Page 1

annual report

2004


ANNUALREPORT #/.4%.43 -AININDICATORS 0RO½LE (ISTORICAL"ACKGROUND -ESSAGEFROMTHE"OARDOF$IRECTORS 3TRATEGY 'RENDENE´S-ARKET -ANAGEMENT´S$ISCUSSION!NALYSIS-$! #APITAL-ARKETS )NVESTMENTSAND/UTLOOK #ORPORATE'OVERNANCE 2ISK-ANAGEMENT 3OCIAL2ESPONSIBILITY #ORPORATE)NFORMATION 3HAREHOLDER)NFORMATION &INANCIAL3TATEMENTS

              




'RENDENE\!NNUAL2EPORT

?MAININDICATORS  %ARNINGS2MILLION 'ROSS2EVENUES $OMESTIC-ARKET %XPORT-ARKET .ET2EVENUES 'ROSS0RO½T 'ROSS-ARGIN %ARNINGS"EFORE)NTEREST AND4AX%")4 %")4-ARGIN !DJUSTED%ARNINGS"EFORE)NTEREST4AXES $EPRECIATION AND!MORTIZATION%")4$!  %")4$!-ARGIN !DJUSTED.ET)NCOME .ET-ARGIN 3ALESTHOUSANDPAIRS $OMESTIC-ARKET -ASCULINE &EMININE #HILDREN -ASS#ONSUMPTION %XPORT-ARKET 4OTAL &INANCIAL)NDICATORS2MILLION 3HAREHOLDERS%QUITY #URRENT,IQUIDITY 2ETURNON%QUITY¯2/% 'ROSS$EBT 'ROSS$EBTIN,OCAL#URRENCY 'ROSS$EBT%")4$! .ET$EBT.ET#ASH #APITAL%XPENDITURE¯#!0%8 0ERFORMANCE .›OFEMPLOYEES !VERAGEPRODUCTIVITY2´EMPLOYEE 3HARES 4RADINGPRICEON"OVESPAON2 .›OFSHARESMILLION  %ARNINGSPERSHARE2 $IVIDENDPERSHARE2 -ARKETCAPITALIZATION2MILLION  4OHELPWITHTHECOMPARISON ADJUSTMENTSHAVEBEENMADEANDAREDESCRIBEDINTHE&INANCIAL3TATEMENTS  4RADINGSTARTEDON/CTOBER   #ONSTANTAMOUNTOFSHARESCONSTANTFORCOMPARABILITYREASONS



                         





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'RENDENE\!NNUAL2EPORT

.ETSALES

%")4$!AND-ARGIN

?2-ILLION

?2-ILLION 



  

 

 

 

















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'RENDENE\!NNUAL2EPORT

?PRO½LE /NEOFTHELARGESTMANUFACTURERSINTHEWORLDOFSYNTHETICFOOTWEARANDLEADER INSEVERALSEGMENTSINTHE"RAZILIANMARKET 'RENDENEHASANINSTALLEDCAPACITY OFMILLIONPAIRS)TSPRODUCTSARESOLDUNDERSUCCESSFULBRANDNAMESSUCHAS -ELISSA 'RENDHA 2IDER "ABY +IDS AND)PANEMA)TSINDUSTRIALUNITS LOCATED INTHESTATESOF#EARfAND2IO'RANDEDO3ULAREDIFFERENTIATEDBYTHEUSEOF EXCLUSIVEANDPROPRIETARYTECHNOLOGY 'RENDENEISONEOFTHELARGESTMANUFACTURERSINTHEWORLDOFSYNTHETICFOOTWEAR MADEFROM06#AND%6!%THYLENE6INYL!CETATE  )TSPRODUCTSARESOLDONTHE"RAZILIANMARKETUNDERWELL KNOWNBRANDNAMES SUCHAS-ELISSAAND'RENDHAFEMININE 2IDERMASCULINE "ABYAND+ID´SCHILDRENANDINFANTS AND)PANEMAMASSCONSUMPTION )N 'RENDENESOLDMILLIONPAIRSOFSHOESANDHADA SHAREOFTHEDOMESTIC"RAZILIANMARKET 'RENDENESPECIALIZESINMANUFACTURINGTHERMOPLASTIC INJECTEDSHOES MADEWITHITSOWNEXCLUSIVETECHNOLOGYFROMMOLDSWHICHIT PRODUCESITSELF4HISALLOWSTHECOMPANYTOMANUFACTUREINNOVATIVEANDORIGINALFOOTWEARMOREQUICKLY WITHGREATERPRECISION LESSLABOR ANDATLOWERCOSTSTHANITSCOMPETITORS !NNUALPRODUCTIVECAPACITYISMILLIONPAIRS PRODUCEDATFOURINDUSTRIALUNITS4HREEARELOCATEDINTHESTATEOF#EARf3OBRAL #RATO AND&ORTALEZA ANDONEINTHESTATEOF2IO'RANDEDO3UL&ARROUPILHA WHERETHECOMPANYWASFOUNDEDIN!½FTHUNIT LOCATEDIN #ARLOS"ARBOSA ALSOIN2IO'RANDEDO3UL PRODUCESMOLDSFORTHESHOES!TTHEENDOF 'RENDENEHAD EMPLOYEESCOMPARED WITH ATTHEENDOF 'RENDENEBENE½TSFROMACOMBINATIONOFADVANTAGESWHICHENSUREITSOUTSTANDINGPOSITIONONITSOPERATINGMARKETANDREPRESENT INTANGIBLEASSETSWHICHCANINCREASEITSMARKETVALUE4HESEAREITSBRANDS INNOVATIVECAPACITY TECHNOLOGY PRODUCTIVESYSTEM DISTRIBUTION NETWORK CLIENTRELATIONSHIPSANDHISTORYOFSOLIDGROWTH 'RENDENEPRODUCTSCANBEFOUNDAT SALESPOINTSIN"RAZILAND ABROAD4HECOMPANYEXPORTSTOMORETHANCOUNTRIES %XPORTSALESACCOUNTFORANAVERAGEOFOFANNUALVOLUMEANDOFALL"RAZILIANFOOTWEAREXPORTS4HE"RAZILIANMARKETISSERVED BYCOMMERCIALREPRESENTATIVESWHILEINTERNATIONALSALESAREHANDLEDBYDIRECTEXPORTS DISTRIBUTORS COMMERCIALREPRESENTATIVESAND WHOLLY OWNEDSUBSIDIARIESINTHE5NITED3TATESAND!RGENTINA 




