(Convenience Translation into English from the
Original Previously Issued in Portuguese)
Saraiva S.A.
Livreiros Editores
Interim Financial Statements for the
Quarter Ended March 31, 2010 and
Independent Accountants’ Review Report
Deloitte Touche Tohmatsu Auditores Independentes
Deloitte Touche Tohmatsu
Rua José Guerra, 127
04719-030 - São Paulo - SP
Brasil
Tel.: +55 (11) 5186-1000
Fax: +55 (11) 5181-2911
www.deloitte.com.br
(Convenience Translation into English from the Original Previously Issued in Portuguese)
INDEPENDENT ACCOUNTANTS’ REVIEW REPORT
To the Shareholders and Board of Directors of
Saraiva S.A. Livreiros Editores
São Paulo - SP
1.
We have reviewed the accounting information included in the accompanying interim
financial statements of Saraiva S.A. Livreiros Editores (the ―Company‖) and subsidiary, for
the quarter ended March 31, 2010, consisting of the individual (Company) and consolidated
balance sheets, the related statements of income, changes in shareholders’ equity, cash flows
and value added, the related notes and the performance report, prepared under the
responsibility of the Company’s Management.
2.
Our review was conducted in accordance with specific standards established by the
Brazilian Institute of Independent Auditors (IBRACON), together with the Brazilian Federal
Accounting Council (CFC), and consisted, principally, of: (a) inquiries of and discussions
with certain officials of the Company and its subsidiary who have responsibility for
accounting, financial and operating matters about the criteria adopted in the preparation of
the interim financial statements; and (b) review of the information and subsequent events
that have, or might have had, material effects on the financial position and results of
operations of the Company and its subsidiary.
3.
Based on our review, we are not aware of any material modifications that should be made to
the accounting information included in the interim financial statements referred to in
paragraph 1 for them to be in conformity with Brazilian accounting practices and standards
issued by the Brazilian Securities Commission (CVM), specifically applicable to the
preparation of the interim financial statements.
4.
As mentioned in note 4, during 2009, CVM approved several technical pronouncements,
interpretations and instructions issued by the Accounting Pronouncements Committee
(CPC), mandatory for adoption in 2010, which changed the accounting practices adopted in
Brazil. As permitted by CVM Resolution 603/09, the Company’s management elected to
present its interim financial statements in accordance with the accounting standards
effective in Brazil through December 31, 2009, rather than early adopting the standards
effective for fiscal years ending before 2010. As required by CVM Resolution 603/09, the
Company disclosed the basis of presentation of its interim financial statements in note 4,
including a summary of the main changes that might impact its financial statements at
yearend, as well as estimates of possible effects on shareholders' equity and net income.
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firm s,
each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed
description of the legal structure of Deloitte Touche Tohmatsu and its member firms.
Member of
Deloitte Touche Tohmatsu
Deloitte Touche Tohmatsu
5.
The accompanying interim financial statements have been translated into English for the
convenience of readers outside Brazil.
São Paulo, May 14, 2010 (except for complementary information at note 19.a, which date is July
23, 2010)
DELOITTE TOUCHE TOHMATSU
Auditores Independentes
Maurício Pires de Andrade Resende
Engagement Partner
2
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
REGISTRATION WITH THE CVM DOES NOT IMPLY ANY ANALYSIS OF THE COMPANY. COMPANY’S
MANAGEMENT IS RESPONSIBLE FOR THE ACCURACY OF THE INFORMATION PROVIDED.
01.01 - IDENTIFICATION
1 - CVM CODE
001047-2
3 - Federal Corporate Taxpayers’
Registration Number (CNPJ)
60.500.139/0001-26
2 - COMPANY’S NAME
SARAIVA S.A. LIVREIROS EDITORES
4 - State Registration Number (NIRE)
35300025300
01.02 - HEAD OFFICE
1 - ADDRESS
2 - SUBURB OR DISTRICT
Rua Henrique Schaumann, 270 - 10º andar
Cerqueira Cesar
3 - POSTAL CODE
4 - MUNICIPALITY
05413-909
São Paulo
6 - AREA CODE
7 - TELEPHONE
8 - TELEPHONE
11 - AREA CODE
12 - FAX
13 - FAX
011
5 - STATE
SP
3613-3000
011
9 - TELEPHONE
-
3611-3308
10 - TELEX
-
14 - FAX
-
-
15 - E-MAIL
http:/www.saraivari.com.br
01.03 - INVESTOR RELATIONS OFFICER (Company Mail Address)
1 - NAME
João Luís Ramos Hopp
2 - ADDRESS
3 - SUBURB OR DISTRICT
Rua Henrique Schaumann, 270 - 5º andar
Cerqueira Cesar
4 - POSTAL CODE
5 - MUNICIPALITY
7 - AREA CODE
8 - TELEPHONE
9 - TELEPHONE
12 - AREA CODE
13 - FAX
14 - FAX
05413-909
6 - STATE
São Paulo
011
SP
10 - TELEPHONE
11 - TELEX
3613-3263
011
-
3619-3062
15 - FAX
-
16 - E-MAIL
jlhopp@saraiva.com.br
01.04 - GENERAL INFORMATION / INDEPENDENT ACCOUNTANT
CURRENT YEAR
1 - BEGINNING
01/01/2010
CURRENT QUARTER
2 - END
3 - QUARTER
12/31/2010
1
4 - BEGINNING
01/01/2010
5 - END
03/31/2008
PRIOR QUARTER
6 - QUARTER 7 - BEGINNING
4
8 - END
10/01/2009
12/31/2009
9 - INDEPENDENT ACCOUNTANT
10 - CVM CODE
11 - PARTNER RESPONSIBLE
12 - INDIVIDUAL TAXPAYERS’
REGISTRATION NUMBER OF
THE PARTNER RESPONSIBLE
Deloitte Touche Tohmatsu Auditores Independentes
Maurício Pires de Andrade Resende
00385-9
603.835.426-34
Page 1
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
01.05 - CAPITAL
NUMBER OF SHARES
(THOUSANDS)
1 - CURRENT QUARTER
03/31/2010
Paid-up Capital
1 - Common
2 - Preferred
3 - Total
Treasury Shares
4 - Common
5 - Preferred
6 - Total
2 - PRIOR QUARTER
12/31/2009
3 - SAME QUARTER IN PRIOR YEAR
03/31/2009
9,622
18,974
28,596
9,622
18,974
28,596
9,622
18,974
28,596
0
366
366
0
366
366
0
366
366
01.06 - CHARACTERISTICS OF THE COMPANY
1 - TYPE OF COMPANY
Commercial, Industrial and Other Companies
2 - SITUATION
Operating
3 - NATURE OF OWNERSHIP
Domestic Private
4 - ACTIVITY CODE
1100 - Printing and Publishing House
5 - MAIN ACTIVITY
Publishing and printing of books
6 - TYPE OF CONSOLIDATION
Full
7 - TYPE OF REPORT OF INDEPENDENT ACCOUNTANT
Unqualified
01.07 - COMPANIES EXCLUDED FROM THE CONSOLIDATED FINANCIAL STATEMENTS
1 - ITEM
2 - CNPJ
3 - NAME
01.08 - DIVIDENDS APPROVED AND/OR PAID DURING AND AFTER THE QUARTER
1 - ITEM
2 - EVENT
01
02
Annual Shareholders’ Meeting
Annual Shareholders’ Meeting
3 - DATE OF
APPROVAL
04/20/2010
04/30/2010
4 - TYPE
5 - BEGINNING OF PAYMENT
6 - TYPE OF SHARE
7 - AMOUNT PER SHARE
Interest on Capital
Interest on Capital
04/30/2010
04/30/2010
Registered common
Registered preferred
0.7341020900
0.7341020900
Page 2
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
01.09 - SUBSCRIBED CAPITAL AND ALTERATIONS IN THE CURRENT YEAR
1 - ITEM
2 - DATE OF
ALTERATION
3 - CAPITAL
4 - AMOUNT OF
5 - NATURE OF
(In thousands of Brazilian reais - R$) THE ALTERATION
ALTERATION
(In thousands of Brazilian reais - R$)
7 - NUMBER OF SHARES
ISSUED
(Thousands)
8 - SHARE PRICE ON ISSUE DATE
(Brazilian reais - R$)
01.10 - INVESTORS RELATIONS OFFICER
1 - DATE
07/23/2010
2 - SIGNATURE
Page 3
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
02.01 - BALANCE SHEET - ASSETS (In thousands of Brazilian reais - R$)
1 - Code
1
1.01
1.01.01
1.01.02
1.01.02.01
1.01.02.02
1.01.02.02.01
1.01.02.02.02
1.01.02.02.03
1.01.02.02.04
1.01.02.02.05
1.01.02.02.07
1.01.02.02.08
1.01.03
1.01.04
1.01.04.01
1.01.04.02
1.02
1.02.01
1.02.01.01
1.02.01.02
1.02.01.02.01
1.02.01.02.02
1.02.01.02.03
1.02.01.03
1.02.01.03.01
1.02.01.03.02
1.02.01.03.03
1.02.01.03.04
1.02.02
1.02.02.01
1.02.02.01.01
1.02.02.01.02
1.02.02.01.03
1.02.02.01.04
1.02.02.01.05
1.02.02.02
1.02.02.03
1.02.02.04
2 - Description
Total assets
Current assets
Cash and cash equivalents
Receivables
Trade accounts receivable
Other receivables
Dividends receivable from subsidiary
Recoverable taxes
Deferred income and social contribution taxes
Loans to subsidiary
Receivables for sale of property, plant and equipment
Copyrights advances
Other
Inventories
Other
Deferred advertising expenses
Prepaid expenses
Noncurrent assets
Long-term assets
Other receivables
Intercompany receivables
Affiliates
Subsidiaries
Other related parties
Other
Escrow deposits
Deferred income and social contribution taxes
Receivables for sale of property, plant and equipment
Other
Permanent assets
Investments
In affiliates
In affiliates - goodwill
In subsidiaries
In subsidiaries - goodwill
Other investments
Property, plant and equipment
Intangible assets
Deferred charges
3 - 03/31/2010 4 - 12/31/2009
566,454
511,316
240,343
210,916
28,624
30,063
107,201
77,544
96,501
62,974
10,700
14,570
0
0
4,946
5,824
180
630
0
0
4,632
7,570
0
942
546
103,235
102,779
1,283
530
1,211
0
72
530
326,111
300,400
35,328
17,782
0
0
24,496
6,964
0
0
24,496
6,964
0
0
10,832
10,818
8,516
8,512
720
741
1,566
1,535
30
30
290,783
282,618
250,606
242,546
0
0
0
0
250,175
242,138
23
0
408
408
18,374
18,575
21,803
21,497
0
0
Page 4
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
02.02 - BALANCE SHEET - LIABILITIES (In thousands of Brazilian reais - R$)
1 - Code
2
2.01
2.01.01
2.01.02
2.01.03
2.01.04
2.01.04.01
2.01.04.02
2.01.04.03
2.01.05
2.01.05.01
2.01.05.02
2.01.06
2.01.07
2.01.08
2.01.08.01
2.01.08.02
2.01.08.03
2.01.08.04
2.01.08.05
2.02
2.02.01
2.02.01.01
2.02.01.02
2.02.01.03
2.02.01.03.01
2.02.01.03.02
2.02.01.03.03
2.02.01.04
2.02.01.05
2.02.01.06
2.03
2.05
2.05.01
2.05.02
2.05.03
2.05.03.01
2.05.03.02
2.05.04
2.05.04.01
2.05.04.02
2.05.04.03
2.05.04.04
2.05.04.05
2.05.04.06
2.05.04.07
2 - Description
Total liabilities and shareholders’ equity
Current liabilities
Financing
Debentures
Trade accounts payable
Taxes payable
Income and social contribution taxes
Taxes payable
Social contributions
Dividends payable
Interest on capital
Dividends
Provisions
Intercompany payables
Other
Copyrights payable
Contract for acquisition of subsidiary
Payable commission
Management profit sharing
Other payables
Noncurrent liabilities
Long-term liabilities
Financing
Debentures
Provisions
Reserve for contingencies
Deferred income and social contribution taxes
Taxes payable
Intercompany payables
Advances to future capital increase
Other
Deferred income
Shareholders’ equity
Capital
Capital reserves
Revaluation reserves
Owned assets
Subsidiaries/affiliates
Profit reserves
Legal reserve
Statutory reserve
Reserve for contingencies
Unrealized profit reserve
Profit retention reserve
Special reserve for undistributed dividends
Other profit reserves
3 - 03/31/2010
566,454
83,364
7,534
0
16,399
24,913
15,138
1,400
8,375
20,724
20,724
0
1,473
0
12,321
7,238
0
537
4,065
481
68,320
68,320
58,418
0
9,783
1,181
7,775
827
0
0
119
0
414,770
190,978
0
0
0
0
178,520
21,977
0
0
0
0
0
156,543
4 - 12/31/2009
511,316
88,870
10,344
0
35,655
9,109
703
1,651
6,755
20,724
20,724
0
4,065
0
8,973
6,342
1,488
517
0
626
53,315
53,315
43,203
0
9,975
1,276
7,741
958
0
0
137
0
369,131
190,978
0
0
0
0
178,153
21,977
0
0
0
0
0
156,176
Page 5
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
02.02 - BALANCE SHEET - LIABILITIES (In thousands of Brazilian reais - R$)
1 - Code
2.05.04.07.01
2.05.04.07.02
2.05.04.07.03
2.05.05
2.05.05.01
2.05.05.02
2.05.05.03
2.05.06
2.05.07
2 - Description
Reserve for future capital increase
Treasury shares
Stock option plan
Valuation adjustments to equity
Adjustment of securities
Accumulated translation adjustment
Business combination adjustment
Retained earnings/accumulated deficit
Advances for future capital increase
3 - 03/31/2010
156,840
(2,870)
2,573
0
0
0
0
45,272
0
4 - 12/31/2009
156,840
(2,870)
2,206
0
0
0
0
0
0
Page 6
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
03.01 - STATEMENT OF INCOME (In thousands of Brazilian reais - R$)
1 - Code
3.01
3.02
3.03
3.04
3.05
3.06
3.06.01
3.06.02
3.06.02.01
3.06.02.02
3.06.03
3.06.03.01
3.06.03.02
3.06.04
3.06.05
3.06.05.01
3.06.05.02
3.06.06
3.07
3.08
3.08.01
3.08.02
3.09
3.10
2 - Description
Gross revenue from sales and/or services
Deductions
Net revenue from sales and/or services
Cost of products and/or services
Gross profit
Operating (expenses) income
Selling expenses
General and administrative expenses
Management compensation
Other
Financial
Financial income
Financial expenses
Other operating income
Other operating expenses
Depreciation and amortization
Other
Equity in subsidiary
Income (loss) from operations
Nonoperating income (expenses)
Income
Expenses
Income before taxes and profit sharing
Provision for income and social contribution taxes
3 - 01/01/2010 to 03/31/2010 4 - 01/01/2010 to 03/31/2010 5 - 01/01/2009 to 03/31/2009 6 - 01/01/2009 to 03/31/2009
141,731
141,731
131,967
131,967
(15)
(15)
(53)
(53)
141,716
141,716
131,914
131,914
(31,722)
(31,722)
(27,199)
(27,199)
109,994
109,994
104,715
104,715
(43,944)
(43,944)
(40,069)
(40,069)
(36,199)
(36,199)
(31,628)
(31,628)
(12,540)
(12,540)
(12,015)
(12,015)
(1,473)
(1,473)
(1,391)
(1,391)
(11,067)
(11,067)
(10,624)
(10,624)
(2,140)
(2,140)
117
117
1,042
1,042
2,102
2,102
(3,182)
(3,182)
(1,985)
(1,985)
84
84
73
73
(1,174)
(1,174)
(1,144)
(1,144)
(1,121)
(1,121)
(1,128)
(1,128)
(53)
(53)
(16)
(16)
8,205
8,205
4,528
4,528
66,050
66,050
64,646
64,646
0
0
0
0
0
0
0
0
0
0
0
0
66,050
66,050
64,646
64,646
(18,880)
(18,880)
(19,513)
(17,540)
Page 7
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
03.01 - STATEMENT OF INCOME (In thousands of Brazilian reais - R$)
1 - Code
3.11
3.12
3.12.01
3.12.02
3.13
3.15
2 - Description
3 - 01/01/2010 to 03/31/2010 4 - 01/01/2010 to 03/31/2010 5 - 01/01/2009 to 03/31/2009 6 - 01/01/2009 to 03/31/2009
Deferred income tax
(505)
(505)
(726)
(726)
Profit sharing/contributions
(1,473)
(1,473)
(1,391)
(1,391)
Profit sharing
(1,473)
(1,473)
(1,391)
(1,391)
Contributions
0
0
0
0
Reversal of interest on capital
0
0
0
0
Net income (loss)
45,272
45,272
43,016
43,016
NUMBER OF SHARES, EX-TREASURY (THOUSANDS)
28,230
28,230
28,230
28,230
EARNINGS PER SHARE (BRAZILIAN REAIS - R$)
1,60368
1,60368
1.52377
1.52377
LOSS PER SHARE (BRAZILIAN REAIS - R$)
Page 8
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
04.01 - STATEMENT OF CASH FLOWS - INDIRECT METHOD (In thousands of Brazilian reais - R$)
1 - Code
4.01
4.01.01
4.01.01.01
4.01.01.02
4.01.01.03
4.01.01.04
4.01.01.05
4.01.01.06
4.01.01.07
4.01.01.08
4.01.01.09
4.01.02
4.01.02.01
4.01.02.02
4.01.02.03
4.01.02.04
4.01.02.05
4.01.02.06
4.01.02.07
4.01.02.08
4.01.02.09
4.01.02.10
4.01.03
4.02
4.02.01
2 - Description
Net cash from operating activities
Net cash provided by operating activities
Net income
Depreciation and amortization
Deferred income and social contribution taxes
Allowance for doubtful accounts
