Via Varejo has in its accounts receivable the amount of installment sales to be received by individual customers, over which, the estimation of losses is made in accordance with the expected percentage of losses, obtained through the observation of the historical behavior of the portfolio, as well as, other economic circumstances.  h)    Tax recoverable  The Company and its subsidiaries have recoverable tax credits related to ICMS, ICMS from Tax Substitution, PIS and Cofins. The estimate of future recoverability of these tax credits is made based on the projections prepared by Management, operational issues and the consumption of the credits by the companies in GPA. Further details on recoverable tax credits and utilization are disclosed on Note 12.


F-38

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 7.   Cash and cash equivalents Rate (a)

   2013

   2012Cash on hand and bank accounts

   

   343,114

   490,616Financial investments:Itaú BBA

   100.9%

   778,881

   1,430,672Itaú – Delta Fund

   101.6%

   181,384

   1,831,692Banco do Brasil

   100.8%

   1,425,957

   1,376,813Bradesco

   101.0%

   2,051,130

   1,496,352Santander

   102.0%

   995,568

   62,692CEF

   101.0%

   732,424

   4,104Votorantim

   102.3%

   439,082

   5,850Safra

   101.7%

   645,197

   337,682Credit Agricole

   102.4%

   362,996

   -BNP

   101.1%

   279,469

   -Other

   (b)

   131,974

   49,7788,367,176

   7,086,251
 (a)Financial investments at December 31, 2013 and 2012 earn interest at the Interbank Deposit Certificate (“CDI”) and are redeemable in terms of less than 90 days. (b)Refer to automatic bank account investments at the end of each month.


F-39

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 8.Trade accounts receivable 2013

   2012

   01.01.2012Credit card companies (a)

   276,262

   421,384

   454,648Sales vouchers

   148,101

   181,253

   176,917Consumer finance - CDCI (b)

   2,249,407

   2,078,439

   1,937,410Credit sales with post-dated checks

   3,018

   4,004

   4,010Accounts receivable from wholesale customers

   18,394

   30,016

   49,106Private label credit card

   13,539

   22,360

   19,214Account receivable FIDCs

   -

   -

   2,558,726Accounts receivable from related parties (Note 13 a)

   -

   -

   -Present value adjustment (c)

   (7,264)

   (5,488)

   (10,823)Allowance for doubtful accounts (d)

   (228,733)

   (189,492)

   (210,970)Accounts receivable from suppliers

   18,205

   8,663

   121,840Other

   24,737

   94,940

   11,864Current

   2,515,666

   2,646,079

   5,111,942Consumer finance – CDCI (b)

   125,219

   117,487

   117,783Allowance for doubtful accounts (d)

   (10,320)

   (8,988)

   (6,998)Noncurrent

   114,899

   108,499

   110,7852,630,565

   2,754,578

   5,222,727
  (a)    Credit card companies The Company and subsidiaries sell credit card receivables to banks or credit card companies without recourse or obligation related in order to strengthen their working capital. In view of the restructuring of receivables funds previously used for credit assignment of accounts receivable with credit cards, which are described in Note 9, in the year ended December 31, 2013, the Company and its subsidiaries sold its receivables from credit card issuers in the amount of R$29,698,080 (R$27,090,485 at December 31, 2012) to operators or banks directly, without any right of recourse or obligation related. The financial result impact of this transaction is included in note 31. (b)    Consumer finance– CDCI – Via Varejo It refers to direct consumer credit through an intervening party (CDCI), which can be paid in up to 24 installments, however, the most utilized term is substantially less than 12 months. Via Varejo maintains agreements with financial institutions where it is referred to as the intervening party of these operations (see Note 19).


F-40

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 8.    Trade accounts receivable -Continued (c)   Adjustment to present value The discount rate used by the subsidiary Via Varejo, operations tradename "Casas Bahia" considers current market valuations of the time value of money and the asset's specific risks. Credit sales with the same cash value were recorded at their present value on the transaction date, in view of their terms, adopting the monthly average rate of receivables anticipation with credit card companies, In the year ended December 31, 2013 these rates averaged 0.72% per month (0.72% per month at December 31, 2012). (d)    Allowance for doubtful accounts The allowance for doubtful accounts is based on average historical losses complemented by Company's estimates of probable future losses: 2013

   2012At the beginning of the year

   (198,480)

   (217,968)Allowance recorded

   (475,857)

   (324,462)Allowance write-off

   435,284

   343,950At the end of the year

   (239,053)

   (198,480)Current

   (228,733)

   (189,492)Noncurrent

   (10,320)

   (8,988)
 Below, the breakdown of consolidated accounts receivable by gross amount and maturity period: Past-due receivablesTotal

   Falling due

   <30 days

   30-60 days

   61-90 days

   >90 days2013

   2,869,618

   2,565,483

   162,755

   56,635

   36,265

   48,4802012

   2,953,058

   2,775,925

   91,796

   32,820

   21,823

   30,694
   9.    Receivables securitization fund  Due to changes in its policy of sales of receivables, the Company negotiated changes to its receivables funds. Accordingly, as GPA does not hold any interest in the current Multicredit FIDC and is not obliged to absorb any of the estimated risks of the fund assets, the Fund was excluded from consolidation on December 26, 2012. a)PAFIDC: There was a change in the bylaw of PAFIDC approved at the Quotaholders’ Meeting of December 21, 2012, in which the Company no longer has interest or obligation to the Fund, The Fund had its name changed to denominate Multicredit FIDC and no longer holds, exclusively, GPA receivables. Therefore, as GPA no longer has any interest in the current FIDC and has no obligation to absorb any of the expected risks of the fund's assets, the Fund ceased to be consolidated at December 26, 2012.


F-41

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 9.    Receivables securitization fund- Continued b)Globex FIDC: The operations of discounted receivables by credit card through the Globex FIDC were closed at December 14, 2012, in mutual agreement with the senior quotaholders. Thus, the senior quotas were paid to quotaholders by the fund and at December 31, 2012, remained in the fund balance of cash and obligations in counterpart to subordinated quotas that had been completely redeemed, thus completing the process of liquidation of the Fund during the first quarter of 2013. With this restructuring the Company and Via Varejo began carrying out the receivables sales, as described in Note 8 (a).   10.   Other accounts receivable  2013

   2012Accounts receivable related to sale of fixed assets

   55,320

   78,821Expenses reimbursements (b)

   20,556

   51,939Advances rentals

   41,616

   10,396Amounts to be reimbursed

   106,269

   93,100Accounts receivable – Audax

   13,028

   -Trade accounts receivable from services

   2,366

   5,127Rental receivable

   22,346

   17,630Accounts receivable - Paes Mendonça (a)

   514,615

   484,008Rede Duque (note 15)

   49,255

   -Other

   31,931

   26,849857,302

   767,870Current

   227,367

   211,473Noncurrent

   629,935

   556,397
  (a)   Accounts receivable - Paes Mendonça. Accounts receivable from Paes Mendonça relate to amounts deriving from the payment of third-party liabilities by the subsidiaries Xantocarpa, Novasoc and Sendas, Pursuant to contractual provisions, these accounts receivable are monetarily restated (General Market Price Index – IGP-M) and guaranteed by commercial lease rights (“Commercial rights”) of certain stores currently operated by the Company, Novasoc, Sendas and Xantocarpa, The maturity of the accounts receivable is linked to the lease agreements, which expire in 2014, and were recorded as non current, due to the possibility of conversion of of these receiveables into intangible rights in the leased  stores (“fundo de comércio”). (b)Expenses reimbursementsfrom suppliers Derive from the compliance with purchase volume, price protection, and as part of agreements defining the supplier’s participation in marketing and advertising expenses. At June 30, 2013, Via Varejo changed the negotiation with suppliers of goods and services so that the settlement of these amounts occurs by reducing the balance payable. Thus, the receivable of R$58,508 was classified at December 31, 2013 under suppliers account. This new classification does not change the balances as at December 31, 2012, once the new agreements were entered and signed in 2013.


F-42

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 11.   Inventories 2013

   2012Stores

   3,597,410

   2,890,345Distribution centers

   2,914,980

   3,021,882Inventories in construction (c)

   172,280

   172,280Bonus in inventories (a)

   (78,830)

   (99,453)Provision for obsolescence/losses and breakage (b)

   (52,016)

   (53,126)6,553,824

   5,931,928Current

   6,381,544

   5,759,648Noncurrent

   172,280

   172,280
 (a)Bonuses in inventories The Company records bonuses received from suppliers in the profit or loss as the inventories that gave rise to the bonuses are realized. (b)Provision for obsolescence/losses and breakage 2013

   2012At the beginning of the year

   (53,126)

   (75,809)Additions

   (64,898)

   (59,311)Write-offs

   66,008

   81,994At the end of the year

   (52,016)

   (53,126)
 (c)Inventories in construction The amount of inventories of real estate units under construction refers to the fair value of the barter of land for real estate units, based on the market value of real estate units received, as observed in comparable market transactions Barter revenue refers to the transaction whereby GPA Malls gave lands in exchange of the real estate units of the projects Thera Faria Lima Pinheiros (“Thera”), Figue and Classic and Carpe Diem, plus one store to be built on the ground floor of the Thera Faria Lima Pinheiros building.Construction and development are being carried out by Cyrela Polinésia Empreendimentos Imobiliários Ltda., Pitangueiras Desenvolvimento Imobiliário SPE Ltda. and Hesa Investimentos Imobiliários Ltda.Barter revenue corresponds to the fair value of the land exchanged, net of its carrying amount. The apartment units of the Thera project are scheduled to be delivered within 52 months from December 18, 2011. For the Figue project the delivery will occur 29 months from April 4, 2012 and for Classic e Carpe Diem (Bosque Maia Project) the delivery will occur between 36 and 48 months from November 11, 2012.The sales deferred revenue and the accounts receivables are recognized on a net basis as deferred revenue (note 26) and when the delivery of the property, the net gain from this transaction will be recognized in the income statement, taking into account the balance of inventory.


F-43

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 12.  Recoverable taxes 2013

   2012CurrentState value-added tax on sales and services – ICMS recoverable (a)

   769,086

   686,554Social Integration Program/ Tax for Social Security Financing-PIS/COFINS recoverable

   20,242

   34,741Income tax on Financial investments

   50,864

   70,157Income and Social Contribution taxes

   31,031

   47,842Social Security Contribution - INSS

   30,796

   29,338Other

   5,964

   2,389Total current

   907,983

   871,021NoncurrentICMS recoverable (a)

   1,088,787

   1,000,076PIS/COFINS recoverable

   254,228

   150,713Social Security Contribution- INSS

   86,006

   80,853Total noncurrent

   1,429,021

   1,231,6422,337,004

   2,102,663
 (a)The ICMS realization is estimated to occur as follows: Up to one year (*)

   769,0862015

   438,0352016

   280,7972017

   294,1042018

   28,8612019

   29,8092020

   17,1811,857,873
 (*) The realization projection does not consider new credits that will be generated. Since 2008, the Brazilian States have been substantially changing their laws aiming at implementing and broadening the ICMS (State VAT) tax substitution system (ICMS-ST). This system implies the prepayment of ICMS throughout the commercial chain, upon goods outflow from manufacturer or importer or their inflow into the State. The creation of such system to a wider range of products traded at retail is based on the assumption that the trading cycle of these products will end in the State, so that ICMS is fully owed thereto.  In order to supply its stores, the Company maintains Distribution Centers strategically located in certain States and in the Federal District, which receive goods with ICMS of the entire commercial chain (by force of tax replacement) already prepaid by suppliers or the Company, and then, goods are sent to locations in other States. Such interstate shipment remittance entitles the Company to a refund reimbursement of prepaid ICMS, i.e., the ICMS of the commercial chain paid in acquisition becomes a tax credit to be refunded, pursuant to the State laws.  The refund process requires the evidence through tax documents and digital files referring to the operations that entitled the Company to refund. Only after its previous legal ratification by State Tax Authorities and/or compliance with specific ancillary obligations aiming such evidence then credits may be used by the Company, which occurs in periods after these are generated.  The tax credit to be refunded by the Company has grown, in accordance with the number of items sold in our stores subject to the tax substitution system.


F-44

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 12.   Recoverable taxes –Continued The Company has been realizing these credits with authorization for immediate offset with those credits due in view of its operations, for having obtained the Special Regime and also for complying with other procedures contained in the state rulings.  Referring to the credits which still cannot be offset immediately, the Company’s Management based on a technical feasibility study, based on the growth future expectation and offset against debts deriving from its operations, understands its future offset is probable. These studies were prepared based on information extracted from strategically planning report previously approved by the Company’s Board of Directors.  13.  Related parties a)Sales, purchases of goods, services and other operations 2013

   2012SuppliersAssociated Companies:FIC

   12,897

   13,673Dunnhumby (xv)

   -

   20Joint operation:Indústria de Móveis Bartira Ltda. (x)

   -

   62,487Other related parties:Grupo Diniz (iii)(*)

   1,811

   1,858Globalbev Bebidas e Alimentos (*)

   285

   3,949Globalfruit (*)

   44

   759BMS Import

   -

   1,976Bravo Café (*)

   225

   213Fazenda da Toca Ltda. (xi) (*)

   205

   560Sykué Geração Energia (vii) (*)

   -

   341Indigo Distribuidora

   406

   38115,873

   86,217PurchasesJoint operation:Indústria de Móveis Bartira Ltda. (x)

   438,284

   449,392Other related parties:Globalbev Bebidas e Alimentos (*)

   7,840

   17,465Globalfruit (*)

   4,298

   3,289Bravo Café (*)

   1,224

   1,615Sykué Geração de Energia (vii) (*)

   21,249

   24,563Fazenda da Toca Ltda. (xi) (*)

   5,617

   6,958BMS Import.

   -

   1,369Indigo Distribuidora

   3,374

   3,352481,886

   508,003
 (*) Balances were presented until the date of settlement as per note 1 (a).


F-45

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 13.Related parties– Continued a)   Sales, purchases of goods, services and other operations – Continued 2013

   2012AssetsControlling shareholder:Casino (i)

   3,404

   6,258Other related parties:Casa Bahia Comercial Ltda. (v)

   134,112

   103,236Management of Nova Pontocom (vi)

   34,307

   37,082Audax SP (ix)

   -

   22,335Audax RJ (ix)

   -

   6,957Rede Duque (xiv)

   158

   472Instituto Grupo Pão de Açúcar

   -

   3Other

   855

   2,077172,836

   178,420LiabilitiesAssociated companies:FIC (iv)

   9,012

   1,742Joint operation:Indústria de Móveis Bartira Ltda. (x)

   -

   62,439Other related parties:Casa Bahia Comercial Ltda (v)

   23,609

   -Fundo Península (ii)

   -

   16,21832,621

   80,3992013

   2012Revenues (Expenses)Controlling shareholder:Casino (i)

   (12,056)

   (5,511)Wilkes Participações (xii)

   (2,124)

   (2,803)Associates:FIC (iv)

   15,482

   19,272Dunnhumby (xv)

   (585)

   (807)Joint operation:Indústria de Móveis Bartira Ltda. (x)

   -

   (139)Other related parties:Fundo Península (ii) (*)

   (112,377)

   (156,707)Grupo Diniz(iii) (*)

   (14,878)

   (18,974)Sykué Consultoria em Energia Ltda. (viii) (*)

   (1,019)

   (2,120)Casa Bahia Comercial Ltda. (v)

   (223,917)

   (152,033)Management of Nova Pontocom (vi)

   3,054

   2,873Axialent Consultoria (xiii) (*)

   (4)

   (2,394)Habile Segurança e Vigilância Ltda.

   (7,324)

   (30,117)Pão de Açúcar S.A. Indústria e Comércio (xvi) (*)

   (516)

   (8,400)Audax SP (ix)

   (11,754)

   (13,172)Audax RJ (ix)

   (7,790)

   (13,834)Instituto Grupo Pão de Açúcar

   (7,902)

   (7,833)(383,710)

   (392,699)
 (*) Balances were presented until the date of settlement as per note 1 (a).


