HELBOR EMPREENDIMENTOS S.A. Independent auditor s report

Transcrição

1 (Convenience translation into English from the original previously issued in Portuguese) HELBOR EMPREENDIMENTOS S.A. Independent auditor s report Financial statements

2 HELBOR EMPREENDIMENTOS S.A. Financial statements Contents Independent auditor s report on the interim financial information Management Report Statements of financial position Statements of operations Statements of comprehensive income (loss) Statements of changes in equity Statements of cash flows Statements of value added Notes to the financial statements 2

3 Tel.: Rua Major Quedinho 90 Fax: Consolação São Paulo, SP - Brasil INDEPENDENT AUDITOR S REPORT ON THE INTERIM FINANCIAL INFORMATION To the Shareholders, Board Members and Management of Helbor Empreendimentos S.A. Mogi das Cruzes - SP Introduction We have reviewed the individual and consolidated interim financial information of Helbor Empreendimentos S.A. ( Company ), included in the Quarterly Information for the quarter ended March 31, 2018, which comprises the statement of financial position as at March 31, 2018 and the respective statements of operations, comprehensive income (loss), statements of changes in equity, and cash flows for the quarter then ended, including the notes to the financial statements. The Company s Management is responsible for the preparation of the individual and consolidated interim financial information according to Technical Pronouncement CPC 21 (R1) Interim statements and with international standard IAS 34 - Interim financial reporting, comprising the guideline included in Circular Letter/CVM/SNC/SEP 01/2018 related to the application of OCPC Orientation 04 on the recognition of revenues over time, as well as the presentation of this information according to the standards issued by the Brazilian Securities and Exchange Commission, applicable to the Quarterly Information. Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of the review We have conducted our review in accordance with Brazilian and international standards for reviewing interim financial information (NBC TR 2410 and ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity ). An interim review consists principally of applying analytical and other review procedures, and making enquiries of and having discussions with persons responsible for financial and accounting matters. An interim review is substantially less in scope than an audit conducted in accordance with auditing standards. An interim review does not provide assurance that we would become aware of any or all significant matters that might be identified in an audit. Accordingly, we do not express such an audit opinion. Conclusion on the individual and consolidated interim financial information Based on our review, we are not aware of any fact that would lead us to believe that the individual and consolidated interim financial information included in the quarterly information previously mentioned was not prepared, in all relevant aspects, in accordance with Technical Pronouncement CPC 21 (R1) - Interim information and with international standard IAS 34 - Interim Financial Reporting, comprising the guideline included in Circular Letter/CVM/SNC/SEP 01/2018 related to the application of OCPC Orientation 04 on the recognition of revenues over time as well as the presentation of this information according to the standards issued by the Brazilian Securities and Exchange Commission, applicable to the Quarterly Information. 3

4 Emphasis Instruction OCPC 04 As described in Note 2.1, the individual and consolidated interim financial information was prepared in accordance with Technical Pronouncement CPC 21 (R1) and IAS 34, comprising the guideline included in Circular Letter/CVM/SNC/SEP 01/2018 related to the application of OCPC Orientation 04 then effective, on the recognition of revenues over time, while the process of discussion of OCPC 04 is not concluded. Our conclusion is not qualified in respect of this matter. Other matters Statements of value added The quarterly information mentioned above includes the individual and consolidated statements of value added for the three-month period ended March 31, 2018, prepared under the responsibility of the Company's Management and presented as supplementary information for the purposes of IAS 34. These statements were submitted to review procedures carried out as a whole with the review of the quarterly information, aiming to conclude if they are in accordance with the interim financial information and accounting records, as applicable, and if its form and content are in accordance with the criteria established in the Technical Pronouncement 09 Statement of value added. Based on our review, we are not aware of any fact that would lead us to believe that the financial information was not prepared in all relevant aspects in accordance with the criteria established in this Technical Pronouncement and consistently with the individual and consolidated interim financial information taken as whole. Corresponding amounts The amounts related to the individual and consolidated interim financial information as at March 31, 2017 were previously reviewed by other independent auditors, whose report thereon, dated May 11, 2017, was unmodified. The amounts related to the year ended December 31, 2017, presented for comparison purposes, were previously audited by us and our report thereon, dated March 27, 2018, was unmodified. The accompanying financial statements have been translated into English for the convenience of readers outside Brazil. São Paulo, May 15, BDO RCS Auditores Independentes CRC 2 SP /O-1 Julian Clemente Accountant CRC 1SP /O-6 4