'RENDENE\!NNUAL2EPORT









&ORTALEZA %STABLISHED #ONSTRUCTEDAREA SQUAREMETERS )NSTALLEDCAPACITYMILIONPAIRS ,INE06# FOOTWEARANDCOMPONENTS06#

3OBRAL

#EARf

%STABLISHED #ONSTRUCTEDAREA SQUAREMETERS )NSTALLEDCAPACITYMILLIONPAIRSMILLIONINTHEMIDDLEOF ,INE06# FOOTWEARANDCOMPONENTS06#

#RATO &ARROUPILHA %STABLISHED #ONSTRUCTEDAREA SQUAREMETERS )NSTALLEDCAPACITYMILLIONPAIRS ,INESFOOTWEAR06#AND%6! !DMINISTRATIVECENTER

#ARLOS"ARBOSA 2IO'RANDEDO3UL

%STABLISHED #ONSTRUCTEDAREA SQUAREMETERS ,INE-OLDINGS

%STABLISHED #ONSTRUCTEDAREA SQUAREMETERS )NSTALLEDCAPACITYMILLIONPAIRS ,INEFOOTWEARANDCOMPONENTS%6!






'RENDENE\!NNUAL2EPORT

?HISTORICALBACKGROUND

3TARTOFPRODUCTIONOF PLASTICPARTSFORMACHINERY ANDAGRICULTURALIMPLEMENTS FOLLOWEDBYCOMPONENTITEMS FORSHOES SUCHASSOLESAND HEELS'RENDENEWASTHE½RST COMPANYTOUSEPOLYAMIDE NYLON ASARAWMATERIALINTHE MANUFACTUREOFTHESEPARTS

  'RENDENEISFOUNDEDIN &ARROUPILHA INTHESTATEOF2IO 'RANDEDO3UL ON&EBRUARY )TS½RSTPRODUCTLINECONSISTS OFPLASTICPACKAGINGFORWINE BOTTLES4HISISANINNOVATION ONTHEMARKETWHICHUNTIL THENHADONLYBEENSERVED BYMANUALLYPRODUCED WICKERWORKPACKAGING

)NAUGURATIONOFTHEMOLD PLANTLOCATEDIN#ARLOS "ARBOSA INTHESTATEOF2IO 'RANDEDO3UL TOPRODUCE THE#OMPANY´SOWNDIES FORTHEMANUFACTUREOF PLASTICFOOTWEAR

  4HE½RSTPLASTICSANDALLINEIS LAUNCHED WITHTHEBRANDNAME.UAR )TWASDEVELOPEDFROMTECHNOLOGY USEDTOMAKESHOEPARTS4HE#OMPANY WASTRANSFORMEDINTOAJOINTSTOCK COMPANYINTHESAMEYEAR ,AUNCHOFACOLLECTIONOFPLASTIC SANDALSWITHTHE-ELISSABRANDNAME 4HE3PIDERSTYLEWASINSPIREDBY SHOESWORNBY&RENCH½SHERMEN ANDBECAMESYNONYMOUSWITHTHIS KINDOFPRODUCT

4HE½RSTPRODUCTIONUNIT INTHESTATEOF#EARfWAS SETUPIN&ORTALEZA)TWAS OF½CIALLYNAMED'RENDENEDO .ORDESTE3!ANDHASACURRENT PRODUCTIVECAPACITYOF½VE MILLIONPAIRS

  ,AUNCHOFTHE2IDERBRANDOF SANDALS ONEOFANEWGENERATION OFSHOESWITHADIFFERENTIATED DESIGNANDCOMFORT DIRECTEDAT THEMEN´SMARKET3EVERALYEARS AFTERITSLAUNCH THE2IDERBRANCH CONSOLIDATEDITSPOSITIONASA GENUINEAFTER SPORTSHOEAND BECAMESYNONYMOUSWITHTHIS KINDOFPRODUCT

 )NAUGURATIONOFTHE3OBRALPLANT WHICHISALSOLOCATEDINTHESTATE OF#EARf ANDWASOF½CIALLYNAMED 'RENDENE3OBRAL3!ANDLATER IN  'RENDENE#ALlADOS3! 4HISPLANTHASTHEGREATESTVOLUME OFPRODUCTIONAROUNDOFTHE TOTAL &ISCALBENE½TS LOWERLABOR COSTSANDASTRATEGICLOCATIONFOR THEINTERNATIONALMARKETWERE AMONGTHEREASONSFORTHETRANSFER OFTHEPRODUCTIONOFOPERATIONS WHICH UNTILTHEN HADBEEN LOCATEDIN&ARROUPILHA




'RENDENE\!NNUAL2EPORT

,AUNCHOFTHE'RENDHA PRODUCTLINEFORTHE WOMEN´SMARKET



'RENDENE.ORDESTE3! LOCATED IN&ORTALEZA#% ISINCORPORATEDBY THEPARENTCOMPANY 'RENDENE3!