Equity in subsidiary
Result on sale of property, plant and equipment
Financial charges on loans and liabilities
Stock option plan
Other operating provisions
Decrease in assets and liabilities
Trade accounts receivable
Receivables from subsidiary - sale of goods
Dividends - subsidiary
Inventories
Other receivables
Trade accounts payable
Income and social contribution taxes
Payment of interest on financing
Debt payment on interest on capital
Other operating liabilities
Other
Net cash used in investing activities
Purchase of property, plant and equipment
3 - 01/01/2010 to 03/31/2010 4 - 01/01/2010 to 03/31/2010 5 - 01/01/2009 to 03/31/2009 6 - 01/01/2009 to 03/31/2009
3,256
3,256
(15,786)
(15,786)
40,044
40,044
36,587
36,587
45,272
45,272
43,016
43,106
1,186
1,186
1,184
1,184
505
505
727
727
612
612
437
437
(8,025)
(8,025)
(4,528)
(4,528)
4
4
(47)
(47)
1,160
1,160
(1,568)
(1,568)
367
367
237
237
(1,037)
(1,037)
(2,871)
(2,871)
(36,788)
(36,788)
(52,373)
(52,373)
(23,936)
(23,396)
(17,374)
(17,374)
(10,203)
(10,203)
(7,679)
(7,679)
0
0
0
0
(456)
(456)
(1,584)
(1,584)
(342)
(342)
1,198
1,198
(19,256)
(19,256)
(36,405)
(36,405)
14,435
14,435
10,992
10,992
(460)
(460)
(497)
(497)
0
0
0
0
3,430
3,430
(1,024)
(1,024)
0
0
0
0
1,670
1,670
(2,736)
(2,736)
(1,386)
(1,386)
(2,976)
(2,976)
Page 9
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
04.01 - STATEMENT OF CASH FLOWS - INDIRECT METHOD (In thousands of Brazilian reais - R$)
1 - Code
4.02.02
4.02.03
4.03
4.03.02
4.03.03
4.03.04
4.04
4.05
4.05.01
4.05.02
2 - Description
3 - 01/01/2010 to 03/31/2010 4 - 01/01/2010 to 03/31/2010 5 - 01/01/2009 to 03/31/2009 6 - 01/01/2009 to 03/31/2009
Receipts from sales of property, plant and equipment items
3,091
3,091
240
240
Acquisition of shares from minority shareholders
(35)
(35)
0
0
Net cash used in financing activities
(6,365)
(6,365)
(11,661)
(11,661)
Loans and financing
13,658
13,658
11,651
11,651
Loans granted - subsidiary
(17,225)
(17,225)
(20,517)
(20,517)
Amortization of loans and financing
(2,798)
(2,798)
(2,795)
(2,795)
Exchange variation on cash and cash equivalents
0
0
0
0
Decrease in cash and cash equivalents
(1,439)
(1,439)
(30,183)
(30,183)
Cash and cash equivalents at beginning of year
30,063
30,063
31,370
31,370
Cash and cash equivalents at end of year
28,624
28,624
1,547
1,547
Page 10
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
05.01 - STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 01/01/2010 TO 03/31/2010 (In thousands of Brazilian reais - R$)
1 - Code
5.01
5.02
5.03
5.04
5.05
5.05.01
5.05.02
5.05.03
5.05.03.01
5.05.03.02
5.06
5.07
5.07.01
5.07.02
5.07.03
5.08
5.09
5.10
5.11
5.12
5.12.01
5.13
2 - Description
3 - Capital 4 - Capital reserves 5 - Revaluation reserves 6 - Profit reserves
Opening balance
190,978
0
0
178,153
Prior year adjustments
0
0
0
0
Adjusted balance
190,978
0
0
178,153
Net income (loss)
0
0
0
0
Allocations of income
0
0
0
0
Dividends
0
0
0
0
Interest on capital
0
0
0
0
Other
0
0
0
0
Legal reserve
0
0
0
0
Transfer to earnings reserve
0
0
0
0
Recognition of earnings reserve
0
0
0
0
Valuation adjustments to equity
0
0
0
0
Adjustments of securities
0
0
0
0
Accumulated translation adjustment
0
0
0
0
Business combination adjustments
0
0
0
0
Capital increase/decrease
0
0
0
0
Recognition/realization of capital reserves
0
0
0
0
Treasury shares
0
0
0
0
Other capital transactions
0
0
0
0
Other
0
0
0
367
Stock option plan
0
0
0
367
Ending balance
190,978
0
0
178,520
7 - Retained
9 - Total
earnings/accumulated 8 - Valuation
shareholders’
deficit
adjustments to equity equity
0
0
369,131
0
0
0
0
0
369,131
45,272
0
45,272
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
367
0
0
367
45,272
0
414,770
Page 11
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
05.02 - STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 01/01/2010 TO 03/31/2010 (In thousands of Brazilian reais - R$)
1 - Code
5.01
5.02
5.03
5.04
5.05
5.05.01
5.05.02
5.05.03
5.05.03.01
5.05.03.02
5.06
5.07
5.07.01
5.07.02
5.07.03
5.08
5.09
5.10
5.11
5.12
5.12.01
5.13
2 - Description
Opening balance
Prior year adjustments
Adjusted balance
Net income (loss)
Allocations of income
Dividends
Interest on capital
Other
Legal reserve
Transfer to earnings reserve
Recognition of earnings reserve
Valuation adjustments to equity
Adjustments of securities
Accumulated translation adjustment
Business combination adjustments
Capital increase/decrease
Recognition/realization of capital
reserves
Treasury shares
Other capital transactions
Other
Stock option plan
Ending balance
3 - Capital 4 - Capital reserves 5 - Revaluation reserves 6 - Profit reserves
190,978
0
0
178,153
0
0
0
0
190,978
0
0
178,153
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
367
0
0
0
367
190,978
0
0
178,520
7 - Retained
9 - Total
earnings/accumulated 8 - Valuation
shareholders’
deficit
adjustments to equity equity
0
0
369,131
0
0
0
0
0
369,131
45,272
0
45,272
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
45,272
0
0
0
0
0
0
0
0
0
367
367
414,770
Page 12
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
01047-2
SARAIVA S.A. LIVREIROS EDITORES
3 - Federal Corporate Taxpayers’ Registration Number
(CNPJ)
60.500.139/0001-26
08.01 - CONSOLIDATED BALANCE SHEET - ASSETS (In thousands of Brazilian reais - R$)
1 - Code
1
1.01
1.01.01
1.01.02
1.01.02.01
1.01.02.02
1.01.02.02.01
1.01.02.02.02
1.01.02.02.03
1.01.02.02.04
1.01.02.02.05
1.01.03
1.01.04
1.01.04.01
1.01.04.02
1.02
1.02.01
1.02.01.01
1.02.01.02
1.02.01.02.01
1.02.01.02.02
1.02.01.02.03
1.02.01.03
1.02.01.03.01
1.02.01.03.02
1.02.01.03.03
1.02.01.03.04
1.02.01.03.05
1.02.02
1.02.02.01
1.02.02.01.01
1.02.02.01.02
1.02.02.01.03
1.02.02.02
1.02.02.03
1.02.02.04
2 - Description
Total assets
Current assets
Cash and cash equivalents
Receivables
Trade accounts receivable
Other receivables
Recoverable taxes
Deferred income and social contribution taxes
Receivables for sale of property, plant and equipment
Copyrights advances
Other
Inventories
Other
Deferred advertising expenses
Prepaid expenses
Noncurrent assets
Long-term assets
Other receivables
Intercompany receivables
Affiliates
Subsidiaries
Other related parties
Other
Deferred income and social contribution taxes
Escrow deposits
Receivables for sale of property, plant and equipment
Recoverable taxes
Other
Permanent assets
Investments
In affiliates
In subsidiary
Other investments
Property, plant and equipment
Intangible assets
Deferred charges
3 - 03/31/2010 4 - 12/31/2009
902,211
843,575
661,426
603,626
31,364
38,762
331,821
266,422
281,315
216,331
50,506
50,091
31,029
24,154
9,582
12,345
4,632
7,570
74
0
5,189
6,022
296,866
297,597
1,375
845
1,216
0
159
845
240,785
239,949
39,958
40,173
0
0
0
0
0
0
0
0
0
0
39,958
40,173
19,530
19,692
10,009
9,950
1,566
1,535
8,811
8,954
42
42
200,827
199,796
566
543
0
0
23
0
543
543
103,655
104,331
96,606
94,902
0
0
Page 13
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
01047-2
SARAIVA S.A. LIVREIROS EDITORES
3 - Federal Corporate Taxpayers’ Registration Number
(CNPJ)
60.500.139/0001-26
08.02 - CONSOLIDATED BALANCE SHEET - LIABILITIES (In thousands of Brazilian reais - R$)
1 - Code
2
2.01
2.01.01
2.01.02
2.01.03
2.01.04
2.01.04.01
2.01.04.02
2.01.04.03
2.01.05
2.01.05.01
2.01.05.02
2.01.06
2.01.06.01
2.01.06.02
2.01.07
2.01.08
2.01.08.01
2.01.08.02
2.01.08.03
2.01.08.04
2.01.08.06
2.01.08.07
2.01.08.08
2.02
2.02.01
2.02.01.01
2.02.01.02
2.02.01.03
2.02.01.03.01
2.02.01.03.02
2.02.01.03.03
2.02.01.04
2.02.01.05
2.02.01.06
2.02.01.06.01
2.02.01.06.02
2.03
2.04
2.05
2.05.01
2.05.02
2.05.03
2.05.03.01
2.05.03.02
2.05.04
2 - Description
Total liabilities and shareholders’ equity
Current liabilities
Financing
Debentures
Trade accounts payable
Taxes payable
Income and social contribution taxes
Taxes payable
Social contributions
Dividends payable
Interest on capital
Dividends
Provisions
Management profit sharing
Customer Loyalty Program
Intercompany payables
Other
Copyrights payable
Contract for acquisition of subsidiary
Payable commission
Freight and commissions payable
Advances from customers
Management profit sharing
Other payables
Noncurrent liabilities
Long-term liabilities
Financing
Debentures
Provisions
Deferred income and social contribution taxes
Reserve for contingencies
Taxes payable
Intercompany payables
Advances to future capital increase
Other
Payables to former shareholders
Other
Deferred income
Minority interest
Shareholders’ equity
Capital
Capital reserves
Revaluation reserves
Owned assets
Subsidiaries/affiliates
Profit reserves
3 - 03/31/2010
902,211
334,738
68,083
0
179,312
37,161
15,138
3,366
18,657
20,724
20,724
0
6,375
1,473
4,902
0
23,083
7,950
5,779
0
0
3,286
4,065
2,003
152,651
152,651
122,210
0
24,889
22,559
1,503
827
0
0
5,552
4,875
677
0
52
447,770
190,978
0
0
0
0
178,520
4 - 12/31/2009
843,575
351,726
81,458
0
197,851
21,196
703
5,720
14,773
20,724
20,724
0
7,841
4,065
3,776
0
22,656
7,090
7,565
0
1,488
4,002
0
2,511
122,655
122,655
92,348
0
24,619
20,817
2,844
958
0
0
5,688
4,790
898
0
63
369,131
190,978
0
0
0
0
178,153
Page 14
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
01047-2
SARAIVA S.A. LIVREIROS EDITORES
1 - Code
2.05.04.01
2.05.04.02
2.05.04.03
2.05.04.07
2.05.04.07.01
2.05.04.07.02
2.05.04.07.03
2.05.05
2.05.05.01
2.05.05.02
2.05.05.03
2.05.06
2.05.07
2 - Description
Legal reserve
Statutory reserve
Reserve for contingencies
Other profit reserves
Reserve for future capital increase
Treasury shares
Stock option plan
Valuation adjustments to equity
Adjustment of securities
Accumulated translation adjustment
Business combination adjustment
Retained earnings/accumulated deficit
Advances for future capital increase
3 - Federal Corporate Taxpayers’ Registration Number
(CNPJ)
60.500.139/0001-26
3 - 03/31/2010
21,977
0
0
156,543
156,840
(2,870)
2,573
0
0
0
0
45,272
0
4 - 12/31/2009
21,977
0
0
156,176
156,840
(2,870)
2,206
0
0
0
0
0
0
Page 15
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
09.01 - CONSOLIDATED STATEMENT OF INCOME (In thousands of Brazilian reais - R$)
1 - Code
3.01
3.02
3.03
3.04
3.05
3.06
3.06.01
3.06.02
3.06.02.01
3.06.02.02
3.06.03
3.06.03.01
3.06.03.02
3.06.04
3.06.05
3.06.05.01
3.06.05.02
3.06.06
3.07
3.08
3.08.01
3.08.02
3.09
3.10
3.11
2 - Description
Gross revenue from sales and/or services
Deductions
Net revenue from sales and/or services
Cost of products and/or services
Gross profit
Operating (expenses) income
Selling expenses
General and administrative expenses
Management compensation
Other
Financial
Financial income
Financial expenses
Other operating income
Other operating expenses
Depreciation and amortization
Other
Equity in subsidiary
Income (loss) from operations
Nonoperating income (expenses)
Income
Expenses
Income before taxes and profit sharing
Provision for income and social contribution taxes
Deferred income tax
3 - 01/01/2010 to 03/31/2010 4 - 01/01/2010 to 03/31/2010 5 - 01/01/2009 to 03/31/2009 6 - 01/01/2009 to 03/31/2009
457,838
457,838
374,763
374,763
(19,081)
(19,081)
(14,802)
(14,802)
438,757
438,757
359,961
359,961
(222,254)
(222,254)
(168,242)
(168,242)
216,503
216,503
191,719
191,719
(146,290)
(146,290)
(123,304)
(123,304)
(106,038)
(106,038)
(91,364)
(91,364)
(26,506)
(26,506)
(25,246)
(25,246)
(2,703)
(2,703)
(2,136)
(2,136)
(23,283)
(23,283)
(23,110)
(23,110)
(7,208)
(7,208)
(3,016)
(3,016)
901
901
818
818
(8,109)
(8,109)
(3,834)
(3,834)
976
976
1,578
1,578
(7,514)
(7,514)
(5,256)
(5,256)
(6,192)
(6,192)
(4,209)
(4,209)
(1,322)
(1,322)
(1,047)
(1,047)
0
0
0
0
70,213
70,213
68,415
68,415
0
0
0
0
0
0
0
0
0
0
0
0
70,213
70,213
68,415
68,415
(18,800)
(18,800)
(20,402)
(20,402)
(4,667)
(4,667)
(3,604)
(3,604)
Page 16
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
09.01 - CONSOLIDATED STATEMENT OF INCOME (In thousands of Brazilian reais - R$)
1 - Code
3.12
3.12.01
3.12.02
3.13
3.14
3.15
2 - Description
3 - 01/01/2010 to 03/31/2010 4 - 01/01/2010 to 03/31/2010 5 - 01/01/2009 to 03/31/2009 6 - 01/01/2009 to 03/31/2009
Profit sharing/contributions
(1,473)
(1,473)
(1,391)
(1,391)
Profit sharing
(1,473)
(1,473)
(1,391)
(1,391)
Contributions
0
0
0
0
Reversal of interest on capital
0
0
0
0
Minority interest
(1)
(1)
(2)
(2)
Net income (loss)
45,272
45,272
43,106
43,106
NUMBER OF SHARES, EX-TREASURY (THOUSANDS)
28,230
28,230
28,230
28,230
EARNINGS PER SHARE (BRAZILIAN REAIS - R$)
1,60368
1,60368
1.52377
1.52377
LOSS PER SHARE (BRAZILIAN REAIS - R$)
Page 17
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
10.01 - CONSOLIDATED STATEMENT OF CASH FLOWS - INDIRECT METHOD (In thousands of Brazilian reais - R$)
1 - Code
4.01
4.01.01
4.01.01.01
4.01.01.02
4.01.01.03
4.01.01.04
4.01.01.05
4.01.01.06
4.01.01.07
4.01.01.08
4.01.01.09
4.01.01.10
4.01.01.11
4.01.02
4.01.02.01
4.01.02.02
4.01.02.03
4.01.02.04
4.01.02.05
4.01.02.06
4.01.02.07
4.01.02.08
4.01.03
4.02
4.02.01
4.02.02
2 - Description
Net cash from operating activities
Net cash provided by operating activities
Net income
Depreciation and amortization
Deferred income and social contribution taxes
Allowance for doubtful accounts
Result on sale of property, plant and equipment
Financial charges on loans and liabilities
Stock option plan
Other provisions
Realization of goodwill from company acquisition
Minority interest - subsidiary
Equity in subsidiary
Decrease in assets and liabilities
Trade accounts receivable
Inventories
Other receivables
Trade accounts payable
Income and social contribution taxes
Payment of interest on financing
Debt payment on interest on capital
Other payables
Other
Net cash used in investing activities
Purchase of property, plant and equipment
Business acquisition
3 - 01/01/2010 to 03/31/2010 4 - 01/01/2010 to 03/31/2010 5 - 01/01/2009 to 03/31/2009 6 - 01/01/2009 to 03/31/2009
(16,068)
(16,068)
(11,010)
(11,010)
63,127
63,127
50,295
50,295
45,272
45,272
43,016
43,106
6,542
6,542
4,433
4,433
4,667
4,667
3,605
3,605
885
885
525
525
80
80
(83)
(83)
2,363
2,363
178
178
367
367
237
237
2,962
2,962
(1,618)
(1,618)
0
0
0
0
(11)
(11)
2
2
0
0
0
0
(79,195)
(79,195)
(61,305)
(61,305)
(65,869)
(65,869)
(22,913)
(22,913)
731
731
(9,016)
(9,016)
(6,673)
(6,673)
(5,086)
(5,806)
(18,539)
(18,539)
(32,542)
(32,542)
14,435
14,435
10,992
10,992
(2,500)
(2,500)
(969)
(969)
0
0
0
0
(780)
(780)
(1,771)
(1,771)
0
0
0
0
(4,674)
(4,674)
(15,846)
(15,846)
(7,742)
(7,742)
(16,125)
(16,125)
(23)
(23)
0
0
Page 18
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
10.01 - CONSOLIDATED STATEMENT OF CASH FLOWS - INDIRECT METHOD (In thousands of Brazilian reais - R$)
1 - Code
4.02.03
4.03
4.03.01
4.03.02
4.04
4.05
4.05.01
4.05.02
2 - Description
3 - 01/01/2010 to 03/31/2010 4 - 01/01/2010 to 03/31/2010 5 - 01/01/2009 to 03/31/2009 6 - 01/01/2009 to 03/31/2009
