COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Authorized-Capital Publicly-Held Company

CNPJ/MF n.º 47.508.411/0001‐56 

NIRE 35.300.089.901

GENERAL SHAREHOLDERS MEETING TO BE HELD ON DECEMBER 28, 2012, AT 11 A.M.

MANAGEMENT PROPOSAL

Dear shareholders,

The management of Companhia Brasileira de Distribuição (“Company” or “CBD”), under the terms of Law No. 6.404, of December 15, 1976, as amended (“Lei das S.A.”), and under the terms of CVM Instruction No. 481, of December 17, 2009, as amended (“ICVM 481/09”), hereby present, for discussion on the general shareholders meeting (“AGE”) to be held on the December 28^th, 2012, at 11:00am, at the Company’s registered offices, at Avenida Brigadeiro Luís Antonio, No. 3.142, sala 1, at the city and state of São Paulo, a proposal as hereunder (“Proposal”): 

1.                  SCOPE 

The scope of the present Proposal is to consolidate  the terms and conditions in connection with the required activities for the corporate restructuring of Grupo Pão de Açúcar, as following: (i) partial and discretionary spin-off of Sendas Distribuidora S.A. (“Sendas”), followed by the merger of the assets spun-off of Sendas by the Company; (ii) partial spin-off of Barcelona Comércio Varejista e Atacadista S.A. (“Barcelona”), followed by the merger of the assets spun-off of Barcelona by Sendas; (iii) subscription of new shares on the capital of Barcelona, by means of the capitalization of credits held by the Company against Barcelona; (iv) exchange of all the shares of Barcelona, held by the Company, for all quotas of Sé Supermercados Ltda. (“Sé”), held by Novasoc Comercial Ltda. (“Novasoc”); (v) partial spin-off of Sé, followed by the merger of the assets spun-off of Sé by the Company (“Restructuring Operation”). 

2.                  CORPORATE RESTRUCTURING

Means the restructuring of Grupo Pão de Açúcar by means of a sequence of corporate acts in connection with the hereunder companies, directly or indirectly, by the Company.

(i)                 Sendas Distribuidora S.A., incorporate company, headquartered at City of São João do Meriti, State of Rio de Janeiro, at Rua João Antonio Sendas, No. 286, José Bonifácio, registered under the CNPJ/MF No. 06.057.223/0001-71, dully incorporated at Board Trade of Rio de Janeiro under the No. 33.300.272.909 (“Sendas”); 

(ii)               Barcelona Comércio Varejista e Atacadista S.A., incorporate company, headquartered at City of São Paulo, State of São Paulo, at Rua Manilha, nº 42, Sobreloja, Vila Carrão, registered under the CNPJ/MF No. 07.170.943/0001-01, dully incorporated at Board Trade of Rio de Janeiro under the No. 35.300.320.590 (“Barcelona”); 

(iii)             Sé Supermercados Ltda., incorporate company, headquartered at City of São Paulo, State of São Paulo, at Av. Brigadeiro Luis Antônio, No. 3.172, Jardim Paulista, CEP 01402-002, registered under the CNPJ/MF No. 01.545.828/0001-98, dully incorporated at Board Trade of Rio de Janeiro under the No. 35.215.818.694 (“Sé”); and

(iv)             Novasoc Comercial Ltda., incorporate company, headquartered at City of São Paulo, State of São Paulo, at Av. Brigadeiro Luis Antônio, No. 3.126, 2^nd floor, Jardim Paulista, CEP 01402-002, registered under the CNPJ/MF No. 03.139.761/0001-17, dully incorporated at Board Trade of Rio de Janeiro under the No. 35.215.667.106 (“Sé”). 

2.1.            General Description of the Restructuring Operation

The Restructuring Operation refers to companies within the same economic group of the Company and takes part on a major restructuring of Grupo Pão de Açúcar, which shall be fully implemented between 2013 and 2014 and targets, mainly, considerable benefits for administrative, economic and financial scopes, mainly by means of the rationalization and simplification of the corporate structure of Grupo Pão de Açúcar, which may enable the consolidation and reduction of operational costs, enabling, also, operational and tax synergies for companies within the Group.

2.2.            Protocols 

As established by Lei das S.A., the terms and conditions regarding mergers and acquisitions shall count with a protocol previous negotiated and signed between the management of each entity or between the shareholders of the companies involved into.

Such protocol shall include the hereunder information: (i) the number, species and class of the shares to be used in substitution of shareholders rights that shall be terminated and the criteria taken into account to establish the substitution affairs; (ii) the resources and liabilities that shall perform each part of the company’s asset, in case of spin-off; (iii) the evaluation criteria for net worth, the evaluation date, and the procedures for further asset value variation; (iv) eventual explanation to be taken regarding the shares or quotas that one company held from another company; (v) the capital of the companies to be created or the reduction of capital of companies involved into the operation; (vi) draft or drafts of bylaws, of bylaws amendments, that shall be approved in order to complete the operation; (vii) all further conditions that the operation are bound to.

Besides the protocol, the regulation requires the preparation of a reasoning of the operation to be subject to shareholders meeting appreciation of the involved companies, which shall scrutiny: (i) the motivation or purposes of the operation and the interest of the company on accomplishing it; (ii) the preferred shares that the shareholders shall own and the purposes for the modification of their rights, if so; (iii) the composition, after the operation, considering kind and class of the shares of the capital of the companies that shall issue shares in substitution of those to be extinguished; and (iv) the reimbursement amount for the stock that the dissident shareholders have rights of.

In compliance with legal requirements, on December 28^th, 2012 was undertaken an “Agreement for Protocol and Justification for the Partial and Discretionary Spin-off of Sendas Distribuidora S.A., followed by the merger of the asset spun-off by Companhia Brasileira de Distribuição” (Exhibit I); on December 28^th, 2012 was undertaken an “Agreement for Protocol and Justification for the Partial and Discretionary Spin-off of Barcelona Comércio Varejista e Atacadista S.A., followed by the merger of the asset spun-off by Sendas Distribuidora S.A.” (Exhibit II); and on December 28^th, 2012 was undertaken an “Agreement for Protocol and Justification for the Partial and Discretionary Spin-off of Sé Supermercados Ltda, followed by the merger of the asset spun-off by Companhia Brasileira de Distribuição” (Exhibit III); together they perform the terms, conditions and justification for each of the referred corporate operations.

Reference is made to the “Agreement for Protocol and Justification for the Partial and Discretionary Spin-off of Sendas Distribuidora S.A., followed by the merger of the asset spun-off by Companhia Brasileira de Distribuição” and the “Agreement for Protocol and Justification for the Partial and Discretionary Spin-off of Sé Supermercados Ltda, followed by the merger of the asset spun-off by Companhia Brasileira de Distribuição”, which are available for the shareholder at the headquarters of the Company and on the respective webpages of Brazilian Securities and Exchange Commission (“CVM”) and on webpage of BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros (“BM&FBOVESPA”). 