F-46

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 13.Related parties– Continued a)     Sales, purchases of goods, services and other operations – Continued Transactions with related parties refer mainly to transactions between the Company and its subsidiaries and other related entities and were substantially accounted for in accordance with the prices, terms and conditions agreed between the parties, including: (i)Casino:Technical Assistance Agreement, signed between the Company and Casino on July 21, 2005, whereby, in exchange for the annual payment of US$1,818 thousand. This agreement was approved by the Extraordinary Shareholders’ Meeting held on August 16, 2005. (ii)Fundo Península:60 real estate lease agreements with the Company, 1 property with Novasoc and 1 property with Barcelona.Due to the agreement described in note 1 (a), since September 2013, Fundo Peninsula is no longer considered as a related party since September 2013. (iii)Grupo Diniz:lease of 15 properties to the Company and 2 properties to Sendas.Due to the agreement described in note 1a, since September 2013, Grupo Diniz is no longer considered as a related party since September 2013. (iv)FIC:(i) refund of expenses arising from the infrastructure agreement, such as: expenses related to the cashiers’ payroll, and commissions on the sale of financial products; (ii) financial expenses related to the sale of receivables (named “financial discount”); (iii) property rental revenue; and (iv) the cost apportionment agreement. (v)Casa Bahia Comercial Ltda,:Via Varejo has an accounts receivable related to the “First Amendment to the Shareholders ́ Agreement” between Via Varejo, GPA and CB, which guarantees to Via Varejo the right to be reimbursed by CB for certain contingencies recognized that may be payable by Via Varejo as of June 30, 2010 (see x). Additionally, besides Via Varejo and its joint operation, until October 31, 2013 – Bartira, CB has lease contracts of 314 properties between distribution centers, commercial buildings and administrative requirements under specific conditions with management of CB. (vi)Management of Nova Pontocom:in November 2010, within the context of the restructuring of GPA’s e-commerce business, the Company granted to certain statutory members of Nova Pontocom’s Management an updated loan amounting to R$ 10,222 at December 31, 2013 and entered into a swap agreement in the updated amount of R$24,085 at December 31, 2013, both maturing on January 8, 2018. (vii)Sykué Geração de Energia:acquisition of power in the free market to supply several of the Company’s consumer units. Due to the agreement described in Note 1 (a),Sykué Geração de Energiais no longer considered a related party since September 2013. (viii)Sykué Consultoria em Energia Ltda,:energy supply planning services, including projection of energy consumption for each consumer unit, during 102 months (economic feasibility study of the costs to maintain the stores in the captive market or in the free market) and regulatory advisory services with the Brazilian Electricity Regulatory Agency - ANEEL), the spot market – CCEE and ONS. Sykué Consultoria em Energiais no longer considered a related party since September 2013.


F-47

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 13.Related parties– Continued a)Sales, purchases of goods, services and other operations – Continued (ix)Audax:loans to the football clubs Audax SP and Audax RJ, in addition to the financial support in training professional athletes, GPA and third parties signed on September 14, 2013 a binding agreement to transfer definitively the maintenance and management of AUDAX SP and AUDAX RJ. The agreement contained for certain conditions precedents, which were met, and the definitive agreements were signed in November, 2013. The remaining balance was reclassified to "Other receivables", as shown in note 10. (x)Indústria de Móveis Bartira Ltda:amounts arising from infrastructure expenses and the purchase and sale of goods. (xi)Fazenda da Toca Ltda: contract for the supply of organic eggs, conventional oranges and organic juices, etc. Due to the agreement described in Note 1 (a),Fazenda da Tocais no longer considered a related party since September 2013. (xii)Wilkes: commissions paid related to the Company’s loan agreements in which Wilkes is a guarantor. (xiii)Axialent Consultoria: human resources advisory service agreement. Due to the agreement described in Note 1 (a),Axialentis no longer considered a related party since September 2013. (xiv)Rede Duque: represents the loan agreement between Vancouver and the gas stations Vereda Tropical, Rebouças and Barueri. (xv)Dunnhumby:information management service agreement. As of July 2013, the Company no longer holds 2% interest in Dunnhumby, negotiating an operational agreement (xvi)Pão de Açúcar S.A. Indústria e Comércio: temporary equipment assignment agreement.Due to the agreement described in Note 1 (a),Pão de Açúcar S.A Indústria e Comérciois no longer considered a related party since September 2013.


F-48

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 13.Related parties– Continued b)    Management and Fiscal Council’s compensation The expenses related to the compensation of senior management (executive/statutory officers appointed pursuant to the Bylaws andthe Board of Directors) and the Fiscal Council, recorded in the Company profit or loss for the years ended December 31, 2013, 2012 and 2011, were as follows: In relation to total compensation at December 31, 2013Remuneration

   Variable Remuneration

   Stock Option Plan

   Total

   % expense share basis paymentBoard of Directors (*)

   6,569

   -

   -

   6,569Board of Executive Officers

   18,615

   19,014

   11,373

   49,002Fiscal Council

   504

   -

   -

   50425,688

   19,014

   11,373

   56,075

   20.3%
  In relation to total compensation at December 31, 2012Remuneration

   Variable Remuneration

   Stock Option Plan

   Total

   % expense share basis paymentBoard of Directors (*)

   7,924

   -

   -

   7,924Board of Executive Officers

   17,002

   23,051

   20,662

   60,715Fiscal Council

   486

   -

   -

   48625,412

   23,051

   20,662

   69,125

   29.9%
  In relation to total compensation at December 31, 2011Remuneration

   Variable Remuneration

   Stock Option Plan

   Total

   % expense share basis paymentBoard of Directors (*)

   7,836

   -

   -

   7,836Board of Executive Officers

   19,176

   25,610

   16,643

   61,429Fiscal Council

   504

   -

   -

   50427,516

   25,610

   16,643

   69,769

   23.9%
 (*) Remuneration according to the number of attendance in the meeting.


F-49

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 14.Investments a)Breakdown of investments FIC

   BINV

   Bartira (i)

   Other

   TotalBalances at 01.01.2012

   233,068

   19,722

   86,872

   460

   340,122Additions

   -

   -

   -

   4

   4Share of protif in associate

   10,245

   575

   -

   (1)

   10,819Dividends receivable

   (11,473)

   (1,553)

   -

   -

   (13,026)Gain on equity interest

   24,510

   -

   -

   -

   24,510Balances at 12.31.2012

   256,350

   18,744

   86,872

   463

   362,429Share of protif in associate

   46,594

   716

   -

   -

   47,310Dividends receivable

   (13,139)

   (200)

   -

   -

   (13,339)Changes in interest

   -

   -

   (86,872)

   -

   (86,872)Balances at 12.31.2013

   289,805

   19,260

   -

   463

   309,528
 (i)Fair value of investment held in Bartira It refers to the measurement of the investment held by Via Varejo of 25% of Bartira’s capital stock at fair value. The asset was recognized at the time of the business combination between CB and the Company. With the acquisition of Bartira in 2013, this amount was reclassified to goodwill and interest was re-measured, previously held at 25%, also against goodwill, resulting in a gain of R$71,364, as per Note 15(b). (ii)Public offering of shares At December 27, 2013, the Via Varejo’s Secondary Public Offering of Share Certificates or Units (each Unit is composed of one common share and two preferred shares) was concluded. Considering the allotment, a total amount of 123,696,984 Units were offered, with aggregate proceeds totaling R$2,845,030 of which .R$896,803 was received by the Company. The Company sold a total amount of 38,991,441 Units for R$896,803, so that its interest in Via Varejo decreased to 62.25% of common shares and 43.35% of total capital. The proceeds from such divestment were recorded against equity, as this is a transaction with non-controlling shareholders, less income tax on capital gain, transaction costs and write-off of related investments. The net effect in equity deriving from this transaction was R$199,598. Also pursuant to Clauses 4.1.3 and 10.1.4.2 of the Shareholders’ Agreement, since: (i) CB Group (represented by Messrs. Samuel Klein, Michael Klein and Mrs. Eva Lea Klein, and other entities) sold more than 23.64% of their shares representing Via Varejo’s capital stock; and (ii) Via Varejo’s total free float reached a level higher than 20% of total capital. On this present date, CB Group holds 27.31% of shares representing Via Varejo’s capital and its free float reached 29.34% of total, Klein family went below the minimum interest level to maintain all its rights at Via Varejo.


F-50

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 14.Investments–Continued (ii)  Public offering of shares - Continued Accordingly, CB Group lost some rights, such as: (i) Mr. Michael Klein is no longer the Chairman of Via Varejo’s Board of Directors; (ii) CB Group’s agreement, in previous meeting, with Via Varejo’s vote at the shareholders’ meetings of its subsidiary Nova Pontocom or by members of Nova Pontocom’s Board of Directors, appointed by Via Varejo, in relation to certain matters; (iii) the Migration Right; (iv) GPA’s call option; and (v) CB Group’s call option. In addition, pursuant to Clause 4.1.2 of the Shareholders’ Agreement, as its interest decreased, CB Group now appoints only 2 members for Via Varejo’s Board of Directors. Transaction costs, totaling R$88,996, net of income tax, were fully paid and assumed by Via Varejo, pursuant to the terms of the Shareholders Agreement, and recorded directly in Shareholders Equity. 15.Business combinations a)Acquisition of Rede Duque Context of the operation In 2009, the Company signed an Agreement for Outsourcing Management (“Management Agreement”) with Rede Duque for a 20-year term, whereby the Company would conduct the operational and financial management of 39 Rede Duque gas stations through its subsidiary Vancouver, in exchange for payment based on these gas stations’ results. At May 28, 2012, the Management Agreement was terminated and, as part of the termination, pursuant to the Agreement for Share Purchase and Other Covenants, Vancouver acquired all the shares of five gas stations (“Acquired Gas Stations”) and established a partnership with Rede Duque in three other gas stations through the acquisition of shares representing 95% of their capital stock (“Partnership Gas Stations”), with a subsequent call option to be exercised by Rede Duque (“Call and Put Option Agreement"). (i)Acquisition of the five gas stations Through the Agreement for Share Purchase, the Company acquired all the shares of six companies that were part of Rede Duque and operated five gas stations (one of the companies operates a convenience store in one of the acquired gas stations). Determination of the consideration transferred for the acquisition of five Rede Duque gas stations Under the Management Agreement, the Company and Vancouver had prepaid R$30,000 for the use of GPA brands in the gas stations and exclusive management of the gas stations. The release of this amount was subject to certain events. This amount was used as part of the payment for the acquisition of the Acquired Gas Stations, plus an additional payment of R$10,000, for a total purchase price of R$40,000. Goodwill resulting from the acquisition On June 30, 2013, the Company completed the allocation of the purchase price and measurement of goodwill, being permanently recorded by the Company.


F-51

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 15.Business combinations–Continued a)Acquisition of Rede Duque- Continued (i)Acquisition of the five gas stations - Continued As a result of: (i) measurement of total consideration transferred for the acquisition of control of the gas stations; and (ii) measurement of the identifiable assets and liabilities at fair value, the Company recorded goodwill in the amount of R$38,702. (ii)Partnership of the three gas stations Through the Debt Assumption Agreement, entered into on the same date between the Company, Vancouver and Rede Duque, Vancouver assumed Rede Duque’s bank debts in the amount of R$50,000. On the same date, the parties entered into an Agreement for Share Purchase, whereby Vancouver acquired approximately 95% of the shares of the Partnership Gas Stations, which operated three gas stations with net revenue of approximately R$3,500, upon assignment of part of Vancouver’s receivables from Rede Duque, acquired as a result of said debt assumption. The acquired gas stations will continue to be managed by Rede Duque, and the Company will have protective vetoes. Also through the agreement, a Call and Put Option Agreement was executed whereby Vancouver granted Rede Duque an option to purchase its shares of the capital of the Partnership Gas Stations, exercisable in one year, for R$50,000, restated at 110% of CDI and payable in 240 monthly installments Beginning in 2014. In November 18, 2013, Rede Duque confirmed the exercise of the call option for the current amount of R$56,952 (R$7,697 present value of the receivables) which was transferred to “Other Accounts Receivable”. Refer to Note 10. b)Acquisition of Bartira Since the association between the Company and CB (November 1, 2010), the Company had a call option of the remaining 75%, to be exercised within three to six years as of the association. Until October 31, 2013, Via Varejo and Casa Bahia Comercial Ltda. (“CB”) were partners in Bartira, subsidiary Via Varejo, holding interests of 25% and 75%, respectively. This option fair value was calculated through the Black & Scholes method, using a volatility of 28% and a risk-free rate of 5.8% p.a., which resulted in a fair value of R$314,456 (R$306,739 on December 31, 2012) on the exercise date. Up to the exercise date, this option was recorded as financial instrument in the consolidated financial statements. On October 31, 2013, Via Varejo’s Shareholders’ Meeting approved the exercise of option to purchase the remaining interest in Bartira (“Purchase Option”), followed by the submission to CB of the exercise notification on November 1, 2013. The quotas of Bartira’s capital stock were transferred on December 2, 2013. The price paid for the exercise of the purchase option on November 1, 2013 was R$212,273. After the transaction, the subsidiary Via Varejo holds Bartira’s entire capital stock. As of the date of notification to CB, Via Varejo holds substantive rights on Bartira, and November 1, 2013 was defined as the business combination date.


F-52

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 15.Business combinations–Continued b)Acquisition of Bartira- Continued Prior to the business combination, the subsidiary Via Varejo held a 25% interest in Bartira. The fair value of the previously held interest was measured at fair value on the acquisition date, as defined in IFRS 3 (R), through the discounted cash flow method, and amounted to R$175,676. The fair value of remeasurement of the investment previously held, compared to the book value of the investment, resulted in a gain of R$71,364, recorded in “Other operating expenses and income”. Thus, the consideration transferred for the execution of the business combination is determined by (i) the exercise price of the call option in the amount of R$212,273 paid in cash; (ii) the fair value of the call options held by the Company prior to the business combination in the amount of R$314,456; and (iii) the remeasurement at fair value of the investment previously held in the amount of R$175,576. Remeasurement of previousloy held interest on Bartira is not taxable. Below are the fair values of identifiable assets and liabilities acquired from Bartira on the business combination date: R$ thousand

   11.01.2013AssetsCash and cash equivalents

   980Inventories

   50,925Deferred income tax

   4,142Other

   39,862Property, plant and equipment

   138,516Intangible assets

   82,383Acquired assets

   316,808LiabilitiesLoans and financing

   (18,676)Materials and services

   (62,388)Provision for contingencies

   (119,178)Other

   (17,951)Assumed liabilities

   (218,193)Identifiable net assets

   98,615Consideration transferred

   212,273Fair value of purchase option held

   314,457Fair value of the interest previously held

   175,576Goodwill on acquisition

   603,691
  For purposes of consolidated cash flow statement, the amount paid must be deducted from the net cash acquired. Thus, the amount recorded will be R$212,273, less 75% of Bartira’s cash equivalent, totaling R$211,538. Goodwill on acquisition is supported by the future profitability of the furniture products sold in Via Varejo ́s stores. Bartira is significant to the verticalization of the furniture line, in order to maximize its margin.


F-53

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 15.Business combinations–Continued b)Acquisition of Bartira- Continued Subsequent measurement – provisional allocation of the purchase price. The acquisition of control over Bartira was recognized using the acquisition method, in compliance with IFRS 3 (R). In relation to the business combination of Bartira (note 15), contingencies were evaluated at fair value, as required by IFRS 3(R), which differs of IAS 37 used for evaluation of other contingencies. The main issue is related to the possibility of non compliance on preparation of calcularion on social contribution, income tax, PIS, COFINS, IPI and ICMS amounting R$95,310 for Social Contribution, Income Tax, PIS, Cofins, IPI and ICMS. In compliance with IFRS 3(R), the Company will conclude the data collection and the fair value measurement of net assets acquired on November 1, 2013 in the 12 months as of the date of business combination. The Company does not expect significant changes in the evaluation of intangible assets already identified and net assets acquired. The sales of Bartira are eliminated agains Cost of sales since sales are 100% to Via Varejo. Remaining impacts on the consolidated income statement as a result of consolidation of Bartira are not significant.  16.Property and equipment 2013Balance at:

   

   

   

   

   

   Balance at:12.31.2012

   Additions

   Depreciation

   Acquisition of subsidiary(**)

   Write-offs

   Transfers (*)

   12.31.2013Land

   1,264,764

   141,565

   -

   -

   (4,929)

   10,482

   1,411,882Buildings

   2,056,430

   42,863

   (66,470)

   -

   116

   (16,487)

   2,016,452Leasehold improvements

   2,243,860

   369,587

   (172,877)

   113

   (12,870)

   359,529

   2,787,342Machinery and equipment

   1,107,678

   376,046

   (231,462)

   117,522

   (45,335)

   119,985

   1,444,434Facilities

   285,334

   55,048

   (31,306)

   3,105

   (153)

   13,843

   325,871Furniture and fixtures

   494,371

   140,312

   (63,862)

   10,949

   (7,577)

   (46,683)

   527,510Vehicles

   229,790

   15,865

   (19,795)

   597

   (46,316)

   (13,560)

   166,581Construction in progress

   204,631

   445,867

   -

   9,039

   (394)

   (450,183)

   208,960Other

   79,528

   36,287

   (21,700)

   (19,249)

   (111)

   (7,348)

   67,4077,966,386

   1,623,440

   (607,472)

   122,076

   (117,569)

   (30,422)

   8,956,439Financial leaseEquipment

   23,220

   (3)

   (2,906)

   -

   (11)

   (682)

   19,618Hardware

   79,256

   -

   (28,899)

   -

   (8,106)

   1,392

   43,643Facilities

   1,045

   -

   (123)

   -

   -

   12

   934Furniture and fixtures

   8,736

   -

   (1,067)

   -

   (9)

   60

   7,720Vehicles

   10,255

   -

   (57)

   -

   (7,201)

   (1,894)