Receipts from sales of property, plant and equipment items
3,091
3,091
279
279
Net cash used in financing activities
13,344
13,344
(7,497)
(7,497)
Obtained loans and financing
27,998
27,998
21,128
21,128
Amortization of loans and financing
(14,654)
(14,654)
(28,625)
(28,625)
Exchange variation on cash and cash equivalents
0
0
0
0
Decrease in cash and cash equivalents
(7,398)
(7,398)
(34,353)
(34,353)
Cash and cash equivalents at beginning of year
38,762
38,762
37,823
37,823
Cash and cash equivalents at end of year
31,364
31,364
3,470
3,470
Page 19
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
11.01 - CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 01/01/2010 TO 03/31/2010 (In thousands of Brazilian reais - R$)
1 - Code
5.01
5.02
5.03
5.04
5.05
5.05.01
5.05.02
5.05.03
5.06
5.07
5.07.01
5.07.02
5.07.03
5.08
5.09
5.10
5.11
5.12
5.12.01
5.13
2 - Description
3 - Capital 4 - Capital reserves 5 - Revaluation reserves 6 - Profit reserves
Opening balance
190.978
0
0
178,153
Prior year adjustments
0
0
0
0
Adjusted balance
190.978
0
0
178,153
Net income (loss)
0
0
0
0
Allocations of income
0
0
0
0
Dividends
0
0
0
0
Interest on capital
0
0
0
0
Other
0
0
0
0
Recognition of earnings reserve
0
0
0
0
Valuation adjustments to equity
0
0
0
0
Adjustments of securities
0
0
0
0
Accumulated translation adjustment
0
0
0
0
Business combination adjustments
0
0
0
0
Capital increase/decrease
0
0
0
0
Recognition/realization of capital reserves
0
0
0
0
Treasury shares
0
0
0
0
Other capital transactions
0
0
0
0
Other
0
0
0
367
Stock option plan
0
0
0
367
Ending balance
190.978
0
0
178,520
7 - Retained
9 - Total
earnings/accumulated 8 - Valuation
shareholders’
deficit
adjustments to equity equity
0
0
369,131
0
0
0
0
0
369,131
45,272
0
45,272
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
367
0
0
367
45,272
0
414,770
Page 20
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
11.02 - CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 01/01/2010 TO 03/31/2010 (In thousands of Brazilian reais - R$)
1 - Code
5.01
5.02
5.03
5.04
5.05
5.05.01
5.05.02
5.05.03
5.06
5.07
5.07.01
5.07.02
5.07.03
5.08
5.09
5.10
5.11
5.12
5.12.01
5.13
2 - Description
3 - Capital 4 - Capital reserves 5 - Revaluation reserves 6 - Profit reserves
Opening balance
190.978
0
0
178,153
Prior year adjustments
0
0
0
0
Adjusted balance
190.978
0
0
178,153
Net income (loss)
0
0
0
0
Allocations of income
0
0
0
0
Dividends
0
0
0
0
Interest on capital
0
0
0
0
Other
0
0
0
0
Recognition of earnings reserve
0
0
0
0
Valuation adjustments to equity
0
0
0
0
Adjustments of securities
0
0
0
0
Accumulated translation adjustment
0
0
0
0
Business combination adjustments
0
0
0
0
Capital increase/decrease
0
0
0
0
Recognition/realization of capital reserves
0
0
0
0
Treasury shares
0
0
0
0
Other capital transactions
0
0
0
0
Other
0
0
0
367
Stock option plan
0
0
0
367
Ending balance
190.978
0
0
178,520
7 - Retained
9 - Total
earnings/accumulated 8 - Valuation
shareholders’
deficit
adjustments to equity equity
0
0
369,131
0
0
0
0
0
369,131
45,272
0
45,272
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
367
0
0
367
45,272
0
414,770
Page 21
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
1.
CORE BUSINESS
Saraiva S.A. Livreiros Editores (the ―Company‖) is primarily engaged in publishing
elementary and high school textbooks, supplementary textbooks, legal books and economics
and management books. Development of digital content; development of content for the
so-called Ético Teaching System (―Ético‖), which consists of teaching material for
elementary and high schools, as well as of preparation courses for college admission tests.
The Company experiences seasonality in its business, with 80% of its sales concentrated in
the first and fourth quarters of the year. This sales concentration is due to two factors: (i) the
back-to-school period in the first quarter; and (ii) the sale of textbooks to the government in
the fourth and first quarters of the year.
Saraiva e Siciliano S.A. (―Livraria‖), a subsidiary of the Company, is engaged in retail sale
of books, DVDs, music, periodicals, stationery, multimedia, and computer and electro-electronic products. Distribution is conducted through an Internet-based sales platform and
a chain of 100 stores, of which 39 are megastores and 53 are conventional stores and 8
franchises.
2.
PRESENTATION OF INTERIM FINANCIAL STATEMENTS
The Company’s and its subsidiaries’ individual and consolidated financial statements have
been prepared in accordance with the Brazilian accounting practices through December 31,
2009, including all changes in accounting practices introduced by Law 11638/07 and
Provisional Act 449/08, regulated by the technical pronouncements of the Accounting
Pronouncements Committee (CPC) and the Brazilian Securities Commission (CVM).
3.
SIGNIFICANT ACCOUNTING PRACTICES
a) General principles
Results of operations are determined on the accrual basis. Sales revenues and costs are
recorded upon the transfer of risks and benefits associated to the products and services.
b) Current and noncurrent assets
 Cash and cash equivalents
Comprises cash balances, bank deposits and short-term investments. Short-term
investments can be immediately converted into a known cash amount and are subject
to immaterial risk of change in value. These short-term investments refer to bank
certificates of deposit (CDBs) and repurchase agreements, which are characterized by
the sale of a bond with the commitment of the seller (bank) to buy it back and of the
buyer to resell it in the future.
Page 22
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
 Allowance for doubtful accounts
Trade accounts receivable are recorded and stated in balances sheets at their original
amounts. Accounts receivable are controlled by aging, and an allowance for losses is
recognized for receivables past due for more than 180 days. Uncollectible receivables
are charged directly to income.
Receivables are not adjusted to present value as they have a short-term maturity and
do not materially impact the financial statements.
 Inventories
Stated at average acquisition or production cost, less allowance for adjustment write-down to fair or realizable value, when lower, and allowance for losses with slow- moving items, excessive, or not realizable, based on periodic analysis conducted by
Management.
 Other noncurrent assets
Recorded at cost or at the net realizable value, when the latter is lower.
 Investments
Investments in the subsidiary are accounted for under the equity method, and other
investments are stated at cost, less a provision for write-down to market value, when
applicable.
 Property, plant and equipment and intangible assets
Stated at acquisition or construction cost, less depreciation and amortization and,
when applicable, provision for reduction to recoverable value. Depreciation and
amortization are calculated under the straight-line method, based on the estimated
useful lives of the assets and rights. Livraria’s facilities and leasehold improvements
are depreciated over the shortest of the lease term or the economic useful lives of the
assets.
Carrying amounts of intangible assets with a defined useful life and property and
equipment indicating impairment losses are reviewed to make sure that a provision
for losses in their carrying amount in relation to the recoverable value is recognized in
the statements of income.
The cash generating units defined by Management and used to evaluate the
recoverability of the carrying amount of the related assets correspond to the operation
of the Company and each of the stores, and the website ―Saraiva.com‖, in the case of
Page 23
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
Livraria. The evaluation process uses operating and financial performance indicators
established by Management and, upon indication of an impairment loss, a
comparative analysis is performed for each cash generating unit between the amount
determined by the cash flow discounted to present value and the respective carrying
amount. As of March 31, 2010, Management, in its best judgment, did not identify
assets recorded at amounts higher than their recoverable value.
 Goodwill
Goodwill resulting from the acquisition of investments is based on the projected
earnings capacity of the acquired businesses over the estimated period for return on
investment in 60 months. Goodwill is amortized under the straight-line method at the
rate of 20% per year until December 31, 2008. Beginning January 1, 2009, goodwill
will no longer be amortized and will be tested for recoverable value on an annual
basis.
The cash generating units defined by Management and used to evaluate the
recoverability of the carrying amount of the goodwill correspond to the operation of
the stores purchased from Siciliano S.A. (―Siciliano‖) and Ético’s operations, and, as
of March 31, 2010, Management, in its best judgment, did not identify the need to
recognize a provision for reduction of the carrying amount of the recorded goodwill.
c) Current and noncurrent liabilities
 Loans and financing
Adjusted based on the contractual interest and financial charges incurred through the
balance sheet dates.
 Copyrights
Calculated and recognized, on the accrual basis, as operating expenses when sales are
made and, in some cases, as production cost when the work is published.
 Leasing operations
Lease agreements for the Company’s and Livraria’s commercial units are classified
as operating leases, and the respective costs are recognized in the interim statements
of income as operating expenses.
Page 24
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
 Other current and noncurrent liabilities
Stated at known or estimated amounts plus charges and monetary or exchange
variations incurred through the balance sheet dates.
d) Income and social contribution taxes
Taxes on income include current and deferred amounts.
Income tax is calculated at the rate of 15% on taxable income plus a 10% surtax, and
social contribution is calculated at the rate of 9% on taxable income.
Deferred income and social contribution taxes are calculated on tax loss carryforwards
of Livraria and on temporary differences of the Company and Livraria. Deferred taxes
are recorded in current and noncurrent assets and noncurrent liabilities, according to note
15.a). Deferred tax assets are supported by a study on the expected realization of future
taxable income, which is reviewed annually and adjusted in the event that a significant
reduction in the projected income is expected.
e) Share-based payments
Fair value for stock option plans is calculated on the grant date of each plan and based
on the binomial pricing model. The effects are reflected in the net income and
shareholders’ equity for the period comprised between the grant date and the date on
which all eligibility conditions under each plan are met.
f) Reserve for contingencies
Adjusted through the balance sheet date for the probable loss amount, according to the
nature of each contingency and based on the opinion of the Company’s legal counsel.
For financial statement purposes, the reserve is stated net of related judicial deposits.
The bases for and nature of the reserves for tax, civil, and labor risks are described in
note 16.
g) Earnings per share
Calculated based on the number of shares outstanding at the balance sheet dates.
h) Accounting estimates
The preparation of financial statements requires the Management of the Company and
Livraria to make estimates and assumptions that affect the reported amounts of assets,
liabilities and other transactions. Accordingly, the financial statements include several
estimates related to the allowance for doubtful accounts, allowance for inventory losses,
reserve for contingencies, assessment of the useful lives of property and equipment and
Page 25
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
intangible assets, and related projections to determine the impairment of property and
equipment, intangible assets, goodwill, and deferred income tax assets. These estimates
consider the best available indications and are based on assumptions existing at yearend.
Actual results in the realization or settlement of the underlying assets and liabilities
could differ from those estimates.
4.
CHANGES IN ACCOUNTING PRACTICES ADOPTED IN BRAZIL
With the enactment of Law 11638/07, which introduced changes in Brazilian Corporate
Law to enable convergence of accounting practices adopted in Brazil with the International
Financial Reporting Standards (IFRS), new accounting standards and technical
pronouncements have been issued in conformity with IFRS by the Accounting
Pronouncements Committee (CPC).
During 2009 the CPC issued new technical pronouncements, interpretations and instructions
(CPCs, ICPCs and OCPCs, respectively), approved by CVM resolutions, whose mandatory
application was postponed to December 2010, with optional early adoption encouraged,
pursuant to CVM Resolution 603/09 issued on November 10, 2009, and CVM Official
Letter 01/2010, issued on March 31, 2010.
The Management of Editora and Livraria elected the option granted by said Resolution for
the first quarter of 2010 and prepared the related interim financial statements pursuant to the
accounting practices effective until December 31, 2009. Upon the full adoption of the new
CPCs, ICPCs and OCPCs, these interim financial statements will be restated comparatively
with the 2009 figures and adjusted for such pronouncements.
This decision was made so that the Company can complete its analyses regarding the
changes and the impacts arising from the full adoption of the new CPCs, ICPCs and OCPCs.
Management presents below, based on its best judgment, the main changes that could have
an impact on the financial statements for the period, and an estimate of their possible effects
on shareholders’ equity and net income and disclosures from the application of said
pronouncements:
 CPC 22 Operating Segments - Determines the need to disclose separate information by
operating segment, defined as the components of an entity: a) that engages in business
activities from which it may earn revenues and incur expenses; b) whose operating
results are regularly reviewed by the entity’s chief operating decision maker to make
decisions about resources to be allocated to the segment and assess its performance; and
c) for which discrete financial information is available. Management should analyze the
additional disclosure required in its financial statements based on how its business is
currently managed.