2.3.            Information regarding the Evaluation Companies

The board of the Company, for purposes of Article 21 of ICVM481/09, discloses the hereunder information in connection with Magalhães Andrade S/S Auditores Independentes, registered on CNPJ/MF under the No. 62.657.242/0001-00, registered on CRC/SP under the No. 2SP000233/O-3, headquartered at headquartered at City of São Paulo, State of São Paulo, at Avenida Brigadeiro Faria Lima, 1893, 6º floor, Jardim Paulistano (“Magalhães Andrade”), hired as an evaluation company in charge for the preparation of accounting reports in connection with Reestructuring Operation

ü    Recommended Evaluator: For purposes of preparation of the evaluation report or the net book value in connection with Restructuring Operation , the board of the Company recommended the hiring of the independent firm Magalhães Andrade.

ü    Description of the technical background of Magalhães Andrade. The description of the technical background of Magalhães Andrade for purposes of preparation of the accounting evaluation reports follows attached as Exhibit IV.

ü    Presented Work Proposal. The present work proposal follows attached as Exhibit V to this document.  

ü    Relation between Magalhães Andrade, the Company and Related Parts on the last 3 (three) years. There is not any material relationship between Magalhães Andrade, the Company and Related Parts.

The board of the Company, for purposes of Article 32 of ICVM 481/09, presenteds the hereunder information regarding PricewaterhouseCoopers Corporate Finance & Recovery Ltda., registered on CNPJ/MF under the No. 05.487.514/0001-37, headquartered at the City of São Paulo, State of São Paulo, at Avenida Francisco Matarazzo, 1400, 1˚ floor (“PWC”), hired as evaluator company in charge for the preparation of economic reports in connection with the Restructuring Operation:

ü    Recommended Evaluator. In order to accomplish the economic evaluation reports in connection with the Restructuring Operation, the board of the Company recomended the hiring of the independente firm PWC.

ü  Description of the technical background of PWC. The description of the technical background of PWC for purposes of preparation of the accounting evaluation reports follows attached as Exhibit VI.

ü  Presented Work Proposal. The present work proposal follows attached as Exhibit VI to this document.  

ü  Relation between PWC, the Company and Related Parts on the last 3 (three) years. There is not any material relationship between Magalhães Andrade, the Company and Related Parts.

2.4.            Partial and Discritionary Spin-offof Sendas

Due the partial and discretionary of Sendas, its capital shall be reduced in R$504,017.00 (five hundred and four thousand and seventeen Reais), corresponding to the net book value of the spun-off asset, by means of the termination, based on the economic relation between the spun-off asset and the total asset of Sendas, under the terms of the economic evaluation report, in 157,082,802 (one hundred fifty-seven million, eighty-two thousand, eight hundred and two) preferred shares issued by Sendas, all owned by CBD, performing a raising from the current R$835,677,000.00 (eight hundred thirty-five million six hundred and seventy-seven thousand Reais), represented by 700,002,000(seven hundred million and two thousand) common shares and 157.082.802 (one hundred fifty-seven million, eight two thousand eight hundred and two) preferred shares, to R$835,172,983. 00 (eight hundred and thirty five million, one hundred seventy-two thousand, nine hundred eight-three Reais), represented by 700,002,000  (seven hundred million and two thousand) common shares, without par value, wich shall perform the hereunder  ownership structure frame of Sendas:

The evaluation report of the net assets of Sendas to be transferred to the Company (“Evaluation Report of Sendas”) pursuant to Article 226 of lei das SAs was accomplished by Magalhães Andrade, independent evaluation firm hired by the management. Under the terms of corporate law, hiring Magalhães Andrade shall be approved by the Company’s shareholders and Sendas, by means of a Special Shareholders Meeting summoned for this sole purpose.

In accordance with the Evaluation Report of Sendas, the net asset to be transferred to the Company, evaluated on the base of 09/30/2012, is R$504,017. 00 (five hundred and for thousand and seventeen Reais). Reference is made that, under the terms of the Protocol, CBD shall effort any variations in equity or assets of Sendas occurred between the base date of evaluation and the effective date of merger of the split-off asset.

The Evaluation Report of Sendas is available to shareholders at the Company’s and Sendas’ headquarters and on the respective webpages of CVM and BM&FBOVESPA. 

2.5.   Partial Spin-off of Barcelona

            Due to the partial spin-off of Barcelona, its capital will be reduced by R$552,430.00 (five hundred fifty-two thousand, four hundred and thirty Reais), corresponding to the net book value of the spun-off asset, upon cancellation, based on the economic relationship between the spun-off assets and total Barcelona acquits under a valuation report from 3,846,438 (three million, eight hundred forty-six thousand, four hundred thirty-eight) common shares, without par value, all owned by Sé, causing the capital of Barcelona to raise from the current R$109,328,798.41 (one hundred and nine million, three hundred twenty-eight thousand, seven hundred ninety-eight Reais and forty one cents), represented by 21,703,453 (twenty one million, seven hundred and three thousand, four hundred and fifty three) common shares, without par value, to R$108,776,368.41 (one hundred and eight million, seven hundred seventy-six thousand, three hundred and sixty-eight Reais and forty one cents), represented by 17,857,015 (seventeen million, eight hundred and fifty-seven thousand and fifteen) common shares, without par value, distributed among its shareholders as below:

The evaluation report of the net assets of Barcelona to be transferred to Sendas ("Valuation Report from Barcelona"), pursuant Article 226 of the Lei das SAs, was prepared by Magalhães Andrade, independent evaluation firm hired by the board. Under corporate law, hiring Magalhães Andrade shall be approved by shareholders of Sendas and Barcelona by means of a Special General Shareholder Meeting summoned for this sole purpose.

In accordance with the Evaluation Report of Barcelona, Barcelona net assets to be transferred to Sendas, evaluated on the base date of 09/30/2012, is R$552,430.00 (five hundred fifty-two thousand, four hundred and thirty Reais). Reference is made that, under the terms of the Protocol, Sendas shall effort any equity or asset variations occurring between the Barcelona-based assessment date and the effective date of merger of the split-off.

2.6.            Subscription of New Shares in the Capital of Barcelona for CBD

            The Company will subscribe 3,722,470 (three million, seven hundred twenty-two thousand, four hundred and seventy) preferred shares, nominative and with no par value, on the capital of Barcelona, all issued with  the price of R$149.7752836 per share, in a total amount of R$557,534,000.00 (five hundred fifty-seven million, five hundred thirty-four thousand Reais), performing a raise on the capital of Barcelona from  R$108,776,368.41 (one hundred and eight million, seven hundred seventy-six thousand three hundred and sixty-eight Reais and forty-one cents) to R$666,310,368.41 (six hundred sixty-six million, three hundred and ten thousand, three hundred and sixty-eight Reais and forty-one cents), distributed into 17,857 .015 (seventeen million, eight hundred and fifty-seven thousand and fifteen) common shares and 3,722,470 (three million, seven hundred twenty-two thousand, four hundred and seventy) preferred shares, all nominative and without par value.

            The payment of the preferred shares to be subscribed by the Company will be made through the capitalization of loans held by the Company against Barcelona.  