   1,103Buildings

   25,600

   -

   (1,457)

   -

   -

   -

   24,143148,112

   (3)

   (34,509)

   -

   (15,327)

   (1,112)

   97,161Total

   8,114,498

   1,623,437

   (641,981)

   122,076

   (132,896)

   (31,534)

   9,053,600


F-54

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 16.  Property and equipment -Continued 2012Balance at:

   

   

   

   

   

   Balance at:01.01.2012

   Additions

   Depreciation

   Acquisition of subsidiary(**)

   Write-offs

   Transfers (*)

   12.31.2012Land

   948,170

   97,051

   -

   -

   -

   219,543

   1,264,764Buildings

   2,115,548

   14,184

   (65,466)

   -

   (8,070)

   234

   2,056,430Leasehold improvements

   1,797,492

   255,018

   (150,389)

   5

   6,669

   335,065

   2,243,860Machinery and equipment

   919,182

   280,694

   (187,381)

   531

   (14,030)

   108,682

   1,107,678Facilities

   265,700

   39,405

   (36,464)

   320

   (2,963)

   19,336

   285,334Furniture and fixtures

   437,406

   123,170

   (64,966)

   34

   (9,910)

   8,637

   494,371Vehicles

   266,871

   25,649

   (36,109)

   29

   (41,015)

   14,365

   229,790Construction in progress

   341,547

   567,275

   -

   83

   (391)

   (703,883)

   204,631Other

   81,309

   47,714

   (18,455)

   -

   (307)

   (30,733)

   79,5287,173,225

   1,450,160

   (559,230)

   1,002

   (70,017)

   (28,754)

   7,966,386Financial leaseEquipment

   27,941

   -

   (3,819)

   -

   (433)

   (469)

   23,220Hardware

   105,085

   3,177

   (30,005)

   -

   982

   17

   79,256Facilities

   861

   -

   (110)

   -

   (26)

   320

   1,045Furniture and fixtures

   10,147

   -

   (1,388)

   -

   (246)

   223

   8,736Vehicles

   14,064

   -

   (102)

   -

   (3,793)

   86

   10,255Buildings

   26,927

   -

   (1,328)

   -

   -

   1

   25,600185,025

   3,177

   (36,752)

   -

   (3,516)

   178

   148,112Total

   7,358,250

   1,453,337

   (595,982)

   1,002

   (73,533)

   (28,576)

   8,114,498
   (*) The column “transfers” is mainly impacted by: (i) the acquisition of intangible assets that remain in progress until capitalization; and (ii) transfer of property and equipment in the amount of R$30,190 relating to the assets of the stores to be sold, see Note 1 (e).  (**) The acquisition of subsidiary is related to the acquisition of subsidiary Bartira, as shown in Note 15 (b).  2013

   2012Cost

   Accumulated depreciation

   Net

   Cost

   Accumulated depreciation

   NetLand

   1,411,882

   -

   1,411,882

   1,264,764

   -

   1,264,764Buildings

   2,921,600

   (905,148)

   2,016,452

   2,906,108

   (849,678)

   2,056,430Leasehold improvements

   4,396,106

   (1,608,764)

   2,787,342

   3,698,557

   (1,454,697)

   2,243,860Machinery and equipment

   2,809,446

   (1,365,012)

   1,444,434

   2,243,454

   (1,135,776)

   1,107,678Facilities

   630,753

   (304,882)

   325,871

   567,033

   (281,699)

   285,334Furniture and fixtures

   1,033,295

   (505,785)

   527,510

   981,198

   (486,827)

   494,371Vehicles

   231,440

   (64,859)

   166,581

   300,629

   (70,839)

   229,790Construction in progress

   208,960

   -

   208,960

   204,631

   -

   204,631Other

   158,512

   (91,105)

   67,407

   152,264

   (72,736)

   79,52813,801,994

   (4,845,555)

   8,956,439

   12,318,638

   (4,352,252)

   7,966,386Financial leaseEquipment

   36,473

   (16,855)

   19,618

   37,051

   (13,831)

   23,220Hardware

   182,516

   (138,873)

   43,643

   152,194

   (72,938)

   79,256Facilities

   1,858

   (924)

   934

   1,859

   (814)

   1,045Furniture and fixtures

   15,147

   (7,427)

   7,720

   14,897

   (6,161)

   8,736Vehicles

   1,746

   (643)

   1,103

   12,800

   (2,545)

   10,255Buildings

   43,403

   (19,260)

   24,143

   43,401

   (17,801)

   25,600281,143

   (183,982)

   97,161

   262,202

   (114,090)

   148,112Total

   14,083,137

   (5,029,537)

   9,053,600

   12,580,840

   (4,466,342)

   8,114,498


F-55

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 16.Property and equipment–Continued a)Guarantees At December 31, 2013 and December 31, 2012, the Company and its subsidiaries had collateralized property and equipment items for some legal claims, as disclosed in Note 24 (h). b)Capitalized borrowing costs The amount of the borrowing costs for the year ended of December 31, 2013 was R$ 24,630 (R$17,205 at December 31, 2012), The rate used to determine the borrowing costs eligible for capitalization was 104.6% of CDI, corresponding to the effective interest rate of the Company’s borrowings. c)Additions to the property and equipment 2013

   2012Additions (i)

   1,623,437

   1,453,337Financial lease (ii)

   -

   (3,177)Capitalized interest

   (24,630)

   (17,205)Real estate financing - Additions (ii)

   (128,652)

   (124,004)Real estate financing - Payments (ii)

   185,672

   -Total

   1,655,827

   1,308,951
 (i)Theadditions made by the Company relate to the purchase of operating assets, acquisition of land and buildings to expand activities, building of new stores, improvements of existing distribution centers and stores and investments in equipment and information technology. (ii)Fixed assets additions demonstraded in below comprise only additions with cash disbursement during the years. In the cash flow statement were deducted fixed asset additions of R$32,390 (R$144,386 at December 31, 2012), referring to acquisitions of property and equipment through finance leases or property acquisitions (including land) on installments, as they did not involve cash disbursement on the date of acquisition. The payments are related to properties acquired by installments whose maturity is less than 90 days from purchase date. d)Other information At December 31, 2013, the Company and its subsidiaries recorded in the cost of goods sold and services rendered the amount of R$78,020 (R$82,571 at December 31, 2012) referring to the depreciation of its fleet of trucks, equipment, buildings and facilities related to the distribution centers. The Company has not identified evidence on the items of its property and equipment which require a provision for impairment at December 31, 2013. e)Asset impairment tests On December 31, 2013 and 2012, there was no loss related to impairment. The recoverable amount was calculated based on the value in use and was determined relative to the cash-generating unit. A cash-generating unit consists of assets in stores, in eachsegment. To determine the value in use of the cash-generating unit, the cash flows were discounted at a rate of 10.8% before taxes.


F-56

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 17.Intangible assets 2013Balance at:

   

   

   

   

   

   Balance at:12.31.2012

   Additions

   Amortization

   Acquisition of subsidiary

   Write-offs

   Transfers

   12.31.2013Goodwill – Cash and carry

   361,567

   -

   -

   -

   -

   -

   361,567Goodwill – home appliances

   296,607

   603,691

   

   

   

   (4,716)

   895,582Goodwill – food retail

   746,965

   -

   -

   -

   -

   -

   746,965Brand– Cash and carry (d)

   38,639

   -

   -

   -

   -

   -

   38,639Brand– home appliances (d)

   2,015,259

   -

   -

   45,818

   -

   -

   2,061,077Commercial rights – home appliances (e)

   608,297

   -

   (7,559)

   -

   -

   (23,597)

   577,141Commercial rights – food retail (e)

   34,902

   8,100

   -

   -

   -

   -

   43,002Commercial rights - Cash and carry (e)

   10,000

   18,842

   -

   -

   -

   -

   28,842Customer relationship – home appliances (i)

   12,280

   -

   (6,282)

   -

   -

   -

   5,998Advantageous furniture supply agreement – Bartira (f)

   61,194

   -

   (61,194)

   -

   -

   -

   -Lease agreement –stores under advantageous condition - NCB (g)

   149,138

   -

   (47,145)

   35,937

   -

   -

   137,930Software(h)

   640,708

   184,162

   (96,749)

   471

   (1,240)

   (189)

   727,163Software CL

   -

   81,266

   (4,515)

   -

   -

   -

   76,751Total intangible assets

   4,975,556

   896,061

   (223,444)

   82,226

   (1,240)

   (28,502)

   5,700,657
 The column Transfer is impacted by the amount of R$28,312 related to the portion of goodwill and commercial rights of the stores to be sold, as per Note 1(e).  2012Balance at:

   

   

   

   

   Balance at:01.01.2012

   Additions

   Amortization

   Write-offs

   Transfers

   12.31.2012Goodwill – Cash and carry

   361,567

   -

   -

   -

   -

   361,567Goodwill – home appliances

   296,664

   -

   -

   -

   (57)

   296,607Goodwill – food retail

   717,070

   38,777

   -

   (300)

   (8,582)

   746,965Brand– Cash and carry (d)

   38,639

   -

   -

   -

   -

   38,639Brand– home appliances (d)

   2,015,218

   41

   -

   -

   -

   2,015,259Commercial rights – home appliances (e)

   613,484

   -

   (8,050)

   (579)

   3,442

   608,297Commercial rights – food retail (e)

   17,600

   -

   -

   -

   17,302

   34,902Commercial rights - Cash and carry (e)

   -

   -

   -

   -

   10,000

   10,000Customer relationship – home appliance(i)

   18,562

   -

   (6,282)

   -

   -

   12,280dvantageous furniture supply agreement

   – Bartira (f)

   134,932

   -

   (73,738)

   -

   -

   61,194Lease agreement– stores under advantageous condition – NCB (g)

   201,002

   -

   (51,864)

   -

   -

   149,138Software(h)

   524,623

   84,402

   (98,180)

   (800)

   130,663

   640,708Total intangible assets

   4,939,361

   123,220

   (238,114)

   (1,679)

   152,768

   4,975,556


F-57

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 17.  Intangible assets– Continued  2013

   2012Cost

   Accumulated amortization

   Net

   Cost

   Accumulated amortization

   NetGoodwill – Cash and carry

   371,008

   (9,441)

   361,567

   371,008

   (9,441)

   361,567Goodwill – home appliances

   895,582

   -

   895,582

   296,607

   -

   296,607Goodwill – food retail

   1,848,403

   (1,101,438)

   746,965

   1,848,402

   (1,101,437)

   746,965Brand– Cash and carry (d)

   38,639

   -

   38,639

   38,639

   -

   38,639Brand – home appliances (d)

   2,061,077

   -

   2,061,077

   2,015,259

   -

   2,015,259Commercial rights – home appliances (e)

   635,557

   (58,416)

   577,141

   663,565

   (55,268)

   608,297Commercial rights – food retail (e)

   43,002

   -

   43,002

   34,902

   -

   34,902Commercial rights - Cash and carry (e)

   28,842

   -

   28,842

   10,000

   -

   10,000Customer relationship– home appliances (i)

   34,268

   (28,270)

   5,998

   34,268

   (21,988)

   12,280Advantageous furniture supply agreement – Bartira (f)

   221,214

   (221,214)

   -

   221,214

   (160,020)

   61,194Lease agreement –stores under advantageous condition - NCB (g)

   292,040

   (154,110)

   137,930

   256,104

   (106,966)

   149,138Software (h)

   1,093,451

   (366,288)

   727,163

   1,003,604

   (362,896)

   640,708Software CL

   81,265

   (4,514)

   76,751

   -

   -

   -Total intangible assets

   7,644,348

   (1,943,691)

   5,700,657

   6,793,572

   (1,818,016)

   4,975,556
 c)Impairment testing of goodwill and intangible assets  At December 31, 2013, the Company calculated the recoverable amount of the goodwill arising from past acquisitions, whose balance ceased to be amortized as of January 1, 2008, with the purpose of evaluating if there were changes in the assets’ value resulting from events or changes in economic, operating and technological conditions that might indicate impairment for all cash generating units (“CGU”).  For impairment testing purposes, the goodwill acquired through business combinations and licenses with indefinite useful lives was allocated to four cash generating units, which are also operating segments that disclose information: food retail, home appliances,cash and carryand e-commerce.  The recoverable amount of the segments was defined by means of a calculation based on the value in use based on cash projections arising from the financial budgets approved by senior management for the next three years. The discount rate before taxes applied to cash flow projections is 10.8% (10.8% at December 31, 2012), and cash flows exceeding 3 years are extrapolated by using a growth rate of 6.5% (6.7% at December 31, 2012). Based on this analysis, a charge for impairment was not necessary. d)Trade names  The “Cash and Carry” segmentrefers to “ASSAI” and the “home appliances” segment refers to “PONTO FRIO” and “CASAS BAHIA”. These trade names were recorded during the business combinations made with the companies that owned the rights over the trade names.  The value was subject to impairment tests through the income approach – Relief from Royalty, which consists of determining the value of an asset by measuring the present value of future benefits, Given the indefinite useful life of the trade name, we consider a perpetual growth of 6.5% in the preparation of the discounted cash flow, The royalty rate used was 0.4% for “ASSAI”, 0.7% for “PONTO FRIO” and 0.9% for “CASAS BAHIA”. e)Commercial rights “Fundo de Comércio”  The funds were allocated to the Cash Generating Units - CGUs, The CGUs were tested with assets recoverability through the discounted cash flow as of December 31, 2013 and adjustments have not been identified.


F-58

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 17.  Intangible assets– Continued  f)Advantageous supply agreement – Bartira  Via Varejo has an exclusive supply contract with Bartira. This contract present advantageous condition in the acquisition of furniture for resale, compared the margins established in the sector. The amount was recorded at the combination of business and has been established for information on comparable transactions in the market, refined methodology "Income Approach".  The useful life of that asset was defined as three years, ending during 2013.  g)Advantageous lease agreement – NCB  Refers to properties from Casa Bahia, comprised of stores, distribution centers and buildings, which are subject to operating leases on advantageous terms held by NCB. Its measurement was performed by information on comparable transactions in the market, applied the methodology "Income Approach". The assets were recognized because of the business combination between the Company and Casa Bahia.  The useful life was defined as 10 years in accordance with the association agreement The market conditions upon contracting did not deteriorate in relation to current condition, it is not necessary to record a provision for impairment at December 31, 2013.  h)Other intangible assets  Software was tested for impairment according to the same criteria used for property and equipment. Other intangible assets, whose useful lives are indefinite, were tested for impairment according to the same calculation criteria used for goodwill on investments, and it is not necessary to record a provision for impairment of these assets.  i)Intangible assets with definite useful life  Advantageous lease agreements for stores and buildings (10 years), advantageous furniture supply agreement (3 years) and customer relationships (5 to 7 years).  j)Additions to intangible assets  2013

   2012Additions

   896,061

   123,220Goodwill

   (603,691)

   (38,777)Other accounts payable (i)

   (17,000)

   -Leasing (ii)

   (81,585)

   -Total

   193,785

   84,443
  (i)In the statements of cash flows it was excluded additions made in the year ended of December 31, 2013, totaling R$702,276 (R$38.777 at December 31, 2012), referring to software acquirted through finance leases and goodwill, as they did not involve cash disbursement on the date of acquisition.