  3TARTOFOPERATIONSATTHETHIRD UNITLOCATEDIN#EARf INTHETOWN OF#RATO UNDERTHENAME#ALlADOS 'RENDENE,TDA4HEPLANTHAS CURRENTANNUALPRODUCTIVECAPACITY OFMILLIONPAIRSOF%6!%THYLENE 6INYL!CETATE PRODUCTS

0ARTNERSHIPAGREEMENTSIGNED WITHTOPMODEL'ISELE"~NDCHEN FORTHELAUNCHOFAPRODUCT BEARINGHERNAME¯)PANEMABY 'ISELE"~NDCHEN

  #ORPORATERESTRUCTURINGWITH THEINCORPORATIONOF)ND{STRIADE #ALlADOS'RENDENE,TDABY'RENDENE #ALlADOS3! ANDTHELAUNCHOFTHE )PANEMALINEOF¾IP ¾OPSANDSANDALS

'RENDENE´SINITIALPUBLIC OFFERINGWASON/CTOBERANDITS COMMONSHARESSTARTTRADINGON THE.OVO-ERCADOOFTHE3jO0AULO 3TOCK%XCHANGE 4HE-ELISSALINECOMMEMORATES YEARS´EXISTENCEWITHTHELAUNCH OFTHE-ELISSA#ELEBRATIONLINE ANDTHE2IDERLINECOMPLETES YEARS

  )N!UGUST 'RENDENE#ALlADOS3! WASINCORPORATEDINTO'RENDENE3! AS PARTOFTHEPREPARATIONSFOR#OMPANY´S INITIALPUBLICOFFERING&OLLOWINGTHE CORPORATERESTRUCTURING THE#OMPANY BECAMEAHOLDINGCOMPANYFORAN OPERATINGCOMPANY WITHONLYONE WHOLLY OWNEDSUBSIDIARY 3ADDLE #ORPORATION BASEDIN5RUGUAY WHICH CONTROLSTWOWHOLLY OWNEDSUBSIDIARIES 'RENDHA3HOES INTHE5NITED3TATES AND3ADDLE#ALZADOS IN!RGENTINA




'RENDENE\!NNUAL2EPORT

?MESSAGEFROMTHEBOARDOFDIRECTORS

±)TWASAVERYSPECIALYEARINTERMSOFRETAILERANDCUSTOMERSATISFACTION7EGAINED MOREMARKETSHAREANDCONSOLIDATEDOURBRANDS)TISTHEFORCEOFTHEMARKETWHICH MOTIVATES US AND SUSTAINS OUR GROWTH ALLOWING US TO MAINTAIN OUR $.! AS AN INNOVATIVECOMPANYWITHTHEABILITYTOREINVENTANDSURPASSITSELF²

!LTHOUGH PRO½TABILITY WAS BELOW EXPECTATIONS WE HAD A GOOD YEAR IN TERMS OF BUSINESS PERFORMANCE WITH AN EXPANSION IN ALL PRODUCT LINES GREATERMARKETSHAREANDTHECONSOLIDATIONOFOURBRANDS7EAREGETTINGREADYFORNEWSPURTSOFGROWTH4HEINITIALPUBLICOFFERING WHICHWECARRIED OUTAT THEENDOF/CTOBER WITH THELAUNCHOFOURSHARESON THE3jO0AULO3TOCK%XCHANGE´S.OVO-ERCADO RE¾ECTEDOURINTENTIONOFENSURING THE #OMPANY´SCONTINUITYANDLOOKFORGROWTHANDEF½CIENCY ANDHAVINGADIFFERENTIATEDCORPORATEGOVERNANCEMODEL /URGROWTHINWASABOVETHE"RAZILIANFOOTWEARSECTORAVERAGEOFAROUND/URREVENUESINCREASEDBYTO2 MILLIONANDSALES VOLUMEOFSHOESROSEBYTOATOTALOFMILLIONPAIRS4HEOPERATIONALCASHGENERATION%")4$! CAMETO2MILLIONANDNETINCOMEAMOUNTED TO2MILLION7EBEGANPUBLISHINGASTATEMENTOFOURCASH¾OW WHICHSHOWEDTHEHIGHLEVELOFCASHGENERATIONFROMTHEOPERATIONS!TTHEENDOF  THEAMOUNTOFCASHANDCASHEQUIVALENTSINCREASEDTO2MILLIONFROM2MILLIONIN (OWEVER WEHADEXPECTEDMOREANDTHISCREATIVEDISSATISFACTION¯WHICHPUSHESUSTO½NDNEWWAYSOFIMPROVINGOUREXISTINGSKILLS¯HASDRIVEN 'RENDENESINCEITWASFOUNDEDINANDISINCORPORATEDINTOOURCULTURE 4HREEFACTORSOUTSIDETHE#OMPANY´SCONTROLAFFECTEDTHERESULT¯THEEXCHANGERATE THEHIGHERTAXBURDENANDTHERISEINTHEPRICEOFTHEMAINRAW MATERIAL 06#4HEDEVALUATIONOFTHEDOLLARREDUCEDEXPORTREVENUESANDHADANEGATIVEEFFECTONTHE½NANCIALRESULTOFINVESTMENTSINFOREIGNCURRENCY )NTERMSOFTAXES THEINCREASEINTHE#/&).33OCIAL3ECURITY&INANCING4AX HADANIMPACTOFONOURGROSSMARGIN4HISINCREASE ALONGWITHTHE IMPACTOFHIGHERPETROCHEMICALPRICESONCOSTS COULDNOTBEPASSEDONENTIRELYTOTHECUSTOMER EVENWITHTHEREADJUSTMENTSMADEINTHESECOND SEMESTEROF4HISWASDUETOTHEFACTTHATCONSUMERS´INCOMEDIDNOTACCOMPANY"RAZIL´SECONOMICGROWTHATTHESAMERATE 7E ALSO DECIDED TO INCREASE OUR MARKETING EXPENSES4HEY AMOUNTED TO  OF NET SALES IN  COMPARED WITH THE HISTORIC AVERAGE OF 