2.7.            Exchange of Investment Held by Novasoc in Sé for all Shares of Barcelona Held by CBD

As a result of the exchange of 3,722,470 (three million, seven hundred twenty-two thousand, four hundred and seventy) preferred shares and ten (10) common shares, all nominative and without par value, representing 17.25% (seventeen point two five percent) of the total capital of Barcelona held by CBD, represented for 99,680,669 (ninety-nine million, six hundred and eighty thousand, six hundred and sixty-nine) shares, with nominal value of R$1.00 (one Real) each, representing 6.9% (six point nine percent) of the total and voting capital of Sé, CBD will own all the shares in the capital of Sé.

2.8.            Partial Spin-off of Sé

Due to the partial spin-off of Sé, its capital shall be reduced by R$ 514,615.91 (five hundred and fourteen thousand, six hundred and fifteen Reais and ninety one cents), corresponding to the net book value of the spun-off asset, upon cancellation, based the economic relationship between the spun-off assets and total assets of Sé, under the terms of the economic evaluation report, of 1,078,389,334 (one billion, seventy-eight million, three hundred and eighty-nine thousand, three hundred and thirty four) quptas issued by Sé and held by CBD, performing a raise in the capital of Sé  from the current R$1,444,656,368.00 (one billion, four hundred forty-four million, six hundred fifty-six thousand, three hundred sixty-eight Reais) represented by 1,444,656,368 (one billion, four hundred forty-four million, six hundred and fifty-six thousand, three hundred and sixty-eight) shares, to R$1,444,141,752.09 (one billion, four hundred forty-four million, one hundred and forty-one thousand seven hundred and fifty-two Reais and nine cents), represented by 366,267,034 (three hundred sixty-six million, two hundred and sixty-seven thousand and thirty-four) shares with a par value of $ 3, 94286577287 each, changing the ownership structure of Sé as set hereunder:

The evaluation report of the net assets of Sé to be transferred to the Company ("Valuation Report of Sé”), pursuant Article 226 of the Lei das SAs., was prepared by Magalhães Andrade, independent evaluation firm hired by the board. Under corporate law, hiring Magalhães Andrade shall be approved by the Company's shareholders, by means of a Special general Shareholders Meeting, and by shareholders of Sé, be means of Quota Holders Meeting, both summoned by this sole purpose..

In accordance with the evaluation report of Sé, the net assets of Sé to be transferred to the Company, evaluated on the base date of 30/09/2012, is R$514,615.91 (five hundred and fourteen thousand, six hundred and fifteen Reais and ninety-one cents). Reference is, under the terms of the Protocol, CBD shall effort any variantions in equity and assets of Sé occurred between the base date of the evaluation and the effective date of merger of the split-off.

The evaluation report - Sé is available to shareholders at the Company’s headquarters and the respective webpages of the Company, the CVM and BM&FBOVESPA.

2.9.            Further Applicable Conditions

It is up to the board of each company in connection with the Restructuring Operation to perform all actions, records and approvals necessary for the implementation of the Restructuring Operation.

3.                  CORPORATE APPROVALS

This proposal was approved by the Board of Directors of the Company at its meeting held on December 12, 2012, and the Company's Audit Committee meeting held on December 6, 2012, as their minutes that are at your disposition at Company’s headquarters and on the respective webpages of CVM  and on webpage of BM&FBOVESPA.

4.                  CONCLUSIONS 

For the reasons hereafter and in accordance with Brazilian regulation, Company's Bylaws and the provisions of this Proposal, the Company's board recommends your approval for the herein matters at the Special General Meeting of the Company to be held on December 28, 2012:

(i)                 approval of the merger of the spun-off assets of Sendas by CBD;

(ii)               approval of the merger of the spun-off assets of Sé by CBD;

(iii)             approval of the hiring of Magalhães Andrade and PWC by the Company;

(iv)             approval of the evaluation reports prepared by Magalhães Andrade and PWC;

(v)               approval of Protocols, and;

(vi)             approval of further operations that compose the Restructuring Operation, as described on the Proposal

For the Shareholders whose mean to be represented by means of Power of Attorneys at the Special General Meeting scalled herein, we kindly require the submission of such documents with 72 (seventy two) hours in advance of the date of the general Meeting. The documents shall be forwarded to the Company's Corporate Legal Department, at Avenida Brigadeiro Luís Antonio, No. 3,142, City of São Paulo, Estate of São Paulo, as protocol.

At least, the board states that this proposal, as well as the Call Notice to Special General Meeting referred to, are available at Company’s headquarters and on the respective webpages of CVM  and on webpage of BM&FBOVESPA.

São Paulo, December 5, 2012

MANAGEMENT

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Authorized-Capital Publicly-Held Company

CNPJ/MF n.º 47.508.411/0001‐56 

NIRE 35.300.089.901

SPECIAL SHAREHOLDERS MEETING TO BE HELD

ON DECEMBER 28, 2012, AT 11 A.M.

EXHIBIT I TO THE MANAGEMENT PROPOSAL

Agreement for Protocol and Justification for the Partial and Discretionary spin-off of Sendas Distribuidora S.A., followed by the merger of the spun-off asset by Companhia Brasileira de Distribuição

Agreement for Protocol and Justification of Partial and Discretionary Split-Off  of Sendas Distribuidora S.A., followed by the merger of the Spun-off Assets Spun-off by

Companhia Brasileira de Distribuição

By this private instrument and pursuant to law, the management of companies,

(A)       Sendas Distribuidora S.A., an incorporated company (sociedade por ações), with its headquarters in the City of São João do Meriti, State of Rio de Janeiro, at Rua João Antônio Sendas, Nº 286, José Bonifácio, enrolled in the CNPJ/MF under Nº 06.057.223/0001-71, herein represented by its bylaws by Messrs. José Roberto Coimbra Tambasco, Brazilian, divorced, business administrator, bearer of Identity Card R.G. Nº 7.659.908-5 SSP/SP, enrolled in the CPF/MF under Nº 966.121.508-15, and Vitor Fagá de Almeida, Brazilian, married, economist, bearer of Identity Card R.G. nº 25.209.660-5 SSP/SP, enrolled in the CPF/MF under Nº 204.156.108-42, both resident and domiciled in the City of São Paulo, State of São Paulo, with its commercial address at Av. Brigadeiro Luis Antônio, Nº 3172, Jardim Paulista, henceforth referred to as “Sendas” or “Split Company”; and  

(B)        Companhia Brasileira de Distribuição, a publicly held company (sociedade por ações de capital aberto), with its headquarters in the City of São Paulo, State of São Paulo, at Av. Brigadeiro Luis Antônio, Nº 3142, Jardim Paulista, CEP 01.402-000, enrolled in the CNPJ/MF under Nº 47.508.411/0001-56, herein represented by its bylaws by Messrs. Enéas César Pestana Neto, Brazilian, married, accountant, bearer of Identity Card R.G. Nº 11.383.698-3 SSP/SP, enrolled in the CPF/MF under Nº 023.327.978-40, and Christophe José Hidalgo, French, married, accountant, bearer of Identity Card Nº V194572-X, enrolled in the CPF/MF under Nº 214.455.098-06, both resident and domiciled in the City of São Paulo, State of São Paulo, with its commercial address at Av. Brigadeiro Luis Antônio, Nº 3172, Jardim Paulista, henceforth referred to as “CBD” or “Acquiring Company”;

The Split Company and the Acquiring Company henceforth individually referred to as “Party” and, jointly, as “Parties”,

HAVE DECIDED to execute this “Agreement for Protocol and Justification of Partial and Discretionary Split-Off  of Sendas Distribuidora S.A., followed by the merger of the Assets Spun-off by Companhia Brasileira de DistribuiçãoDiscretionarySpun-off Assets” (the “Protocol”), pursuant to Articles 224 and 225 of Law Nº 6,404 of December 15 1976, as amended (“Brazilian Corporate Law”), in compliance with the terms, clauses and conditions evidenced ahead.