Page 26
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
 CPC 40 Financial Instruments: Disclosures - Requires disclosures in the financial
statements that enable users to evaluate the significance of financial instruments for the
entity’s financial position and performance; the nature and extent of risks arising from
financial instruments to which the entity is exposed; and how the entity manages those
risks. Management should analyze the additional disclosure required in its financial
statements based on financial and business exposures, and its risk and capital
management.
 CPC 24 Events after the Reporting Period - Prescribes when an entity should adjust its
financial statements for events after the reporting period; and b) the disclosures that an
entity should give about the date when the financial statements were authorized for issue
and about events after the reporting period. The main impact is in the accounting of
proposed dividends for approval by the Annual Shareholders' Meeting. Under this CPC,
the liability can only be recognized as regards mandatory minimum dividends provided
for in bylaws. Additional dividends must be recognized after their approval by the
Company’s decision-making bodies.
 CPC 26 Presentation of Financial Statements - Prescribes the basis for presentation of
financial statements, including separate and consolidated financial statements, to ensure
comparability both with the entity’s financial statements of previous periods and with the
financial statements of other entities. Its main impact is the requirement to present a
statement of comprehensive income.
 CPC 30 Revenue - Prescribes that revenue is recognized when it is probable that future
economic benefits will flow to the entity and these benefits can be measured reliably at
fair value. The main impact is the amount of and the way Livraria’s Customer Loyalty
Program will be recognized. The probable effects on shareholders' equity and net income
are as follows:
Shareholders’ equity
Net income
03/2010 12/2009 03/2010 03/2009
As currently recognized
Effect of the adjustment
Under CPC 30
414,770
(2,221)
412,549
369,131
(2,329)
366,802
45,272
108
45,380
43,016
270
43,286
Editora and Livraria’s Management is analyzing the possible effects of the other CPCs,
ICPCs and OCPCs on the Company’s financial statements.
Page 27
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
5.
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
The consolidated interim financial statements were prepared in accordance with
consolidation criteria prescribed by the Brazilian accounting practices include the accounts
of the Company and Livraria, in which the Company has equity interest of 99.97%. The
interim financial statements of Livraria, used in the preparation of the consolidated financial
statements, were prepared as of the same date, and in accordance with the accounting
practices.
The following procedures were adopted in the preparation of the consolidated interim
financial statements:
 Elimination of intercompany balances and transactions.
 Elimination of the Company’s investment against the subsidiary’s shareholders’ equity.
 Minority interest in shareholders’ equity and net income of Livraria is recorded in a
separate caption in the balance sheets and statements of income, respectively.
6.
CASH AND CASH EQUIVALENTS
Company
03/2010 12/2009
Cash and banks
Temporary cash investments (*)
4,336
24,288
28,624
1,044
29,019
30,063
Consolidated
03/2010 12/2009
7,076
24,288
31,364
9,743
29,019
38,762
(*) As of December 31, 2009 and 2008, these investments refer to bank certificates of
deposit (CDB) with yield from 100% to 100,5% of interbank deposit rate (CDI)
variation and with daily liquidity.
7.
TRADE ACCOUNTS RECEIVABLE
Company
03/2010 12/2009
Trade accounts receivable
Intercompany receivables - Livraria
Credit cards
Checks receivable
Allowance for doubtful accounts
73,750
17,511
601
5,811
97,673
(1,172)
96,501
Consolidated
03/2010 12/2009
53,485
79,771
59,608
7,308
90 199,394 157,774
4,000
7,691
5,801
64,883 286,856 223,183
(1,909)
(5,541)
(6,852)
62,974 281,315 216,331
Page 28
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
Aging list of accounts receivable:
Company
03/2010 12/2009
Current
Past due:
Up to 60 days
Over 180 days
8.
89,655
58,930
274,021
211,613
5,094
2,924
97,673
2,014
3,939
64,883
5,448
7,387
286,856
2,525
9,045
223,183
INVENTORIES
Goods for resale
Finished products
Work in process
Raw materials
Packing and consumption materials
9.
Consolidated
03/2010 12/2009
Company
03/2010 12/2009
Consolidated
03/2010 12/2009
79
55,210
30,504
16,593
849
103,235
192,349
55,210
30,504
16,593
2,210
296,866
145
57,464
32,831
11,487
852
102,779
193,614
57,464
32,831
11,487
2,201
297,597
RECOVERABLE TAXES
Company
03/2010 12/2009
Consolidated
03/2010 12/2009
Taxes on revenues (COFINS)
Taxes on revenues (PIS)
Income Tax (IRPJ)
Social Contribution on Net Income (CSLL)
State VAT (ICMS)
Others
3,091
1,855
4,946
3,238
1,393
1,193
5,824
22,890
6,776
2,909
1,251
6,014
39,840
21,306
5,939
2,825
2,326
624
88
33,108
Current assets
Noncurrent assets
4,946
4,946
5,824
5,824
31,029
8,811
39,840
24,154
8,954
33,108
Page 29
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
10. INVESTMENTS IN SUBSIDIARY
Direct investments in Livraria and its main information are as follows:
03/2010 12/2009
Number of shares - thousands
Number of shares held - thousands
Ownership interest
Percentage of this investment in the Company’s shareholders’ equity
(includes intercompany loans)
Paid-in capital
Shareholders’ equity
195,053 195,053
193,013 193,003
99.98% 99.97%
Investment value
250,175 242,138
66.22% 67.48%
296,317 296,317
250,228 242,201
The calculation basis for the equity in subsidiaries recognized by Editora is as follows:
03/2010 12/2009
Calculation basis for equity in subsidiary
Equity in subsidiary
8,027
8,025
4,529
4,528
The change recorded in investments for the quarter is as follows:
03/2010
Balance at beginning of quarter
Acquisition of shares from non-controlling shareholders
Interest in Livraria
Balance at end of quarter
242,138
12
8,025
250,175
Page 30
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
The balance sheets of Livraria as of March 31, 2010 and December 31, 2009 are as follows:
03/2010
12/2009
03/2010 12/2009
ASSETS
627,940
LIABILITIES AND
588,669 SHAREHOLDERS’ EQUITY
CURRENT
Cash and cash equivalents
Trade accounts receivable
Inventories
Recoverable taxes
Deferred income and social
contribution taxes
Other
438,594
2,740
202,235
193,630
26,083
400,018
8,699
160,665
194,818
18,330
NONCURRENT
Judicial deposits
Deferred income and social
contribution taxes
Recoverable taxes
Other
Investments
Property, plant and equipment
Intangible assets
189,436
1492
9,402
4,414
18,811
8,811
12
135
85,282
74,803
CURRENT
Trade accounts payable
Financing
Related parties
Provision for income and
social contribution taxes
11,715 Taxes payable
5,791 Other
188,651 NONCURRENT
1,438 Financing
Reserve for contingencies
18,951 Deferred income and social
8,954
contribution taxes
12 Other
135 SHAREHOLDERS’ EQUITY
85,756 Paid-in capital
73,405 Accumulated losses
627,940
588,669
293,380
180,243
60,548
24,496
277,128
169,504
71,114
6,964
10,283
1,966
15,664
8,019
4,068
17,459
84,332
63,793
322
69,340
49,145
1,568
14,784
13,076
5,434
5,551
250,228 242,201
296,317 296,317
(46,089) (54,116)
11. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Company
Annual
depreciation/
amortization
rate - %
Property, plant and equipment:
Land
Buildings and constructions
Machinery and equipment
Furniture, fixtures and installations
Vehicles
IT equipment
Property, plant and equipment in progress
4
10
10
20
20
-
Cost
1,438
7,361
1,755
16,975
6,213
12,662
127
46,531
03/2010
12/2009
Accumulated
depreciation/
amortization
Accumulated
depreciation/
amortization
Net
1,438
(3,777) 3,584
(1,402)
353
(10,212) 6,763
(2,924) 3,289
(9,842) 2,820
127
(28,157) 18,374
Cost
1,438
7,361
1,916
16,159
6,485
12,843
1,091
47,293
Net
1,438
(3,704) 3,657
(1,538)
378
(10,431) 5,728
(3,031) 3,454
(10,014) 2,829
1,091
(28,718) 18,575
Page 31
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
Company
Annual
depreciation/
amortization
rate - %
Cost
20
2,932
20
20
2,091
17,431
15,374
188
1,722
2,547
42,285
Intangible assets:
Assignment of rights
Goodwill on acquisition of investments:
Formato (a)
Ético (b)
Software
Trademarks and patents
Intangible assets:
Assignment of rights
03/2010
12/2009
Accumulated
depreciation/
amortization
Accumulated
depreciation/
amortization
Net
Cost
1,089
2,932
(2,021)
70
(2,905) 14,526
(13,283) 2,091
188
(430) 1,292
2,547
(20,482) 21,803
2,091
17,431
15,149
188
1,722
2,137
41,650
(1,843)
(1,792)
Net
1,140
(2,021)
70
(2,905) 14,526
(13,091) 2,058
188
(344) 1,378
2,137
(20,153) 21,497
Consolidated
Property, plant and equipment:
Land
Buildings and constructions
Machinery and equipment
Furniture, fixtures and installations
Vehicles
IT equipment
Property, plant and equipment in
progress
Intangible assets:
Goodwill on acquisition of company:
Formato (a)
Ético (b)
Siciliano (c)
Commercial assignment
Assignment of rights
Software
Trademarks and patents
Other intangibles
Intangible in progress
(a)
03/2010
12/2009
Accumulated
depreciation/
amortization
Accumulated
depreciation/
amortization
Annual
depreciation/
amortization
rate - %
Cost
4
10
10
20
20
1,441
8,802
2,741
167,220
6,979
37,618
(4,588)
(2,195)
(90,704)
(3,398)
(26,461)
1,441
4,214
546
76,516
3,581
11,157
1,441
8,802
2,917
159,966
7,250
37,240
(4,501)
(2,337)
(87,916)
(3,476)
(26,117)
1,441
4,301
580
72,050
3,774
11,123
-
6,200
231,001
(127,346)
6,200
103,655
11,062
228,678
(124,347)
11,062
104,331
20
20
20
-
2,091
17,431
79,249
24,872
2,932
27,695
323
1,722
8,547
164,862
(2,021)
(2,905)
(16,578)
(21,796)
(1,844)
(22,617)
(65)
(430)
(68,256)
70
14,526
62,671
3,076
1,088
5,078
258
1,292
8,547
96,606
2,091
17,431
79,249
25,952
2,932
27,395
323
1,722
6,309
163,404
(2,021)
(2,905)
(16,578)
(22,665)
(1,792)
(22,133)
(64)
(344)
(68,502)
70
14,526
62,671
3,287
1,140
5,262
259
1,378
6,309
94,902
Net
Cost
Net
Goodwill arising from the acquisition of Formato Editorial Ltda., which was transferred to intangible assets due to the merger of the
company on February 3, 2004.
(b) Goodwill based on expected future earnings from the acquisition of Ético, merged with the Company on February 1, 2008.
(c)
Goodwill based on expected future earnings from the acquisition of Siciliano by Livraria e Papelaria Saraiva S.A., as of March 6,
2008.
Page 32
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
Changes in ―Property, plant and equipment‖ and ―Intangible assets‖ during the quarter were
as follows:
Company
03/2010 12/2009
Balance at beginning of year
Additions
Disposals
Depreciation and amortization
Balance at end of year
40,072
1,386
(95)
(1,186)
40,177
Consolidated
03/2010 12/2009
38,303 199,233 160,133
2,976
7,742 16,125
(193)
(172)
(196)
(1,184) (6,542) (4,433)
39,902 200,261 171,629
12. LOANS AND FINANCING
Company
Consolidated
03/2010 12/2009 03/2010 12/2010
CurrentIn local currency - BNDES - FINEM
Working capital
7,534
7,534
NoncurrentIn local currency - BNDES - FINEM
58,418
10,344
10.344
13,988
54,095
68,083
17,251
64,207
81,458
43,203 122,210
92,348
The noncurrent liabilities portion matures as follows:
2011
2012
2013
2014
Total
Company
2,914 19,473 19,473 16,558
58,418
Consolidated
6,256 40,624 39,620 35,710 122,210
Page 33
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
Additional information on financing is as follows:
Financing
Company:
BNDES - FINEM contract of 11/2005
BNDES - FINEM contract of 02/2009
subloans E/F
BNDES - FINEM
contract of 02/2009
subloans A/B/C/D
Livraria:
BNDES - FINEM contract of 11/2006
BNDES - FINEM
contract of 02/2009
subloans A/B/C
BNDES - FINEM contract of 02/2009
subloans E/F
BNDES - FINAME
contract of 02/2009
subloan D
(i)
Purpose
Guarantees
Due date
Charges
4% + TJLP
(i)
2.32% +
TJLP (i)
Publishing Plan - 2005 to 2007, and
information systems
Publishing plan - 2008/2010/working
capital
Bank guarantee
11/2010
None
09/2014
Publishing plan - 2008/2010/working
capital
None
09/2014
2.32% +
BNDES
rate (ii)
Investment projects for opening of 11
stores, renovation and modernization
of 19 stores of the chain, and
centralization of logistics operations
Expansion of store chain/working capital
Company’s guarantee
05/2012
3.1% +
TJLP (i)
Company’s guarantee
09/2014
Expansion of store chain/working capital
Company’s guarantee
09/2014
2.32% +
BNDES
rate (ii)
2.32% +
TJLP (*)
Expansion of stores chain
Company’s guarantee
09/2014
1.42% +
TJLP (i)
Long-term interest rate (TJLP) for the period ended in March 31, 2010 was 6.00% per year (6.00% in December 31
2009).
(ii) Reference rate disclosed by BNDES at the date subloans are used, which will be equivalent to the average cost of
funds without being subject to onlending under specific conditions, in addition to derivatives from BNDES and
BNDES Participações S.A. - BNDESPAR, indexed to the IPCA (Extended Consumer Price Index).
In February 2009, the Company and Livraria entered into new loan agreements with the
National Bank for Economic and Social Development (BNDES) totaling R$71,900 and
R$69,700, respectively, of which R$83,364 were released in 2009 and R$27,998 were
released in the first quarter 2010. The funds obtained will be used for working capital
purposes, the development of new publishing projects, and the refurbishment and expansion
of Livraria’s store chain.
In the year ended December 31, 2009, Livraria raised working capital loans totaling
R$77,000, which bear average interest equivalent to 119% of the interbank deposit rate
(CDI). The amount recognized as financial expenses for the period ended March 31, 2010
was R$1,498.
Page 34
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
Contractual covenants for the Company, including those related to the agreement signed
with Livraria
The Company and Livraria are required to meet the covenants set forth in the financing
agreements with BNDES. As of March 31, 2010, the Company and Livraria are compliant
with such covenants, the main of which are as follows:
 Maintain the following financial ratios: (i) current liquidity equal or higher than 1.5 in
2009 and equal or higher than 1.7 in 2010; (ii) capitalization level equal or higher than
0.43; and (iii) indebtedness level equal or lower than 0.22.
 Provide periodic information, such as: (i) annual financial statements audited by external
auditors; (ii) maintenance of staff; and (iii) holding valid business licenses for stores
13. LOYALTY PROGRAM - SARAIVA PLUS
Livraria has a customer loyalty program (―Saraiva Plus‖) whereby purchases made by
customers in stores and in the website earn points that can be discounted in future
purchases. Accumulated points, net of redemptions and valued in accordance with the
program regulation, are accrued considering redemption estimates. As of March 31, 2010, a
provision for loyalty program in the amount of R$4,902 (R$3,776 as of December 31, 2009)
is recorded in current liabilities under the caption ―Other payables‖ in the interim
consolidated financial statements.
14. RELATED-PARTY TRANSACTIONS
Related-party transactions include purchases and intercompany loans. Loans granted to
Livraria have indeterminate maturity and bear interest of 101% of the CDI (interbank
deposit rate).
Loans recorded in noncurrent assets:
03/2010 12/2009
Balance receivable at beginning of quarter/year
Loans, net of repayments received
Transfer for capital increase in subsidiary
Financial income
Balance receivable at end of quarter/year
6,964
17,225
307
24,496
52,167
10,923
(58,000)
1,874
6,964
Page 35
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
The main balances and transactions with Livraria are as follows:
03/2010 12/2009
Balances:
Assets:
Trade accounts receivable (current)
Loans to subsidiary (noncurrent)
LiabilitiesTrade accounts payable (current)
Transactions:
Sale of products
Purchase of products
Financial income
Financial expenses
17,509
24,496
7,308
6,964
2
1
21,079
11
307
-
33,571
73
1,874
475
Management compensation
Under Brazilian Corporate Law and the Company’s bylaws, it is the shareholders to
establish the total annual amount of directors’ and officers’ compensation is shareholders’
responsibility. Management is also entitled to a profit sharing of up to 10% of net income
for the year.
