Petrobras – Clarifications regarding CVM Letter

Rio de de Janeiro, March 7, 2017 – Petróleo Brasileiro SA – Petrobras informs that it received today a Letter No. 33/2017/CVM/SEP/GEA-5, following a meeting of the Brazilian Securities and Exchange Commission (CVM) that took place today, in which CVM’s Collegiate decided to publish the  Letter No. 30/2017/CVM/SEP/GEA-5 (“Letter No. 30”), dated March 3, 2017, through which CVM’s technical area determined “the re-making, re-presentation and re-statement of the complete annual financial statements for the periods ending on December 31, 2013, December 31, 2014, and December 31, 2015, and the re-making and re-presentation of the respective DFP Forms, as well as the restatement and re-presentation of the ITR Forms presented in the course of the fiscal years of 2013 (2nd and 3rd), 2014, 2015 and 2016, considering the reversals of recognized accounting effects arising from the application of hedge accounting.”

The Company informs that in accordance with CVM Deliberation No. 463/03, the demands set forth in Letter No. 30 are subject to appeal before the CVM’s Collegiate, and that Petrobras will take the necessary measures to defend its interests.

It is important to clarify that the decision of the Collegiate, adopted today, refers exclusively to the disclosure of the content of the Letter No. 30 that determines the publication of said accounting documents, and the analysis of the merits of the demands is still pending decision by the same Collegiate at a later time, since the CVM’s technical area accepted the Company’s request to suspend the effects of the Letter No. 30.

Regarding the merits, Petrobras informs that, as announced to the market in 2013, it began to apply the accounting practice known as Hedge Accounting to its exports, as of May 2013.

Based on this accounting practice, regulated in Brazil by the accounting pronouncement “CPC38 – Financial Instruments: Recognition and Measurement” and by the international accounting standard “IAS 39 – Financial Instruments Recognition and Measurement”, Petrobras designates hedge relationships between “highly probable future exports” and installments of certain liabilities in US dollars, so that the exchange effects of both are recognized at the same time in the income statement, as disclosed in its annual financial statements.
Petrobras reaffirms its understanding that it uses the Hedge Accounting practice correctly and reiterates that the Company’s financial statements for the years 2013, 2014 and 2015 are in accordance with accounting practices adopted in Brazil, as well as with international standards (IFRS) and were audited by an independent auditor who issued an unqualified opinion that these statements adequately presented, in all material respects, the financial position of Petrobras.


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