5 Management report for the first quarter 2018 Mogi das Cruzes, May 15th, 2018 Helbor Empreendimentos S.A. (B3:HBOR3), a residential and commercial real estate developer with projects in 28 cities in 10 Brazilian states and the Federal District, announces today its results for the first quarter of 2018 (1Q18). The information herein is presented in comparison with 4Q17 and 1Q17. The Company s consolidated financial statements are prepared in accordance with the accounting practices adopted in Brazil, which include the rules issued by the Brazilian Securities and Exchange Commission (CVM), the Accounting Pronouncements Committee (CPC), and the Federal Accounting Board (CFC). They also comply with International Financial Reporting Standards (IFRS) applicable to real estate developers in Brazil. FINANCIAL PERFORMANCE Helbor s net operating revenue totaled R$ 80.5 million in 1Q18, a decrease of 33.2% in comparison with 4Q17. The gross losses presented variation of %, from R$ 3.4 million in 4Q17, to R$ 12.9 million in 1Q18, and the gross margin reached -16%, a base points (bps) increase when compared to the 4Q17 margin. Net loss totaled R$ 67.8 million in the 1Q18 an decrease of 36.2% when compared to 4Q17. The net margin reached -84.3% and the return on average equity of the last 12 months (ROE) was -28.5%. The table below presents Helbor s main financial indicators by quarter and year to date, as well as the respective comparisons: Financial Indicators 1Q18 1Q17 Var. 1Q18 x 1Q17 4Q17 Var. 1Q18 x 4Q17 Net operating revenue (R$ 000) 80, , % 120, % Gross profit (R$ 000) -12,885-2, % -3, % Gross margin (%) -16.0% -1.6% bps -2.8% bps Profit (R$ 000) -67,847-48, % -106, % Net margin (%) -84.3% -25.8% bps -88.2% 390 bps ROE Last 12 months -28.5% -11.4% bps -22.4% -610 bps In March 31 st, 2018, Helbor s indebtedness totaled R$ million, a decrease of 3% when compared with December 31 st, The table below details the total indebtedness at the end of 1Q18, 1Q17 and 4Q17: Debt (R$ '000) 1Q18 1Q17 Var. 1Q18 x Var. 1Q18 x 4Q17 1Q17 4Q17 Loans ,6% ,6% Construction Financing ,0% ,3% Debentures ,7% ,9% Total Debt ,2% ,0% 5

6 Helbor s net debt represented 100.8% of equity as at March 31 st, 2018 (3.9% excluding the SFH - Brazilian Housing Financing System, which is directly linked to the portfolio of receivables). The table below presents the composition of the net debt at the end of 1Q18, 1Q17 and 4Q17: Debt (R$ '000) 1Q18 1Q17 Var. 1Q18 x 1Q17 4Q17 Var. 1Q18 x 4Q17 Total Debt 1,989,807 2,216, % 2,050, % Cash and Cash Equivalents 273, , % 350, % Net Debt 1,716,735 1,948, % 1,699, % Construction Financing 1,651,088 1,875, % 1,672, % Net Debt (ex-sfh) ¹ 65,647 72, % 27, % Total Shareholder s Equity 1,702,434 1,829, % 1,795, % Net Debt / Total Shareholder s Equity 100.8% 106.5% -570 bps 94.7% 610 bps Net Debt (ex-sfh) / Shareholder s Equity 3.9% 4.0% -10 bps 1.5% 240 bps * Excluding SFH which is directly linked to the portfolio of receivables Total receivables, net of the adjustment to present value, reached R$ 1.220,6 million at March 31 st, 2018, R$ 406 million of which, net of the adjustment to present value, related to units under construction and R$ million to completed units. The evolution of receivables on completed units is compatible with the projects delivered in the period. The tables below present the composition of receivables, including the balance of the adjustment to present value and other receivables, at the end of 1Q18, 1Q17 and 4Q17: Concluded Developments Under Construction Total Receivables on Balance Var. Var. Var. (R$ '000) 1Q18 1Q17 1Q18 x 1Q17 1Q18 1Q17 1Q18 x 1Q17 1Q18 1Q17 1Q18 x 1Q17 Accounts Receivables * 786, , % 416, , % 1,202,768 1,805, % Adjustment to Present Value (11,194) (20,759) -46.1% (11,194) (20,759) -46.1% Other Credits 28,493 27, % 484 3, % 28,977 30, % Total 814, , % 406, , % 1,220,552 1,816, % * Net of provision for loan losses. Concluded Developments Under Construction Total Receivables on Balance Var. Var. Var. (R$ '000) 1Q18 4Q17 1Q18 x 4Q17 1Q18 4Q17 1Q18 x 4Q17 1Q18 4Q17 1Q18 x 4Q17 Accounts Receivables * 786, , % 416, , % 1,202,768 1,292, % Adjustment to Present Value (11,194) (15,726) -28.8% (11,194) (15,726) -28.8% Other Credits 28,493 31, % 484 5, % 28,977 36, % Total 814, , % 406, , % 1,220,551 1,312, % 6

7 Backlog results totaled R$ 68 million at the end of 1Q18, a decrease of 5.1% as compared with the end of 4Q17 and the margin was 32.2%, an increase of 50 bps in relation to the end of the previous quarter. The table below presents the evolution of backlog revenue, costs and results, for 1Q18, 1Q17 and 4Q17: (R$ '000) 1Q18 1Q17 Var. 1Q18 x Var. 1Q18 x 4Q17 1Q17 4Q17 Net Backlog Revenues 210, , % 226, % Costs of Sold Units to be recognized (142,968) (203,937) -29.9% (154,663) -7.6% Backlog Results 67, % % Backlog Margin 32.2% 33.4% -120 bps 31.7% 50 bps LAUNCHES The company launched one project in 1Q18, a prime real state located in the city of Alphaville. The company also reached a total PSV of R$ in 1Q18. R$ 65.3 million of which represents Helbor s share The table below summarizes the developments launched: Launches 1Q18 1Q17 Var. 1Q18 x Var. 1Q18 x 4Q17 1Q17 4Q17 Total PSV (R$ 000) 145, , % 407, % Helbor s PSV (R$ 000) 65,332 44, % 225, % Helbor s share (%) 45.0% 38.2% 680 bps 5.4% bps Developments launched Units launched Helbor Developments (PSV in R$ '000) Date Location Segment Units 1 Net Units 2 Total Net Helbor's PSV 2 Net PSV 2 Interest Myrá mar-18 Barueri/SP Commercial ,182 65, % Total 1Q18-1 Development ,182 65, % Total Development ,182 65, % SALES Contracted sales in 1Q18 totaled R$ million. R$ million of which represented Helbor s share (65% of total sales). Regarding Helbor s share 15.5%. of the total sales for the quarter related to launches. The sales velocity (SoS) reached 8.2% in the quarter. The table below presents a summary of certain operational information relating to contracted sales for the 4Q17, 4Q16 and 3Q17: 7