F-59

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 18.Trade accounts payable 2013

   2012

   01.01.2012Merchandise suppliers

   8,844,193

   6,312,899

   5,541,769Service suppliers

   489,671

   455,420

   740,000Accounts receivable from suppliers (a)

   (775,507)

   (562,886)

   (325,558)Other trade accounts payable

   -

   55,601

   7,699Present value adjustment

   (10,813)

   (20,678)

   (10,711)8,547,544

   6,240,356

   5,953,199
 (a)Accounts receivable from suppliers It includes bonuses and discounts obtained from suppliers. These amounts are established in agreements and include amounts for discounts on purchase volumes, joint marketing programs, freight reimbursements, and other similar programs. As per agreements signed between parties, the receipt of these receivables is by offsetting the amounts payable to suppliers. 19.Loans and financing a)Debt breakdown 2013

   2012CurrentDebentures (h)Debentures

   1,250,205

   674,003Swap contracts(c), (g)

   -

   (206)Borrowing cost

   (5,312)

   (5,353)1,244,893

   668,444Loans and financingLocal currencyBNDES (e)

   110,911

   113,236IBM

   23,817

   5,100Working capital (c)

   822,070

   155,196Direct consumer credit - CDCI (c) (d)

   2,726,425

   2,498,997Financial lease (Note 25)

   56,330

   83,054Swap contracts(c), (g)

   (12,384)

   (11,210)Borrowing cost

   (5,179)

   (7,290)3,721,990

   2,837,083Foreign currencyWorking capital (c)

   293,949

   723,140Swap contracts(c), (g)

   (89,414)

   (17,387)Borrowing cost

   -

   (130)204,535

   705,623Total current

   5,171,418

   4,211,150


F-60

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 19.Loans and financing– Continued a)Debt breakdown – Continued  Noncurrent

   2013

   2012Debentures (h)Debentures

   2,600,000

   3,748,000Borrowing cost

   (1,456)

   (6,647)2,598,544

   3,741,353Loans and financingLocal currencyBNDES (e)

   200,524

   283,141IBM

   95,822

   -Working capital (c)

   1,105,399

   1,806,566Direct consumer credit - CDCI (c) (d)

   140,603

   130,338Financial lease (Note 25)

   198,511

   162,537Swap contracts(c), (g)

   (11,742)

   (35,221)Borrowing cost

   (5,811)

   (8,172)1,723,306

   2,339,189Foreign currencyWorking capital (c)

   -

   258,811Swap contracts(c), (g)

   -

   (58,249)-

   200,562Total noncurrent

   4,321,850

   6,281,104
  b)Maturity schedule of loans and financing recorded in noncurrent liabilities Year2015

   3,613,3802016

   136,0462017

   58,460After 2017

   521,230Subtotal

   4,329,116Borrowing cost

   (7,266)Total

   4,321,850


F-61

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 19.Loans and financing– Continued c)Financing of working capital, swap and direct consumer credit – CDCI Debt

   Rate*

   2013

   2012Local currencyBanco do Brasil

   11.63% per year

   386,471

   524,175Banco do Brasil

   105.66% of CDI

   2,226,792

   1,997,047Bradesco

   110.70% of CDI

   605,975

   887,730Safra

   106.25 of CDI

   386,769

   356,215Safra

   CDI + 0.85 per year

   1,188,490

   825,9304,794,497

   4,591,097Current

   

   3,548,496

   2,654,193Noncurrent

   

   1,246,001

   1,936,904Foreign currencyCitibank

   (Libor + 1.45%) per year

   54,993

   48,121Itaú BBA

   USD + 3.48% per year

   238,199

   597,583Santander

   USD + 0.65% per year

   757

   132,204HSBC

   USD + 2.40% per year

   -

   204,043293,949

   981,951Current

   

   293,949

   723,140Noncurrent

   

   -

   258,811Swap contractsCitibank

   105.00% of CDI

   (13,611)

   (7,145)Itaú BBA

   100.00% of CDI

   (75,803)

   (34,067)Banco do Brasil

   102.00% of CDI

   (24,126)

   (46,432)Santander

   110.70% of CDI

   -

   839Unibanco

   104.96% of CDI

   -

   (206)HSBC

   99.00% of CDI

   -

   (35,262)(113,540)

   (122,273)Current

   

   (101,798)

   (28,803)Noncurrent

   

   (11,742)

   (93,470)4,974,906

   5,450,775
 (*)    Weighted average rate per year. The resources for financing working capital are raised from local financial institutions denominated in foreign or local currency.  d)Direct consumer credit - CDCI The operations of the consumer finance intervention correspond to the financing activities of installment sales to customers by means of a financial institution. Sales can be paid in up to 24 months, however, are substantially less than 12 months. The average financial charges are 110.8% of the CDI (111.40% in December 31, 2012). In these contracts, the Company retains substantially all the risks and benefits related to loans financed, guaranteed by assignment of receivables.


F-62

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013, 2012 and 2011 (In thousands of Brazilian reais, except when otherwise stated)
 19.Loans and financing– Continued e)BNDES Annual financial charges

   Number of monthly installments

   Issue date

   Maturity

   2013

   20123% per year

   96

   Sep/13

   Apr/23

   2,715

   -3% per year

   96

   Out/13

   Apr/23

   135

   -3% per year

   96

   Dec/13

   Apr/23

   14

   -3% per year

   96

   Sep/13

   May/23

   1,591

   -3% per year

   96

   Aug/13

   Jul/23

   955

   -TJLP + 2.3% per year

   48

   Jun/08

   Jun/13

   -

   1,3764.5% per year

   11

   Sep/09

   Nov/14

   13

   26TJLP + 3.6% per year

   60

   Jul/10

   Dec/16

   246,102

   328,1204.5% per year

   60

   Feb/11

   Dec/16

   23,879

   31,833TJLP + 1.9% per year

   30

   May/11

   Jun/14

   5,643

   16,930TJLP + 1.9% per year+1% per year

   30

   May/11

   Jun/14

   2,420

   7,258TJLP + 3.5% per year+1% per year

   30

   May/11

   Jun/14

   2,018

   6,052TJLP + 2.5% per year

   24

   Sep/12

   Aug/15

   16,934

   4,7822.5%per year

   96

   Jun/13

   Jan/23

   8,083

   -3%per year

   48

   Oct/13

   Apr/18

   209

   -3.5%per year

   36

   Nov/13

   Sep/18

   329

   -3%per year

   96

   Nov/13

   Jun/23

   395

   -311,435

   396,377Current

   

   

   

   110,911

   113,236Noncurrent

   

   

   

   200,524

   283,141
 The credit line agreements denominated in local currency with the Brazilian Development Bank (BNDES), in certain cases, are subject to the indexation based on the long-term interest rate - TJLP, plus remuneration rates and the borrowing cost, in order to reflect the BNDES’ funding portfolio. Financing is paid in monthly installments after a grace period, as mentioned in the table above, or annual fixed rate. The Company cannot offer any assets as collateral for loans to other parties without the BNDES’ prior consent and it must comply with certain financial debt covenants, calculated based on the consolidated balance sheet, as follows: (i) maintenance of a capitalization ratio (equity/total assets) equal to or greater than 0.30 and (ii) EBITDA/net debt equal to or greater than 0.35. The Company controls and monitors these ratios. At December 31, 2013, the Company was in compliance with the aforementioned clauses. f)Guarantees The Company signed promissory notes and letters of guarantee as collateral to the loans and financings obtained from BNDES and IBM at the amount of R$115,000. g)Swap contracts The Company uses swap transactions to exchange liabilities denominated in U.S. dollars and fixed interest rates for Real tied to CDI floating interest rates. The Company contracts swap transactions with the same counterparty, currency and interest rate. All these transactions are classified as hedge accounting, as disclosed in Note 20. The CDI annual benchmark rate at December 31, 2013 was 8.06% (8.40% in 2012).


F-63

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of Brazilian reais, unless otherwise stated)
 19.Loans and financing– Continued  h)Debentures Outstanding debentures

   Date

   Annual financial chargesType

   Issue amount

   Issue

   Maturity

   Unit price

   2013

   2012Parent Company6thIssue – 1st Series - GPA

   No preference

   540,000

   -

   3/1/07

   3/1/13

   CDI + 0.5%

   -

   -

   184,2786thIssue – 2ndSeries - GPA

   No preference

   239,650

   -

   3/1/07

   3/1/13

   CDI + 0.5%

   -

   -

   81,7826th issue – 1st and 2ndSeries - GPA

   Interest rate swap

   779,650

   -

   3/1/07

   3/1/13

   104.96% of CDI

   -

   -

   (206)8thIssue – Single series - GPA

   No preference

   500,000

   500

   12/15/09

   12/15/14

   109.5% of CDI

   402

   200,812

   401,0429thIssue – Single series- GPA

   No preference

   610,000

   610

   1/5/11

   1/5/14

   107.7% of CDI

   1,333

   813,105

   748,00010thIssue – Single series- GPA

   No preference

   800,000

   80,000

   12/29/11

   6/29/15

   108.5% of CDI

   10

   800,323

   873,66911thIssue – Single series- GPA

   No preference

   1,200,000

   120,000

   5/2/12

   11/2/15

   CDI + 1%

   10

   1,218,952

   1,214,147Subsidiaries3rdIssue-Single series- Via Varejo

   No preference

   400,000

   40,000

   01/30/12

   7/30/15

   CDI + 1%

   10

   416,854

   413,6241stIssue-Single series- Nova Pontocom

   No preference

   100,104

   -

   4/25/12

   4/25/13

   105.35% of CDI

   -

   -

   105,4611stIssue-1st Series– NCB

   No preference

   200,000

   20,000

   6/29/12

   12/29/14

   CDI + 0.72%

   10

   200,080

   200,0001stIssue-2nd Series– NCB

   No preference

   200,000

   20,000

   6/29/12

   1/29/15

   CDI + 0.72%

   10

   200,080

   200,000Borrowing cost

   

   

   

   

   

   

   

   (6,769)

   (12,000)3,843,437

   4,409,797Current liabilities

   

   

   

   

   

   

   

   1,244,893

   668,444Noncurrent liabilities

   

   

   

   

   

   

   

   2,598,544

   3,741,353
  (i)Breakdown of outstanding debentures Number of debentures

   AmountAt December 31, 2012

   459,075

   4,409,797Interest and swap accrued

   

   352,683Amortization

   (177,965)

   (919,043)At December 31, 2013

   281,110

   3,843,437
 GPA uses the issue of debentures to strengthen its working capital, maintain its cash strategy, lengthen its debt profile and make investments. The debentures issued are unsecured and not convertible into shares, except for the debentures issued by the subsidiaries, which are guaranteed by the Company. These debentures are amortized according to the issue. The methods of amortization are as follows: (i) payment only at maturity (including all series of Nova Pontocom and the 9th issue of CBD), (ii) payment only at maturity with annual remuneration (10th issue of CBD), (iii) payment only at maturity with semiannual remuneration (11th issue of GPA, 3rd issue of Via Varejo and 1st  issue of NCB) incorporated by Via Varejo, (iv) annual installments (6th series of CBD) and semiannual payments as of the 4th anniversary of the issue, and (v) semiannual payments and remuneration as of the third anniversary of the issue (8th issue of CBD). The 8th, 9th, 10th and 11th issues are entitled to early redemption, at any time, in accordance with the conditions established in the issue. The 6th and 3rd issues of Via Varejo can only be redeemed after 18 months, NCB, incorporated by Via Varejo, and Nova Pontocom issues are not eligible for early redemption. GPA is required to maintain certain debt financial covenants in connection with the issues made, except in the case of Nova Pontocom. These ratios are calculated based on consolidated interim financial information of the Company prepared in accordance with accounting practices adopted in Brazil, in the respective issuing Company as follows: (i) net debt (debt minus cash and cash equivalents and trade accounts receivable) not greater than equity and (ii) consolidated net debt/EBITDA ratio lower than or equal to 3.25 (effective at December 31, 2013 was 0.34), At December 31, 2013, GPA was in compliance with these ratios.


F-64

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of Brazilian reais, unless otherwise stated)
 20.Financial instruments The Company uses financial instruments only for protecting identified risks, limited to 100% of the risks. Derivative transactions have the sole purpose of reducing the exposure to the interest rate and foreign currency fluctuations and maintaining a balanced capital structure. The main financial instruments and their amounts recorded in the financial statements, by category, are as follows:  Carrying amount

   Fair value2013

   2012

   2013

   2012Financial assets:Loans and receivables (including cash)Cash and cash equivalents

   8,367,176

   7,086,251

   8,367,176

   7,086,251Trade receivable and other accounts receivables

   3,487,867

   3,522,448

   3,535,048

   3,526,179Related parties - assets (*)

   172,836

   178,420

   172,836

   178,420Fair value through profit or lossPut/call option

   -

   359,057

   -

   359.057Financial investments measured at fair value

   24,453

   -

   24,453

   -Financial liabilities:Amortized costRelated parties -liabilities (*)

   (32,621)

   (80,399)

   (32,621)

   (80,399)Trade accounts payable

   (8,547,544)

   (6,240,356)

   (8,547,544)

   (6,240,356)Financing for purchase of assets

   (48,161)

   (88,181)

   (48,161)

   (88,181)Debentures

   (3,843,437)

   (4,409,797)

   (3,839,608)

   (4,402,206)Loans and financing

   (5,091,922)

   (4,342,993)

   (5,205,890)

   (4,498,755)Fair value through profit or lossLoans and financing, including derivatives

   (557,909)

   (1,739,464)

   (557,909)

   (1,739,464)Net exposure

   (6,069,262)

   (5,755,014)

   (6,132,220)

   (5,899,454)
  (*)Transactions with related parties refer mainly to transactions between the Company and its subsidiaries and other related entities and were substantially accounted for in accordance with the prices, terms and conditions agreed between the parties.


F-65

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of Brazilian reais, unless otherwise stated)
 20.Financial instruments –Continued The fair value of other financial instruments described in Note 20 (b) allows an approximation of the carrying amount based on the existing payment conditions. The hierarchy classification of assets and liabilities at fair value is described in Note 20 (c). a)   Considerations on risk factors that may affect the business of the Company The Company adopts risk control policies and procedures, as outlined below: (i)Credit risk ·Cash and cash equivalents: in order to minimize credit risk of these investments, the Company adopts investment policies at financial institutions approved by the Company’s Cash Flow Committee, also taking into consideration monetary limits and financial institution evaluations, which are frequently updated (see Note 7). ·Accounts receivable: credit risk related to accounts receivable is minimized by the fact that big portion of the sales are paid with credit cards, and the Company sells these receivables to banks and credit card companies itself, aiming strength working capital. The sales of receivables result in the derecognition of the accounts receivable due to the transfer of the credit risk, benefits and control of such assets. ·The Company also has counterparty risk related to the derivative instruments; such risk is mitigated by the Company’s policy of carrying out transactions with major financial institutions. ·Financed sales (CDCI): sales are made through operating agreements (credit lines) with banks Bradesco, Safra and Banco do Brasil for granting loans to their customers, through intervention with their financial institutions, with the aim of enabling and encouraging the sale of goods in their stores. In this type of sale, the subsidiary Via Varejo has ultimate responsibility for the settlement of loans and the credit risk of the operation. ·There are no amounts receivable that are individually, higher than 5% of accounts receivable or sales, respectively. (ii)Interest rate risk The Company raises loans and financing with major financial institutions for cash needs for investments and growth. As a result, the Company is exposed to relevant interest rates fluctuation risk, especially in view of derivatives liabilities (foreign currency exposure hedge) and CDI-pegged debt. The balance of cash and cash equivalents, indexed to CDI, partially offsets this effect. (iii)Exchange rate risk The Company is exposed to exchange rate fluctuations, which may increase outstanding balances of foreign currency-denominated borrowings. The Company and its subsidiaries use derivatives, such as swaps, with a view to mitigating the exchange exposure risk, converting the cost of debt into currency and domestic interest rates.


F-66

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of Brazilian reais, unless otherwise stated)
 20.  Financial instruments – Continued a)   Considerations on risk factors that may affect the business of the Company and its subsidiaries - Continued (iv)Capital management risk The main objective of the Company’s capital management is to ensure that the Company sustains its credit rating and a well-defined equity ratio, so that to support businesses and maximize shareholder value. The Company manages the capital structure and makes adjustments taking into account changes in the economic conditions. There were no changes as to objectives, policies or processes during the year ended December 31, 2013. 2013

   2012Loans and financing

   9,493,268

   10,492,254(-) Cash and cash equivalents

   (8,367,176)

   (7,086,251)Net debt

   1,126,092

   3,406,003Shareholders ́

   12,711,964

   11,067,951Shareholders ́ and net debt

   13,838,056

   14,473,954
 (v)Liquidity management risk The Company manages liquidity risk through the daily follow-up of cash flows, control of financial assets and liabilities maturities and a close relationship with main financial institutions. The table below summarizes the aging profile of financial liabilities of the Company at December 31, 2013 and December 31, 2012. Up to 1 year

   1 – 5 years

   More than 5 years

   TotalLoans and financing

   4,045,687

   1,783,679

   18,889

   5,848,255Debentures

   1,539,388

   2,837,356

   -

   4,376,744Derivatives

   (96,763)

   (13,613)

   -

   (110,376)Finance lease

   75,042

   175,729

   51,901

   302,672At December 31, 2013

   5,563,354

   4,783,151

   70,790

   10,417,295Up to 1 year

   1 – 5 years

   More than 5 years

   TotalLoans and financing

   3,561,872

   2,669,235

   149,876

   6,380,983Debentures

   897,657

   4,225,743

   -

   5,123,400Derivatives

   (11,345)

   (87,647)

   -

   (98,992)Finance lease

   74,373

   143,868

   49,992

   268,233At December 31, 2012

   4,522,557

   6,951,199

   199,868

   11,673,624


F-67

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of Brazilian reais, unless otherwise stated)
 20.  Financial instruments – Continued a)   Considerations on risk factors that may affect the business of the Company and its subsidiaries - Continued (vi)Derivative financial instruments Certain swap operations are classified as fair value hedge, whose objective is to hedge against foreign exchange exposure (U.S. dollars) and fixed interest rates, converting the debt into domestic interest rates and currency. At December 31, 2013 the notional value of these contracts were R$460,300 (R$1,144,050 at December 31, 2012). These operations are usually contracted under the same terms of amounts, maturities and fees, and preferably carried out with the same financial institution, observing the limits set by Management. The Company’s derivatives are measured at fair value through profit or loss, including: (i) “swap” agreements of foreign currency-denominated debts (U,S, dollars), to convert from fixed interest rates and foreign currencies to Brazilian Reais and domestic variable interest rates (CDI). There is no balance at December 31, 2013 (R$259,883 at December 31, 2012) and (ii) are primarily related to debentures, swapping variable domestic interest rates plus fixed interest rates to variable interest rates (CDI). According to the Company’s treasury policies, swaps cannot be contracted with restrictions (“caps”), margins, as well as return clauses, double index, flexible options or any other types of transactions different from traditional “swap” operations to hedge against debts, including for speculative purposes. The Company’s internal controls were designed so that to ensure that transactions are conducted in compliance with this treasury policy. The Company calculates the effectiveness of operations and hedge accounting is applied on inception date and on continuing basis. Hedge operations contracted in the year ended  December  31, 2013 were effective in relation to the covered risk. For derivative transactions qualified as hedge accounting, according to technical pronouncement IAS 39, the debt is also adjusted at fair value.