Management compensation is presented is a separate line account of the statements of
income for the period ended March 31, 2010 and 2009.
15. INCOME TAX AND SOCIAL CONTRIBUTION
a) Deferred taxes
Deferred income and social contribution taxes are derived from:
Company
Consolidated
03/2010 12/2009 03/2010 12/2010
Current assets:
Accrued sale costs of products received on
consignment
Program ―SaraivaPlus‖
Provision for inventory obsolescence
Allowance for doubtful accounts
Other provisions
180
180
124
506
630
5,221
1,667
642
1,546
506
9,582
7,670
1,284
826
1,589
976
12,345
Page 36
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
Company
Consolidated
03/2010 12/2009 03/2010 12/2010
Noncurrent assets::
Tax loss carryforwards
Reserves for contingencies and taxes
payable
Noncurrent liabilities:
Provision for book inventory losses - Law
10753/03
Tax amortization of goodwill on business
acquisitions
Other
-
-
15,278
14,924
720
720
741
741
4,252
19,530
4,768
19,692
6,266
6,529
14,247
14,149
1,506
3
7,775
1,209
3
7,741
8,309
3
22,559
6,665
3
20,817
The Company and Livraria, based on the opinion of their outside attorneys, considered
the tax incentive established by Law 10753/03, amended by Law 10833/03, concerning
the deductibility of the provision for inventory losses, as a direct adjustment to the tax
base. The tax effects of deferred liabilities were recognized in the financial statements in
accordance with CVM Instruction 371/02.
Based on the expectation of future taxable income and positive cash flows, the Company
and Livraria maintained in their financial statements the deferred tax assets.
Management believes that the carrying amount of the Company’s deferred tax assets
from temporary differences is realizable in proportion to the final resolution of lawsuits
and the settlement of liabilities; with regard to deferred tax assets from tax loss
carryforwards and temporary differences of Livraria, Management considers their
realization based on future taxable income as follows:
Balance sheet date
December 31, 2010
December 31, 2011
December 31, 2012
December 31, 2013
Realization of
deferred tax asset
9,402
8,423
5,623
4,764
28,212
Page 37
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
b) Expense reconciliation
Reconciliation of the tax expense calculated by applying the combined tax rate to the tax
expense charged to income is as follows:
Company
03/2010 03/2009
Income before income and social contribution taxes
Combined tax rate - %
Taxes computed at the combined tax rate
Permanent additions - nondeductible expenses
Permanent deductions:
Equity in subsidiary
Other deductions
Other items
Income and social contribution taxes:
Current
Deferred
Consolidated
03/2009 03/2010
66,050
64,646
70,213
68,415
34
34
34
34
(22,457) (21,980) (23,872) (23,262)
(361)
(405)
(379)
(462)
2,729
1,539
133
287
133
(583)
651
320
651
301
(19,305) (20,239) (23,467) (24,006)
(18,800) (19,513) (18,800) (20,402)
(505)
(726) (4,667) (3,604)
(19,305) (20,239) (23,467) (24,006)
Effective tax rate on net income - %
29.23%
31.4%
33.42%
35.0%
16. RESERVE FOR CONTINGENCIES
Reserve for contingencies is as follows:
Company
Judicial
12/2008 Recognition Payment deposits 12/2009 Recognition Payment 03/2010
PIS/COFINS - increase in tax
basis (a)
IR/CSLL - ―Plano Real‖
(economic plan) Law 8880/94 (b)
PIS - Supplementary
Law 7/70 (c)
Civil and labor contingencies
Judicial deposits
223
29
861
-
1,015
243
(1,084)
1,258
18
47
-
-
252
3
-
255
(861)
-
-
-
-
-
861
-
(29)
(29)
1,033
243
(252)
1,276
3
6
(101)
(101)
1,036
243
(353)
1,181
Page 38
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
Consolidated
Payment/ Judicial
Judicial
12/2008 Recognition Reversal deposits 12/2009 Recognition deposits 03/2010
PIS/COFINS - increase in tax
basis (a)
IR/CSLL - ―Plano Real‖
(economic plan) Law 8880/94 (b)
PIS - Supplementary
Law 7/70 (c)
Civil and labor contingencies
(d)
Other
Judicial deposits
9,418
366
861
-
2,529
48
1,599
1,429
(10,258)
5,578
414
(861)
(1,356)
(1,429)
861
(2,785)
-
9,784
33
-
9,817
-
-
-
-
-
-
2,577
9
-
2,586
243
(9,760)
2,844
-
-
243
(363)
(363)
42
(1,383) (11,143)
(1,383)
1,503
(a) The Company and Livraria are challenging in court certain aspects related to federal taxes, such as PIS and COFINS
(taxes on revenue), with regard to the increase in the tax base and in the tax rate. These lawsuits were initiated in 1999
and are guaranteed by judicial deposits.
(b) According to a Decision of the Federal Revenue Service, dated August 21, 2006, Livraria Saraiva was required to pay
part of the accrued amount for the lawsuit challenging the ―Plano Real‖ (Brazilian economic plan) - Law 8880/94, in
the amount of R$4. The same decision tacitly approved the credit under discussion represented by the reserve of
R$1,613, which was reversed and recorded in 2007 under the line account ―Other operating income (expenses)‖. The
Company’s lawsuit was paid on November 30, 2009, utilizing the benefits set forth by Law 11941/09, totaling R$538.
Requests were filed for the withdrawal of the lawsuit and the realized judicial deposit.
(c) The Company and Livraria Saraiva, which was merged with and into Livraria, filed in 1989 a lawsuit requesting the
Court to declare the nonexistence of the obligation to pay the PIS, pursuant to Supplementary Law 7/70. Judicial
deposits made between April 1989 and May 1992 were withdrawn upon court authorization. A final decision on the
merits was rendered acknowledging the validity and applicability of Supplementary Law 7/70 and, by virtue of the
granting of the National Treasury’s appeal, the case is now in the stage of calculation of the amounts due to the
Federal Government. Therefore, the companies recognized the respective amounts as a provision, according to the
opinion from the counsel handling the case and considering the best estimates existing on the balance sheet dates to
calculate the amount necessary to settle the tax debits.
On February 19, 2010, the Company and Livraria were ordered to recompose judicial deposits, pursuant to the final
and unappealable decision, by R$99 and R$1,237, respectively. The amount that settles the tax debt is still under
discussion.
(d) Reversal of the reserve recognized by Siciliano before it was acquired by Livraria Saraiva for civil, labor, and tax
contingencies guaranteed by the purchase and sale agreement and represented by the installment retained to secure
contractual indemnification obligations.
The Company and Livraria made an application for the payment of taxes in accordance with
the terms of Law 11941/09 relating to administrative and judicial proceedings, which, in
accordance with Management’s judgment and its legal outside advisers’ opinion, are likely
to have unfavorable final decisions. Currently there are petitions for withdrawal of
administrative proceedings and the respective judicial decisions not yet released. The
accrued amounts will be maintained in the financial statements and the eventual gains will
not be recorded until the formal acknowledgement of the tax authorities on the amounts
effectively owed.
Page 39
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
The Management of the Company and Livraria did not consider necessary to recognize a
reserve to cover possible losses on ongoing lawsuits, totaling approximately R$23,024, for
which, in the opinion of its legal counsel, the likelihood of loss is possible.
The Company and Livraria are challenging the payment of certain taxes, contributions and
labor obligations, guaranteed by judicial deposits made for the appeals filed in equivalent
amounts, which await final court decisions, which total R$8,157, Company, and R$9,649,
on a consolidated basis (R$8,512 and R$9,950 in December 31, 2009) that are recorded in
noncurrent assets.
17. TAXES PAYABLE
Company
Consolidated
03/2010 03/2009 03/2009 03/2010
State VAT (ICMS) (a)
Installment payment of IR (income tax) and CSLL
(social contribution) (b)
Installment payment of CSLL (c)
Withholding income tax (IRRF)
Taxes on revenues (PIS and COFINS)
Others
Current liabilities
Noncurrent liabilities
-
-
-
1,703
1,369
1681
40
146
2,227
1,491
1,038
40
40
2,609
730
1,360
1,172
399
532
4,193
1,193
1,491
1,601
442
248
6,678
1,400
827
2,227
1,651
958
2,609
3,366
827
4,193
5,720
958
6,678
(a) Includes ICMS payable calculated on product inventories existing on April 30 and May
31, 2009, as a result of the change in São Paulo State legislation requiring that the
products sold by Livraria be taxed under the tax substitution system (payment of VAT
on behalf of the final consumer). This amount will be settled in 10 monthly
installments, starting June 30, 2009 for the amount calculated on inventories as of April
30, and starting July 31 for the amount calculated on inventories as of May 31, 2009.
(b) Request filed with the National Treasury Attorney General in October 2005 for the
installment payment of the accrued amounts related to lawsuits brought to discuss the
effects of IR and CSLL arising from the ―Plano Real‖ - Law 8880/94.
(c) Request filed with Federal Revenue Service in November 2007 for the installment
payment of the debt arising from the denial of the administrative appeal against the tax
delinquency notice related to the deduction of interest on capital from the CSLL tax
basis for 1996.
Page 40
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
18. SHAREHOLDERS’ EQUITY
a) Capital
Fully paid-up capital as of March 31, 2010 is R$190,978, represented by 28,596,123
shares, of which 9,622,313 are common shares and 18,973,810 are preferred shares,
without par value.
The Company’s bylaws comply with São Paulo Stock Exchange (BM&F BOVESPA)
Level 2 of Differentiated Corporate Governance Practices.
The Company is authorized to increase capital, through a new issue of shares for
subscription and, regardless of any amendment to the bylaws, by up to 4,000,000 shares.
Of this total, up to 500,000 shares can be granted as stock options, pursuant to the
bylaws.
The Company’s preferred shares, which cannot surpass 2/3 of the total shares issued,
entitle their holders to the following rights or advantages:
 Restricted voting rights, pursuant to the bylaws.
 Right to sell the preferred shares in the case of sale of the Company’s controlling
interest.
 Dividends equal to those paid on common shares.
 Share in the distribution of bonus shares out of capitalization of reserves, retained
earnings and any other funds, under the same conditions as holders of common
shares.
Common shares are not allowed to be converted into preferred shares, and vice versa.
b) Treasury shares - CVM Instructions 10/80 and 298/97
The Company holds 365,750 (365,750 as of December 31, 2009) preferred shares in
treasury, acquired for R$2,870, with market value of R$12,947 (R$35.40 per share quotation as of March 31, 2010). During this quarter, there were no new acquisitions of
shares.
c) Interest on capital and dividends
Shareholders are entitled to a minimum dividend of 25% of adjusted net income for each
year.
Page 41
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
The Company cannot, unless authorized by a majority vote in a special preferred
shareholders’ meeting, hold, for more than four successive quarters, cash and cash
equivalents in an amount greater than 25% of total assets, provided that its financial
condition allows so. Cash and cash equivalents will correspond to the amounts recorded
under the caption ―Cash and cash equivalents‖ exceeding the sum of the amounts
recorded under the caption ―Loans and financing‖ in current and noncurrent liabilities.
Pursuant to the bylaws, interest on capital included in mandatory dividends is net of
income tax.
The Annual Shareholders’ Meeting held on April 20, 2010 approved the payment of
interest on capital and dividends to shareholders according with the Meeting held on
December 18, 2009, the Board of Directors approved the accrual in the amount of
R$20,724 (R$0.73410209 per share), whose payment will be made starting on April 30,
2010.
d) Legal reserve
In accordance with Brazilian Corporate Law and the Company’s bylaws, 5% of net
income for each year shall be allocated to the legal reserve.
e) Stock option plan
The Company’s Board of Directors approved the 3rd, 4th, and 5th Stock Option Plans. The
options were granted to officers and employees and will be exercised by means of the
issuance of new shares and/or sale of treasury shares held by the Company, at the
discretion of the Board of Directors at the time of exercise.
Fair value for stock option plans was calculated on the grant date of each plan and based
on the binomial pricing model. The effects were reflected in the net income, under the
line account “Operating expenses”, and in the shareholders’ equity, under the line
account “Earnings reserve”, as follows:
Year of grant
2007
2008
2009
Year ended Year ended Year ended
12/31/07
12/31/08
12/31/09
371
371
451
418
869
427
482
57
966
Year ended
3/31/10
Future
years
Total
81
122
164
367
456
1,287
1,743
1,330
1,478
1,508
4,316
Page 42
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
The following table presents the changes during the quarter of options granted:
3rd Plan
Total share options granted (thousands)
Options cancelled
Balance as at March 31, 2010
4th Plan
5th Plan
123,800 124,600 125,000
(2,200) (2,100)
121,600 122,500 125,000
In the period between April 23 and May 7, 2010, 115,200 options of the 3rd Plan were
exercised by means of sale of shares held in treasury.
In determining the fair value of stock options, the following economic assumptions were
used:
3rd Plan
Date of grant
Beginning of option exercise period
End of option exercise period
Risk-free interest rate
Number of managers and employees eligible
Fixed price - R$
Index
Number of outstanding options
4th Plan
5th Plan
5/3/2007 28/02/2008 30/11/2009
8/3/2010
8/3/2011
8/3/2012
7/5/2010
7/5/2011 10/5/2012
12,01%
12,45%
12,20%
19
22
27
21,50
30,00
26,27
IPCA
IPCA
IPCA
121.600
122.500
125.000
Option fair value on grant date - per option - R$
11,20
12,61
12,06
Option value for exercise, adjusted by the IPCA
until March 31, 2010 - R$
22,93
31,90
26,77
19. FINANCIAL INSTRUMENTS
a) Derivative transactions
During the first quarter of 2010, the Company entered into derivative instruments
transactions and as of March 31 presented an open position in U.S dollar. The
transaction was conducted with Banco do Brasil S.A. and consists in buying a quantity
of U.S, dollar, without cash delivery, considering an exchange rate established by the
sale price on the first business day preceding the expiration date of each contract,
informed by Central Bank of Brazil - PTAX800, as follows
Page 43
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
Agreement information
Date of
Notional amount
transaction (US$ thousand)
1/15/2010
840
1/15/2010
840
1/15/2010
840
Total
2,520
Maturity
date
3/26/2010
4/26/2010
5/26/2010
Exchange rate - US$
Gain
Gain (loss)
Date of Maturity At the end of
recorded
transaction date
the quarter (in thousand of R$)
1.7970
1.8008
3
1.8080
1.7810
(23)
1.8205
1.7810
(33)
(53)
The net loss incurred at the end of the quarter was recorded directly at the result of the
period, against a specific account at current liabilities.
Those agreements are free of fines and/or other penalties in the case of anticipated
settlement. The Company does not expect relevant results at the maturity date.
The sensitivity analysis, based on those agreements, was developed based on the
exposure to the exchange variation in U.S. dollar, as follows:
Transaction
Perda no encerramento do trimestre
Risk
Scenarios
Probable (i) Possible (ii)
US$
decrease
56
803
Remote (iii)
1.552
Balances include interest calculated as follows:
(i)
Based on current average U.S. dollar exchange rate.
(ii) Considering a 25% increase in U.S. dollar exchange rate.
(iii) Considering a 50% increase in U.S. dollar exchange rate.
b) Other financial instruments
The carrying amounts of cash and cash equivalents, trade accounts receivable and
current liabilities approximate fair values, since the maturity of a significant portion of
these balances is near the balance sheet dates. The carrying amounts of financing
correspond to funds obtained from the BNDES, are subject to interest that does not
differ from interest currently charged by the BNDES in similar transactions.
Page 44
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
c) Market risks
 Credit risk: to minimize possible losses on customer default, the Company adopts
strict policies for granting credit, consisting of careful analyses of customer profiles,
as well as timely monitoring of accounts receivable.
 Inventory obsolescence risk: discontinued products and new technologies may lead to
excess and obsolete inventories. To minimize these conditions, the Company and
Livraria periodically monitor inventory levels and take necessary action for inventory
realization.
d) Interest rate
Livraria is exposed to normal market risks arising from changes in interest rates on loans
obtained during the period.
The sensitivity analysis was developed based on the exposure to the CDI variation,
which is the only index applicable to loans obtained by Livraria.
Transaction
Balance of secured account loans
subject to CDI variation
Risk
Scenarios
Probable (i) Possible (ii) Remote (iii)
CDI
increase
55,796
56,299
56,656
Balances include interest calculated as follows:
(i)
Based on current average CDI variation.