8 Total Sales 1Q18 1Q17 Var. 1Q18 x Var. 1Q18 x 4Q17 1Q17 4Q17 Total contracted sales (R$ 000) 266, , % 340, % Helbor s contracted sales (R$ 000) 173, , % 236, % Helbor s share 65.0% 77.8% bps 69.5% -450 bps Units sold LANDBANK The landbank for future developments at the end of 1Q18 totaled thousand m 2 of the total sales area, which corresponded to a total PSV of R$ 5.5 billion. As regards Helbor s share, the potential PSV is R$ 4.2 billion. which represents 75.4% of the total landbank. Helbor s landbank continues to be diversified in terms of product profile and geographical distribution. Landbank 1Q18 1Q17 Var. 1Q18 x Var. 1Q18 x 4Q17 1Q17 4Q17 Helbor's landbank - Total PSV (R$ 000) 5,706,903 6,714, % 5,932, % Helbor's landbank - Helbor's share (R$ 000) 4,301,889 4,957, % 4,527, % Number of Helbor projects Number of Helbor units 10,412 12,506 (2,094) 11,761 (1,349) 8

9 Statements of financial position as at March 31, 2018 and December 31, 2017 (In thousands of Brazilian Reais) ASSETS Parent company Notes 03/31/ /31/ /31/ /31/2017 Current assets Cash and cash equivalents Marketable securities Accounts receivable Intercompany accounts with partners in ventures Properties for sale Recoverable taxes Unrecognized selling expenses Other assets Total current assets Noncurrent assets Accounts receivable Properties for sale Intercompany accounts with partners in ventures Related-party transactions Court deposits 17(c) Unrecognized selling expenses Investments Intangible assets Fixed assets Total noncurrent assets Total assets The accompanying notes are an integral part of these financial statements. 9

10 Statements of financial position as at March 31, 2018 and December 31, 2017 (In thousands of Brazilian Reais) LIABILITIES AND EQUITY Parent company Notes 03/31/ /31/ /31/ /31/2017 Current liabilities Loans and financing Debentures Trade accounts payable Social, labor and tax liabilities Provision for Income and Social Contribution Taxes 15(a) Equity (deficit) 8(c) Deferred taxes Customers advances Creditors from acquired properties Accounts payable Related-party transactions Acquisitions of ownership interest Total current liabilities Noncurrent liabilities Loans and financing Debentures Deferred taxes Customers advances Creditors from acquired properties Accounts payable Acquisitions of ownership interest Provision for legal claims Debts with participants in Silent Partnerships (SCPs) Total noncurrent liabilities Equity: Paid-in capital stock 18(a) (-) Expenses on public offering 18(c) (13.236) (13.236) (13.236) (13.236) Treasury shares 18(d) (25.052) (25.052) (25.052) (25.052) Share Purchase Option Plan - Program Asset and liability valuation adjustment 18(b) Statutory reserve Income reserve Non-controlling interest Total equity Total liabilities and equity The accompanying notes are an integral part of these financial statements. 10

11 Statements of operations For the periods ended March 31, 2018 and March 31, 2017 (In thousands of Brazilian Reais, except earnings per share) Parent company Notes 03/31/ /31/ /31/ /31/2017 Net operating revenue Costs of real estate sold 21 (21) (92) (93.402) ( ) Gross profit (loss) (12.885) (2.966) Operating revenues (expenses): General and administrative expenses 22(a) (11.905) (11.876) (20.097) (18.488) Selling expenses 22(b) (139) (138) (22.389) (19.539) Tax expenses 22(a) (678) (520) (2.249) (2.431) Other revenues and (expenses), net (306) (2.734) 182 Equity in earnings (losses) of subsidiaries 9 (49.073) (30.184) (2.005) (195) Operating income (loss) before financial income (loss) (60.779) (42.039) (62.359) (43.437) Financial expenses 23 (8.787) (7.427) (37.266) (33.889) Financial revenues Loss before Income and Social Contribution Taxes (67.774) (48.633) (77.501) (56.774) Income and social contribution taxes: Current 15(b) - - (4.574) (5.892) Deferred 15(b) (73) (84) Loss for the year (67.847) (48.717) (79.112) (60.879) Loss for the year attributable to: Controlling shareholders (67.847) (48.717) Non-controlling shareholders (11.265) (12.162) Loss for the year (79.112) (60.879) Basic earnings (loss) per share (in Brazilian Reais) 19(a) - - Diluted earnings (loss) per share (in Brazilian Reais) 19(a) - - The accompanying notes are an integral part of these financial statements. 11