F-68

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of Brazilian reais, unless otherwise stated)
 20.Financial instruments –Continued a)   Considerations on risk factors that may affect the business of the Company and its subsidiaries - Continued (vi)Derivative financial instruments – Continued  Notional value

   Fair value2013

   2012

   2013

   2012Fair value hedgePurpose of hedge (debt)

   

   460,300

   1,144,050

   679,662

   1,506,413Liability position (buy)Fixed rate

   11.63% p.a.

   260,000

   377,000

   385,104

   521,575US$ + fixed

   3.48% p.a.

   200,300

   767,050

   293,768

   996,538460,300

   1,144,050

   678,872

   1,518,113Asset position (sell)CDI 100.33% p.a.

   (460,300)

   (1,144,050)

   (565,332)

   (1,396,045)Net hedge position

   

   -

   -

   113,540

   122,068Swap without hedge accountingLiability position (buy)CDI + fixed

   CDI+0.5% p.a

   -

   259,883

   -

   266,276-

   259,883

   -

   266,276Asset position (sell)

   104.96% of CDI

   -

   (259,883)

   -

   (266,071)Swap net position

   

   -

   -

   -

   205Total net swap position

   

   -

   -

   113,540

   122,273
  Realized and unrealized gains and losses over these contracts during the year ended December 31, 2013 are recorded in the net financial result and balance payable by fair value is R$113,540 (R$122,273 at December 31, 2012) and recorded under “Loans and financing”.


F-69

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of Brazilian reais, unless otherwise stated)
 20.Financial instruments –Continued a)   Considerations on risk factors that may affect the business of the Company and its subsidiaries - Continued (vi)   Derivative financial instruments – Continued Fair value “hedge” effects recorded in profit or loss for the year ended December 31, 2013 were a gain of R$54,031 (R$87,584 at December 31, 2012). (vii)  Fair values of derivative financial instruments Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Fair values are calculated by projecting the future cash flows of operations, using the curves of CDI and discounting them to present value, using CDI market rates for swaps both disclosed by BM&FBovespa. The market value of exchange coupon swaps versus CDI rate was obtained applying market exchange rates effective on the date the interim financial information are drawn up and rates are projected by the market calculated based on currency coupon curves, In order to calculate the coupon of foreign currency indexed-positions, the straight-line convention - 360 consecutive days was adopted and to calculate the coupon of CDI indexed-positions, the exponential convention - 252 business days was adopted. b)   Sensitivity analysis of financial instruments The sensitivity analysis, was developed for each type of market risk deemed as relevant by Management, to which the entity is exposed at the end of the reporting period. According to the Management’s assessment, the most probable scenario is what the market has been estimating through market curves (currency and interest rates) of BM&FBovespa, on the maturity dates of each operation, Therefore, in the probable scenario (I), there is no impact on the fair value of financial instruments already mentioned in item (vi) above. For scenarios (II) and (III), , for the sensitivity analysis effect, according to CVM rules, a deterioration of 25% and 50% was taken into account, respectively, on risk variables, up to the maturity date of the financial instruments. For the probable scenario, exchange rate weighted was R$2.41 on the due date, and the interest rate weighted was 9.66% per year.  In order to calculate the fair value, debts and “swaps” are measured through rates disclosed in the financial market and projected up to their maturity date. The discount rate calculated through the interpolation method of foreign currency-denominated loans is developed through DDI curves, Clean Coupon and DI x Yen, indexes disclosed by BM&FBovespa (Securities, Commodities and Futures Exchange), and DI curve is used in domestic currency-denominated loans, an index published by CETIP and calculated through the exponential interpolation method. In case of derivative financial instruments (aiming at hedging the financial debt), changes in scenarios are accompanied by respective hedges, indicating effects are not significant, see item b(ii).


F-70

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of Brazilian reais, unless otherwise stated)
 20 . Financial instruments – Continued b)   Sensitivity analysis of financial instruments – Continued The Company disclosed the net exposure of the derivatives financial instruments, corresponding financial instruments and certain financial instruments in the sensitivity analysis chart below, for each of the scenarios mentioned: (i)Fair value “hedge” (at maturity dates) Market projectionOperations

   Risk

   Scenario I

   Scenario II

   Scenario IIIDebt at fixed rate

   Rate increase

   (426,998)

   (426,998)

   (426,998)Swap (asset position in fixed rate)

   Rate increase

   427,064

   427,064

   427,064Net effect

   66

   66

   66“Swap” (liability position in CDI)

   CDI increase

   (395,444)

   (404,182)

   (413,148)Total net effect

   

   

   (8,738)

   (17,704)
  (ii)Derivatives recorded at fair value through profit or loss Market projectionOperations

   

   Risk

   

   Scenario I

   Scenario II

   Scenario IIIDebt - US$

   

   US$ increase

   

   (324,978)

   (406,222)

   (487,466)Swap (asset position in US$)

   

   US$ increase

   

   329,684

   412,105

   494,526Net effect

   

   4,706

   5,883

   7,060Swap (liability position in CDI)

   

   CDI decrease

   

   (254,979)

   (256,454)

   (257,905)Total net effect

   

   

   

   

   (298)

   (572)
  (iii)Other financial instruments Market projectionOperations

   

   Risk

   

   Scenario I

   Scenario II

   Scenario IIIDebentures

   

   CDI + 1%

   

   (1,351,301)

   (1,381,341)

   (1,411,381)Debentures

   

   108.27% of CDI

   

   (2,156,078)

   (2,204,008)

   (2,251,939)Debentures - Via Varejo

   

   100% CDI + 0.9%

   

   (933,229)

   (963,169)

   (993,383)Bank loan - CDB

   

   102.51% of CDI

   

   (1,292,172)

   (1,320,897)

   (1,349,623)Lease

   

   100.18% of CDI

   

   (143,704)

   (146,898)

   (150,093)Lease

   

   IGP-DI + 6% per year

   

   (35,967)

   (36,766)

   (37,566)Lease – Via Varejo

   

   100% CDI

   

   (18,020)

   (18,379)

   (18,736)Bank loan- Via Varejo

   

   110.1% of CDI

   

   (3,136,479)

   (3,145,976)

   (3,155,357)Total loans andfinancingexposure

   

   

   

   (9,066,950)

   (9,217,434)

   (9,368,078)Cash and cash equivalents

   

   99.99 % of CDI (*)

   

   9,174,629

   9,378,584

   9,582,539Net exposure

   

   

   

   107,679

   161,150

   214,461Deterioration compared with the Scenario I

   

   

   53,471

   106,782(*)weighted average


F-71

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of Brazilian reais, unless otherwise stated)
 20.Financial instruments –Continued c)   Fair value measurements The Company discloses its financial assets and liabilities at fair value, in according with “IFRS13”, which are those referring concept from evaluation and requirements of disclosure. As per “IAS 32” defines fair value as an amount that a assets may be change, or a liability settled, between the parties knowledgeable, in a transaction no favored. The “IFRS 13” establishes a hierarchy from fair value of true levels: i.Level 1 – Quoted Market prices on active markets for identical assets or liabilities; ii.Level 2 – Different inputs from level 1; and iii.Level 3 – inputs to assets and liabilities that are not based on data observable in Market (Non observable inputs). The fair value of cash and cash equivalentes, trade accounts receivable, short term debt and suppliers accounts payable are the same of the amounts recorded. The table below represents the hierarchy of fair value of financial assets and liabilities recorded at fair value: 2013

   Quoted price in an active market for an identical instrument (Level 1)

   Fair value measurement at the end of the reporting period adopting other observable relevant assumptions (Level 2)Financial investments measured at fair value

   24,453

   24,453

   -Cross-currency interest rate swaps

   89,414

   -

   89,414Interest rate swaps

   24,126

   -

   24,126Loans andfinancing

   (671,449)

   -

   (671,449)(533,456)

   24,453

   (557,909)
  There were no changes between the fair value measurement levels in the year ended December 31, 2013. ·Financial investments are classified on level 1, represented by cash denominated in U.S. dollars and instruments for which a quoted market price is available in an  active Market. ·Foreign exchange and interest rate swaps, loans and financing and debentures are classified on level 2, since the fair value measurement uses readily observable market inputs, for example, expected interest rate, current and future foreign exchange rate (as described on item a) (vii).


F-72

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of reais, unless otherwise stated)
 20.Financial instruments –Continued d)   Consolidated position of operations with derivatives financial instruments As of December 31, 2013 and December 31, 2012, below, the consolidated position of outstanding derivative financial instruments operations: Outstanding

   

   

   

   

   Amount payable or receivable

   Fair valueDescription

   Counterparties

   Notional value

   Contracting date

   Maturity

   2013

   2012

   2013

   2012Exchange swaps registered at CETIP (US$ x CDI)

   Santander

   US$57,471

   4/16/2010

   4/10/2013

   -

   (1,350)

   -

   (839)Citibank

   US$40,000

   2/13/2012

   2/13/2014

   13,362

   6,765

   13,611

   7,145Itaú Unibanco

   US$175,000

   7/1/2010

   6/7/2013

   -

   (18,281)

   -

   (16,389)Itaú Unibanco

   US$100,000

   5/5/2011

   4/16/2014

   73,007

   43,653

   75,803

   50,456HSBC

   US$95,847

   4/29/2011

   4/22/2013

   -

   34,119

   -

   35,264Interest rate swap registered at CETIP

   (fixed rate x CDI)

   Banco do Brasil

   R$117,000

   12/23/2010

   12/24/2013

   -

   4,746

   -

   11,210Banco do Brasil

   R$130,000

   6/28/2010

   6/6/2014

   11,545

   5,091

   12,384

   14,858Banco do Brasil

   R$130,000

   6/28/2010

   6/2/2015

   10,943

   4,706

   11,742

   20,363Itaú Unibanco

   R$779,650

   6/25/2007

   3/1/2013

   -

   132

   -

   205108,857

   79,581

   113,540

   122,273
  e)   Call option Rede Duque The call option in the amount of R$50,000 is subject of 110% of CDI interest and at December 31, 2013, finance income recognized was R$4,634 (R$2,318 in December 31, 2012), see Note 15 (ii). The call option was exercised on November 18, 2013.


F-73

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of reais, unless otherwise stated)
 21.Income and social contribution taxes payable and taxes payable in installments a)Payable taxes, contributions and taxes installments. 2013

   2012PIS and COFINS payable

   368,386

   251,902Provision for income and social contribution taxes

   169,185

   147,915ICMS payable

   226,644

   233,154Other

   59,949

   17,790824,164

   650,761
 b) Taxes payable in installments -Law 11941/09 (i)

   1,188,312

   1,327,115INSS

   13,323

   13,740Other (ii)

   15,512

   19,0561,217,147

   1,359,911Current

   968,462

   806,129Noncurrent

   1,072,849

   1,204,543
  (i)     Federal tax installment payment, Law 11,941/09 – The Law 11,941, was enacted on May 27, 2009, a special federal tax and social security debt installment program, for debts overdue until November 2008, and gave several benefits to its participants, such as reduction of fines, interest rates and legal charges, the possibility of utilization of accumulated tax losses to settle penalties and interest and payment in 180 months. The Company still has the possibility of using restricted deposits linked to the claim to reduce the balance, besides of the fact that such reduction gains are not subject to IRPJ/CSLL/PIS/COFINS. (ii)    Other – the Company filed request for tax installment payment according to the Incentive Tax Installment Payment Program (PPI). These taxes are adjusted by Special System for Settlement and Custody - SELIC and are payable in 120 months. c)Maturity structure of taxes in the noncurrent liabilities will occur as follows In2015

   144,0112016

   143,5402017

   142,8482018

   140,0682019

   135,100After 2019

   367,2821,072,849


F-74

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of reais, unless otherwise stated)
 22.Income and social contribution taxes a)Income and social contribution tax expense reconciliation 2013

   2012

   2011Profit before income and social contribution taxes

   1,754,790

   1,676,334

   804,655Income and social contribution taxes at the notional rate of 25% for the Company and 34% for subsidiaries

   (526,437)

   (502,900)

   (241,397)Recognition of deferred tax and social contribution asset over provisions

   -

   -

   106,196Tax penalties

   (5,227)

   (4,671)

   (3,053)Equity in an associate

   14,193

   3,246

   10,448Credit recovery/reversal

   -

   (17,275)

   31,026Reversal of deferred income and social contribution taxes and other tax credits (*)

   123,605

   -

   -Impact in revaluation of the Bartira’s investment at fair value

   34,003

   -

   -Other permanent differences (undeductible)

   1,280

   1,702

   11,781Effective income and social contribution taxes

   (358,583)

   (519,898)

   (84,999)Income and social contribution taxes for the year:Current

   (269,493)

   (326,550)

   (142,117)Deferred

   (89,090)

   (193,348)

   57,118Income and social contribution taxes expenses

   (358,583)

   (519,898)

   (84,999)Effective rate

   20.43%

   31.01%

   10.60%
 CBD does not pay social contribution tax (9%) based on final and unappealable court decision in the past. (*) Amount refers to deferred taxes on Bartira call option, which occurred with the option exercise in October 2013, since the option is no longer a financial instrument in the amount of R$ 106,760 besides additional tax credits recognized in the year amounting R$ 16,845. b)Breakdown of deferred income and social contribution tax assets and liabilities: 2013

   2012Tax losses

   793,633

   796,771Provision for contingencies

   301,686

   269,390Provision for derivative operations taxed on a cash basis

   5,997

   22,608Allowance for doubtful accounts

   81,731

   75,394Provision for financial expenses

   63,576

   49,557Goodwill tax amortization

   (395,564)

   (270,666)Present value adjustment Law 11638/07

   (929)

   1,320Financial lease adjustment Law 11638/07

   (75,110)

   (43,183)Fair value on derivatives adjustmentLaw 11638/07

   534

   729Fair value of assets acquired in business combination

   (808,318)

   (986,701)Technological innovation – future realization

   (20,708)

   (11,722)Depreciation as per tax rates

   (89,577)

   -Other

   32,954

   37,969Deferred income and social contribution tax assets

   (110,095)

   (58,534)Noncurrent assets

   950,757

   1,078,842Noncurrent liabilities

   (1,060,852)

   (1,137,376)Deferred income and social contribution taxes

   (110,095)

   (58,534)


F-75

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of reais, unless otherwise stated)
 22.Income and social contribution taxes–Continued b)   Breakdown of deferred income and social contribution taxes–Continued Management has prepared a technical feasibility study on the future realization of deferred tax assets, considering the probable capacity to generate taxable income in the context of the main variables of their business. This study was prepared based on information extracted from the strategic planning report previously approved by the Company’s Board of Directors. Based on these studies, the Company estimates to recover these tax credits, as follows: Year

   20132014

   263,8752015

   219,5922016

   59,5872017

   50,4072018

   357,296950,757
 c)Changes in deferred income and social contribution taxes 2013

   2012

   01.01.2012At January 1

   (58,534)

   134,814

   107,476Benefit (expense) for the year

   (89,090)

   (193,348)

   57,118Bartira (aquisition)

   29,534

   -

   -Public Offering of Share- Via Varejo

   8,288

   -

   -Other

   (293)

   -

   (29,780)At December 31

   (110,095)

   (58,534)

   134,814
  23.    Payable related to the acquisition of  non-controlling interest 2013

   2012Interest acquisition in Assai (a)

   5,339

   4,945Interest acquisition in Sendas (b)

   171,465

   216,277176,804

   221,222Current liabilities

   69,014

   63,021Noncurrent liabilities

   107,790

   158,201
  (a)    Refers to accounts payable due to the acquisition of noncontrolling interest in Assai, subsidiary that operates in the “Cash and carry” segment. (b)    Refers to accounts payable for the acquisition of noncontrolling interest in Sendas in December 2010, corresponding to 42.57% of the capital at the time the total amount of R$377,000. At December 31, 2013 three annual installments were remaining, recorded at present value, estimated to be adjusted by the IPCA, the last amortization will occur in July 2016.