'RENDENE\!NNUAL2EPORT

4HISMOVEWASPARTOFOURSTRATEGYOFSTRENGTHENINGTHEPOSITIONINGOFOURBRANDSINTHEPERIODAFTERBECOMINGALISTED#OMPANY MARKINGANEWPHASE IN'RENDENE´SLIFEANDCONSOLIDATINGTHESUCCESSOFOURPRODUCTSATTHESALESPOINT )TISPRECISELYTHISPERFORMANCETHATMADETHEYEARVERYSPECIALINTERMSOFRETAILERANDCUSTOMERSATISFACTION SINCEITISTHEFORCEOFTHEMARKET WHICHENCOURAGESUSANDSUSTAINSOURGROWTH 7EWEREPLEASEDTORECEIVETWOIMPORTANTAWARDSIN4HESEWEREFOR"USINESS%XCELLENCEFROMTHE&UNDAljO'ET{LIO6ARGASBUSINESSSCHOOL FORTHESECONDCONSECUTIVEYEAR ANDTHEBESTCOMPANYINTHE½NISHING TEXTILESANDFOOTWEARCATEGORYIN"RAZIL INTHERANKINGOFTHE-ELHORES-AIORES "ESTAND"IGGEST SUPPLEMENTOFTHEMAGAZINE%XAME7ERECEIVEDANOTHERAWARDFOROUREFFORTSATTHEBEGINNINGOFWHENWEWERECHOSENAS 7AL -ART´S)NTERNATIONAL3UPPLIEROF !PERFORMANCELIKETHISDOESNOTCOMEABOUTBYCHANCEBUTTHROUGHLOTSOFRESEARCHANDDEVELOPMENT4HISISAVITALAREAINTHEFASHIONPRODUCTS MARKETAND FORTHISREASON ISGIVENPRIORITYBY'RENDENE7ELAUNCHEDNEWPRODUCTSDURINGTHEYEAR4HISSHOWSOURABILITYTOINNOVATE ANTICIPATE TRENDSANDIDENTIFYTHECUSTOMER´SDESIRESRAPIDLY WHILECREATINGINNOVATIVEMODELSANDMOREEF½CIENTPRODUCTIVEPROCESSES 7EINVESTED2MILLIONINTHISAREAINANDINTENDSPENDINGASIMILARAMOUNTIN4HESEINVESTMENTAREALIGNEDTOOURSTRATEGYOF INCREASING OUR MARKET SHARE BY CONSTANTLY CREATING NEW PRODUCTS WHICH PROVIDE QUALITY ORIGINALITY PRACTICALITY COMFORT AND EMOTIONAL APPEAL AT COMPETITIVEPRICES 4OSUSTAINOURGROWTH WEBEGANINVESTMENTSINTOEXPANDTHEPRODUCTIVECAPACITYOFOURPLANTAT3OBRALBY3OBRALISRESPONSIBLEFOR OFOURPRODUCTIONANDTHEINVESTMENT AMOUNTINGTO2MILLION WILLINCREASEINSTALLEDCAPACITYFROMMILLIONPAIRSTOMILLIONPAIRSFROM -AY &ORALLTHESEREASONS WASANIMPORTANTSTEPINANEWCYCLEOFDEVELOPMENT!SALISTEDCOMPANY WEAREBUILDINGANEWCULTUREONADAILYBASIS IMPROVINGOURSYSTEMSANDPROCESSESTOENSURETRANSPARENCY STRUCTURINGTHEDISCLOSUREOFOURPERFORMANCE ANDCREATINGADIFFERENTIATEDRELATIONSHIP WITHOURSTAKEHOLDERS!TTHESAMETIME WEAREMAINTAININGOUR$.!ASANINNOVATIVE#OMPANYWITHTHEABILITYTOREINVENTANDSURPASSITSELF 7EFACETHEFUTUREWITHCON½DENCEANDWISHTOTHANKALLTHOSEWHOHAVEHELPEDMAKE'RENDENEACOMPANYWHICHCOMPLIESWITHITSAMBITIONSTO GROWTHESHAREHOLDERS FORTHEIRTRUSTINOURABILITYTOCREATELONG TERMVALUEOUR EMPLOYEES FORTHEIRDEDICATIONANDCOMMITMENTTORESULTS OURSUPPLIERS FORTHEIRPARTNERSHIPANDOURCLIENTSANDCUSTOMERS WHOPREFEROURBRANDSANDCONSTANTLYCHALLENGEUSTOSURPASSOURSELVESINTERMSOF QUALITYANDCREATIVITY 4HE"OARD




?BRANDS /VER THE YEARS 'RENDENE HAS CONSOLIDATED STRONG BRANDS SUCH AS -ELISSA SANDALSANDTHE2IDER,INE WHICHARERECOGNIZEDONTHEMARKET4HESEBRANDS HAVE BECOME SYNONYMOUS WITH PLASTIC AND AFTER SPORT SANDAL PRODUCTS RESPECTIVELY4HEPRODUCTSAREDIFFERENT THANKSTOTHEIRORIGINALITY PRACTICALITY DESIGN AND EMOTIONAL APPEAL TO THE CUSTOMER 4HIS STRATEGY IS BASED ON ASSOCIATINGTHEPRODUCTSWITH"RAZILIANANDINTERNATIONALCELEBRITIESAND IN THECASEOFTHE+ID´SLINE THROUGHLICENSINGAGREEMENTSINVOLVINGCHILDRENS CHARACTERSWHOAREWELL KNOWNIN"RAZILANDABROAD /FTHEMOSTRECENTLY CREATEDBRANDS )PANEMA LAUNCHEDIN HASALREADY GAINED A LARGE MARKET SHARE )N  A )PANEMA SPECIAL LINE BEARING THE SIGNATUREOFTOPMODEL'ISELE"~NDCHENWASLAUNCHED 4HELICENSESINCLUDENAMESSUCHAS8UXA 3ENNINHA 'UGA 3ANDY 7ANESSA #AMARGO %LIANA 2OUGE +ELLY+EY )VETE3ANGALO !DRIANE'ALISTEU !LEXANDRE (ERCHCOVITCH 0ININFARINA AND -ORMAII 4HEY ALSO INCLUDE THE CHARACTERS OF 3PONGE "OB (ELLO +ITTY 0OWERPUFF 'IRLS AND CHARACTERS FROM $ISNEY -ATTELSUCHAS"ARBIE 7ARNER"ROS,OONEY4UNES ANDTHE3qTIODO0ICA0AU !MARELO AFAMOUS"RAZILIANCHILDRENSSERIES !TTHEENDOF THE#OMPANYHADBRANDSREGISTEREDIN"RAZIL WITH MORETHANREGISTRATIONAPPLICATIONSOUTSTANDING)THADAPPROXIMATELY BRANDSREGISTEREDABROADINCOUNTRIESWITHREGISTRATIONAPPLICATIONS OUTSTANDING4HE#OMPANYHASALSOREGISTEREDSEVENINDUSTRIALPATENTS  UTILITYMODELSANDINDUSTRIALDESIGNS MAINLYINFOOTWEARPRODUCTION