12 Statements of comprehensive income (loss) For the periods ended March 31, 2018 and March 31, 2017 (In thousands of Brazilian Reais, except earnings per share) Parent company 03/31/ /31/ /31/ /31/2017 Net income (loss) for the year (67.847) (48.717) (79.112) (60.879) Other components of comprehensive income (loss) Financial assets available for sale: Gains or losses on investments (2.297) - (2.297) - Total comprehensive income (loss) for the year (70.144) (45.326) (81.409) (57.488) Total comprehensive income (loss) for the year attributable to Controlling shareholders (70.144) (45.326) Non-controlling shareholders (11.265) (12.162) Comprehensive income (loss) for the year (81.409) (57.488) The accompanying notes are an integral part of these financial statements. 12

13 Statements of changes in equity For the periods ended March 31, 2018 and March 31, 2017 (In thousands of Brazilian Reais) Income reserve Share Asset and Retained Capital stock Share issue cost Treasury shares Purchase Option Plan - Program liability valuation adjustment Statutory reserve Appropriated Retained earnings earnings (Accumulated losses) Total Equity of parent company Controlling interest Total equity Balances as at December 31, (13.236) (25.052) Loss for the period (48.717) (48.717) (48.717) (12.162) (60.879) Asset and liability valuation adjustment Non-controlling interest Balances as at March 31, (13.236) (25.052) (48.717) Balance as at December 31, (13.236) (25.052) Loss for the period (67.847) (67.847) (67.847) (11.265) (79.112) Transactions with non-controlling shareholders (2.297) (2.297) - (2.297) Non-controlling interest (11.480) (11.480) Balances as at March 31, (13.236) (25.052) (67.847) The accompanying notes are an integral part of these financial statements. 13

14 Statements of cash flows - indirect method For the periods ended March 31, 2018 and March 31, 2017 (In thousands of Brazilian Reais) Parent company 03/31/ /31/ /31/ /31/2017 Operational flow From operating activities Loss before Income and Social Contribution Taxes (67.774) (48.633) (77.501) (56.774) Adjustments to reconcile income (loss) to cash and cash equivalents from operating activities Depreciation and amortization Discount to Present Value - - (4.532) (3.498) Provision for contingencies (452) (108) (1.293) (114) Provision for termination of contract with clients (80) Deferred taxes - PIS and COFINS (2.671) (1.725) Recognition of charges on financing Finance charges on amortized financing (capitalized) (2.601) (8.999) (2.601) (8.999) Recognition of finance charges on loans (33) (482) (33) (576) Equity (deficit) Equity in earnings (losses) of subsidiaries Changes in assets and liabilities Accounts receivable Properties for sale 21 (11) (11.640) (22.363) Recoverable taxes 385 (61) (549) (604) Unrecognized selling expenses (165) (31) (2.268) (1.329) Court deposits (99) (3) (1.652) (1.143) Other assets (319) Related-party receivables (11.667) (608) - Related-party payables (25.366) Trade accounts payable 246 (57) (10.334) Social, labor and tax liabilities Customers advances (1.175) (95) (35.053) Creditors from acquired properties - - (50.528) (17.643) Accounts payable (79) (2.395) (2.834) Paid income and social contribution taxes - - (4.709) (5.745) Payments of interest on loans and financing (10.316) (3.586) (48.118) (18.172) Net cash from operating activities (55.685) (12.248) (11.849) (36.452) Cash flows from investing activities Increase in investments ( ) (72.780) (5.828) (10.326) Decrease in investments Intangible assets (151) 375 (160) 749 Fixed assets (5) (495) (1.153) (1.107) Financial investments (9.901) (317) (14.287) 143 Acquisitions (disposals) of ownership interest (4.462) (4.462) Net cash from investing activities (50.717) (31.658) (4.894) (9.206) Cash flows from financing activities Raising of loans and financing Intercompany accounts with partners in ventures (705) (7.722) (705) (2.493) Receipt of loans and principal Payments of principal of loans and financing (36.470) ( ) ( ) ( ) Decrease in debts with participants in Silent Partnerships (SCPs) (141) Non-controlling interest - - (11.505) Net cash from financing activities (75.470) Increase (decrease) in cash and cash equivalents (71.588) (92.213) (8.030) Cash and cash equivalents At beginning of year At end of year Increase (decrease) in cash and cash equivalents (71.588) (92.213) (8.030) The accompanying notes are an integral part of these financial statements. 14

15 Statements of value added For the periods ended March 31, 2018 and March 31, 2017 (In thousands of Brazilian Reais) 1. Revenues Parent company 03/31/ /31/ /31/ /31/ Revenue from sales of properties Management fee Operating revenues (expenses) 400 (306) (1.452) Inputs 2.1 Cost of real estate sold and services rendered (21) (92) (93.402) ( ) 2.2 Materials, energy, third-party services and others (2.507) (2.387) (31.523) (27.721) 3. Gross value added (1.394) (1.574) (45.380) (26.442) 4. Withholdings 4.1. Depreciation and amortization (609) (545) (1.732) (1.157) (609) (545) (1.732) (1.157) 5. Net added value produced (3-4) (2.003) (2.119) (47.112) (27.599) 6. Value added received as transfer 6.1 Equity in earnings (losses) of subsidiaries (49.073) (30.184) (2.005) (195) 6.2 Financial revenues (47.281) (29.351) Total value added to be distributed (5+6) (49.284) (31.470) (26.993) (7.242) 8. Distribution of value added 8.1 Personnel and charges Direct compensation Benefits FGTS (Severance Pay Fund) Taxes, fees and contributions Federal State Municipal Interest and rents Interest Rents Others Return on equity capital Losses for the year (67.847) (48.717) (67.847) (48.717) Participants in SCPs - - (25) Minority interest in subsidiaries - - (11.240) (12.221) (67.847) (48.717) (79.112) (60.879) Total distribution of value added (49.284) (31.470) (26.993) (7.242) The accompanying notes are an integral part of these financial statements