F-76

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of reais, unless otherwise stated)
 24.Provision for risks The provision for risks is estimated by the Company and supported by its legal counsels. The provision was evaluated in an amount considered sufficient to cover losses deemed as probable by the Company: PIS/COFINS

   Taxes and other

   Social security and labor

   Civil

   TotalBalance at January 01, 2012

   78,050

   346,128

   132,853

   123,092

   680,123Additions

   4,963

   43,906

   102,158

   116,616

   267,643Payments

   -

   (3,179)

   (39,197)

   (14,528)

   (56,904)Reversals

   (947)

   (36,454)

   (33,547)

   (113,218)

   (184,166)Monetary restatement

   4,491

   13,681

   28,569

   20,924

   67,665Balance at December 31, 2012

   86,557

   364,082

   190,836

   132,886

   774,361Additions

   190,861

   11,165

   160,021

   90,572

   452,619Payments

   (14,245)

   (5,395)

   (48,487)

   (13,291)

   (81,418)Reversals

   (56,210)

   (37,204)

   (45,529)

   (64,493)

   (203,436)Monetary restatement

   16,221

   13,135

   27,800

   29,445

   86,601Acquisition of subsidiary

   7,116

   98,816

   12,822

   41

   118,795Transfer

   41,898

   (41,898)

   -

   -

   -Balance at December 31, 2013

   272,198

   402,701

   297,463

   175,160

   1,147,522
  a)Taxes Tax claims are indexed, by law, by monthly restatement, which refers to an adjustment in the amount of provisions for legal claims in accordance with the indexation rates used by each tax jurisdiction, In all cases, both the interest charges and fines, when applicable, were computed and fully provisioned with respect to unpaid amounts. The main provisioned tax claims are as follows: COFINSandPIS With the non-cumulativeness system when calculating PIS and COFINS, the Company is discussing at court the right to exclude the ICMS from the calculation basis of these two contributions. In addition, the Company offset tax debts related to PIS and COFINS against excise tax - IPI credits – inputs subject to a zero rate or exempt - acquired from third parties (transferred based on final and unappealable court decision). The amount for PIS and COFINS claims at December 31, 2013 is R$91,898 (R$86,557 at December 31, 2012). In addition, in 2013 there were developments in the claims related to the offset of Finsocial, COFINS and PIS, which lead our legal counsel to change their estimation of losses from possible to probable in the amount of R$173,184.


F-77

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of reais, unless otherwise stated)
 24.Provision for risks–Continued a)Taxes–Continued Taxes and other Taxes The Company has other tax claims, which after analysis of its legal counsel, were deemed as probable losses and accrued by the Company. These are: (i) tax assessment notices related to purchase, industrialization and sale of soybean and byproducts exports (PIS, COFINS and IRPJ); (ii) disagreement on the non-application of Accident Prevention Factor - FAP for 2011; (iii) disagreement on the “Fundo de Combate à Pobreza” (State Government Fund Against Poverty), enacted by the Rio de Janeiro State government; (iv) disagreement on tax losses carryforwards, as well as suppliers contracted considered disqualified before the registration of the State Internal Revenue Service, error when applying rate, ancillary obligations by State tax authorities; and (v) other less relevant issues. During the second quarter of 2013, procedural events occurred that led to change in the likelihood of loss from probable to possible of a claim related to income taxes in the amount of R$44,060. The amount recorded for those matters at December 31, 2013 is R$100,094 (R$173,687 at December 31, 2012). In addition, the Company discusses in court the eligibility to not pay the contributions provided for by Supplementary Law 110/01, referring to the FGTS (Government Severance Indemnity Fund for Employees) costs, The accrued amount at December 31, 2013 is R$38,509 (R$31,529 at December 31, 2012). Other Provisions for tax contingent liabilities were recorded in Via Varejo subsidiary, which upon business combinations are recorded, under technical pronouncement IFRS 3. At December 31, 2013, the amount recorded was R$165,283 (R$158,866 at December 31, 2012) in tax contingent liabilities. Main tax contingent liabilities recorded refer to administrative proceedings related to the offset of PIS contribution, under the protection of Decrees 2445/88 and 2449/88, generated in view of credits deriving from legal proceedings and the offset of tax debts with contribution credits levied on coffee exports. Contingencies Bartira In relation to the business combination of Bartira (note 15), contingencies were evaluated at fair value, as required by IFRS 3(R), which differs of IAS 37 used for evaluation of other contingencies. The main issue is the lack of documentation, amounting R$95,310 for Social Contribution, Income Tax, PIS, Cofins, IPI and ICMS.


F-78

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of reais, unless otherwise stated)
 24.Provision for risks–Continued b)Labor The Company is party to numerous lawsuits involving disputes with its employees, primarily arising from layoffs in the ordinary course of business, At December 31, 2013, the Company recorded a provision of R$297,467 (R$177,698 at December 31, 2012) referring to lawsuits whose risk of loss was considered probable. Management, assisted by its legal counsels, evaluates these claims recording provision for losses when reasonably estimable, bearing in mind previous experiences in relation to the amounts claimed. Labor claims are indexed to the benchmark interest rate (“TR”) 0.19% at December 31, 2013 (0.29% at December 31, 2012) plus 1% monthly interest rates. At December 31, 2013 labor provisions were recorded in subsidiary Via Varejo of contingent liabilities recognized upon business combination amounting to R$13,138. c)Civil and other The Company is defendant in civil actions, at several court levels (indemnifications and collections, among others) and at different courthouses. The Company’s Management sets up provisions in amounts considered sufficient to cover unfavorable court decisions when its internal and external legal advisors consider losses to be probable. Among these lawsuits, we point out the following: ·The Company files and answers various lawsuits in which it requests the renewals of lease agreements and the review of the lease paid. The Company recognizes a provision for the difference between the amount originally paid by the stores and the amounts pleaded by the adverse party (owner of the property) in the lawsuit, when internal and external legal advisors agree on the likelihood of changing the lease paid by the entity.At December 31, 2013, the amount accrued for these lawsuits is R$42,791 (R$36,112 at December 31, 2012), to which there are no restricted deposits. ·The subsidiary Via Varejo is party to lawsuits involving the consumer relations rights (civil actions and assessments from PROCON) and few lawsuits involving contracts terminated with suppliers and the amount referred to in these lawsuits totals R$68,694 at December 31, 2013 (R$43,769 at December 31, 2012). Total civil actions and other at December 31, 2013 is R$175,160 (R$132,886 at December 31, 2012). d)Other non-accrued contingent liabilities The Company has other litigations which have been analyzed by the legal counsels and deemed as possible but not probable; therefore, they have not been accrued, amounting to R$7,630,094 at December 31, 2013 (R$6,706,171 at December 31, 2012), and are mainly related to: ·INSS (Social Security Tax) – the Company was assessed regarding the non-levy of payroll charges on benefits granted to its employees, and the loss, considered possible, corresponds to R$282,853 at December 31, 2013 (R$283,245 at December 31, 2012). The proceedings are under administrative and court discussion. ·IRPJ, withholding income tax - IRRF, CSLL, tax on financial transactions - IOF, withholding income tax on net income  ILL, IPI – the Company has several assessment notices regarding offsetting proceedings, rules on the deductibility of provisions and payment discrepancies and overpayments; fine due to failure to comply with ancillary obligation, amongst other less significant taxes.


F-79

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of reais, unless otherwise stated)
 24.Provision for risks–Continued d)Other non-accrued contingent liabilities–Continued In the 4th quarter of 2012, the Company became aware of delinquency notice issued up by Internal Revenue Agency related to the collection of alleged differences in the payment of income tax due in the years 2007 to 2009, under the allegation that there was improper deduction of goodwill amortization arising from transactions between shareholders Casino and Abilio Diniz, The Company filed a defense at the administrative level and is awaiting a decision, In the second quarter of 2013, the Company became aware of a new delinquency in relation to the calendar years 2010 and 2011. No provision was made for both cases, since the chances of loss are classified partly as possible is R$636,787 at December 31, 2013 (R$300,800 at December 31, 2012) and partly as a remote by the Company ́s legal advisors. These proceedings await decision in the administrative and court level.  The amount involved in these assessments corresponds to R$1,296,578 at December 31, 2013 (R$783,305 at December 31, 2012). ·COFINS, PIS and provisional contribution on financial transactions - CPMF – the Company has been challenged for offsetting, collection of taxes on soybean export operations, tax payment discrepancies and overpayments; fine due to failure to comply with ancillary obligation, among other less significant taxes. These proceedings await decision in the administrative and court level, The amount involved in these assessments is R$982,419 at December 31, 2013 (R$1,076,782 at December 31, 2012). ·ICMS – the Company was served notice by the State tax authorities regarding: (i) on the appropriation of credits of electricity; (ii) acquisitions from vendors considered to be in arrears/default according to the Internal Revenue Service of State; (iii) refund of tax replacement without due compliance of ancillary obligations brought by CAT Ordinance 17 of the State of São Paulo; (iv) resulting from the sale of extended warranty, (v) financed from sales; and (viii) among others, not relevant. The total amount of these assessments is R$4,032,307 at December 31, 2013 (R$3,599,179 at December 31, 2012), which await a final decision in the administrative and court levels. ·Municipal service tax - ISS, Municipal Real Estate Tax (“IPTU”), Property Transfer Tax (“ITBI”) and other – these are related to assessments on third parties retention, IPTU payment discrepancies, fines due to failure to comply with ancillary obligations and sundry taxes, the amount is R$339,363 at December 31, 2013 (R$325,139 at December 31, 2012) and await administrative and court decisions. ·Other litigations–they are related to administrative lawsuits, real estate lease claims that the Company pleads the renewal of leases and setting rents according to the values prevailing in the market and the claims initiated against the Company and its subsidiaries under the civil court scope, special civil court, Consumer Protection Agency  - PROCON (in many States), Weight and Measure Institute  - IPEM, National Institute of Metrology, Standardization and Industrial Quality - INMETRO and National Health Surveillance Agency - ANVISA, amounting to R$697,174 at December 31, 2013 (R$638,521 at December 31, 2012). Occasional adverse changes in the expectation of risk of the referred lawsuits may require that additional provision for litigations be set up. The Company hires external counsel to defend the tax assessments received, which remuneration is linked to a percentage over the amount won in case of favorable final decision. This percentage may vary according to qualitative and quantitative factors of each claim, and on December 31, 2013, the estimated amount, in case of finalization of all claims with success, is approximately R$109 millions.


F-80

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of reais, unless otherwise stated)
 24.Provision for risks–Continued e)Restricted deposits from legal proceedings The Company is challenging the payment of certain taxes, contributions and labor-related obligations and has made court escrow deposits (restricted deposits) of corresponding amounts pending final court decisions, in addition to collateral deposits related to provisions for lawsuits. The Company has recorded in its assets amounts related to court deposits. 2013

   2012Tax

   145,271

   137,911Labor

   567,924

   738,228Civil and other

   101,995

   76,155Total

   815,190

   952,294
 f)Guarantees Lawsuits

   Real estate

   Equipment

   Bank guarantee

   TotalTax

   831,887

   32

   4,989,192

   5,821,111Labor

   7,195

   3,046

   70,939

   81,180Civil and other

   11,105

   1,772

   301,564

   314,441Total

   850,187

   4,850

   5,361,695

   6,216,732
 These guarantees are given in legal claims, mainly tax, and its cost is approximately 0.5% of value on lawsuits and is recorded by the passage of time.  g)Provisional Measure 627/13 In November 2013, the Provisional Measure (MP) 627 was issued, introducing changes in the tax rules and eliminating the Transitional Tax System (RTT). The Company, supported by its external advisors, analyzed the provisions of this MP, the implications of early adoption and the impacts in the financial statements for the fiscal year ended December 31, 2013, concluding that there are no material effects to be recorded. This analysis should be reviewed by the management when enacted the Law, since there may be adjustments or changes to your final draft. h)Tax audits According to current tax laws, municipal, federal, state taxes and social security contributions are subject to auditing in periods varying between 5 and 30 years.


F-81

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of reais, unless otherwise stated)
 25.Leasing transactions a)Operating lease 2013

   2012Gross commitments from operating leaseMinimum rental payment:Up to 1 year

   1,270,330

   931,2041 - 5 years

   3,873,476

   2,579,478Over 5 years

   5,085,869

   4,084,68110,229,675

   7,595,363
 The non-cancellable minimum operating lease payments refers to the period of contract in normal course of operation. All contracts have termination clauses in the event of breach to contract, ranging from one to six months of rent. If the Company had terminated these contracts at December 31, 2013, the fine would be R$631,515 (R$863,853 at December 31, 2012). (i)     Contingent payments The Management considers additional rental payments as contingent payments, which vary between 0.5% and 2.5% of sales. 2013

   2012

   2011Contingent payments recognized as expense in the year

   452,623

   349,424

   474,656Non contingent payments

   628,175

   576,985

   582.152
 (ii)     Clauses with renewal or adjustment option The lease term varies between 5 and 25 years and the agreements may be renewed according to the Rental Law 12,122/10. The agreements have periodic adjustment clauses according to inflation indexes.  2013

   2012Minimum rentals

   462,892

   433,161Contingent rentals

   941,211

   750,643Sublease rentals (*)

   (163,945)

   (143,867)1,240,158

   1,039,937
 (*) It refers to lease agreements receivable from commercial shop malls.


F-82

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of reais, unless otherwise stated)
 25.Leasing transactions–Continued b)   Financial lease Financial lease agreements amounted to R$482,543 at December 31, 2013 (R$369,699 at December 31, 2012), according to the chart below: 2013

   2012Financial lease liability –minimum lease payments:Up to 1 year

   56,330

   83,0541 - 5 years

   142,857

   127,283Over 5 years

   55,654

   35,254Present value of financial lease agreements

   254,841

   245,591Future financing charges

   227,702

   124,108Gross amount of financial lease agreements

   482,543

   369,699
  2013

   2012

   2011Contingent payments recognized as expense in the year

   2,397

   2,324

   2,918
  26.Deferred revenue The subsidiary Via Varejo received in advance values of trading partners on exclusivity in the intermediation services or additional/extended warranties, and subsidiary Barcelona received in advance values for the rental of shelves and light panel (Back lights) for exhibition of products from its suppliers. 2013

   2012Additional or extended warranties

   471,586

   513,003Bradesco agreement

   11,395

   -Barter agreement

   50,378

   32,975Back lights

   37,027

   17,807570,386

   563,785Current

   114,749

   92,120Noncurrent

   455,637

   471,665
 Management estimates that the value classified as noncurrent will be recognized in profit or loss, the passage of time and the financial performance of each contract, in the following proportion: 20132015

   

   126,4692016

   

   93,4252017

   

   76,0042018

   

   57,1972019

   

   55,5682020

   

   46,974455,637


F-83

---



Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of reais, unless otherwise stated)
 27.Equity a)   Capital stock The subscribed and paid-up capital is represented by 264,453 at December 31, 2013 (263,410 at December 31, 2012) in thousands of registered shares with no par value, of which 99,680 in thousands of common shares at December 31, 2013 and December 31, 2012, and 164,773 in thousands of preferred shares at December 31, 2013 (163,730 at December 31, 2012). The Company is authorized to increase its capital stock up to the limit of 400,000 (in thousands of shares), regardless of the amendment to the Company’s Bylaws, by resolution of the Board of Directors, which will establish the issue conditions. In the year ended of December 31, 2013 the Company increased the capital, as follows: ·At the Board of Directors’ Meeting held at February 19, 2013, the capital was increased by R$1,088 by means of the issue of 41,000 preferred shares. ·At the Extraordinary Shareholders’ Meeting held at April 17, 2013, the shareholders approved to increase the Company’s capital, in the amount of R$38,025 by capitalizing the special goodwill reserve without issuing new shares. ·At the Extraordinary Shareholders’ Meeting held on April 17, 2013, the shareholders approved to increase the Company’s capital in the amount of R$30,420 by capitalizing the special goodwill reserve with the of 300,000 preferred shares. ·At the Board of Directors’ Meeting held at April 25, 2013 the capital was increased by R$5,692 by means of the issue of 237,000 preferred shares. ·At the Board of Directors’ Meeting held at June 20, 2013 the capital was increased by R$4,091 by means of the issue of 304,000  preferred shares. ·At the Board of Directors’ Meeting held at August 29, 2013 the capital was increased by R$878 by means of the issue of 26,000 preferred shares. ·At the Board of Directors’ Meeting held at October 16, 2013 the capital was increased by R$1,473 by means of the issue of 44,000 preferred shares ·At the Board of Directors’ Meeting held at December 11, 2013 the capital was increased by R$3,018 by means of the issue of 91,000 preferred shares b)   Share rights Preferred shares (“PNA”) are non-voting and entitle the following rights and advantages to its holders: (i) priority in the reimbursement of capital should the Company be liquidated; (ii) priority in the receipt of a non-cumulative annual minimum dividend of R$0,08 per share; (iii) right to receive a dividend 10% greater than the dividend attributed to common shares, including the preferred dividend paid pursuant to item (ii) above for the purposes of calculating the respective amount. c)    Capital reserve – special goodwill reserve This reserve was generated by the corporate restructuring realized in 2006, and consisted of merging the former holding company, resulting in deferred income tax assets savings of R$103,398, and represents the future tax benefit through the amortization of incorporated goodwill. The special goodwill reserve corresponding to the benefit already received shall be capitalized at the end of each year to the benefit of controlling shareholders, with the issue of new shares.