1.         Description of intended operation

            1.1.      The Protocol herein has the purpose of making evident the substance of the justifications, terms and conditions of the partial and discretionary split-off of Sendas, with allocation of part of its assets, which shall be conveyed to CBD, with the resulting extinguishing of the interest of CBD preferred shares issued by Sendas, as provided for under articles 227 and 229 of the Brazilian Corporate Law (the “Operation”). 

            1.2.      Sendas is a incorporated company (sociedade por ações) whose corporate capital is eight hundred and thirty-five million six hundred and seventy-seven thousand Reais   (R$835,677,000.00), represented by seventy hundred million and two thousand (700,002,000) common shares and one hundred and fifty-seven million eight-two thousand eight hundred and two (157,082,802) preferred shares, all registered and without par value.

            1.3.      CBD is a publicly held corporation (sociedade por ações de capital aberto), whose corporate capital is six billion seven hundred and seven million five hundred and ninety-four thousand five hundred and seventy-six Reais  and thirty-one cents of Reais  (R$6,707,594,576.31), represented by two hundred and sixty-three million three hundred and five thousand seven hundred and sixty-five (263,305,765)  shares without par value, of which ninety-nine million six hundred and seventy-nine thousand eight hundred and fifty-one (99,679,851) are common shares and one hundred and sixty-three million six hundred and twenty-five thousand nine hundred and fourteen (163,625,914) are preferred shares.

            1.4.      CBD holds one thousand (1,000) common shares and one hundred and fifty-seven million eighty-two thousand eight hundred and two (157,082,802) preferred shares, all issued by Sendas.

            1.5.      The Spun-off Assets of Sendas to be incorporated by CBD is formed by stores, inventory, financial assets and fixed assets of stores (the “Spun-off Assets””).

2.         Justification of the Operation

            2.1.      The signatory parties to this Protocol are companies that belong to the same economic group, and the Operation is part of a larger project for restructuring the group that shall be fully implemented from year 2013 to year 2014 and that mainly aims at obtaining considerable administrative, economic and financial benefits, mainly by means of rationalization and simplification of the corporate structure of the group, making it possible to consolidate and write down operational costs and expenses and make it feasible to seize operational and tax synergies of the Parties. It is thus justified the lawful interests of the Split Company and of the Acquiring Company, as well as of their shareholders and administrators, in implementing the Operation.

3.         Valuation of the Spun-off Assets and Base date of the Operation

            3.1.      Equity Version and Valuation. Because of the Operation, the Spun-off Assets shall be transferred to CBD. For purposes of the Operation, the Spun-off Assets shall be valuated based on their book value and their respective report (the “Evaluation Report”) shall be prepared by specialized firm Magalhães Andrade S/S Auditores Independentes, enrolled in the CNPJ/MF under Nº 62.657.242/0001-00, registered with the registry of the CRC/SP under Nº 2SP000233/O-3, with its headquarters in the City of São Paulo, State of São Paulo, at Avenida Brigadeiro Faria Lima, 1893, 6º andar, Jardim Paulistano, CEP 01452-001 (the “Evaluation Firm”), which has represented that there is no conflict or pooling of interests, current or potential, with the shareholders of Sendas or of CBD. The Evaluation Report shall be attached to this Protocol as Exhibit 3.1. All valuations prepared for purposes of the Operation had as base date September 30 2012 (the “Base Date”).  

3.2.      Equity Changes: The equity changes between the Base date and the date of the effective incorporation of the Spun-off Assets shall be absorbed by CBD.

4.         Reduction in the Corporate Capital of Sendas

            4.1.      Reduction in the Corporate Capital of Sendas. As a result of the partial and discretionary split-off and consequent transfer of the Spun-off Assets, the corporate capital of the Split Company shall be reduced by five hundred and four thousand seventeen Reais  (R$504,017.00), corresponding to the net book value of the Spun-off Assets, upon cancellation, based on the economic relation existing between the Spun-off Assets and the total assets of Sendas, in accordance with the terms of the Economics Evaluation Report, attached to this Protocol as Exhibit 4.1 (the “Economics Evaluation Report”), of one hundred and fifty-seven million eighty-two thousand eight hundred and two (157,082,802) preferred shares issued by the Split Company and held by the Acquiring Company. The corporate capital of the Split Company shall go from its current eight hundred and thirty-five million six hundred and seventy-seven thousand Reais   (R$835,677,000.00), represented by seventy hundred million and two thousand (700,002,000) common shares and one hundred and fifty-seven million eighty-two thousand eight hundred and two (157,082,802) preferred shares, to eight hundred and thirty five million one hundred and seventy-two thousand nine hundred and eighty-three Reais  (R$835,172,983.00), represented by seventy hundred million and two thousand (700,002,000) common shares, registered and without par value, and thus the corporate structure of the Split Company has now the following composition:

            4.2.      The Economic Evaluation Report shall be prepared by specialized firm PricewaterhouseCoopers Corporate Finance & Recovery Ltda., enrolled in the CNPJ/MF under Nº 05.487.514/0001-37, with its headquarters in the City of São Paulo, State of São Paulo, at Avenida Francisco Matarazzo, 1400, 1˚ Floor, CEP 05001-100.

5.         Lack of increase in the Corporate capital of CBD

            5.1.      Lack of increase in the Corporate capital of CBD. The Operation shall not bring about changes in the corporate capital of the Acquiring Company, as the net book value of the Spun-off Assets conveyed to CBD is equivalent to the economic value of the preferred shares issued by Sendas held by CBD, which shall be cancelled in accordance with the terms of the item 4.1 above.

6.         Further conditions Applicable to the Operation

            6.1.      Amendment to the do Bylaws of Sendas. The Bylaws of Sendas shall be amended in order to evidence the reduction in capital to which this Protocol refers.

            6.2.      Amendment to the Bylaws of CBD.   The Bylaws of CBD shall not be amended in view that the Operation shall not bring about any changes to its corporate capital.

            6.3.      Implementation. It shall be incumbent on the administrators of the Split Company and of the Acquiring Company to carry out all acts, registrations and annotations needed to implement the Operation.