(ii) Considering a 25% increase in CDI variation.
(iii) Considering a 50% increase in CDI variation.
Page 45
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
20. OTHER OPERATING REVENUES AND EXPENSES
Company
Consolidated
03/2010 03/2009 03/2009 03/2010
Other income:
Gain on sale of permanent assets
Royalties on franchise operations
Gift card and other cash advancements not
requested by customers
Indemnities for product losses
Sale of excessive and obsolete products
Income from favorable court decisions
Reversal of operating accruals
Other operating income
Other expenses:
Provision for loyalty program - SaraivaPlus
Loss on sale of permanent assets
Taxes paid in administrative proceedings
Other operating provisions
-
47
-
122
83
227
37
47
84
27
74
577
124
62
91
976
302
737
27
114
88
1,578
(4)
(49)
(53)
(17)
(17)
31
57
(1,126)
(81)
(115)
(1,322)
(346)
(710)
(68)
(269)
(1,047)
531
21. FINANCIAL INCOME (EXPENSES)
Company
Consolidated
03/2010 03/2009 03/2010 03/2009
Financial income:
Income from temporary cash investments
Interest on loans to subsidiary
Interest on trade accounts receivable
Interest on recoverable taxes
Financial discount obtained
Other financial income
450
307
237
32
8
8
1,042
298
1,482
311
2
9
2,102
471
241
105
56
28
901
303
320
19
126
50
818
Page 46
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
Company
Consolidated
03/2010 03/2009 03/2010 03/2009
Financial expenses:
Interest, monetary and exchange variations on
financing
Financial discounts granted
Other interest and monetary variation
CPMF (tax on banking transactions)/IOC (tax
on credit operations)
Other financial commissions
Other financial expenses
(2,005)
(308)
(730)
(505)
(232)
(1,134)
(5,643)
(476)
(1,321)
(1,056)
(333)
(1,839)
(36)
(25)
(78)
(3,182)
(58)
(31)
(25)
(1,985)
(359)
(26)
(284)
(8,109)
(443)
(43)
(120)
(3,834)
(7,208)
(3,016)
(2,140)
117
22. OPERATING LEASE - STORES
As of March 31, 2010, Livraria had 91 lease agreements with third parties for its stores. Said
agreements were reviewed by Management, who concluded that they fit into the
classification of operating lease. Most of the store lease agreements provide for a variable
rental expense, based on sales, or a minimum amount adjusted to inflation on an annual
basis by several indexes, and are effective for five years, subject to renewal. Rentals under
lease agreements for Livraria’s logistics and administrative areas and Company’s stores are
fixed, with annual adjustments to inflation according to the variation of the main indexes.
In the 2010 first quarter, rental expenses, net of recoverable taxes, totaled R$1,288 (R$1,323
in the first quarter of 2009) - Company and R$11,398 (R$10,386 in the first quarter of 2009)
- consolidated. The balance of ―Rentals payable‖ included in ―Other liabilities‖ as of March
31, 2010 is R$537 (R$517 as of March 31, 2009) - Company, and R$5,779 (R$7,565 as of
December 31, 2009) - consolidated.
Future obligations (consolidated), from these agreements, totaled the minimum amount of
R$136,769 as of March 31, 2010, as follows:
Amount
Until 03/31/2011
04/01/2011 to 03/31/2012
04/01/2012 to 03/31/2013
04/01/2013 to 03/31/2014
Other maturities until 2018
Total
38,009
32,770
23,659
16,861
25,470
136,769
Page 47
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
23. STATEMENTS OF CASH FLOWS
The Company’s Management defines as ―cash and cash equivalents‖ amounts maintained
for the purpose of meeting short-term commitments and not for investment or any other
purposes. Short-term investments can be immediately converted into a known cash amount
and are not subject to significant changes in value. As of March 31, this line account is
broken down as described in note 6.
Changes in the financial position that did not impact cash flows are as follows:
Company
Consolidated
03/2010 03/2009 03/2010 03/2009
Portion of recoverable taxes transferred to current
assets
Receivables for sale of property and equipment
transferred to current assets
Portion of financing transferred to current
liabilities
-
-
143
-
-
1,438
-
1,438
-
2,968
690
5,497
24. INSURANCE (NOT REVIEWED BY INDEPENDENT AUDITORS)
The Company and Livraria have an insurance policy that considers risk concentration and
its materiality, obtained in amounts considered sufficient by Management taking into
consideration the nature of their activities and the advice of insurance brokers.
As of March 31, 2010, insurance coverage is as follows:
Year
03/2010 03/2009
Loss of profits
Fire - maximum amount per store
Vehicles - only civil liability - maximum amount per vehicle
45,000
47,595
1,025
45,000
47,595
1,025
Page 48
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 - SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
06.01 - NOTES TO THE INTERIM FINANCIAL STATEMENTS
25. STATEMENT OF VALUE ADDED FOR THE QUARTERS ENDED MARCH 31
Company
01/01/2010 to
03/31/2010
VALUE ADDED CREATED
Sale of products, goods and services
Allowance for doubtful accounts, net of reversals
Other operating income
Consolidated
01/01/2009 to
03/31/2009
01/01/2010 to
03/31/2010
01/01/2009 to
03/31/2009
141,731
(612)
171
141,290
131,967
(636)
266
131,597
457,838
(885)
1,063
458,016
374,763
(724)
1,772
375,811
(19,837)
(38,708
(91)
(17,299)
(94)
(34,581)
(193)
(6,656)
(217,278)
(80,041)
(168)
(6,898)
(163,300)
(70,701)
(195)
GROSS VALUE ADDED CREATED
82,654
79,430
153,873
134,717
RETENTIONS
Depreciation and amortization
(1,136)
(1,140)
NET VALUE ADDED CREATED
81,518
78,290
147,381
130,384
8,205
1,402
9,067
4,528
2,102
6,630
900
900
819
819
VALUE ADDED TO BE DISTRIBUTED
90,585
84,920
148,281
131,203
DISTRIBUTION OF VALUE ADDED
Personnel - payroll and related charges
Government - taxes and contributions
Creditors - financial expenses, excluding CPMF and IOC
Lessees - rentals
Shareholders - dividends and interest on capital
Minority interest
Shareholders - recognition of profit reserves
16,976
22,279
3,146
1,439
1,473
45,272
14,273
22,783
1,927
1,530
1,391
43,016
38,128
44,070
7,749
11,587
1,473
2
45,272
34,261
38,447
3,391
10,695
1,391
2
43,016
90,585
84,920
148,281
131,203
INPUTS PURCHASED FROM THIRD PARTIES
(Include recoverable or unrecoverable taxes)
Raw materials consumed
Cost of sales and services
Materials, electric energy, outside services and other
Other operating expenses
VALUE ADDED RECEIVED IN TRANSFER
Equity in subsidiary
Financial income
(6,492)
(4,333)
Page 49
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
12.01 - COMMENT OF CONSOLIDATED QUARTER PERFORMANCE
The Saraiva Group operates in the editorial sector through Saraiva S.A. Livreiros Editores (―Editora‖ or the ―Company‖) and in
the retail sector through Saraiva e Siciliano S.A. (―Livraria‖ or the ―Company‖). The accounting information contained in the
Quarterly Information is presented according to the accounting practices adopted in Brazil in effect until December 31, 2009, and
refer to the first quarter of 2010 (1Q10), except where otherwise indicated. All comparisons were made in relation to the first
quarter of 2009 (1Q09), except when stated otherwise.
HIGHLIGHTS
The strategic actions adopted by the Saraiva Group during the first quarter of 2010 enabled the
company to expand its retail operations, as well as its editorial business. Consolidated gross
revenue rose 22.2% and consolidated EBITDA increased 10.5%.
Editora registered a 7.4% growth in gross revenue in 1Q10, due to investments made in new
contents aimed at private elementary and high schools as well as at students and professionals
who use scientific, technical and professional books.
Livraria posted a significant 30.1% increase in gross revenue and counted with the contribution
of all business channels where it operates. Good sales results of Livraria’s physical stores stem
from investments made to improve the shopping experience of Siciliano chain’s customers, as
well as from recent improvement in consumer trust placed on the future of the country’s
economy, which has reflected on retail sales as a whole. Livraria opened a new store in the
Federal District this quarter and ended the period with a total of 92 own stores.
Revenue - Consolidated gross revenue reached R$ 457.8 million, up 22.2%.
EBITDA1 - Consolidated EBITDA totaled R$ 83.6 million and registered an increase of 10.5%.
Result - Consolidated net profit reached R$ 45.3 million, up 5.2% over that of 1Q09.
Livraria - The 30.1% increase in Livraria’s gross revenue resulted from the good performance
of electronic retail (+33.9%), as well as of the physical stores (+28.1%). Under the same-store
concept, the Group’s retail operations registered an excellent performance, growing 20.2% in
1Q10 in relation to the same period of 2009.
1
EBITDA represents net income before financial result, social contribution, income tax, depreciation and amortization It is not a measure used
according to the adopted accounting practices in Brazil or in the generally-accepted accounting principles of other countries and does not
represent the cash flow for the periods shown and must not be considered as an alternative for net profit as an indicator of operational
performance of the company or as an alternative for cash flow as an indicator of liquidity. EBITDA has no standard definition and our definition
of EBITDA may not be comparable with that of other companies.
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
12.01 - COMMENT OF CONSOLIDATED QUARTER PERFORMANCE
EDITORA (SARAIVA S/A LIVREIROS EDITORES)
Editora is the parent company of Livraria with 99.97% of its shares and the companies have
separate activities and corporate names.
The products sold by Editora in the first quarter are basically contents aimed at private
elementary and high schools, at universities and at professionals from several areas.
The following table summarizes Editora’s main economic-financial performance indicators:
1Q10
141,731
141,716
109,994
77.6%
49,829
61,286
2,140
37,247
45,272
Editora (R$ thousand)
Gross Revenue
Net Revenue
Gross Profit
Gross Margin
Operating Expenses
EBITDA
Net Financial (Revenue) Expenses
Net Income (Loss) Before Equity in Subsidiaries
Net Income (Loss)
1Q09
131,967
131,914
104,715
79.4%
44,714
61,129
(117)
38,488
43,016
Chg.
7.4%
7.4%
5.0%
-177 b.p.
11.4%
0.3%
-3.2%
5.2%
Gross Revenue
Editora’s gross revenue totaled R$ 141.7 million, up 7.4% as compared with 1Q09, due to the
restructuring of its catalogue and a more aggressive competitive positioning. The following
graph shows the evolution of gross revenue by quarter with the revenue from government sales
separated from those from the private market.
Gross Revenue (R$ million)
141.3
131.6
112.2
102.6
93.8
14.8
1Q06
19.1
0.4
0.3
1Q07
1Q08
Privet Market
1Q09
0.4
1Q10
Government
(*) CAGR: Compound Annual Growth Rate
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12.01 - COMMENT OF CONSOLIDATED QUARTER PERFORMANCE
Private Market
Book sales to the private market rose 7.4%, totaling R$ 141.3 million, fueled by the growth of
textbook, scientific, technical and professional book lines. In the Economy, Administration,
Accounting and Business areas, the 1Q10 highlight was the sale of customized content for college
institutions; in the legal segment, highlight was the performance of collections aimed at preparing
professionals for public careers.
Government
In 1Q10, government sales summed R$ 0.4 million, practically the same as the amount posted in
1Q09. The amounts recognized in 1Q10 refer to the National School Library Program (PNBE),
which Editora took part in. Revenues under the scope of the National Textbook Program (PNLD
2010) were fully recognized in 4Q09 since all deliveries from this program occurred in that
quarter.
Gross Profit
Gross profit reached R$ 110.0 million in 1Q10, against R$ 104.7 million in 1Q09. Editora’s
gross margin registered a drop of 177 basis points, from 79.4% in 1Q09 to 77.6% in 1Q10, due
to small changes in the product mix in 1Q10, with a greater share of Elementary and High
School books.
Operating Result
Operating expenses totaled R$ 49.8 million, up 11.4% over those in 1Q09. The operating
expense to net revenue ratio shows an increase of 126 basis points, from 33.9% in 1Q09 to
35.2% in 1Q10. The nominal growth of operating expenses in relation to the same period of last
year is due mainly to expenses incurred to adapt the commercial and administrative structure of
new editorial lines, such as the Benvirá fiction and nonfiction imprint, the activities of the
Saraiva Educação Multimídia imprint and the activities of the Teaching Systems Division.
EBITDA
EBITDA totaled R$ 61.3 million, up 0.3% as compared with 1Q09. The EBITDA margin went
from 46.3% in 1Q09, to 43.2% in 1Q10. The EBITDA growth in absolute terms was not greater
due only to expenses related to the Company’s new editorial lines.
Editora (R$ thousand)
Income from Operations before Equity Income
(+) Depreciation and Amortization Expenses
(+) Net Financial (Revenue) Expenses
(=) EBITDA
EBITDA Margin
1Q10
58,025
1,121
2,140
61,286
43.2%
1Q09
60,118
1,128
(117)
61,129
46.3%
Chg.
-3.5%
-0.6%
0.3%
-309 b.p.
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Financial Result/Capital Structure
The financial result of 1Q10 posted a net financial expenses of R$ 2.1 million against a net
financial revenue of R$ 0.1 million in 1Q09. Editora’s financial result reflects a higher degree of
leverage after the company contracted a loan from the National Economic and Social
Development Bank (BNDES) in February of 2009. The contract, amounting to R$ 71.9 million,
is aimed at financing the editorial investment plan for the period between 2008 and 2010 and
should be fully disbursed by BNDES by December of 2010. One of the disbursements,
amounting to R$ 13.7 million was made during 1Q10.
Net Profit
Net profit before equity income of Livraria totaled R$ 37.3 million in 1Q10, against R$ 38.5
million in the same quarter of last year, down 3.2%. Net profit after equity income summed R$
45.3 million in 1Q10, up 5.2% over the R$ 43.0 million registered in 1Q09.
Investments
Investments made in 1Q10 totaled R$ 1.4 million and were mostly used for information
technology projects.
LIVRARIA (SARAIVA E SICILIANO S.A.)
Livraria operates predominantly in the retail of books, DVDs, CDs, periodicals, stationery,
multimedia, information technology and electronic goods. Currently, Livraria has 92 own stores,
which comprise a total sales area of 47.9 thousand m2.
Livraria (R$ thousand)
Gross Revenue
Net Revenue
Gross Profit
Gross Margin
Operating Expenses
EBITDA
Net Financial (Revenue) Expenses
Net Income (Loss)
1Q10
337,197
318,130
106,519
1Q09
259,139
244,389
87,049
33.5%
89,262
22,328
5,068
8,027
35.6%
75,620
14,510
3,133
4,529
Chg.
30.1%
30.2%
22.4%
-214 b.p.
18.0%
53.9%
61.8%
77.2%
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12.01 - COMMENT OF CONSOLIDATED QUARTER PERFORMANCE
Gross Revenue (R$ million)
CAGR 1Q06 - 1Q10 (Physical Stores): 32.1%
CAGR 1Q06 - 1Q10 (Online Retail): 45.4%
337.2
259.1
194.5
120.8
90.2
98.0
27.0
71.0
118.3
37.5
80.8
124.9
168.9
216.4
1Q06
1Q07
1Q08
1Q09
1Q10
69.6
Physical Stores
Online Retaliling Business
(*) CAGR: Compound Annual Growth Rate
Livraria’s gross revenue amounted to R$ 337.2 million, above 30.1% over that posted in 1Q09.
Sales performance was positively influenced by the growth in online retail (+33.9%), as well as,
by the increment in revenue from physical stores (+28.1%). In 1Q10, Livraria opened another
store in Brasília, Federal District, located at the University Center of Brasilia (UniCEUB).
Same-Store Sales - Quarter
18.1%
11.6%
11.7%
12.1%
Jan to Mar-09
Apr to Jun-09
Jul to Sep-09
Oct to Dec-09
20.2%
Jan to Mar-10
Livraria’s same-store sales rose 20.2% in 1Q10 if compared with those in 1Q09 as shown in the
graph above, having the Siciliano chain stores’ sales locations adapted to Saraiva’s standards
contributing for this result. Such growth proves the success of Livraria's business strategy to
improve the shopping experience of Siciliano’s customers. The remodeling carried out in
Siciliano’s stores is primarily aimed at improving the quality of its catalogue, at agility and
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excellence in customer care and at differentiated services offered to clients. In the book category,
for example, Livraria registered a significant increase of 21.5% in 1Q10 as compared with the
same period last year.