F-84

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of reais, unless otherwise stated)
 27.  Equity–Continued c)    Capital reserve – special goodwill reserve - Continued The capital increase is subject to the preemptive right of noncontrolling shareholders, according to each one's interest by type and class of share at the time of issue, and the amounts paid by noncontrolling shareholders will be directly delivered to the controlling shareholder. At the Extraordinary Shareholders’ Meeting held at April 27, 2012, the shareholders approved to increase the Company's capital, in the amount of R$200,905, by capitalizing the special goodwill reserve.Out of this amount, R$40,180 were capitalized without issuing new shares and R$160,725 were capitalized to the benefit of Wilkes Participações S.A., pursuant to Article 7 of CVM Rule 319/99. At the Extraordinary Shareholders’ Meeting held at April 17, 2013, the shareholders approved to increase the Company’s capital, in the amount of R$38,025 by capitalizing the special goodwill reserve. Out of this amount, R$7,605 were capitalized without issuing new shares and R$30,420 were capitalized to the benefit of Wilkes Participações S.A., pursuant to Article 7 of CVM Rule 319/99. d)   Granted options The “options granted” account recognizes the effects of the Company’s executives’ share-based payments under technical pronouncement IFRS 2 – Share-based payment. e)   Profit reserve (i)Legal reserve: this is created based on appropriations of 5% of net income of each year, limited to 20% of the capital.  (ii)Expansion reserve: this is created based on appropriations of the amount determined by shareholders to reserve funds to finance additional fixed and working capital investment through the allocation of up to 100% of the net income remaining after the appropriations determined by law and supported by capital budget, approved at shareholders’ meeting.  f)    Stock option plan for preferref shares Pursuant to the resolutions at the Extraordinary Shareholders’ Meeting, held at December 20, 2006, the Company’s Stock Option Plan was approved. Starting on 2007, the grants of stock options to Management and employees were made following the rules below: Options will be classified as “Silver” and “Gold”, and the amount of Gold-type options may decrease and/or increase (reducer or accelerator), at the discretion of the Plan Management Committee, in the course of 36 months following the granting date.


F-85

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Companhia Brasileira de Distribuição  Notes to the consolidated financial statements December 31, 2013 and 2012 (In thousands of reais, unless otherwise stated)
 27.Equity–Continued f)    Preferred stock option plan – Continued The exercise price for the Silver-type option will correspond to the average of closing price of the Company preferred shares occurred over the last 20 trading sessions of BM&FBOVESPA, prior to the date on which the Committee resolves on the granting of option, with a 20% discount. The price for the Gold-type option will correspond to R$0,01 and the granting of these options are additional to the Silver options, the granting or the exercise of “Gold” options is not possible separately. In both cases, the prices will not be restated. The Silver and Gold options shall be effective as of the date of the respective agreement. The number of shares resulting from the Silver option is fixed (established in the agreement). The number of shares resulting from the Gold option is variable, establishing on the granting date a number of shares that may be increased or decreased. The Stock Option Committee approved in 2013 new criteria to calculate the reducer or accelerator index of the number of options granted classified as “Gold” in each series of the Stock Option Plan, according to the analysis of compliance with the concept of return on invested capital (ROIC) for series A5 and Return on Capital Employed (ROCE) of CBD, as of Series A6, inclusive. There is no limit for reduction or acceleration in this new criterion approved. Upon option vesting, the average ROIC/ROCE of the last three fiscal years will be calculated, compared to ROIC/ROCE calculated upon granting of each series. As a general rule of the Stock Option Plan, which may be altered by the Stock Option Committee in each series, the option vesting right will be granted between 36th and the 48th month as of the signature date of related adhesion agreement and the beneficiary will be entitled to acquire 100% of shares whose option was classified as “Silver”. The option exercise classified as “Gold” will occur in the same period, but the percentage of these options subject to exercise will be determined by the Stock Option Committee in the 35th month as of the signature date of related adhesion agreement, according to the aforementioned criteria. The options granted under the Stock Option Plan may be exercised in whole or in part, It is worth noting that "Gold" options are additional to "Silver" and thus the "Gold" options may only be exercised jointly with "Silver" options. The price on the exercise of options granted under the Stock Option Plan shall be fully paid in local currency by beneficiary, and the exercise price must be paid in first installment, due  30 days after the subscription date of their shares. At the Board of Directors’ Meeting held at February 19, 2013, the increase of the global limit of shares allocated to the Company's General Stock Option Plan was approved, from 11,618 thousand preferred shares to 15,500 thousand preferred shares, an increase of 3,882 thousand new preferred shares.


F-86

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Companhia Brasileira de Distribuição  Notes to the consolidated
financial statements December 31, 2013 and
2012 (In thousands of reais, unless
otherwise stated)
 27.Equity–Continued f)   
Share-based payment plans – Continued Information on the stock option
plans is summarized below: Price
    Lot of sharesSeriesgranted
    Grant
      date
    1st date of
      exercise
    2nd date of
      exercise and expiration
    On the grant
      date
    End of the
    year
    Number of options
      granted(in thousands)
    Exercised
    Not exercised by
      dismissal
    Total in
    effectBalance at December 31,2012SeriesA2 - Gold
    3/3/2008
    4/30/2008
    3/30/2011
    0.01
    0.01
    848
    (841)
    (7)
    -SeriesA2 - Silver
    3/3/2008
    4/30/2008
    3/30/2012
    26.93
    26.93
    950
    (943)
    (7)
    -SeriesA3 - Gold
    5/13/2009
    5/31/2012
    5/31/2013
    0.01
    0.01
    668
    (668)
    -
    -SeriesA3 - Silver
    5/13/2009
    5/31/2012
    5/31/2013
    27.47
    27.47
    693
    (693)
    -
    -SeriesA4 - Gold
    5/24/2010
    5/31/2013
    5/31/2014
    0.01
    0.01
    514
    (257)
    (2)
    255SeriesA4 - Silver
    5/24/2010
    5/31/2013
    5/31/2014
    46.49
    46.49
    182
    (118)
    (1)
    63SeriesA5 - Gold
    5/31/2011
    5/31/2014
    5/31/2015
    0.01
    0.01
    299
    (59)
    (11)
    229SeriesA5 - Silver
    5/31/2011
    5/31/2014
    5/31/2015
    54.69
    54.69
    299
    (59)
    (11)
    229SeriesA6 - Gold
    3/15/2012
    3/15/2015
    3/15/2016
    0.01
    0.01
    526
    (66)
    (19)
    441SeriesA6 - Silver
    3/15/2012
    3/15/2015
    3/15/2016
    64.13
    64.13
    526
    (66)
    (19)
    4415,505
    (3,770)
    (77)
    1,658Price
    Lot of sharesSeriesgranted
    Grant date
    1st date of
      exercise
    2nd date of
      exercise and expiration
    On the grant
      date
    End of the
    year
    Number of options
      granted(in thousands)
    Exercised
    Not exercised by
      dismissal
    Total in
    effectBalance at December 31,2013Series A4 - Gold
    5/24/2010
    5/31/2013
    5/31/2014
    0.01
    0.01
    514
    (512)
    (2)
    -Series A4 - Silver
    5/24/2010
    5/31/2013
    5/31/2014
    46.49
    46.49
    182
    (181)
    (1)
    -Series A5 - Gold
    5/31/2011
    5/31/2014
    5/31/2015
    0.01
    0.01
    299
    (140)
    (14)
    145Series A5 - Silver
    5/31/2011
    5/31/2014
    5/31/2015
    54.69
    54.69
    299
    (140)
    (14)
    145Series A6 - Gold
    3/15/2012
    3/15/2015
    3/15/2016
    0.01
    0.01
    526
    (171)
    (25)
    330Series A6 - Silver
    3/15/2012
    3/15/2015
    3/15/2016
    64.13
    64.13
    526
    (171)
    (25)
    330Series A7 - Gold
    3/15/2013
    3/14/2016
    3/14/2017
    0.01
    0.01
    358
    (26)
    (16)
    315Series A7 - Silver
    3/15/2013
    3/14/2016
    3/14/2017
    80.00
    80.00
    358
    (26)
    (16)
    3153,062
    (1,367)
    (113)
    1,580
  According to the attributions
provided for in the Stock Option Plan rules, the Management Committee of the
Plan at May 31, 2013, approved that no reduction occurred and/or acceleration
occurred referring to Series A4. At December 31, 2013 there were
232,586 treasury preferred shares which may be used as guarantee for the options
granted in the plan. The preferred share price at BM&FBovespa was R$105.33
per share.


F-87

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Companhia Brasileira de Distribuição  Notes to the consolidated
financial statements December 31, 2013 and
2012 (In thousands of reais, unless
otherwise stated)
 27.Equity–Continued f)   
Share-based payment plans – Continued (i)  
Consolidated information on the stock option plans – GPA The chart below shows the maximum
percentage of interest dilution to which current shareholders will eventually be
subject to in the event of exercise, until 2012, of all options
granted:  2013
    2012
    2011Number of options
    264,453
    263,410
    260,239Balance of granted series in effect
    1,580
    1,658
    1,963Maximum percentage of dilution
    0.60%
    0.63%
    0.75%
  The fair value of each option
granted is estimated on the granting date, by using the options pricing model
“Black&Scholes” taking into account the following assumptions: (a)
expectation of dividends of 0.88% (0.81% at December 31, 2012), (b) expectation
of volatility of nearly 28.91% at December 31, 2013 (33.51% at December 31,
2012) and (c) the risk-free weighted average interest rate of 10.86% at December
31, 2013 (10.19% at December 31, 2012). The expectation of remaining average
life of the series outstanding at December 31, 2013 was 1.70 year (1.64 year at
December 31, 2012). The weighted average fair value of options granted at
December 31, 2013 was R$62.59 (R$51.19 at December 31, 2012). Options
    Weighted average of exercise
      price
    Weighted average of remaining
      contractual term
    Intrinsic value
      addedAt December 31,
      2012Outstanding at the beginning
      of the year
    1,963
    16.90Granted during the
      year
    1,052
    32.08Cancelled during the
      year
    (64)
    29.40Exercised during the
      year
    (1,293)
    16.46Outstanding at the end of the
      year
    1,658
    26.40
    1.64
    106,168Total to be exercised at
      December 31, 2012
    1,658
    26.40
    1.64
    106,168At December 31,
      2013Granted during the
      year
    716
    40.02Cancelled during the
      year
    (51)
    36.43Exercised during the
      year
    (743)
    21.86Outstanding at the end of the
      year
    1,580
    34.39
    1.46
    112,091Total to be exercised at
      December 31, 2013
    1,580
    34.39
    1.46
    112,091
  At December 31, 2013 there were no
options to be exercised. Technical pronouncement IFRS 2 -
Share-based Payment determines that the effects of share-based payment
transactions are recorded in profit or loss and in the Company’s statement of
financial position. The amounts recorded in the profit or loss at December 31,
2013 were R$42,715 (R$45,022 at December 31, 2012).


F-88

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Companhia Brasileira de Distribuição  Notes to the consolidated
financial statements December 31, 2013 and
2012 (In thousands of reais, unless
otherwise stated)
 27.Equity–Continued g)  
Dividends The Annual and Extraordinary
Shareholders’ Meeting held at  April 17, 2013 approved the payment of
dividends for the fiscal year ended December 31, 2012, totaling R$165,987,
amounting to R$0.59 per common share and R$0.65 per preferred share. The total
dividend for the fiscal year ended December 31, 2012, including the value of
R$83,668 of dividends prepaid was R$249,655, which corresponds to R$0.89 per
common share and R$0.98 per preferred share. The Board of Directors’ Meeting
held at April 25, 2013 approved the payment of dividends prepaid for the first
quarter of 2013 in the amount of R$33,110, being R$0.13 per preferred share and
R$0.12 per common stock according to Company’s dividend policy. The payment of
dividend was made at June 16, 2013. The Board of Directors’ Meeting
held at July 19, 2013 approved the payment of dividends prepaid for the second
quarter of 2013 in the total amount of R$33,150, R$0.13 per preferred share and
R$0.12 per common share according to Company’s dividend policy. The payment of
dividend was made at August 12, 2013. The Board of Directors ́Meeting
held at October 16, 2013 approved the payment of dividends prepaid for the
trhird quarter of 2013 in the amount of R$33,159, R$0.13 per preferred share and
R$0.12 per common share, according to Company ́s dividend policy. The payment of
dividend was held on November 06, 2013. The management proposed the
dividends to be paid calculated as follows, considering the dividends prepaid to
its shareholders in the amount R$99,419 in 2013. The dividend payable at
December 31, 2013 is R$152,849 (R$165,987 in December 31, 2012), which
corresponds to a remuneration of R$0.5353953452 for common shares and
R$0.5889348797 for preferred shares.  Dividends proposed2013
    
    2012Net income for the
      year
    1,052,495
    
    1,051,181Legal
      reserve
    (52,624)
    
    (52,559)Calculation basis of
      dividends
    999,871
    
    998,622Mandatory minimum dividends –
      25%
    249,968
    
    249,655Payment of interim
      dividends
    (99,419)
    
    (83,668)Mandatory minimum dividends
      of year
    150,549
    
    165,987Mandatory minimum dividends
      prior year
    931
    
    520Dividends
      payable
    151,480
    
    166,507


F-89

---



Companhia Brasileira de Distribuição  Notes to the consolidated
financial statements December 31, 2013 and
2012 (In thousands of reais, unless
otherwise stated)
 27.Equity–Continued h) 
Noncontrolling interest The changes in equity related to
non-controlling interest refer, besides the attributed profit for the year, the
amounts referring to transactions with these shareholders representing an
increase of interest of non-controlling shareholders over the Company’s total
equity. Among main transactions, we point out: i) the secondary tender offer of
Via Varejo shares (Note 14) and ii) the acquisition of interest in Nova
Pontocom.  Description
    
    Parent
      Company
    
    Noncontrolling
    
    ConsolidatedPublic offering of shares (Note 14(a)
      (ii)Total proceeds
    
    896,803
    
    -
    
    896,803Investiments and
      transaction costs
    
    (562,527)
    
    473,531
    
    (88,996)Income tax over capital gain
    
    (134,678)
    
    -
    
    (134,678)Net effect on shareholder’s
      equity
    
    199,598
    
    473,531
    
    673,129NPC interest acquisition (note
      1(f))
    
    (73,265)
    
    23,617
    
    (49,648)Net effect of capital
      transactions
    
    126,333
    
    497,148
    
    623,481
  28.Net sales 2013
    2012
    2011Gross revenue from goods and/or
      servicesGoods
    63,761,763
    56,695,970
    52,403,743Rendering of services
    1,315,985
    1,270,592
    1,292,778Barter revenue(Note 11 (c))
    -
    152,526
    -Financial services
    1,212,343
    897,560
    681,746Sales return and cancellation
    (1,884,615)
    (1,783,015)
    (1,697,695)64,405,476
    57,233,633
    52,680,572Taxes
    (6,675,214)
    (6,309,172)
    (6,086,086)Net sales
    57,730,262
    50,924,461
    46,594,486


F-90

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Companhia Brasileira de Distribuição  Notes to the consolidated
financial statements December 31, 2013 and
2012 (In thousands of reais, unless
otherwise stated)
 29.Cost of sales, selling and general and administrative
expenses  2013
    2012
    2011Inventories costs
    (42,704,079)
    (37,167,548)
    (33,935,134)Personnel expenses
    (5,094,925)
    (4,702,122)
    (4,538,292)Outsourced services
    (2,789,421)
    (2,858,472)
    (2,992,909)Functional expenses
    (1,457,843)
    (1,383,496)
    (1,123,910)Selling expenses
    (659,789)
    (593,662)
    (535,285)Other expenses
    (662,765)
    (576,221)
    (429,348)(53,368,822)
    (47,281,521)
    (43,554,878)Cost of sales
    (42,704,079)
    (37,167,548)
    (33,935,134)Selling expenses
    (9,180,009)
    (8,360,114)
    (7,936,647)General and administrative expenses
    (1,484,734)
    (1,753,859)
    (1,683,097)(53,368,822)
    (47,281,521)
    (43,554,878)
 30.Other operating expenses,
net 2013
    2012
    2011Provision for legal
      claims(i)
    (392,308)
    -
    -Tax installment
      payment
    -
    -
    (27,951)Indemnified liability Via
      Varejo and CB (ii)
    (147,233)
    (17,532)
    (89,162)Busineses Combination
      Bartira
    71,364
    -
    -Expenditures with integration
      / restructuring (iii)
    (104,636)
    (32,063)
    (83,393)Results from fixed assets write-off
    (60,562)
    11,805
    (48,820)Other
    (39,731)
    4,776
    (9,367)Total
    (673,106)
    (33,014)
    (258,693)
 (i)Refers to
the provision of tax claims Finsocial and PIS and Cofins, whose evaluation by
the Management supported by their legal counsel has become probable loss during
the year, and review of labor risks and respective judicial deposit. (ii)Amount is
comprised by: i) Expenses related to external consultants concluded on October
2013 amounting R$68,863, including: Expenses of R$57,923 referring to
association expenses until June 30, 2013, R$54,667 referring to receivable
write-off that were deemed as uncollectible and not subject of reimbursement by
the parties; gain of R$57,300 referring to receivables considered, until now, as
contingent assets; and other expenses of R$8,307 (note 1d); and ii) Expenses of
R$78,370 of indemnification effects to Via Varejo and CB; (iii)Amounts
related to the Company’s executives, who were informed during the year about
resignation that represents importante changes in the departments’
structure;  31.Financial result,
net 2013
    2012
    2011Finance
      expenses:Cost of debt
    (867,661)
    (907,505)
    (916,548)Cost of sales of
      receivables
    (626,956)
    (523,833)
    (699,952)Monetary restatement
      liabilities
    (238,055)
    (267,510)
    (287,216)Other expenses
    (103,528)
    (87,312)
    (22,242)Total expenses
    (1,836,200)
    (1,786,160)
    (1,925,958)Finance
    income:Revenue in cash and cash
      equivalents
    375,407
    357,927
    338,906Monetary restatement
      assets
    255,821
    217,381
    243,435Other financial
      revenues
    11,523
    17,979
    10,909Total financial
      income
    642,751
    593,287
    593,250Total
    (1,193,449)
    (1,192,873)
    (1,332,708)
  The hedge effects in 2013 and 2012
are disclosed in Note 20(a).