16 1 Operations Helbor Empreendimentos S.A. (the "Company") is a publicly-held corporation founded on October 17, 1977, with head office at Av. Vereador Narciso Yague Guimarães, 1.145, 15 andar in the city of Mogi das Cruzes, state of São Paulo, Brazil, which has its shares traded at São Paulo Stock Exchange since October 29, The Company is mainly engaged in real estate development and in providing joint venture administration services. The Company has partnerships with the main real estate and construction companies of the regions where it operates. The development of real estate ventures occurs by means of Special Purpose Companies (SPEs) or Silent Partnerships (SCPs), specifically created to develop each one of the ventures, separately. The Company is subject to arbitration in the Court of Arbitration of the Market, pursuant to an arbitration clause contained in its Bylaws. The Board of Directors approved issuance of this financial information in a meeting held on May 15, Summary of main accounting policies The main accounting policies applied on the preparation of this individual and consolidated Quarterly Financial Information (ITR) were not changed in relation to the ones presented in the financial statements for the year ended December 31, This financial information does not include all requirements of the annual or complete financial statements and, therefore, must be read with the Company's complete financial statements from the previous years, available in the following websites: CVM ( and Helbor (ri.helbor.com.br). 2.1 Basis of preparation The individual and consolidated interim financial information was prepared according to Technical Pronouncement CPC 21 (R1) Interim statements and with international standard IAS 34 - Interim financial reporting, comprising the guideline included in Circular Letter/CVM/SNC/SEP 01/2018 related to the application of OCPC Orientation 04 issued by the Committee of Accounting Pronouncements (CPC) and approved by the Brazilian Exchange and Securities Commission (CVM) and Federal Association of Accountants (CFC), on the recognition of revenues over time, as well as the presentation of this information according to the standards issued by the Brazilian Securities and Exchange Commission, applicable to the Quarterly Information. The interim financial information was prepared based on historical cost, unless otherwise stated. 12

17 The interim financial information was prepared in the normal course of operations assuming the Company will continue as a going concern. Management evaluates the Company's ability to continue as a going concern when preparing the interim financial information. All interim financial information is presented in thousands of Brazilian Reais (R$) and the amounts are rounded to the next unit, unless otherwise stated. In some circumstances, this can lead to insignificant differences between the sum of the numbers and the subtotal presented in the charts. This information is presented considering OCPC 07 - Evidencing upon Disclosure of General Purpose Financial-Accounting Reports, which reinforces basic disclosure requirements of existing standards and suggests a less generic disclosure focused on: (i) relevant information to users, (ii) quantitative and qualitative aspects, and (iii) risk aspects. 2.2 Consolidation The following accounting practices are applied in the preparation of the financial statements. (a) Subsidiaries and joint ventures Subsidiaries are all entities (including SPEs) over which the Company has the power to establish the financial and operating policies. The subsidiaries are consolidated as from the date when the control is transferred to the Company until the date the control ceases. Results of acquired/merged subsidiaries and jointly-controlled subsidiaries are included in statements of operations beginning as of acquisition date. The financial information of the subsidiaries included in the consolidation coincide with the period of those of the parent company and the accounting policies and practices were applied uniformly at the consolidated companies and are consistent with those used in comparative figures. The consolidated financial statements include operations of the Company and of the following subsidiaries, whose ownership interest on the date of this financial information is as follows: 13

18 (i) Subsidiaries Percentage of interest Corporate name 03/31/ /31/2017 SCP Edifício Helbor Tower 45,000 45,000 SCP Edifício Helbor Home Flex Gonzaga 97,499 97,499 SCP Howa 94,999 94,999 SCP Helbor Resort Reserva do Mar 99,998 99,998 SCP Residencial Helbor Acqualife 99,989 99,989 SCP Cond. Resid. Cap Ferrat 99,990 99,990 SCP Coral Gables 89,999 89,999 SCP Esplanada Life Club 90,000 90,000 SCP Residencial Helbor Upperhouses Parque Taquaral 90,000 90,000 SCP Helbor Reserva do Itapety 99,990 99,990 SPE Capital Federal Investimentos Imobiliários Ltda. 99,990 99,990 SPE Palmeiras Investimentos Imobiliários Ltda. 90,000 90,000 SPE Novaes Investimentos Imobiliários Ltda. 99,990 99,990 SPE Seis Investimentos Imobiliários Ltda. 99,990 99,990 SPE Travessa São José Investimentos Imobiliários Ltda. 99,990 99,990 SPE Washington Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 85 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Aicás Investimentos Imobiliários Ltda. 99,990 99,990 SPE Portugal Investimentos Imobiliários Ltda. 99,990 99,990 SPE Americo Investimentos Imobiliários Ltda. 99,990 99,990 SPE Av. São João 3 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Av. São João Comercial Investimentos Imobiliários Ltda. 99,990 99,990 SPE Iperoig Investimentos Imobiliários Ltda. (b) 99, ,000 SPE LM Investimentos Imobiliários Ltda. 99,990 99,990 SPE Nebias Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 2 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 5 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 6 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 7 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 8 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 10 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 11 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 12 Investimentos Imobiliários Ltda. 90,000 90,000 SPE Hesa 14 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 15 Investimentos Imobiliários Ltda. 99, ,000 SPE Hesa 18 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 21 Investimentos Imobiliários Ltda. 75,000 75,000 SPE Hesa 22 Investimentos Imobiliários Ltda. 75,000 75,000 SPE Hesa 23 Investimentos Imobiliários Ltda. 75,000 75,000 SPE Hesa 26 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 28 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 29 Investimentos Imobiliários Ltda. (b) 99, ,000 14