            6.4.      Succession in Rights and Obligations. CBD shall succeed Sendas only in its rights and obligations transferred as a result of the incorporation of the Spun-off Assets, with no joint liability with regard to the remaining equity of Sendas, as allowed by the sole paragraph of Article 233 of the Brazilian Corporate Law.

6.5.      Corporate Acts to resolve on the Operation. There shall be called and held extraordinary general meetings of both the Split Company and the Acquiring Company to appreciate the Protocol herein, to ratify the retaining of the Evaluation Firm, to approve the Evaluation Report and to approve the Operation.

            6.6.      Approval. This Protocol contains the conditions required by the Brazilian Corporate Law, for the proposal of Partial Split-off of Sendas and incorporation of the Spun-off Assets by CBD  and shall be submitted to appreciation and approval of the shareholders of the Parties assembled at an extraordinary general meeting.

            6.7.      Effects. Should the Operation be approved, it shall produce effects as of December 31 2012.

            IN WITNESS WHEREOF, the parties execute this instrument in six (6) counterparts of the same content and to one sole effect, together with the two witnesses below, present throughout.

São Paulo, November 28 2012

Split Company: 

Agreement for Protocol and Justification of Partial and Discretionary Split-Off  of Sendas Distribuidora S.A., followed by Incorporation of the Spun-off Assets by

Companhia Brasileira de Distribuição

Exhibit 3.1

ACCOUNTING EVALUATION REPORT OF THE

SPUN-OFF ASSETS OF SENDAS DISTRIBUIDORA S.A.

SENDAS DISTRIBUIDORA S.A.

Evaluation report at book value for spin-off and incorporation purposes

11.28.12          1 00 069/12

MAGALHÃESANDRADE S/S Auditores Independentes

Av. Brigadeiro Faria Lima, 1893 – 6º andar – Jardim Paulistano – 01452-001 São Paulo SP

Phone (55 11) 3814-3377 Fax: (55 11) 3813-4822 magalhaesandrade@magalhaesandrade.com.br 

www.magalhaesandrade.com.br

Dear Messrs. Shareholders of

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO and  

SENDAS DISTRIBUIDORA S.A.

MAGALHÃES ANDRADE S/S AUDITORES INDEPENDENTES, an audit and consulting company, registered in the Regional Accounting Council in the State of São Paulo, under number 2SP000233/O-3 and secondary registration in the Regional Accounting Council in the State of Rio de Janeiro, registered with the National Directory of Legal Entities (CNPJ/MF) under No. 62.657.242/0001-00 and located at Av. Brigadeiro Faria Lima, 1893 – 6^oandar, Jardim Paulistano, São Paulo, Capital, appointed by you as the expert appraiser to carry out the evaluation of SENDAS DISTRIBUIDORA S.A.net worth for spin-off purposes with incorporation in the net worth of COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO, in compliance with the diligences and verifications necessary for the execution of its assignment, does hereby present the

EVALUATION REPORT

duly undersigned.

São Paulo, November 28^th, 2012.

MAGALHÃES ANDRADE S/S

Auditores Independentes

CRC2SP000233/O-3

GUY ALMEIDA ANDRADE

Partner

Accountant CRC1SP116758/O-6

EVALUATION REPORT

INTRODUCTION

1. This merger operation is derived from the corporate reorganization process, with the alignment of operational activities and it shall present advantages to the companies involved due to the administrative and management simplification, saving operational costs and enabling the development and streamlining of activities performed independently.

2. SENDAS DISTRIBUIDORA S.A. (SENDAS),and COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO (CBD) are companies that belong to the same economic group and the merger, by the second company, of a split portion from the first company, is part of a group restructuration project, which shall by fully implemented between 2013 and 2014, and it is especially aimed to obtain considerable benefits of administrative, economic and financial nature, especially through the rationalization and simplification of the group’s corporate structure, enabling the consolidation and reduction of operational expenses and expenditures, as well as the capture of operational and tax synergies.

3. Therefore, the purpose of this REPORT is to determine the book value of the equity to be incorporated, taking into account the equity status of SENDAS as of September 30^th, 2012.

4. The Report is being issued in compliance with the audit review of SENDAS balance sheets prepared for this purpose as of September 30^th, 2012. The company’s management is responsible for the preparation and fair presentation of this financial statement in compliance with the accounting practices adopted in Brazil and by the internal controls the company deemed necessary in order to allow the preparation of said financial statements free of material misstatement, whether due to fraud or error.

5. Our review was performed in compliance with the Brazilian and international audit standards. These standards require the fulfillment of ethical requirements by the auditors and that the audit is planned and performed in order to obtain a reasonable safety that the financial statements are free of any material misstatement.

6. An audit involves the execution of procedures selected to obtain evidence regarding the values and disclosures presented in the financial statements. The procedures selected depend on the auditor’s judgment, including the evaluation of the risks of material misstatement in the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and true and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

7. We believe the audit evidence we have obtained is sufficient and appropriate to provide the basis for our opinion.

EQUITY STATUS OF SENDAS

8. SENDAS  equity is comprised of assets and liabilities derived from its operations.

9. The evaluation is performed at book value, in compliance with the sections 226 of Law 6404/76 and based on the equity status reflected in the Balance sheet prepared as of September 30^th, 2012, stated in EXHIBIT 1 and whose equity status is summarized as follows:

10. Said balance sheet was prepared in compliance with the accounting practice adopted in Brazil and, for evaluation purposes, on a going concern basis, according to the concept of going concern.

11. SENDAS maintains its regular bookkeeping, its operations are recorded in a proper book and its balances are duly composed and reconciled.

12. EXHIBIT 2 lists SENDAS  assets and liabilities balances, which shall be split-off and incorporated to the CBD  equity.

EQUITY STATUS IN THE SURVIVING COMPANY

13. CBD balance sheet, prepared as of September 30^th, 2012 is presented in EXHIBIT 3, whose equity status, in thousand Brazilian Reais, is summarized as follows:

SPLIT-OFF EFFECT IN SENDAS

14. The equity split-off effect is stated in SENDAS  balance sheet after the split-off, presented in EXHIBIT 4, and it presents the following summarized equity status:

CONCLUSION

15. Given the findings and statements, we conclude that the net assets of SENDAS DISTRIBUIDORA S.A., as of September 30^th, 2012, to be incorporated to the equity of COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO, which is summarized below, is R$ 504,017.00 and it shall increase the CBD  net worth in this amount, in compliance with the provisions of section 226 of Law 6404/76.

DECLARATIONS

16. The evaluation company expressly declares that she does not have any direct or indirect interest in SENDAS  or CBD  or even in the operation, not having any other circumstance deemed as conflict of interest. She also informs that SENDAS  and CBD  managers did not limit, make difficult or perform any act that could have jeopardized the access, the use or the knowledge of information, properties, documents or methodologies of work relevant for the quality of respective conclusions.

This REPORT is issued in 6 (six) counterparties and it is comprised of 4 (four) pages and 4 (four) exhibits printed just on the front page and initialed by the undersigned expert.