'RENDENE\!NNUAL2EPORT

STRATEGY 'RENDENE´S STRATEGY IS TO GROW IN "RAZIL AND ABROAD )TISSUPPORTED BYPRODUCINGTHEMOSTMODERNSYNTHETICFOOTWEAR INCREASINGBUSINESSON THEDOMESTICANDINTERNATIONALMARKETS EXPANDINGINSTALLEDCAPACITY AND CONSTANTLYRENEWINGITSPORTFOLIO WITHTHEFOCUSONPRODUCTSANDCONCEPTS THATEXPRESSTHEVALUEOFTHEBRAND 'RENDENE´SSTRATEGYISTOINCREASEITSSHAREOFTHEMARKETINSIDEANDOUTSIDE"RAZIL PARTICULARLYIN3OUTH!MERICA EXPANDTHE DEVELOPMENTOFQUALITYPRODUCTSWHICHAREORIGINAL PRACTICAL COMFORTABLEANDWITHANEMOTIONALAPPEAL ATCOMPETITIVEPRICES 4HESTRATEGYISBASEDON½VEMAINDRIVERS ?-ODERNIZATIONOF3YNTHETIC&OOTWEAR 4OCONCENTRATEONCREATINGSYNTHETICFOOTWEARTHROUGHANAUTOMATEDPRODUCTIONPROCESSWHICHBRINGSSIGNI½CANTGAINSOFSCALE !TTHESAMETIME TOCONSOLIDATE GIVEDUEVALUETOANDPUBLICIZETHEUSEOFSYNTHETICSHOES STRESSINGTHEIRADVANTAGESOVEROTHER KINDSOFFOOTWEAR INTERMSOFPRICE LIGHTNESS DIFFERENTIATEDDESIGN VERSATILITY COMFORTANDEASEINACCOMPANYINGFASHIONTRENDS ?'ROWTHONTHE$OMESTIC-ARKET 4HE"RAZILIANFOOTWEARMARKETHASGREATGROWTHPOTENTIALCOMPAREDWITHOTHERCOUNTRIES!CCORDINGTOTHE"RAZILIAN &OOTWEAR)NDUSTRY!SSOCIATION!BICALlADOS ANNUALPERCAPITACONSUMPTIONISPAIRS BELOWCOUNTRIESSUCHASTHE5NITED 3TATESTHEWORLD´SGREATESTCONSUMERWITHPAIRS &RANCE OR'ERMANY 




!NNUAL2EPORT 

'RENDENEHASCONSISTENTLYINCREASEDITSMARKETSHAREINITSFOUROPERATINGAREASMASCULINE FEMININE CHILDREN´SAND MASS CONSUMPTION  "ESIDES CONSOLIDATING AND PUBLICIZING THE USE OF SYNTHETIC FOOTWEAR THE #OMPANY PURSUES WAYS OF STRENGTHENINGCLIENTLOYALTYBYPERMANENTLYCONSULTINGCUSTOMERSASPARTOFITSSALESSTRATEGY4HEAIMIS TOCONCENTRATE ON AND EXPAND THE "RAZILIAN CUSTOMER BASE THE MAIN BUSINESS FOCUS HIGHLIGHTING THE FEMININE AND MASS CONSUMPTION SEGMENTS4HEDOMESTICMARKETWASRESPONSIBLEFORAROUNDOFVOLUMEANDOFGROSSREVENUESIN ?'ROWTHONTHE%XPORT-ARKET 4OINTENSIFYITSPRESENCEONTHEMARKETSWHEREITISALREADYPRESENT IDENTIFYNEWMARKETSWITHTHERIGHTCONSUMERPRO½LEFOR ITSPRODUCTLINE THROUGHCOMPETITIVEPRICES DIFFERENTIATEDDESIGNANDACONSTANTEYEONNEWFASHIONTRENDS OPERATINGWITHITS OWNDESIGNSANDBRANDSANDTHOSEOFTHIRDPARTIES!ROUNDOFTOTALVOLUMEOFFOOTWEARWASEXPORTEDIN REPRESENTING APPROXIMATELYOFTHEGROSSREVENUESFORTHEYEAR




'RENDENE\!NNUAL2EPORT

4OKEEPTHE-ELISSALINESEPARATE ASAMORECONCEPTUALPRODUCTFROMTHEOTHERBRANDS WITHASTRATEGICFOCUSONSELECTIVE SALES POINTS SUCH AS SPECIALIST STORES BOUTIQUES AND FASHION AND DESIGN STORES 4HIS LINE IS AN IMPORTANT INSTRUMENT IN IDENTIFYING CUSTOMER PREFERENCES AND DE½NING TRENDS WHILE ADDING VALUE TO THE FULL PLASTIC KIND OF FOOTWEAR )N TERMS OF THE OTHER LINES THE PLAN IS TO GIVE CONTINUITY TO THE STRATEGY APPLIED OVER  COUNTRIES !T THE SAME TIME NEW COMMERCIAL OPENINGSAREBEINGMADEIN3OUTH!MERICA PARTICULARLYINTHE!NDEANCOUNTRIESWHERENEWAGENTSANDAUTHORIZED EXCLUSIVE DISTRIBUTORSHAVEBEENACCREDITED ?'ROWTHIN0RODUCTIVE#APACITY 4HEINDUSTRIALUNITSAREPREPAREDFORARAPIDINCREASEININSTALLEDCAPACITYATARELATIVELYLOWINVESTMENTCOST/NEEXAMPLE ISTHEEXPANSIONOFCAPACITYATTHESEVENTHPLANTINTHE3OBRAL5NIT4HISPLANTOPENEDINANDTHEEXPANSIONPROJECTOFTHE SEVENTHPLANTWASCARRIEDOUTINSIXMONTHS4HEPLANTEXPANSIONGIVESPRIORITYTOREGIONSWHICHCANBRINGGAINSOFSCALEANDCOST ADVANTAGES!NEWINCREASEOFWASPLANNEDFOR3OBRALINTHEMIDDLEOFATANINVESTMENTCOSTOF2MILLION4HISWILL BOOSTANNUALCAPACITYFROMMILLIONTOMILLIONPAIRS