19 Percentage of interest Corporate name 03/31/ /31/2017 SPE Hesa 31 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 32 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 33 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 34 Investimentos Imobiliários Ltda. 90,000 90,000 SPE Hesa 35 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 36 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 37 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 38 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 39 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 40 Investimentos Imobiliários Ltda. 95,000 95,000 SPE Hesa 41 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 42 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 43 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 44 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 45 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 47 Investimentos Imobiliários Ltda. 90,000 90,000 SPE Hesa 48 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 49 Investimentos Imobiliários Ltda. (b) 99, ,000 SPE Hesa 51 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 52 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 53 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 54 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 55 Investimentos Imobiliários Ltda. 60,000 60,000 SPE Hesa 63 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 64 Investimentos Imobiliários Ltda. 90,000 90,000 SPE Hesa 65 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 66 Investimentos Imobiliários Ltda. 75,000 75,000 SPE Hesa 67 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 68 Investimentos Imobiliários Ltda. 90,000 90,000 SPE Hesa 70 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 75 Investimentos Imobiliários Ltda. 50,000 50,000 SPE Hesa 80 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 83 Investimentos Imobiliários Ltda. (b) 99, ,000 SPE Hesa 86 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 88 Investimentos Imobiliários Ltda. (b) 99, ,000 SPE Hesa 90 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 91 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 92 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 93 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 94 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 97 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 100 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 101 Investimentos Imobiliários Ltda. 75,000 75,000 SPE Hesa 102 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 103 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 104 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 105 Investimentos Imobiliários Ltda. (b) 99, ,000 SPE Hesa 106 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 109 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 110 Investimentos Imobiliários Ltda. 80,000 80,000 15

20 Percentage of interest Corporate name 03/31/ /31/2017 SPE Hesa 111 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 112 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 113 Investimentos Imobiliários Ltda. 60,000 60,000 SPE Hesa 114 Investimentos Imobiliários Ltda. 90,000 90,000 SPE Hesa 115 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 116 Investimentos Imobiliários Ltda. 90,000 90,000 SPE Hesa 117 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 119 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 120 Investimentos Imobiliários Ltda. 90,000 90,000 SPE Hesa 121 Investimentos Imobiliários Ltda. (b) 99, ,000 SPE Hesa 123 Investimentos Imobiliários Ltda. (b) 99, ,000 SPE Hesa 125 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 128 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 129 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 130 Investimentos Imobiliários Ltda. 90,000 90,000 SPE Hesa 131 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 132 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 133 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 134 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 135 Investimentos Imobiliários Ltda. (b) 99, ,000 SPE Hesa 136 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 137 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 138 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 139 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 140 Investimentos Imobiliários Ltda. 85,000 85,000 SPE Hesa 141 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 143 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 146 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 147 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 148 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 149 Investimentos Imobiliários Ltda. 90,000 90,000 SPE Hesa 150 Investimentos Imobiliários Ltda. 57,500 57,500 SPE Hesa 152 Investimentos Imobiliários Ltda. 85,000 85,000 SPE Hesa 153 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 154 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 155 Investimentos Imobiliários Ltda. 75,000 75,000 SPE Hesa 156 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 157 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 158 Investimentos Imobiliários Ltda. 90,000 90,000 SPE Hesa 159 Investimentos Imobiliários Ltda. 55,000 55,000 SPE Hesa 160 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 163 Investimentos Imobiliários Ltda. 80,000 80,000 SPE Hesa 164 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 165 Investimentos Imobiliários Ltda. 34,000 34,000 Hesa Investimentos Imobiliários SPE Ltda. 60,000 60,000 Hesa Investimentos Imobiliários SPE Ltda. 40,000 40,000 Hesa Investimentos Imobiliários SPE Ltda. 90,000 90,000 Hesa Investimentos Imobiliários SPE Ltda. 80,000 80,000 Hesa 171 Investimentos Imobiliários Ltda. 50,000 50,000 Hesa 172 Investimentos Imobiliários Ltda. 60,000 60,000 16