São Paulo, November 28^th, 2012.

MAGALHÃES ANDRADE S/S

Auditores Independentes

CRC2SP000233/O-3

GUY ALMEIDA ANDRADE

Partner

Accountant CRC1SP116758/O-6

EXHIBIT 1

SENDAS DISTRIBUIDORA S.A.

Balance Sheet as of September 30^th, 2012

(amounts in Brazilian Reais)

EXHIBIT 1 (continued)

SENDAS DISTRIBUIDORA S.A.

Balance Sheet as of September 30^th, 2012

(amounts in Brazilian Reais)

EXHIBIT 2

SENDAS DISTRIBUIDORA S.A.

Assets to be split-off and incorporated by CBD

(amounts in Brazilian Reais)

EXHIBIT 3

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Balance sheet prepared as of September 30^th, 2012

(amounts in Brazilian Reais)

EXHIBIT 3 (continued)

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Balance sheet prepared as of September 30^th, 2012

(amounts in Brazilian Reais)

EXHIBIT 4

SENDAS DISTRIBUIDORA S.A.

Balance Sheet after the split-off

(amounts in Brazilian Reais)

EXHIBIT 4 (continued)

SENDAS DISTRIBUIDORA S.A.

Balance Sheet after the split-off

(amounts in Brazilian Reais)

Agreement for Protocol and Justification of Partial and Discretionary Split-Off  of Sendas Distribuidora S.A., followed by Incorporation of the Spun-off Assets by

Companhia Brasileira de Distribuição

Exhibit 4.2

ECONOMICS EVALUATION REPORT OF THE SPUN-OFF ASSETS AND

OF THE TOTAL ASSETS OF SENDAS DISTRIBUIDORA S.A.

a

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

Authorized-Capital Publicly-Held Company

CNPJ/MF n.º 47.508.411/0001‐56 

NIRE 35.300.089.901

SPECIAL SHAREHOLDERS MEETING TO BE HELD

ON DECEMBER 28, 2012, AT 11 A.M.

EXHIBIT II TO THE MANAGEMENT PROPOSAL

Agreement for Protocol and Justification for the Partial and Discretionary spin-off of Barcelona Comércio Varejista e Atacadista S.A., followed by the merger of the spun-off asset by Sendas Distribuidora S.A.

Agreement for Protocol and justification of Partial Split-off of Barcelona Comércio Varejista e Atacadista S.A., followed by the merger of the Assets Spun-off by Sendas Distribuidora S.A.

By this private instrument and pursuant to law, the managers of companies,

(A)    Barcelona Comércio Varejista e Atacadista S.A.,   an incorporated company (sociedade por ações), with its headquarters in the City of São Paulo, State of São Paulo, at Rua Manilha, Nº. 42, Sobreloja, Vila Carrão, enrolled in the CNPJ/MF under Nº 07.170.943/0001-01, herein represented by its bylaws by Messrs. José Roberto Coimbra Tambasco, Brazilian, divorced, business administrator, bearer of Identity Card R.G. Nº 7.659.908-5 SSP/SP, enrolled in the CPF/MF under Nº 966.121.508-15, and Enéas César Pestana Neto, Brazilian, married, accountant, bearer of Identity Card R.G. Nº 11.383.698-3 SSP/SP, enrolled in the CPF/MF under Nº 023.327.978-40, both resident and domiciled in the City of São Paulo, State of São Paulo, with its commercial address at Av. Brigadeiro Luís Antônio, Nº 3172, Jardim Paulista, henceforth referred to as “Barcelona” or “Split Company”; and

(B)     Sendas Distribuidora S.A., an incorporated company (sociedade por ações), with its headquarters in the City of São João de Meriti, State of Rio de Janeiro, at Rua João Antônio Sendas, 286, José Bonifácio, enrolled in the CNPJ/MF under Nº 06.057.223/0001-71, herein represented by its bylaws by Messrs. José Roberto Coimbra Tambasco, identified above, and Vitor Fagá de Almeida, Brazilian, married, economist, bearer of Identity Card R.G. nº 25.209.660-5 SSP/SP, enrolled in the CPF/MF under Nº 204.156.108-42, resident and domiciled in the City of São Paulo, State of São Paulo, at Avenida Brigadeiro Luís Antonio, nº 3172, both resident and domiciled in the City of São Paulo, State of São Paulo, with its commercial address at Av. Brigadeiro Luís Antônio, Nº 3172, Jardim Paulista, henceforth referred to as “Sendas” or “Acquiring Company”;

The Split Company and the Acquiring Company henceforth individually referred to as “Party” and jointly as “Parties”, 

HAVE DECIDED to execute this “Agreement for Protocol and justification of Partial Split-off of Barcelona Comércio Varejista e Atacadista S.A., followed by the merger of the Assets Spun-off by Sendas Distribuidora S.A.” (the “Protocol”), pursuant to Articles 224 and 225 of Law Nº 6,404 of December 15  1976, as amended (“Brazilian Corporate Law”), in compliance with the terms, clauses and conditions evidenced ahead.

1.         Description of intended operation

            1.1.      The Protocol herein has the purpose of making evident the substance of the justifications, terms and conditions of the operation of Partial Split-off of Barcelona, with allocation of part of its assets, which shall be conveyed to Sendas, as provided for under articles 227 and 229 of the Brazilian Corporate Law (the “Operation”). 

            1.2.      Barcelona is a incorporated company (sociedade por ações) whose corporate capital is one hundred and nine million three hundred and twenty-eight thousand seven hundred and ninety-eight Reais  and forty-one cents of Reais  (R$109,328,798.41), represented by twenty-one million seven hundred and three thousand four hundred and fifty-three (21,703,453) common shares, all registered and without par value.

1.3.      Sendas is an incorporated company (sociedade por ações) whose corporate capital is eight hundred and thirty-five million six hundred and seventy-seven thousand Reais  (R$835,677,000.00), represented by seventy hundred million and two thousand (700,002,000) common shares and one hundred and fifty-seven million eighty-two thousand eight hundred and two (157,082,802) preferred shares, all registered and without par value.

                        1.3.1.   Before the implementation of the Operation, Sendas shall have suffered the partial split-off, in accordance with the terms of the Agreement for Protocol and Justification of Partial Split-off of Sendas Distribuidora S.A., followed by the merger of the Assets Spun-off by Companhia Brasileira de Distribuição, executed between Sendas and Companhia Brasileira de Distribuição (“CBD”), so that CBD will no longer be a shareholder of Sendas ( “Sendas Split-Off”). 

            1.4.      Barcelona holds two hundred and fifty million and one thousand (250,001,000) common shares issued by Sendas.

            1.5.      The portion of the assets of Barcelona to be incorporated by Sendas is formed by financial assets and liabilities, corporate interest in Sendas and intangible assets (the “Spun-off Assets””).