From Siciliano’s acquisition (03/06/08) until the end of 1Q10, 73% of its stores’ sales area had
already been adapted to meet Saraiva’s standard. For the rest of the year, another 12 stores are
planned to be remodeled, representing 17% of the original Siciliano sales area. These 12 sales
locations are less representative in revenue terms, which is why the interventions will be on a
lesser scale than those carried out in the Siciliano stores that were remodeled throughout 2009.
Another factor that has contributed to the sales growth is the customer’s acceptance of the
―Saraiva Plus‖ loyalty program and the Saraiva Credit Card. Investments made in training and
personnel recruitment, with the objective of adapting the store staff’s profile to the target public
of each unit, also positively affected Livraria’s sales. In addition, the introduction of new product
categories and a greater amount of events held in the store chain have contributed to improve
customers’ shopping experience.
Gross Profit
Gross profit reached R$ 106.5 million in 1Q10, up 22.4% over that of 1Q09. Gross margin
dropped 214 basis points, from 35.6% in 1Q09 to 33.5% in 1Q10.
The more competitive environment, mainly in the e-commerce channel, as well as the introduction
of a mechanism named Tax Replacement in São Paulo state, affected Livraria’s margins. Through
this mechanism, the goods and services tax (ICMS) was incorporated to the products’ cost
instead of reducing gross revenue.
Operating Result and EBITDA
Operating expenses totaled R$ 89.3 million, nominally registering an increase of 18.0% in
relation to the same period of last year. The operating expense to net revenue ratio in 1Q10
reached 28.1% against 30.9% in 1Q09, representing an increase of 280 basis points.
The dilution of Livraria’s operating expenses in 1Q10 is a reflex of the scale gains enabled by
the performance of the physical stores, notably those of Siciliano’s chain, as well as by sales’
growth of the Saraiva.com website.
EBITDA reached R$ 22.3 million, up 53.9% over that of 1Q09 and the EBITDA margin reached
7.0% in 1Q10, 108 basis points over the 5.9% posted in 1Q09.
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The performance of the operating expenses to net revenue ratio and the EBITDA margin are
shown in the graphs below:
Operating Expenses (R$ million) and
Operating Expenses / Net Revenue (%)
30.9%
EBITDA (R$ million) and
EBITDA margin (%)
7.0%
35. 0%
28.1%
30. 0%
8. 0%
5.9%
7. 0%
6. 0%
25. 0%
5. 0%
20. 0%
4. 0%
15. 0%
75.6
89.3
3. 0%
22.3
10. 0%
2. 0%
5. 0%
14.5
1. 0%
0. 0%
0. 0%
1Q09
1Q10
1Q09
1Q10
To better compare the EBITDA of retailing activities with those of the same quarter last year, the
effects of nonrecurring expenses, related mainly to expenses incurred by the remodeling of
Siciliano’s stores in 1Q09, were excluded. Librarian’s adjusted EBITDA totaled R$ 22.3 million,
against R$ 17.8 million in 1Q09, up 25.6%.
Livraria (R$ thousand)
Income from Operations after Net Financial Income
(+) Depreciation and Amortization Expenses
(+) Net Financial (Revenue) Expenses
(=) EBITDA
EBITDA Margin
(+) Non Recurring Expenses
(=) Adjusted EBITDA
Adjusted EBITDA Margin
1Q10
12,189
5,071
5,068
22,328
7.0%
22,328
7.0%
1Q09
8,296
3,081
3,133
14,510
5.9%
3,263
17,773
7.3%
Chg.
46.9%
64.6%
61.8%
53.9%
108 b.p.
-100.0%
25.6%
-25 b.p.
After the remodeling process, the Siciliano chain stores’ EBITDA should converge to the
Saraiva store standards. The Siciliano chain stores remodeled during 2009 now offer a
differentiated shopping experience and are register sales per square meter much closer to those
of stores under the Saraiva standard, as can be seen in the graph below:
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Sales per Square Meter
10%
91%
1Q09
(Before Remodeling)
Saraiva Stores
1Q10
(After Remodeling)
Siciliano Stores Remodeled
Financial Result / Capital Structure
Net financial expense reached R$ 5.1 million in 1Q10, against R$ 3.1 million in 1Q09. The
financial position at the end of 1Q10 was a net debt of R$ 121.6 million and, at the end of 1Q09,
of R$ 24.4 million.
Investments made to open new stores and remodel existing units contributed to change the
financial position over the past 12 months.
Livraria received, during 1Q10, R$ 14.3 million from BNDES to finance the expansion and
remodeling program of the physical store chain in the period between 2008 and 2010. Total value
of the contract, signed in February 2009, is of R$ 69.7 million, of which R$ 56.2 million have
already been received by Livraria by 03/31/10.
Working Capital
The working capital to net revenue ratio went from 16.9% in 1Q09 to 17.3% in 1Q10. Livraria’s
operating cycle reached 77 days in 1Q10, against 73 days in 1Q09.
―Accounts receivable‖ reached 45 days in the 12-month period ended on March 31, 2010,
against 50 days in the 12-month period ended on March 31, 2009.
The average term of inventory coverage increased 11 days from 82 to 93 days in the 12-month
period ended on March 31, 2009 and 2010, respectively. This result is due to the investment
made in the product mix of the Siciliano chain over the past 12 months.
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The supplier payment period remained practically stable, changing from 60 days in the 12-month
period ended on March 31, 2009 to 61 days in the 12-month period ended on March 31, 2010.
Working Capital (1) / Net Revenue (2)
20. 0%
18. 0%
16.8%
17.5%
16.9%
17.3%
1Q07
1Q08
1Q09
1Q10
16. 0%
14. 0%
12. 0%
10. 0%
8. 0%
6. 0%
4. 0%
2. 0%
0. 0%
(1) Inventory + Customers - Suppliers (monthly average in the past 12 months)
(2) Net Revenue in the past 12 months
Net Profit
Net profit reached R$ 8.0 million in 1Q10, a significant growth of 77.2% in relation to that of
1Q09. This performance reflects the operating improvement mentioned earlier.
Investments
During 1Q10, R$ 6.4 million were invested mainly in:

Remodeling Siciliano stores:
o SP Market Shopping mall in São Paulo -São Paulo state (01/10/2010);
o Praia Mar Shopping mall in Santos - São Paulo state (01/28/2010);
o Manaíra Shopping mall in João Pessoa - Paraíba state (03/14/2010).

Opening of the Saraiva store at the University Center of Brasília - Federal District
(01/25/2010)
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
Information systems and logistics activities. Investments made in Livraria’s information
systems are aimed at improving the operating system ERP (Enterprise Resource Planning) in
order to facilitate the launch of new business and product line platforms, and the
development of applications for the sale of digital books and customer relationship
management tools (―CRM‖).
Marketing
The ―Saraiva Plus‖ loyalty program is consolidating itself as one of the most efficient programs
for retaining customers in local retail due to a systematic that facilitates the accumulation of
bonus points and simplifies their redemption. At the end of 1Q10, the membership base
represented 3.9 million, up 9.5% over the base registered in December 2009. In the 12-month
period ended on March 2010, the membership base of the Saraiva Plus card rose 70.7%.
The Saraiva Credit Card, a partnership between Saraiva, Banco do Brasil and Cielo/Visa, had a
membership base of 76.6 thousand active cards at the end of March 2010, 10.4% above the
active cards base in December 2009 and 70.7% higher when comparing to March 2009. This
credit card offers several benefits to Livraria’s customers, which, besides accumulating bonus
points for the ―Saraiva Plus‖ program, are exempt from the payment of administrative fees and
can accumulate air mileage points through a partnership with TAM airlines.
Online Retailing Business (Saraiva.com)
E-commerce has been gaining more importance in Livraria’s operations. Even if including the
growth of Siciliano’s physical stores already remodeled to meet Saraiva’s standards, the share of
total gross revenue from the Saraiva.com website’s operations in relation to the Group’s overall
retailing operations was 35.8% in 1Q10.
Saraiva.com (R$ thousand)
Gross Revenue
Net Revenue
Active Customers (thousand) ¹
% of Revenue - Livraria Saraiva Consolidated
Average Ticket (R$)
1Q10
120,786
112,058
1,348
35.8%
160.2
1Q09
90,221
84,399
1,148
34.8%
132.0
Chg.
33.9%
32.8%
17.4%
100 b.p.
21.4%
(1) Active customers: user that has made at least one purchase in the past year
These good results stem from the decision to continue operating mostly in the textbook and
university book segments, benefitting from Saraiva’s strong image in these markets, especially in
the back-to-school period. Book sales through the Saraiva.com website increased almost 25.0%
in 1Q10 in relation to the same period of last year.
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CONSOLIDATED
The following table shows the major consolidated economic and financial performance data of
the Group.
Consolidated (R$ thousand)
Gross Revenue
Net Revenue
Gross Profit
Gross Margin
Operating Expenses
EBITDA
Net Financial (Revenue) Expenses
Net Income (Loss)
Total Assets
Shareholders' Equity
Net Debt
1Q10
457,838
438,757
216,503
49.3%
139,082
83,613
7,208
45,272
902,211
414,770
(158,929)
1Q09
374,763
359,961
191,719
53.3%
120,288
75,640
3,016
43,016
694,263
379,135
(53,260)
Chg.
22.2%
21.9%
12.9%
-392 b.p.
15.6%
10.5%
139.0%
5.2%
30.0%
9.4%
198.4%
Consolidated Gross Revenue Mix
1Q10
1Q09
Publishing
26%
Publishing
31%
Retail
74%
Retail
69%
Gross Revenue
Consolidated gross revenue reached R$ 457.8 million, up 22.2% over that registered in 1Q09,
due mostly to the increase in sales of the Group's retailing operations.
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Gross Revenue (R$ million)
200.5
231.9
1Q06
1Q07
295.7
1Q08
374.8
1Q09
457.8
1Q10
(*) CAGR: Compound Annual Growth Rate
Gross Profit
Consolidated gross profit totaled R$ 216.5 million, an increase of 12.9% in relation to that of
1Q09. Gross margin was of 49.3%, against 53.3% in 1Q09. The drop of 392 basis points is
explained by the greater contribution of retail in the mix of consolidated grow revenue — 73.6%
in 1Q10, against 69.1 % in 1Q09 —, whose gross margins are lower than those obtained by the
Group’s editorial segment.
Operating Result
Operating result before the financial result (EBIT) reached R$ 77.4 million in 1Q10, that is, a
growth of 8.4% in relation to 1Q09. The EBIT to net revenue ratio presented a margin of 17.6%
in 1Q10, 220 basis points below the 19.8% registered in the same period of last year, and reflects
the greater contribution of retail in the assessment of the Group’s results.
EBITDA
EBITDA totaled R$ 83.6 million, up 10.5% over that of 1Q09. With the greater weighted share
of Livraria, EBITDA margin went from 21.0% in 1Q09 to 19.1% in 1Q10.
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Consolidated (R$ thousand)
Income from Operations after Net Financial Income
(+) Depreciation and Amortization Expenses
(+) Net Financial (Revenue) Expenses
(=) EBITDA
EBITDA Margin
(+) Retail's Non Recurring Expenses
(=) Adjusted EBITDA
Adjusted EBITDA Margin
1Q10
70,213
6,192
7,208
83,613
19.1%
83,613
19.1%
1Q09
68,415
4,209
3,016
75,640
21.0%
3,263
78,903
21.9%
Chg.
2.6%
47.1%
139.0%
10.5%
-196 b.p.
-100.0%
6.0%
-286 b.p.
The EBITDA adjusted by nonrecurring expenses totaled R$ 83.6 million in 1Q10, a 6.0% growth
as compared with that registered in the same quarter of last year.
Adjusted EBITDA Mix
1Q10
1Q09
Retail
23%
Retail
27%
Publishing
73%
Publishing
77%
Financial Result
Saraiva’s consolidated operations in 1Q10 posted a net financial expense of R$ 7.2 million,
against a net financial expense of R$ 3.0 million in 1Q09.
Consolidated financial position went from a net debt of R$ 53.3 million in 1Q09 to a net debt of
R$ 158.9 million in 1Q10.
Net Profit
Consolidated net profit in 1Q10 reached R$ 45.3 million, up 5.2% as compared with the net
profit registered in 1Q09 of R$ 43.0 million.
Investments
A total of R$ 7.8 million were invested in 1Q10 and, in the same period of last year, due to the
remodeling of the Siciliano chain stores, R$ 16.1 million were invested.
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CAPITAL STRUCTURE
Consolidated financial position went from a net debt of R$ 135.0 million at the end of 2009 to
R$ 158.9 million at the end of March 2010.
The Saraiva Group signed a loan contract with BNDES in February 2009 in the total amount of
R$ 141.6 million, of which R$ 114.4 were already disbursed - R$ 28.0 million in 1Q10. These
funds have contributed towards a capital structure suited to the investment projects that sustain
Saraiva’s growth.
CAPITAL MARKETS
Below is a market summary of Saraiva’s shares in 1Q10 in comparison with 1Q09.
Indicators*
1Q10
1Q09
Chg.
Number of trades ¹
4,287
2,527
69.6%
Participation in trading sessions ¹
100.0
100.0
-
Quantity traded - thousand shares ¹
2,858
3,013
-5.1%
103,312
42,010
145.9%
Share Price - R$ ¹
35.40
15.20
132.9%
Total shares outstanding - thousand
28,230
28,230
-
Market Value - R$ milion
999.3
429.1
132.9%
Volume trades - R$ thousand ¹
Source: BM&F Bovespa
(1) Refering to preferred shares (SLED4)
(*) Not reviewed by independet auditors
Saraiva’s preferred shares (SLED 4), over the past 12 months, appreciated 132.9%. In the same
period, Ibovespa appreciated 72.0%. On 03/31/10, Saraiva’s market value was of R$ 999.3
million.
Page 63
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
12.01 - COMMENT OF CONSOLIDATED QUARTER PERFORMANCE
SLED4 versus Ibovespa
From (100 basis) 03/31/2009 to 03/31/2010
260
250
240
232.9
230
220
210
200
190
180
172.0
170
160
150
140
130
120
110
100
Mar-09
Apr-09
May-09
Jun-09
Ibovespa
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10 Feb-10
Mar-10
SLED4
SUBSEQUENT EVENTS
In April 2010, Livraria opened a store exclusively dedicated to the sale of Apple products in
Salvador, Bahia state. This investment, which carries the name of iTown and operates under the
Apple Premium Reseller model, is another retail business diversification of the Company and
can add value to its growth strategies.
In May 2010, Livraria established a partnership with Disney studios to distribute films through
the internet. Up until now, 50 films and animation titles are available for rent and sale through
download. The agreement made with Disney aims at advertising online upcoming films
concurrently with video rental stores. Livraria will be the first company in Latin America to offer
Disney titles in digital format.
Editora launched in April 2010, the ―Benvirá‖ imprint which officially marks its debut in the
fiction and nonfiction segment.OUTLOOK
Editora will continue to invest in new business fronts. The highlights for 2010 will be:

The Benvirá, Arx and Caramelo editorial imprints will take on a more aggressive role in the
child literature, fiction and nonfiction segment;
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
12.01 - COMMENT OF CONSOLIDATED QUARTER PERFORMANCE

In the Teaching Systems Division, the launch of the Agora imprint, exclusively dedicated to
the production of content in the form of teaching systems for public schools.
In April 2010, the Education and Culture Ministry (MEC), through the National Education
Development Foundation (FNDE), announced the result of the evaluation of books that are
included in the Guide that will be chosen by teachers from 6th to 9th grade of elementary schools
in more than 140 thousand public schools in Brazil: the National Textbook Program for the 2011
school year (PNLD 2011). Editora obtained a 58% approval in its applied titles, the second best
approval index among the publishers that participated in this evaluation and above the sector’s
average (30%).
Editora’s market share estimate in new adoptions under the scope of PNLD 2011 is around 13%.
Such estimate is merely Management’s expectation, and may vary to more or less.
Attentive to the new technological trends, Editora is preparing contents selected from its
catalogue for digital sales (e-books) through the main e-commerce sites of the country.
At Livraria, the outlook remains favorable:

Expansion project of the physical store chain: by December 2010, Livraria’s goal is to reach
a sales area of around 51.1 thousand m2;

Investments to remodel the 12 remaining stores of the Siciliano chain;

Opening of a second iTown store in the Barra Shopping mall in Rio de Janeiro, city and state.