21 Percentage of interest Corporate name 03/31/ /31/2017 Hesa 174 Investimentos Imobiliários Ltda. 70,000 70,000 Hesa 175 Investimentos Imobiliários Ltda. 99,990 99,990 Hesa 176 Investimentos Imobiliários Ltda. 60,000 60,000 Hesa 177 Investimentos Imobiliários Ltda. 99,990 99,990 Hesa 180 Investimentos Imobiliários Ltda. 99,990 99,990 Hesa 181 Investimentos Imobiliários Ltda. (c) 99,990 - Hesa 182 Investimentos Imobiliários Ltda. 50,000 50,000 Hesa 184 Investimentos Imobiliários Ltda. (c) 60,000 - Hesa 185 Investimentos Imobiliários Ltda. (c) 99,990 - Hesa 186 Investimentos Imobiliários Ltda. (c) 99,990 - Hesa 187 Investimentos Imobiliários Ltda. (c) 99,990 - SPE Hesa 96 Investimentos Imobiliários Ltda. 85,000 85,000 SPE Chamantá Investimentos Imobiliários Ltda. (b) 99, ,000 SPE Emilio Investimentos Imobiliários Ltda. 95,000 95,000 SPE Hesa 84 Investimentos Imobiliários Ltda. 40,000 40,000 SPE Salvador Incorporação 1 Ltda. 65,000 65,000 SPE Goiania Incorporação 14 Ltda. - Green Style 70,000 70,000 SPE Hesa 1 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 3 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 4 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 13 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 16 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 17 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 19 Investimentos Imobiliários Ltda. 40,000 40,000 SPE Hesa 20 Investimentos Imobiliários Ltda. 50,000 50,000 SPE Hesa 24 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 25 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 27 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Parque Flamboyant 2 Ltda. 70,000 70,000 SPE Goiania Incorporação 15 Ltda. 70,000 70,000 SPE Hesa 50 Investimentos Imobiliários Ltda. 60,000 60,000 SPE Hesa 56 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 57 Investimentos Imobiliários Ltda. 99,990 99,990 SPE Hesa 61 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 62 Investimentos Imobiliários Ltda. 60,000 60,000 SPE Hesa 69 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 72 Investimentos Imobiliários Ltda. 50,000 50,000 SPE Hesa 74 Investimentos Imobiliários Ltda. (a) 100,000 70,000 Tapirapé Empreendimentos Ltda. 50,000 50,000 Jacarandá Incorporadora Ltda. 50,000 50,000 SPE Hesa 77 Investimentos Imobiliários Ltda. 50,000 50,000 SPE Hesa 78 Investimentos Imobiliários Ltda. 50,000 50,000 SPE Hesa 76 Investimentos Imobiliários Ltda. 50,000 50,000 SPE Hesa 79 Investimentos Imobiliários Ltda. 85,000 85,000 SPE Hesa 81 Investimentos Imobiliários Ltda. 50,000 50,000 SPE Hesa 87 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 89 Investimentos Imobiliários Ltda. 60,000 60,000 SPE Hesa 98 Investimentos Imobiliários Ltda. 75,000 75,000 SPE Hesa 107 Investimentos Imobiliários Ltda. 70,000 70,000 SPE Hesa 122 Investimentos Imobiliários Ltda. 80,000 80,000 17

22 Percentage of interest Corporate name 03/31/ /31/2017 SPE Hesa 126 Investimentos Imobiliários Ltda. 62,500 62,500 SPE Hesa 151 Investimentos Imobiliários Ltda. 50,000 50,000 HB Brokers - Gestão Imobiliária Ltda. 99,990 99,990 (a) Increase in ownership interest in the period from transaction with partners. (b) Decrease in ownership interest in the period from transaction with third parties. (c) Companies set up in (ii) Jointly-controlled subsidiaries (not consolidated) Percentage of interest Corporate name 03/31/ /31/2017 Alden Desenvolvimento Imobiliário Ltda. 50,000 50,000 Helbaaco Empreendimentos Imobiliários Ltda. 50,000 50,000 Residencial Goiânia Alpes S/A - Residencial Trinidad Life Style 45,000 45,000 Residencial La Piazza 45,000 45,000 Andromeda Alphaville SPE Empreendimento Ltda. 45,000 45,000 (b) Transactions with non-controlling interest The Company considers transactions with non-controlling interest as transactions with owners of assets of the Group. For purchases of non-controlling interest, the difference between any consideration paid and the portion acquired of the book value of the subsidiary s net assets is recorded in equity. Gains or losses on disposals of non-controlling interest are also directly recorded in equity. (c) Loss of control over subsidiaries When the Company no longer has control over the entity, any interest held in the entity is measured at fair value and the change in book value is recognized in the statement of operations. In addition, any amounts previously recognized in other comprehensive income (loss) referring to that entity are recorded as if the Group had directly disposed the related assets or liabilities. This means that the values previously recognized in other comprehensive income (loss) are reclassified to the statements of operations New standards, changes and interpretations of standards issued by IASB Pronouncement Description Effective period CPC 48 - Financial instruments CPC 47 Revenue from contracts with customers Related to international accounting standards IFRS 9 Financial instruments: Classification, measurement, impairment and hedge accounting. Related to international accounting standards IFRS 15 on revenue recognition in transactions of contracts with customers. CPC 06 (R2) Lease Related to international accounting standards IFRS 16. It refers to the definition and the guideline of the lease contract established in IAS 17. Years started from January 01, Years started from January 01, Years started as from January 01,