2.         Justification of the Operation

            2.1.      The signatory parties to this Protocol are companies that belong to the same economic group, and the Operation is part of a larger project for restructuring the group that shall be fully implemented from year 2013 to year 2014 and that mainly aims at obtaining considerable administrative, economic and financial benefits, mainly through the rationalization and simplification of the corporate structure of the group, making it possible to consolidate and write down operational costs and expenses and make it feasible to seize operational and tax synergies  of the Parties. It is thus justified the lawful interests of the Split Company and of the Acquiring Company, as well as of their shareholders and administrators, in implementing the Operation.

3.         Valuation of the Spun-off assets and Base date of the Operation

            3.1.      Equity Version and Valuation. Because of the Operation, the Spun-off Assets shall be transferred to Sendas. For purposes of the Operation, the Spun-off Assets shall be valuated based on their book value and their respective report (the “Evaluation Report”) shall be prepared by specialized firm Magalhães Andrade S/S Auditores Independentes, enrolled in the CNPJ/MF under Nº 62.657.242/0001-00, registered with the registry of the CRC/SP under Nº 2SP000233/O-3, with its headquarters in the City of São Paulo, State of São Paulo, at Avenida Brigadeiro Faria Lima, 1893, 6º floor, Jardim Paulistano, CEP 01452-001 (the “Evaluation Firm”), which has represented that there is no conflict or pooling of interests, current or potential, with the shareholders of Barcelona or with the shareholders of Sendas. The Evaluation Report shall be attached to this Protocol as Exhibit 3.1. All valuations prepared for purposes of the Operation had as base date September 30 2012 (the “Base Date”). 

3.2.      Equity Changes: The equity changes between the Base date and the date of the effective incorporation of the Spun-off Assets shall be absorbed by Sendas.

4.         Reduction in the Corporate Capital of Barcelona

            4.1.      Reduction in the Corporate Capital of Barcelona. As a result of the transfer of the Spun-off Assets to Sendas, the corporate capital of Barcelona shall be reduced by five hundred and fifty-two thousand four hundred and thirty Reais  (R$552,430.00), corresponding to the net book value of the Spun-off Assets, upon cancellation, based on the economic relation existing between the Spun-off Assets and the total assets of Barcelona, in accordance with the terms of the Economics Evaluation Report, attached to this Protocol as Exhibit 4.1 (the “Economic EvaluationEvaluation Report”), of three million eight hundred and forty-six thousand four hundred and thirty-eight (3,846,438) common shares, registered and without face value, all held by SÉ Supermercados Ltda. (“SÉ”). The corporate capital of the Split Company shall go from its current one hundred and nine million three hundred and twenty-eight thousand seven hundred and ninety-eight Reais  and forty-one cents of Reais  (R$109,328,798.41), represented by twenty-one million seven hundred and three thousand four hundred and fifty-three (21,703,453) common shares, registered and without face value, to one hundred and eight million seven hundred and seventy-six thousand three hundred and sixty-eight Reais  and forty-one cents of Reais  (R$108,776,368.41), represented by seventeen million eight hundred and fifty-seven thousand fifteen (17,857,015) common shares, registered and without face value, distributed among its shareholders as follows:

            4.2.      The Economic Evaluation Report shall be prepared by specialized firm PricewaterhouseCoopers Corporate Finance & Recovery Ltda., enrolled in the CNPJ/MF under Nº 05.487.514/0001-37, with its headquarters in the City of São Paulo, State of São Paulo, at Avenida Francisco Matarazzo, 1400, 1˚ andar, CEP 05001-100.

5.         Lack of increase in the Corporate capital of Sendas

            5.1.      Lack of increase in the Corporate capital of Sendas. The Operation shall not bring about changes in the corporate capital of the Acquiring Company, as the net book value of the Spun-off Assets conveyed to Sendas is equivalent to the economic value of the shares issued by Sendas held by Barcelona. Such shares held by Barcelona shall be cancelled, replaced by new shares issued by Sendas and delivered to the shareholder of Barcelona. SÉ, which, because of the partial split-off of Barcelona, had a portion of its shares cancelled, as shown in the prior item. Therefore, the shares that used to be owned by Barcelona shall be owned by SÉ, and the Sendas ownership structure, already taking into account the Split-Off Sendas, shall have the following composition:

6.         Further conditions Applicable to the Operation

            6.1.      Amendment to the do Bylaws of Barcelona. The Bylaws of Barcelona shall be amended in order to evidence the Reduction in the Corporate Capital of Barcelona provided for in this Protocol.

            6.2.      Amendment to the do Bylaws of Sendas.       The Bylaws of Sendas shall not be amended in view that the Operation shall not bring about any change to its corporate capital.

            6.3.      Implementation. The administrators of both the Split Company and the Acquiring Company shall practice all further acts that may be necessary to the perfect regularization of what has been established in the Protocol herein, including, but not limited to, registrations, filings, and annotations with the qualified public bodies.

            6.4.      Succession in Rights and Obligations. Sendas shall succeed Barcelona only in its rights and obligations transferred as a result of the incorporation of the Spun-off Assets, without any joint liability regarding the remaining equity of Barcelona, as allowed by the sole paragraph of Article 233 of the Brazilian Corporate Law.

6.5.      Corporate Acts to Resolve on the Operation. There shall be called and held the extraordinary general meetings of the Split Company and of the Acquiring Company to appreciate the Protocol herein, to ratify the retaining of the Evaluation Firm, to approve the Valuation Report and to approve the Operation.

            6.6.      Approval. This Protocol contains the conditions required by the Brazilian Corporate Law for the proposal of Partial Split-off of Barcelona and incorporation of the Spun-off Assets by Sendas, and shall be submitted to appreciation and approval of the shareholders of the Parties assembled at an extraordinary general meeting.

            6.7.      Effects. Should the Operation be approved, it shall produce effects as of December 31 2012.

            IN WITNESS WHEREOF, the parties execute the instrument herein in six (6) counterparts of the same content and to one sole effect, with the two witnesses below present throughout.

São Paulo, November 28 2012

Split Company: 

Acquiring Company: 

Witnesses: 

Agreement of Protocol and justification of Partial Split-off of Barcelona Comércio Varejista e Atacadista S.A., followed by the Merger of the Spun-off assets by Sendas Distribuidora S.A.

EXHIBIT 3.1

ACCOUNTING EVALUATION REPORT OF THE SPUN-OFF ASSETS

 OF BARCELONA COMÉRCIO VAREJISTA E ATACADISTA S.A.

BARCELONA COMÉRCIO
VAREJISTA E ATACADISTA S.A.

Evaluation Report of the equity value
for purposes of spin-off and merger

11.28.12                                 1 00 070/12

www.magalhaesandrade.com.br

Dear Shareholders of

SENDAS DISTRIBUIDORA S.A. e

BARCELONA COMÉRCIO VAREJISTA E ATACADISTA S.A.