?#ONTINUOUS2ENEWALOFTHE0ORTFOLIO /NE OF 'RENDENE´S PILLARS IS ITS CONSTANT INNOVATION FOCUSED ON PRODUCTS AND CONCEPTS WHICH EXPRESS THE VALUE OF THE BRANDS)N AROUNDMODELSWERELAUNCHED WHILETHEACTIVEPORTFOLIOCONTAINEDPRODUCTS4HE#OMPANYHASITSOWN STRONGRESEARCHTEAM MADEUPOFPEOPLEFROMDIFFERENTPROFESSIONALBACKGROUNDS4HISTEAMISCONSTANTLYDEVELOPINGNEW PRODUCTSANDTECHNOLOGIESWHICHAREFOCUSEDONTHE#OMPANY´SBUSINESSESANDSUSTAINABLEDESIGN 4HE PROCESS IS BACKED BY STRUCTURED MARKETING PLANNING WHICH IS ESSENTIAL TO CONSOLIDATE THE IMAGE OF THE PRODUCTS 4HESTRATEGYINVOLVESTHEUSEOFTHE#OMPANY´SOWNBRANDS ASWELLASASSOCIATINGTHEMWITHNATIONALLYANDINTERNATIONALLYKNOWN CELEBRITIESANDCHILDREN´SCHARACTERS4HISGIVESTHEPRODUCTSMOREEMOTIONALAPPEALWITHTHEPUBLICANDINCREASESADDEDVALUE

,AUNCHES ?OFEMPLOYEESXNEWMODELS



  

 

 









OFLAUNCHES OF2$EMPLOYEES




'RENDENE\!NNUAL2EPORT

'RENDENE´SMARKET 'RENDENE IS POSITIONED AS A MANUFACTURER OF FASHION PRODUCTS AND WAS RESPONSIBLE FOR  OF "RAZILIAN FOOTWEAR PRODUCTION IN  7ITHLEADERSHIPINSALESVOLUMES ORANOUTSTANDINGPOSITIONINTHE MASCULINE FEMININE CHILDREN´S AND MASS CONSUMER AREAS IT IS SUPPORTED BYTHECONSTANTRENEWALOFITSPORTFOLIO MARKETINGANDCUSTOMERSERVICE 'RENDENE OPERATES IN A MARKET WHERE THERE ARE AROUND   SMALL MEDIUM AND LARGE COMPETITOR COMPANIES AND WHICH PRODUCEDATOTALOFAPPROXIMATELYMILLIONPAIRSOFSHOESIN4HEVOLUMEWASHIGHERTHANIN ACCORDINGTOAN ESTIMATEBYTHE"RAZILIAN&OOTWEAR)NDUSTRY!SSOCIATION!BICALlADOS ANDSALESAMOUNTEDTOAROUND2BILLION BASEDONTHE CONSUMERPRICE 'RENDENESOLDMILLIONPAIRSOFSHOESIN HIGHERTHANTHEPREVIOUSYEAR4HE#OMPANYWASRESPONSIBLEFOR OFDOMESTICPRODUCTIONANDHASALEADINGPOSITIONASAMANUFACTUREROFFASHIONPRODUCTSATCOMPETITIVEPRICES "RAZILISTHETHIRD LARGESTEXPORTEROFFOOTWEARINTHEWORLD BEHIND#HINAAND)NDIA ANDHADSALESOFMILLIONPAIRSIN 'RENDENEHADASHAREOFTHISTOTAL4HEFOOTWEARSECTORISANIMPORTANTJOBCREATORANDEMPLOYSANESTIMATED PEOPLE 4HE#OMPANYOPERATESINFOURMARKETSEGMENTSWITHALEADERSHIPINTERMSOFSALESVOLUMEORMARKETSHARE)TSSTRATEGYIS BASEDONTHECONSTANTRENEWALOFITSPORTFOLIOANDAGGRESSIVEMARKETINGTHROUGHPUBLICITYANDADVERTISING4HESALESDISTRIBUTIONIS WEIGHTEDINSUCHAWAYTHATTHE#OMPANYISNOTDISPROPORTIONATELYDEPENDENTONONESEGMENTORMARKET4HE3OUTHEASTERNREGION WHICHISTHEMAINCONSUMERCENTEROF"RAZIL WASRESPONSIBLEFOROFSALESVOLUMEIN




'RENDENE\!NNUAL2EPORT

3ALES6OLUMEBY3EGMENT ?$OMESTIC-ARKET¯







-!3#5,).% 2IDERBRANDWASLAUNCHEDINANDHASADIFFERENTIATEDDESIGN)TISEXTREMELYCOMFORTABLEANDHASBECOMESYNONYMOUS WITH THIS STYLE OF PRODUCT IN "RAZIL !BROAD 2IDER SANDALS ARE SEEN AS THE GENUINE AFTER SPORT SANDAL AND ARE SOLD IN OVER  COUNTRIES4HEADULTANDCHILDRENSLINEOFSANDALISSPLITINTOTHREESHAPES ACCORDINGTOTHECUSTOMERSUSEANDPREFERENCESPORTS VAMPEDSLIP ONS BEACH¾IP ¾OPS ANDADVENTURESANDALSANDSNEAKER TYPESANDALS 



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3OUTH .ORTH #ENTERWEST 3OUTHEAST .ORTHEAST