23 In 2016, CPC issued CPC 47 - Revenue of contract with customers, new accounting pronouncement about revenue recognition with early adoption for the years or periods started on or after January 1, The Company currently recognizes revenue referring to the construction contracts using Percentage of completion method, which consists in the revenue recognition based on construction cost incurred during the execution of the construction work, following the provisions of Technical Orientation OCPC 04 Application of Technical Interpretation ICPC 02 to Real Estate Companies in Brazil. Due to these changes, technical orientation OCPC 04 Application of Technical Interpretation ICPC 02 to Real Estate Companies in Brazil is being reviewed by CPC, regarding the criteria of revenue recognition and the respective costs and expenses arising from real estate development operations until then recognized during the execution of the construction work (percentage of completion method). The technical area of CVM through Circular Letter/CVM/SNC/SEP/No. 01/2018, guided entities to comply with the provisions established in OCPC 04 then in effect, approved by CVM Resolution No. 653/2010, applying the necessary adjustments due to the effectiveness of IFRS 15 for annual periods as from January 01, 2018, until there is an alignment on the application or not of revenue recognition through time. Accordingly, the Company awaits the final decision on the matter to measure, if applicable, possible impact of the application of CPC 47 on its financial statements. CPC 48, interpretation for IFRS 9, is about the classification and measurement of financial instruments. The main amendments are: (i) new classification criteria for financial assets; (ii) new impairment model for financial assets, hybrid of expected and incurred losses, in replacement to current incurred losses model; and (iii) flexibility of requirements for adoption of hedge accounting. The Company will wait the conclusion of the discussions related to IFRS 15, as mentioned in the paragraph above, to valuate and disclose the effects of IFRS 9. 3 Cash and cash equivalents Parent company 03/31/ /31/ /31/ /31/2017 Cash and banks 6,577 1,808 52,714 62,971 Financial investments (*) 62 76,419 6,513 88,469 6,639 78,227 59, ,440 (i) Investments in Financial Investment Funds (FIF), redeemable at any time, not linked to a certain period, and remunerated based on variation of CDI. 4 Marketable securities Parent company 03/31/ /31/ /31/ /31/2017 Bank certificates of deposit (i) Certificates of Potential Additional Construction (CEPAC) (ii) , ,094 Receivables investment fund (FIDIC) 2, , FICFI RF Interbank Deposit (DI) Referenced 8,715-13,150 - Brazilian prize-draw investment bonds 1,000 1,000 2,000 2,000 19

24 11,849 1, , ,558 (i) Bank Certificates of Deposit (CDB) - remunerated based on certain percentages of CDI variation, which presented average monthly rate of 0.51% in the period (0.76% in 2017), evaluated at fair value through profit or loss. (ii) The Company acquired Certificates of Potential Additional Construction (CEPAC) from public agencies and third parties, with no intention, in the initial record, to include it to ventures, which is the reason why they are presented under the classification of "Financial assets held for negotiation". The variation between acquisition value and fair value is classified under the caption Asset and Liability Valuation Adjustment in equity, net of deferred taxes. The valuation of CEPACs is based on the last negotiations of the secondary market, obtained with independent specialists. 5 Accounts receivable Parent company 03/31/ /31/ /31/ /31/2017 Accounts receivable from units under construction (i) , ,026 Accounts receivable from completed units 8,149 7, ,147 8,149 Total trade accounts receivable 8,149 7,922 1,253,360 8,149 Discount to present value - - (11,194) - Provision for termination of contract with clients (ii) (2,913) (2,831) (50,592) (2,913) Other receivables 3,288 6,793 28,978 3,288 Total Accounts Receivable 8,524 11,884 1,220,552 8,524 Current Noncurrent 6,704 9, ,733 6,704 1,820 2, ,819 1,820 (ii) Accounts receivable from sale of joint ventures under construction are substantially restated at the Civil Construction National Index (INCC) variation. After its conclusion and after keys are delivered, accounts receivable start to be adjusted based on General Market Price Index (IGP-M) variation, plus interest calculated at 12% p.a. using the French amortization system (Price Table). Accordingly, accounts receivable of concluded joint ventures and recognized accounts receivable of ventures under construction, less Adjustment to Present Value (AVP), are estimated to approximate fair value. 20

25 The balance of accounts receivable from real estate units sold and not yet concluded is not fully reflected on the quarterly financial information, given that its record is limited to the revenue portion already recognized, in accordance with Percentage of Completion (PoC). Receivables portfolio maturing in more than 12 months is presented in long-term receivables. (ii) The Company recognized a provision for potential contract terminations, considered as probable by management. Studies on cancellations of agreements are concluded based on estimates determined through internal controls on monitoring and collection that indicate potential new requests with likelihood considered probable by Management. The Company s estimate considers (i) gross margin and construction work percentage of completion ( PoC ) of each joint ventures and (ii) retention of part of values already paid by the client. The analysis of maturities from the total of installments receivable of sales contracts of finished and not finished units, may be stated as follows, per year of maturity: 2018 Year Parent company Overdue Up to 90 days 80 86,475 From 90 to 180 days ,575 Over 180 days 4, ,909 Overdue (*) 4, ,959 Falling due , , , onwards 1, ,365 Falling due 3, ,401 Total portfolio 8,149 1,253,360 (*) A substantial portion of overdue accounts receivable corresponds to the units whose process of bank financing by the client (transfer) is currently in progress. Management considers that the credit risk of ventures under construction is remote, since the ownership of the property is granted only to the clients that are complying with the payments and with the other contractual provisions. On the other hand, Management is monitoring the transfer processes and its effects on cancellation of contracts, so that it can estimate the effects of possible operations that may be cancelled. 21