MAGALHÃES ANDRADE S/S AUDITORES INDEPENDENTES, an audit and consulting firm, registered with the Regional Board of Accountancy of the State of São Paulo under no. 2SP000233/O-3 and secondary registration with the Regional Board of Accountancy of the State of Rio de Janeiro, registered with the Brazilian Ministry of Finance under Brazilian Federal Employer Taxpayer Identification Number 62.657.242/0001-00 and with registered office located at Av. Brigadeiro Faria Lima, 1893 - 6° andar, Jardim Paulistano, São Paulo, Capital City, appointed by you as an expert appraiser for performing an appraisal of the book value of the net worth of BARCELONA COMÉRCIO VAREJISTA E ATACADISTA S.A., for purposes of spin-off with merger into the equity of SENDAS DISTRIBUIDORA S.A., subject to the diligences and verifications required to the delivery of the work, hereby presents the following within

Evaluation Report

In witness whereof, the undersigned has hereunto set his name and seal.

São Paulo, on the 28^th day of November, 2012.

MAGALHÃES ANDRADE S/S
Auditores Independentes
CRC2SP000233/O-3

GUY ALMEIDA ANDRADE

Partner

Accountant CRC1SP116758/O-6

Evaluation Report

INTRODUCTION

1.         This merger operation is a result of the process of corporate reorganization, with alignment of the operating activities, and shall provide an advantage to the companies involved by reason of administrative and management simplification, saving operating costs and enabling the development and streamlining of activities now undertaken in an independent manner.

2.         BARCELONA COMÉRCIO VAREJISTA E ATACADISTA S.A. (BARCELONA) and SENDAS DISTRIBUIDORA S.A. (SENDAS), are companies belonging to the same economic group and the merger into the latter of a spun-off portion from the first one is part of a project for restructuring the group, which must be fully implemented between the years 2013 and 2014 aiming particularly to obtain considerable benefits in administrative, economic and financial fields, specially by streamlining and simplifying the corporate structure of the group, so enabling the strengthening and reduction of expenditures and operating expenses and making feasible the capture of tax and operating synergies.

3.         This REPORT, therefore, is intended to determine the book value of the equity to be merged, taking into account the equity position of BARCELONA  as of September 30^th, 2012.

4.         The Report is being issued in connection with the audit examination of the balance sheets of BARCELONA, prepared for such purpose on September 30^th, 2012. The company’s management is responsible for the preparation and proper presentation of such account statement in accordance with accounting practices adopted in Brazil and for the internal controls as the management has determined as necessary to enable the preparation of accounting statements accounting statements with no material misrepresentation, regardless of if it is a result of fraud or error.

5.         Our examination was performed in accordance with the Brazilian and international audit standards. Such standards require the compliance with ethical requirements by auditors and the audit to be planned and performed intending to obtain reasonable assurance about if the accounting statements are free of material misrepresentation.

6.         An audit involves performing selected procedures to obtain evidence about the amounts and disclosures presented in the accounting statements. The procedures selected depend on the auditor’s judgment, including the assessment of risks of material misrepresentation in accounting statements, regardless of if it is a result of fraud or error. In such risk assessment, the auditor considers internal controls relevant to the preparation and proper presentation of the accounting statements of the Company in order to plan audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal controls of the Company. An audit also includes evaluating the appropriateness of accounting practices used and the reasonableness of accounting estimates performed by the management, as well as evaluating the presentation of the accounting statements taken as a whole.

7.         We believe that the audit evidence we have obtained is sufficient and appropriate to provide a ground for our opinion.

EQUITY POSITION OF BARCELONA

8.         The equity of BARCELONA  is composed by assets and liabilities arising from their operations.

9.         The assessment is made in a book value basis, in compliance with the provisions of section 226 of Law 6.404/76 and based on the assets position reflected on the Balance Sheet prepared as of September 30^th, 2012, shown in EXHIBIT 1 and whose equity position is summarized below:

10.       Such balance has been prepared in accordance with accounting practices adopted in Brazil and taken into account, for purposes of assessment, the company running, according to the concept of continuance of ordinary business.

11.       BARCELONA  keeps its accounting regular, its operations being entered in proper book and its balances properly composed and reconciled.

12.       It was resolved to formalize a credit assignment agreement between CBD  and BARCELONA, under which BARCELONA shall undertake the debt of CBD  to SENDAS. The Management intends to include such liability in spun-off net asset; it is the reason why we consider a pro forma balance sheet, taking into account the aforesaid credit assignment.

13.       In EXHIBIT 2 appears an accounting adjustment and a new equity position and financial standing of BARCELONA  as of September 30^th, 2012, which is summarized as follows:

14.       The EXHIBIT 3 shows the net asset that shall be spun off and which is summarized below:

EQUITY POSITION OF THE SURVIVING COMPANY

15.       The balance sheet of SENDAS  prepared as of September 30^th, 2012, is shown in EXHIBIT 4, whose equity position is summarized below:

16. Taking this opportunity, but due to previous act, SENDAS  was subject-matter of a total spin-off, based on the same balance sheet as of September 30^th, 2012.

17. As a result, the equity position of SENDAS  as of September 30^th, 2012 which shall absorb the spun-off net asset of BARCELONA  is shown in EXHIBIT 5, which is summarized below:

EFFECT RESULTING FROM THE SPIN-OFF IN BARCELONA

18.       The effect resulting from the spin-off in the equity appears on the balance sheet of BARCELONA  “after spin-off”, shown in EXHIBIT 6, having the following equity position summarized below:

EFFECT RESULTING FROM THE MERGER IN SENDAS

19.       The effect resulting from merger appears on the balance sheet of the SURVIVING COMPANY after merger, shown in EXHIBIT 7, having the following equity position summarized below:

20.       Among the accounts merged there is an outstanding balance payable to SENDAS, which is compared to an active balance in the balance sheet of SENDAS, canceling it. CONCLUSION

21. Given the findings and assertions, we conclude that the net asset of BARCELONA  COMÉRCIO VAREJISTA E ATACADISTA S.A., as of September 30^th, 2012, based on the pro forma balance sheet and that shall be merged into the equity of SENDAS DISTRIBUIDORA S.A., is summarized below, amounting to R$ 552,430, in compliance with the provisions of section 226 of Law 6.404/76.

REPRESENTATIONS

22. The expert appraiser expressly represents that it has no interest, whether directly or indirectly, in BARCELONA  or SENDAS  , or even in the operation, and there is no other circumstance that might characterize conflict of interests. It also informs that the administrators of BARCELONA  and SENDAS  have not limited, hindered or performed any acts that could have compromised the access, use or knowledge of information, assets, documents or work methodologies relevant to the quality of the respective conclusions.

This REPORT  is issued in six (6) counterparts and has five (5) pages and seven (7) exhibits, printed on the front page and initialed by the undersigned expert.

São Paulo, on the 28^th day of November, 2012.

MAGALHÃES ANDRADE S/S
Auditores Independentes
CRC2SP000233/O-3

GUY ALMEIDA ANDRADE

Partner

Accountant CRC1SP116758/O-6

EXHIBIT 1

(amounts in BRL)

EXHIBIT 1 (Continuation)

(amounts in BRL)

EXHIBIT 2

(amounts in BRL)

EXHIBIT 2 (Continuation)

(amounts in BRL)