&%-).).% )NTHEFEMININEMARKET 'RENDENESPRODUCTSARESOLDUNDERTHE-ELISSA 'RENDHAAND)PANEMA'ISELE"~NDCHENBRANDS „'RENDHA¯4HISLINE LAUNCHEDIN*ULY COVERS½VESEGMENTS ACCORDINGTOTYPEANDPOSITIONINGCASUALCLASSICMODELS TROPICALFASHIONABLEBEACHWEAR FASHIONTRENDSANDINNOVATION SUMMERSANDALSAND¾IP ¾OPSFORTHEBEACH ANDPROMOTIONAL LICENSED  )N THIS LAST SEGMENT THE PRODUCTS ARE PROMOTED THROUGH46 CAMPAIGNS LINKING THEIR IMAGE TO CELEBRITIES SUCH AS !DRIANE'ALISTEU )VETE3ANGALO 7ANESSA#AMARGO $ANIELA#ICARELLIAND'IANECCHINI46PRESENTERSSINGERSACTORSANDACTRESSES AMONGSTOTHERS „ )PANEMA 'ISELE "~NDCHEN ¯4HIS LINE WAS LAUNCHED IN *ULY  THROUGH A LICENSING AGREEMENT WITH TOP MODEL 'ISELE "~NDCHEN WITHSPECI½CBACK UPADVERTISEMENTANDADEDICATED)NTERNETSITE4HE)PANEMA'ISELE"~NDCHENLINEINCLUDESSANDALS AND¾IP ¾OPS4HECONTRACTWASRENEWEDATTHEBEGINNINGOFANDWILLCONTINUEUNTIL „-ELISSA¯4HE-ELISSALINEOFPRODUCTS LAUNCHEDIN WASTHE½RSTFULLPLASTICSHOEIN"RAZILANDBOOSTED'RENDENES GROWTH)TWASALSOTHE½RSTBRANDINTHESECTORTOBEFEATUREDTHROUGHMERCHANDISINGON"RAZILIANTELEVISION!CTRESSESWORE -ELISSASHOESINSOAPOPERAS SUCHAS$ANCING$AYS WHICHLAUNCHEDTHEFASHIONFORFULLPLASTICSANDALSWITHLUREXSOCKS 4HEBRANDWASREPOSITIONEDASAPREMIUMPRODUCTLINEINANDSOLDTHROUGHSPECI½C DIFFERENTIATEDCHANNELS ASAWAYOF INCREASINGTHEVALUEOFTHEBRANDANDTHEKINDOFFULLPLASTICPRODUCTS4HELINEVALIDATESSHAPESANDISBASEDONANAFFECTIONATE RELATIONSHIPWITHCUSTOMERS)THASADEDICATEDSALESTEAM WITHEXCLUSIVEOF½CESIN"RAZILANDTHREEABROAD-EXICO 5NITED 3TATESAND%UROPE 




'RENDENE\ !NNUAL2EPORT 

4HE-ELISSABRAND WHICHCELEBRATEDYEARSOFSUCCESSIN ISSOLD AS A FASHIONABLE TREND SETTING LINE THROUGH EXCLUSIVE DIFFERENTIATED CHANNELS




4HEORIGINAL3PIDERMODELWASINSPIREDBYTHESHOESWORNBY&RENCH½SHERMENANDWEREWORNBYEXCLUSIVEMODELS SIGNEDBY DESIGNERSSUCHAS!LEXANDRE(ERCHCOVITCH -ARCELO3OMMERANDTHE#AMPANABROTHERS)TISPOSITIONEDASATREND SETTINGFASHION PRODUCT4WO COLLECTIONS ARE LAUNCHED EVERY YEAR AND PRESENTED DURING THE 3jO 0AULO &ASHION7EEK "RAZILS MOST IMPORTANT FASHIONEVENT,AUNCHESAREHELDIN*ANUARY!UTUMN 7INTERCOLLECTIONFORTHESOUTHERNHEMISPHERE ANDANOTHERIN*ULY3PRING 3UMMERCOLLECTIONFORTHESOUTHERNHEMISPHERE !MONGTHEOUTSTANDINGNEWMODELS DEVELOPEDJOINTLYWITH'RENDENESRESEARCH TEAM WERETHEBRAIDEDPLASTICSHOESANDBAGSFROMTHE#AMPANALINE 3CARFUNBY(ERCHCOVITCHAND%SMERALDBY3OMMER 4HE -ELISSA BRAND CELEBRATED ITS TH ANNIVERSARY IN  WITH A SERIES OF EVENTS4HE HIGHLIGHT WAS THE 0LASTICORAMA A MULTI MEDIAPRESENTATIONOFPHOTOSWITH-ELISSAASTHEIRCOMMONTHEME HELDATTHEENDOF-ARCHINTHE2IODE*ANEIRO -ODERN!RT-USEUM-!- 4HESHOESINSPIREDIMAGESORWEREPERSONALIZEDBYDESIGNERS ARTISTSANDSTYLISTS4HEYPAINTEDAND DREWONTHESHOES ADDEDPEBBLES FEATHERS PEARLS STICKERS ETCANDCREATEDEXCLUSIVEMODELSFROMTHISSANDALWHICHHASBECOME SYNONYMOUSWITHTHEPRODUCTCATEGORY


'RENDENE\!NNUAL2EPORT

4HE CHILDREN´S AND FEMININE SEGMENTS ARE SOLD WITH THE SUPPORT OF CELEBRITIES´NAMESANDLICENSES THROUGHTHESTRATEGYOFADDINGVALUEAND EMOTIONALAPPEALTOTHEPRODUCTS ENSURINGVOLUMEANDSALESGROWTH

#(),$2%. 4HE+ID´SPRODUCTLINEISDESIGNEDFORCHILDRENANDPRE TEENSANDWASLAUNCHEDIN4HELINEINCLUDESASERIESOFPRODUCTS LAUNCHEDWITHTHELICENSINGOFNAMESANDBRANDSOFCHILDRENSCHARACTERSWHOAREKNOWNDOMESTICALLYANDINTERNATIONALLY WITH THEAIMOFADDINGEMOTIONALAPPEALTOTHEPRODUCTS3OMEOFTHEPRODUCTSINTHISLINEARESOLDWITHACCESSORIESWHICHADDVALUE ANDAREADIFFERENTIAL -!33#/.35-04)/. 4HISSEGMENTOPERATESUNDERTHE)PANEMABRANDANDINCLUDESLOWER UNITPRICEITEMS4HELINEWASLAUNCHEDIN*ULY ANDISDESIGNEDTOINCREASETHE#OMPANYSOPERATIONSONTHEUNISEX¾IP ¾OPSANDSANDALSMARKET4HELINEOFFERSPRODUCTSAT ACOMPETITIVEPRICE FOCUSESONTHEDISTRIBUTION ANDADDSVALUEBYASSOCIATINGTHESHOESWITHFASHION4HE)PANEMALINECOVERS THREESEGMENTSBASICBASICANDCLASSICMODELS FEMININEANDMASCULINETHEMES