F-91

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Companhia Brasileira de Distribuição  Notes to the consolidated
financial statements December 31, 2013 and
2012 (In thousands of reais, unless
otherwise stated)
 32.Earnings per share  The Company computes earnings per
share by dividing the net income pertaining to each class of share by the
weighted average of the respective class of shares outstanding during the year. Equity instruments that will or
may be settled in Company shares are included in the calculation only when their
settlement has a dilutive impact on earnings per share. The Company granted a share-based
compensation plan to its employees (see Note 27), whose dilutive effects are
reflected in diluted earnings per share by applying the "treasury share"
method. When the stock option exercise
price is greater than the average market price of preferred shares, diluted
earnings per share are not affected by stock options. As of 2003, preferred shares are
entitled to a dividend 10% greater than that distributed to the common shares.
As such earnings may be capitalized or otherwise allocated, there can be no
assurance that preferred shareholders will receive the 10% premium referred to
above, unless earnings are fully distributed. The earnings per share are
calculated as if options were exercised at the beginning of the period, or upon
issuance, if later, and as if the funds received were used to purchase the
Company own shares. The following table presents the
calculation of profit available to common and preferred shareholders and the
weighted average of outstanding common and preferred shares used to calculate
basic and diluted earnings per share for each the years reported: 2013
    
    2012Preferred
    Common
    Total
    
    Preferred
    Common
    TotalBasic
    numeratorActual dividend
      proposed
    161,118
    88,850
    249,968
    
    160,248
    89,407
    249,655Basic allocated and
      undistributed earnings
    517,273
    285,254
    802,527
    
    514,480
    287,046
    801,526Allocated net income available for
      common and preferred
      shareholders
    678,391
    374,104
    1,052,495
    
    674,728
    376,453
    1,051,181Basic denominator (thousands
      of shares)Weighted average of
      shares
    164,325
    99,680
    264,005
    
    162,417
    99,680
    262,097Basic earnings per thousands
      of shares (R$)
    4.13
    3.75
    
    
    4.15
    3.78Diluted
      denominatorWeighted average of shares
      (in thousands)
    164,325
    99,680
    264,005
    
    162,417
    99,680
    262,097Stock call
    option
    627
    -
    627
    
    1,329
    -
    1,329Diluted weighted average of
      shares (in thousands)
    164,952
    99,680
    264,632
    
    163,746
    99,680
    263,426Diluted earnings per
      thousands of shares (R$)
    4.11
    3.75
    
    
    4.12
    3.78


F-92

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Companhia Brasileira de Distribuição  Notes to the consolidated
financial statements December 31, 2013 and
2012 (In thousands of reais, unless
otherwise stated)
 32.Earnings per share-
Continued  2011Preferred
    Common
    TotalBasic
    numeratorActual dividend
      proposed
    
    109,037
    61,540
    170,577Basic allocated and
      undistributed earnings
    
    349,447
    198,195
    547,642Allocated net income available for common and
      preferred shareholders
    
    458,484
    259,735
    718,219Basic denominator (thousands
      of shares)Weighted average of
      shares
    
    159,775
    99,680
    259,455Basic earnings per thousands
      of shares (R$)
    
    2.87
    2.61Diluted
      denominatorWeighted average of shares
      (in thousands)
    
    159,775
    99,680
    259,455Stock call
    option
    
    909
    -
    909Diluted weighted average of
      shares (in thousands)
    
    160,684
    99,680
    260,364Diluted earnings per
      thousands of shares (R$)
    
    2.85
    2.61
   33.Private pension plan of defined
contribution  In July 2007, the Company
established a supplementary private pension plan of defined contribution on
behalf of its employees to be managed by the financial institutionBrasilPrev
Seguros e Previdência S.A.The Company pays monthly contributions on behalf of its
employees, and the amounts paid referring to the year ended December 31, 2013
R$3,721 (R$3,780 at December 31, 2012), and employees contributionsR$5,310
(R$4,715at December 31, 2012), The plan had 1,012 participants at
December 31, 2013 (878 at December 31, 2012).  34.Insurance coverage  The insurance coverage at December
31, 2013 is summarized as follows: Parent Company
    ConsolidatedInsured assets
    Covered
      risks
    Amount
      insured
    Amount
      insuredProperty,
      equipment and inventories
    Assigning profit
    7,915,199
    19,285,514Profit
    Loss of profits
    1,852,050
    4,157,057Cars and other
      (*)
    Damages
    381,008
    708,639
 The Company maintains specific
policies referring to civil liability and directors and officers liability
amounting to R$ 318,630. (*)     The value reported above does
not include coverage of the hooves, which are insured by the value of 100% of
Foundation Institute of Economic Research – FIPE table.


F-93

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Companhia Brasileira de Distribuição  Notes to the consolidated
financial statements December 31, 2013 and
2012 (In thousands of reais, unless
otherwise stated)
 35.Segment information  Management considers the following
segments, as follows: ·Food retail – includes
the tradenames “Pão de Açúcar”, “Extra Hiper”, “Extra Supermercado”,
“Mini-mercado Extra”, “Posto Extra”, “Drogaria Extra” and “GPA Malls &
Properties”. ·Home appliances –
includes the tradenames “Ponto frio” and “Casas Bahia”. ·Cash and
carry–
includes the tradename “ASSAI”. ·E-commerce includes the
“sites” www.pontofrio.com.br; www.extra.com.br; www.casasbahia.com.br;
www.barateiro.com.br and www.partiuviagens.com.br. Management monitors the operating
results of its business units separately for the purpose of making decisions
about resource allocation and performance assessment. Segment performance is
evaluated based on operating income and is measured consistently with operating
income in the interim financial information, GPA financing (including finance
expenses and finance income) and the income taxes are managed on a segment
basis. The Company is engaged in
operations of food retail stores located in 19 states and the Federal District
of Brazil. Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker who has been
identified as the Chief Executive Officer. The chief operating decision-maker
allocates resources and assesses performance by reviewing results and other
information related to four segments. As a mass retailer, the Company
believes that no categorization of products would differentiate the way it
offers products and services at its stores, and would not represent the
similarity as contemplated in paragraph 32 of IFRS 8. The Company deems
impracticable the disclosure of information on sales per product category, given
that similar products are sold based on each business’ strategies and each
segment has its own management controls.


F-94

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Companhia Brasileira de Distribuição  Notes to the consolidated
financial statements December 31, 2013 and
2012 (In thousands of reais, unless
otherwise stated)
 35.Segment
information– Continued The Company measures the results
of segments using IFRS, among other measures, each segment’s operating profit,
which includes certain corporate overhead allocations, At times, the Company
reviews the measurement of each segment’s operating profit, including any
corporate overhead allocations, as dictated by the information regularly
reviewed by the chief operating decision-maker, When revisions are made, the
operating results of each segment affected by the revisions are restated for all
years presented to maintain comparability, Information about the segments is
included in the following table:  2013Description
    Food retail
    Cash and carry
    Home
      appliances
    E-commerce
    Total
    Eliminations (*)
    TotalNet sales revenue
    25,414,314
    6,273,426
    21,745,617
    4,296,905
    57,730,262
    -
    57,730,262Gross profit
    7,029,902
    913,860
    6,689,792
    392,629
    15,026,183
    -
    15,026,183Depreciation and amortization
    (594,299)
    (56,039)
    (130,161)
    (6,906)
    (787,405)
    -
    (787,405)Equity in an associate
    33,255
    -
    14,055
    -
    47,310
    -
    47,310Operating income
    1,032,283
    193,755
    1,625,395
    96,806
    2,948,239
    -
    2,948,239Finance expenses
    (852,838)
    (46,435)
    (814,630)
    (154,585)
    (1,868,488)
    32,288
    (1,836,200)Finance revenue
    374,689
    22,960
    263,915
    13,475
    675,039
    (32,288)
    642,751Earnings (loss) before income and social
      contribution taxes
    554,134
    170,280
    1,074,680
    (44,304)
    1,754,790
    -
    1,754,790Income and social
      contribution taxes
    (12,799)
    (58,206)
    (303,980)
    16,402
    (358,583)
    -
    (358,583)Net profit
    (loss)
    541,334
    112,074
    770,701
    (27,902)
    1,396,207
    -
    1,396,207Current assets
    7,087,919
    1,358,757
    8,753,861
    1,412,263
    18,612,800
    (3,065)
    18,609,735Noncurrent assets
    12,717,447
    2,456,542
    4,376,438
    550,254
    20,100,681
    (702,064)
    19,398,617Current liabilities
    5,379,993
    2,603,726
    7,833,044
    1,901,120
    17,717,883
    (705,129)
    17,012,754Noncurrent liabilities
    6,300,186
    278,946
    1,697,586
    6,916
    8,283,634
    -
    8,283,634Equity
    8,125,187
    932,627
    3,599,669
    54,481
    12,711,964
    -
    12,711,964
    2012Description
    Food
      retail
    Cash and
      carry
    Home
    appliances
    E-commerce
    Total
    Eliminations (*)
    TotalNet sales
    23,439,000
    4,639,211
    19,437,736
    3,408,514
    50,924,461
    -
    50,924,461Gross profit
    6,741,588
    674,693
    5,857,977
    482,655
    13,756,913
    -
    13,756,913Depreciation and amortization
    (553,084)
    (43,610)
    (152,945)
    (1,899)
    (751,538)
    -
    (751,538)Equity in an associate
    11,273
    -
    (454)
    -
    10,819
    -
    10,819Operating income
    1,509,652
    145,625
    1,106,134
    107,796
    2,869,207
    -
    2,869,207Finance expenses
    (872,342)
    (90,094)
    (745,027)
    (113,037)
    (1,820,500)
    34,340
    (1,786,160)Finance revenue
    423,439
    23,514
    170,692
    9,982
    627,627
    (34,340)
    593,287Earnings (loss) before income and social
      contribution taxes
    1,060,749
    79,046
    531,797
    4,742
    1,676,334
    -
    1,676,334Income and social
      contribution taxes
    (287,222)
    (18,295)
    (212,545)
    (1,836)
    (519,898)
    -
    (519,898)Net profit
    (loss)
    773,526
    60,751
    319,254
    2,905
    1,156,436
    -
    1,156,436Current assets
    7,531,844
    827,835
    7,650,902
    861,609
    16,872,190
    (191,888)
    16,680,302Noncurrent assets
    12,383,311
    2,434,936
    3,234,372
    335,589
    18,388,208
    (236,402)
    18,151,806Current liabilities
    4,376,599
    2,003,619
    6,324,067
    1,115,274
    13,819,559
    (428,292)
    13,391,267Noncurrent liabilities
    8,337,036
    388,311
    1,647,530
    13
    10,372,890
    -
    10,372,890Equity
    7,201,520
    870,841
    2,913,677
    81,911
    11,067,949
    2
    11,067,951


F-95

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Companhia Brasileira de Distribuição  Notes to the consolidated
financial statements December 31, 2013 and
2012 (In thousands of reais, unless
otherwise stated)
 35.Segment information– Continued 2011Description
    Food retail
    Cash and carry
    Home appliance
    E-commerce
    Total
    Eliminations (*)
    TotalNet sales
    21,675,732
    3,902,038
    17,827,516
    3,189,200
    46,594,486
    -
    46,594,486Gross profit
    6,078,608
    534,017
    5,556,227
    490,500
    12,659,352
    -
    12,659,352Depreciation and
      amortization
    (515,662)
    (31,703)
    (123,595)
    (7,417)
    (678,377)
    -
    (678,377)Equity in an
      associate
    18,918
    -
    15,907
    -
    34,825
    -
    34,825Operating income
    1,211,935
    75,204
    678,527
    171,697
    2,137,363
    -
    2,137,363Financial
    expenses
    (925,401)
    (98,655)
    (816,192)
    (131,871)
    (1,972,119)
    46,161
    (1,925,958)Financial
    revenue
    372,360
    10,873
    254,307
    1,871
    639,411
    (46,161)
    593,250Earnings (loss) before income
      and social contribution taxes
    658,893
    (12,577)
    116,643
    41,696
    804,655
    -
    804,655Income and social
      contribution taxes
    (34,580)
    4,066
    (39,623)
    (14,862)
    (84,999)
    -
    (84,999)Net profit (loss)
    624,313
    (8,511)
    77,022
    26,832
    719,656
    -
    719,656Current assets
    8,225,600
    833,336
    7,517,380
    884,582
    17,460,898
    (184,506)
    17,276,392Noncurrent
    assets
    12,994,359
    581,258
    3,152,689
    120,279
    16,848,585
    (355,973)
    16,492,612Current
    liabilities
    6,483,760
    679,817
    5,951,296
    926,181
    14,041,054
    (539,852)
    13,501,202Noncurrent
      liabilities
    7,536,679
    515,388
    2,121,200
    737
    10,174,004
    (627)
    10,173,377Equity
    7,199,520
    219,389
    2,597,573
    77,943
    10,094,425
    -
    10,094,425
  Company general
information The Company and its subsidiaries
operate primarily as a retailer of food, clothing, home appliances and other
products, Total revenues are composed of the following types of
products: 2013
    2012
    2011Food
    54.9%
    55.1%
    54.9%Non-food
    45.1%
    44.9%
    45.1%Total sales
    100.0%
    100.0%
    100.0%
  At December 31, capital
expenditures were as follows: 2013
    2012Food
    1,446,694
    1,064,394Non-food
    402,229
    329,000Total investments
    1,848,923
    1,393,394
   36.Subsequent events a)Capital
increase At the Board of Directors’ Meeting
held at February 13, 2014, the capital was increased by  R$15,522 in cash
by means of the issue of 471,000 preferred shares, related to the exercise of
stock options. b)Performance Commitment
Agreement - CADE Between January 1st, and February
12, 2014, the subsidiary Via Varejo sold 7 stores related to the requirements of
CADE for the approval of the Association Agreement.See note 1 (e).





F-96

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Report of independent registered public accounting firm  The Board of Directors and Shareholders of Companhia Brasileira de Distribuição and subsidiaries  We have audited the accompanying consolidated statements of income and comprehensive income, consolidated statements of changes in shareholders' equity, and consolidated statements of cash flows of Companhia Brasileira de Distribuição and subsidiaries (the “Company”) for the year ended December 31, 2011. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.  We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.  In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated results of operations and the cash flows for the year ended December 31, 2011 of Companhia Brasileira de Distribuição and subsidiaries, in conformity with International Financial Reporting Standards - IFRS, issued by the International Accounting Standards Board - IASB.   ERNST & YOUNG TERCO Auditores Independentes S.S. CRC2SP015199/O-6   Antonio Carlos Fioravante Accountant CRC no 1SP184973/O-0 São Paulo, Brazil April 30, 2012





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SIGNATURES The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned to sign this Amendment No. 1 to the Annual Report on its behalf. COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO By:/s/ Ronaldo Iabrudi Name:  Ronaldo Iabrudi Title:  Chief Executive Officer By:/s/ Christophe Hidalgo Name:  Christophe Hidalgo Title:  Chief Financial Officer Dated:  January 30, 2015


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Exhibit Index ExhibitNumber                 Description 12.1

   Section 302 Certification of the Chief Executive Officer.12.2

   Section 302 Certification of the Chief Financial Officer.13.1

   Section 906 Certification of the Chief Executive Officer.13.2

   Section 906 Certification of the Chief Financial Officer.