In the electronic retailing division, there are opportunities to expand the strategy to introduce
new product categories that have synergies relevant to the current operation.
In May 2010, Saraiva established a partnership with Disney studios to distribute films through
the internet. Until now Saraiva Digital had a partnership with seven studios, among which
Warner Bros and Paramount Pictures, and offered 3,000 titles including films, documentaries
and television series. The forecast is to reach around 4,000 items available for download by the
end of 2010.
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
12.01 - COMMENT OF CONSOLIDATED QUARTER PERFORMANCE
As of 2Q10, the internet book sale service for several reading devices, including, among others,
e-readers and mobile phones will be launched. This represents the main answer to the challenges
that Livraria’s business models will face in the future with gradual, but inevitable use of
electronic reading devices.
Notwithstanding not counting with significant revenues in a short and medium term, current
expectation is to capture for such activity at least the revenues that will be subtracted from
conventional book sales to the new reading modality.
This initiative is aligned to the vision and to Livraria’s strategic positioning because it adds value
to the customers’ shopping experience in all sales formats and channels.
In addition, in 2010, the works of revising the supply chain will begin and additional features
will be incorporated in the e-commerce site, including differentiated customer relationship
management tools (CRM).
Page 66
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
09.01- INVESTMENTS IN SUBSIDIARIES AND/OR AFFILIATES
01 - ITEM
01
2 - SUBSIDIARY’S/AFFILIATE’S NAME
SARAIVA E SICILIANO S.A.
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ) 4 - Classification
Non-public subsidiary
61.365.284/0001-04
5 - Equity interest in investee
6 - Investor’s shareholders’ equity
99.98%
66.22%
7 - Company
8 - Number of shares held in the current quarter (in thousands)
9 - Number of shares held in the prior quarter (in thousands)
Commercial, industrial and other
193,013
145,725
Page 67
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
19.01 - DESCRIPTION OF CHANGED INFORMATION
Correction of section 06.01 Notes to the consolidated financial statements – Note 19. Financial
Instruments, item a), as follows:
19 - FINANCIAL INSTRUMENTS
a) Derivative transactions
During the first quarter of 2010, the Company entered into derivative instruments
transactions and as of March 31 presented an open position in U.S dollar. The
transaction was conducted with Banco do Brasil S.A. and consists in buying a quantity
of U.S, dollar, without cash delivery, considering an exchange rate established by the
sale price on the first business day preceding the expiration date of each contract,
informed by Central Bank of Brazil - PTAX800, as follows
Agreement information
Date of
Notional amount
transaction (US$ thousand)
1/15/2010
840
1/15/2010
840
1/15/2010
840
Total
2,520
Maturity
date
3/26/2010
4/26/2010
5/26/2010
Exchange rate - US$
Gain
Gain (loss)
Date of Maturity At the end of
recorded
transaction date
the quarter (in thousand of R$)
1.7970
1.8008
3
1.8080
1.7810
(23)
1.8205
1.7810
(33)
(53)
The net loss incurred at the end of the quarter was recorded directly at the result of the
period, against a specific account at current liabilities.
Those agreements are free of fines and/or other penalties in the case of anticipated
settlement. The Company does not expect relevant results at the maturity date.
The sensitivity analysis, based on those agreements, was developed based on the
exposure to the exchange variation in U.S. dollar, as follows:
Transaction
Perda no encerramento do trimestre
Risk
Scenarios
Probable (i) Possible (ii)
US$
decrease
56
803
Remote (iii)
1.552
Balances include interest calculated as follows:
(i)
Based on current average U.S. dollar exchange rate.
(ii) Considering a 25% increase in U.S. dollar exchange rate.
(iii) Considering a 50% increase in U.S. dollar exchange rate.
Page 68
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
20.01 - OTHER INFORMATION THAT THE COMPANY CONSIDERS IMPORTANT
Additional Requirements for Level 2 of Corporate Governance Practices
1. Shareholders with more than 5% of shares of each type and class
OWNERSHIP POSITION OF SHAREHOLDERS WITH MORE THAN 5% OF SHARES OF EACH TYPE AND
CLASS, INCLUDING INDIVIDUALS
Company: SARAIVA S.A. LIVREIROS EDITORES
Position as of
04/30/2010 (in
thousands of shares)
Common shares
Preferred shares
Total
Shareholder
Number
%
Number
%
Number
%
Jorge Eduardo Saraiva
4,521
47.00
30
4,551
15.91
Olga Maria Barbosa Saraiva
1,131
11.75
1,131
3.96
Maria Sylvia Saraiva M. Gonçalves
494
5.13
494
1.73
Maria Eugênia Saraiva M. Gonçalves
494
5.13
494
1.73
Maria Henriqueta Saraiva M. Gonçalves
494
5.13
494
1.73
Maria Cecília Saraiva M. Gonçalves
494
5.13
13
0.07
507
1.77
HSBC (i)
The Master Trust Bank of Japan Ltd.
0.00
2,089
11.01
2,089
7.31
HSBC GL Invest Funds Brazil Equity
0.00
1,694
8,93
1,694
5.92
HSBC GL Invest Fund Lat Amer Equity
0.00
123
0.65
123
0.43
Trust A C S B L T H B N MO FD
0.00
82
0.43
82
0.29
HSBC Priv Bank World Funds PLC
0.00
8
0.04
8
0.03
Subtotal
0.00
3,996
21.06
3,996
13.98
PROFESSIONAL INVESTOR (i)
Fundo Inv rm Ações IP Seleção
0.00
921
4.85
921
3.23
Hatteras LLC
1
0.01
559
2.95
560
1.96
IP Part FDO de Inv em Ações
4
0.04
521
2.75
525
1.84
Bransfield LLC
0.00
291
1.53
291
1.02
IP Part Institucional Master FIA
0.00
103
0.54
103
0.36
IP Value Hedge FIA
0.00
64
0.34
64
0.22
5
0,05
2,459
12.96
2,464
8.63
subtotal
0.00
1,072
5.65
1,072
3.76
AMUNDI FUNDS
Itaú (i)
Itaú Valor Fundo Inv em Ações
0.00
280
1.48
280
0.98
Itaú Seleção Ações FI
0.00
187
0.99
187
0.65
Itaú Gov Corporativa Ações FI
0.00
200
1.05
200
0.70
Itaú Momento Ações Fundo Inv
0.00
179
0.94
179
0.63
Small cap Val IB Fund Inv Ações
0.00
71
0.37
71
0.25
Itaí Fenix Ações FI
0.00
45
0.24
45
0.16
Itaí Valor Ações Alav FI
0.00
28
0.15
28
0.10
Itaú Celi Ações Fundo de Invest
0.00
28
0.15
28
0.10
Itaú Flexprev Valor Ações FI
0.00
25
0.13
25
0.09
Fondo Mútuo Itaú Small Cap BR
0.00
9
0.05
9
0.03
Goal ACC LTIN Itaú S
0.00
2
0.01
2
0.01
Subtotal
0.00
1,054
5.56
1,054
3.70
Treasury shares
0.00
251
1. 32
251
0.88
Others
1,989
20.68
10,099
53.23
12.088
42.28
Total
9,622 100.00
18,974
100.00
28.596
100.00
(i) Investment fund.
Page 69
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
20.01 - OTHER INFORMATION THAT THE COMPANY CONSIDERS IMPORTANT
2. Position of controlling shareholders, management and outstanding shares
CONSOLIDATED OWNERSHIP POSITION OF CONTROLLING SHAREHOLDERS, MANAGEMENT
AND OUTSTANDING SHARES
Position as of 04/30/2010
Shareholder
Controlling shareholder
Management
Board of Directors
Executive Board
Fiscal Council (ii)
Number of
common shares
(in units)
4,520,574
%
0.16
Total
number of
shares
(in units)
4,550,600
%
15.91
649,656
-
6.75
0.00
0.00
13,507
211,192
-
0.07
1.11
0.00
663,163
211,192
-
2.32
0.74
0.00
-
0.00
250,550
1.32
250.550
0.88
Treasury shares
Other shareholders
Total
Outstanding shares
Number of
preferred shares
%
(in units)
46.98
30.026
4,452,083 46.27
9,622,313 100.00
4,452,083 46.27
18,468,535 97.34
18,973,810 100.00
18,468,535 97.34
22,920.618 80.16
28,596,123 100.00
22,920.618 80.16
CONSOLIDATED OWNERSHIP POSITION OF CONTROLLING SHAREHOLDERS, MANAGEMENT
AND OUTSTANDING SHARES
Position as of 04/30/2009 (prior 12 months)
Shareholder
Controlling shareholder
Management
Board of Directors
Executive Board
Fiscal Council (ii)
Number of
common shares
(in units)
%
Total number of
shares
(in units)
%
4,520,574
46.98
30.026
0.16
4,550,600
15.91
649,656
-
6.75
0.00
0.00
21,507
161,892
-
0.11
0.85
0.00
671,163
161,892
2.35
0.57
0.00
-
0.00
365,750
1.93
365,750
1.28
Treasury shares
Other shareholders
Total
Outstanding shares
%
Number of
preferred shares
(in units)
4,452,083 46.27
9,622,313 100.00
4,452,083 46.27
18,394,635 96.95
18,973,810 100.00
18,394,635 96.95
22,846,718 79.88
28,596,123 100.00
22,846,718 79.88
(ii) The Company does not have a Fiscal Council.
Page 70
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
20.01 - OTHER INFORMATION THAT THE COMPANY CONSIDERS IMPORTANT
3. Binding arbitration clause
The Company, its shareholders, management and Fiscal Council members must submit to
arbitration all disputes specified by the binding arbitration clause of the bylaws, in accordance
with the Regulation of the BOVESPA Market Arbitration Chamber.
Page 71
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
21.01 - INDEPENDENT ACCOUNTANTS’ REVIEW REPORT - UNQUALIFIED
(Convenience Translation into English from the Original Previously Issued in Portuguese)
INDEPENDENT ACCOUNTANTS’ REVIEW REPORT
To the Shareholders and Board of Directors of
Saraiva S.A. Livreiros Editores
São Paulo - SP
1. We have reviewed the accounting information included in the accompanying interim
financial statements of Saraiva S.A. Livreiros Editores (the ―Company‖) and subsidiary, for
the quarter ended March 31, 2010, consisting of the individual (Company) and consolidated
balance sheets, the related statements of income, changes in shareholders’ equity, cash flows
and value added, the related notes and the performance report, prepared under the
responsibility of the Company’s Management.
2. Our review was conducted in accordance with specific standards established by the Brazilian
Institute of Independent Auditors (IBRACON), together with the Brazilian Federal
Accounting Council (CFC), and consisted, principally, of: (a) inquiries of and discussions
with certain officials of the Company and its subsidiary who have responsibility for
accounting, financial and operating matters about the criteria adopted in the preparation of
the interim financial statements; and (b) review of the information and subsequent events that
have, or might have had, material effects on the financial position and results of operations of
the Company and its subsidiary.
3. Based on our review, we are not aware of any material modifications that should be made to
the accounting information included in the interim financial statements referred to in
paragraph 1 for them to be in conformity with Brazilian accounting practices and standards
issued by the Brazilian Securities Commission (CVM), specifically applicable to the
preparation of the interim financial statements.
4. As mentioned in note 4, during 2009, CVM approved several technical pronouncements,
interpretations and instructions issued by the Accounting Pronouncements Committee (CPC),
mandatory for adoption in 2010, which changed the accounting practices adopted in Brazil.
As permitted by CVM Resolution 603/09, the Company’s management elected to present its
interim financial statements in accordance with the accounting standards effective in Brazil
through December 31, 2009, rather than early adopting the standards effective for fiscal years
ending before 2010. As required by CVM Resolution 603/09, the Company disclosed the
basis of presentation of its interim financial statements in note 4, including a summary of the
main changes that might impact its financial statements at yearend, as well as estimates of
possible effects on shareholders' equity and net income.
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 SARAIVA S.A. LIVREIROS EDITORES
Corporate Law
60.500.139/0001-26
21.01 - INDEPENDENT ACCOUNTANTS’ REVIEW REPORT - UNQUALIFIED
5. The accompanying interim financial statements have been translated into English for the
convenience of readers outside Brazil.
São Paulo, May 14, 2010 (except for complementary information at note 19.a, which date is July
23, 2010)
DELOITTE TOUCHE TOHMATSU
Auditores Independentes
Maurício Pires de Andrade Resende
Engagement Partner
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FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
Subsidiary: SARAIVA E SICILIANO S.A.
22.01- STATEMENT OF INCOME (In thousands of Brazilian reais - R$)
1 - Code
3.01
3.02
3.03
3.04
3.05
3.06
3.06.01
3.06.02
3.06.02.01
3.06.02.02
3.06.03
3.06.03.01
3.06.03.02
3.06.04
3.06.05
3.06.05.01
3.06.05.02
3.06.06
3.07
3.08
3.08.01
3.08.02
3.09
3.10
2 - Description
Gross revenue from sales and/or services
Deductions
Net revenue from sales and/or services
Cost of products and/or services
Gross profit
Operating (expenses) income
Selling expenses
General and administrative expenses
Administration
Other
Financial
Financial income
Financial expenses
Other operating income
Other operating expenses
Depreciation and amortization
Other
Equity in subsidiary
Income (loss) from operations
Nonoperating income (expenses)
Income
Expenses
Income before taxes and profit sharing
Provision for income and social contribution taxes
3 - 01/01/2010 to 03/31/2010 4 - 01/01/2010 to 03/31/2010 5 - 01/01/2008 to 03/31/2008 6 - 01/01/2008 to 03/31/2008
337,197
337,197
259,139
259,139
(19,067)
(19,067)
(14,750)
(14,750)
318,130
318,130
244.389
244.389
(211,611)
(211,611)
(157,340)
(157,340)
106,519
106,519
87,049
87,049
(94,330)
(94,330)
(78,753)
(78,753)
(69,849)
(69,849)
(59,781)
(59,781)
(13,965)
(13,965)
(13,231)
(13,231)
(1,229)
(1,229)
(745)
(745)
(12,736)
(12,736)
(12,486)
(12,486)
(5,068)
(5,068)
(3,133)
(3,133)
165
165
198
198
(5,233)
(5,233)
(3,331)
(3,331)
892
892
1,504
1,504
(6,340)
(6,340)
(4.112)
(4.112)
(5,071)
(5,071)
(3,081)
(3,081)
(1,269)
(1,269)
(1,031)
(1,031)
0
0
0
0
12,189
12,189
8,296
8,296
0
0
0
0
0
0
0
0
0
0
0
0
12,189
12,189
8,296
8,296
0
0
(889)
(889)
Page 74
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Corporate Law
01047-2 SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
01.01 - IDENTIFICATION
1 - CVM CODE
2 - COMPANY’S NAME
3 - Federal Corporate Taxpayers’ Registration Number (CNPJ)
01047-2
SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
Subsidiary: SARAIVA E SICILIANO S.A.
22.01- STATEMENT OF INCOME (In thousands of Brazilian reais - R$)
1 - Code
3.11
3.12
3.12.01
3.12.02
3.13
3.15
2 - Description
Deferred income tax
Profit sharing/contributions
Profit sharing
Contributions
Reversal of interest on capital
Net income (loss)
NUMBER OF SHARES, EX-TREASURY (THOUSANDS)
EARNINGS PER SHARE (BRAZILIAN REAIS - R$)
LOSS PER SHARE (BRAZILIAN REAIS - R$)
3 - 01/01/2010 to 03/31/2010 4 - 01/01/2010 to 03/31/2010 5 - 01/01/2008 to 03/31/2008 6 - 01/01/2008 to 03/31/2008
(4,162)
(4,162)
(2,878)
(2,878)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
8,027
8,027
4,529
4,529
193,053
193,053
145,775
145,775
0,04158
0,04158
0.03107
0.03107
Page 75
(Convenience Translation into English from the Original Previously Issued in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
INTERIM FINANCIAL STATEMENTS (ITR) - 03/31/2010
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
01047-2 SARAIVA S.A. LIVREIROS EDITORES
60.500.139/0001-26
22.01 - PERFORMANCE REPORT OF THE SUBSIDIARY/AFFILIATE
Subsidiary/Affiliate: SARAIVA E SICILIANO S.A.
SEE ITEM 12.01 - COMMENTS ON THE CONSOLIDATED PERFORMANCE IN THE
QUARTER.
2010-0410
Page 76