?INNOVATION !SPARTOFITSPOLICYOFINNOVATING RENEWINGANDEXTENDINGITSPRODUCTLINES 'RENDENEDEVELOPSANAVERAGEOFPRODUCTSANNUALLYANDHASAROUND PRODUCTSINITSACTIVEPORTFOLIO 'RENDENE USES THE CONCEPT OF PLANNED OBSOLESCENCE AS A WAY OF CREATING BARRIERSTOCOMPETITORSANDREDUCINGPIRACY4HERESEARCHANDDEVELOPMENT AREAISDEDICATEDEXCLUSIVELYTOCREATINGCONCEPTS DESIGNS MODELSOFSHOES ANDSAMPLESOFCOLORSANDMATERIALS)TCONSISTSOFAROUNDPEOPLEFROM DIFFERENTBACKGROUNDS SUCHASARCHITECTS FASHIONSTYLISTS DESIGNERS BUSINESS ADMINISTRATORS MODELERS CHEMISTS SEAMSTRESSES TECHNICIANS ANDSPECIALISTS IN MARKETING AND MOCK UPS4HESE IDENTIFY NEW TECHNOLOGIES AND DEVELOP NEWPRODUCTS BASEDONCONSUMERRESEARCHANDIDENTI½CATIONOFTRENDS ,OCALANDINTERNATIONALTRENDSCON½RMATIONRESEARCHISCARRIEDOUTANDTHE #OMPANY TAKES PART IN FOOTWEAR AND TRADE FAIRS AND MEETINGS ON DESIGN THEMES 3PECIALIST MAGAZINES ARE ALSO STUDIED 4HE CREATIVE PROCESS IS SELF SUSTAINABLE BASED ON TRENDS THE DEVELOPMENT OF SUCCESSFUL PRODUCTS MARKET RESEARCH AND SALES FEEDBACK4HE #OMPANY INVESTED 2 MILLION IN 2ESEARCHAND$EVELOPMENTIN 4HE CONCEPT IS SUSTAINABLE DESIGN AND INVOLVES THE INTEGRATION OF THE COMMERCIAL SOCIAL AND ENVIRONMENTAL ASPECTS IN THE DEVELOPMENT OF PRODUCTS0RIORITYISGIVENTOPROCESSESWHICHRECYCLEALLTHEMATERIALSUSED EVENINCASESWHERETHESHOESAREMADEFROMDIFFERENTCOMPONENTMATERIALS 4HIS APPROACH BRINGS ½NANCIAL ADVANTAGES AND ELIMINATES NEGATIVE IMPACT RISKSTOTHEENVIRONMENT4HEENTIREDEVELOPMENTOFPRODUCTSISFOCUSEDON THEBUSINESSANDTHEPRODUCTIONPROCESS


'RENDENE\!NNUAL2EPORT

MANAGEMENT´SDISCUSSIONANALYSIS-$! 'ROSSREVENUESOF2BILLIONWEREHIGHERTHANTHEPREVIOUSYEAR AND RE¾ECT THE #OMPANY´S STRATEGY OF FOCUSING GROWTH ON THE FEMININE ANDMASSCONSUMPTIONAREAS4HEEMPHASISISONINCREASINGBUSINESSON THEDOMESTICMARKETWHERESALESROSEBYYEAR ON YEAR BOOSTEDBY NEWPRODUCTLAUNCHES '2/332%6%.5%3 'ROSSREVENUESINCAMETO2 MILLION ARISEOFOVERTHE½GUREOF2 MILLION/FTHIS WASFROM THEDOMESTICMARKETANDFROMEXPORTS COMPAREDWITHANDRESPECTIVELYIN4HEHIGHERREVENUESWEREDUE MAINLYTOTHEHIGHLYSUCCESSFULSTRATEGYOFFOCUSINGGROWTHONTHEFEMININEANDMASSDISTRIBUTIONSEGMENTS 4HEYEAR ON YEARRISEINWASIMPRESSIVE ESPECIALLYWHENITISCONSIDEREDTHATTHECOMPARISONBASEWASALSOVERYHIGH SINCE GROSS REVENUES IN  ROSE BY  OVER  !LTHOUGH THERE WAS VIRTUALLY NO '$0 GROWTH IN  IT WAS A HIGHLY FAVORABLEYEARFOR'RENDENE4HISWASBECAUSEOFTHELOWPRESSUREONCOSTS ANEXCHANGERATEWHICHBENE½TEDEXPORTS ANDTHE LAUNCHOFANEXPORTPRODUCTWITHAHIGHAVERAGEPRICEWHICHWASANINTERNATIONALSUCCESS4HESEFACTORSDIDNOTRECURIN 'RENDENESGROSSREVENUESOVERTHELASTFOURYEARSHAVEGROWNBYANNUALLYANDVOLUMESHAVERISENBY4HISISA HIGHERRATEOFGROWTHTHAN"RAZILIAN'$0PA ANDAVERAGEVOLUMEFORTHEFOOTWEARSECTORPA 4HEDOMESTICMARKET OFFSETTHEFALLINREVENUESANDTHEAVERAGESALESPRICESEENINEXPORTS CAUSEDBYTHELESSFAVORABLEEXCHANGERATEANDTHELESS PRO½TABLEMIXOFCHEAPERPRODUCTS SOTHATTHEAVERAGESALESPRICEREMAINEDSTABLEIN




'RENDENE\!NNUAL2EPORT

'ROSSREVENUES

3ALESVOLUME

!VERAGEPRICE

?)NMILLIONOF2EAIS

?)NMILLIONPAIRS

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$OMESTIC %XPORTS 4OTAL-ARKET

$OMESTICMARKET 3ALESONTHEDOMESTICMARKETWEREHIGHERTHANIN4HISWASDUETOARISEOFINTHEVOLUMEOFSHOESSOLD ANDINTHEAVERAGESALESPRICE4WOMASSMARKETAREASWEREOUTSTANDING¯THE)PANEMAAND'INGALINES¯ANDPRESENTED INCREASESOFINREVENUES INVOLUMEANDIN THEAVERAGEPRICE INLINEWITH THESTRATEGYOFREFUSING TOALLOW PRODUCTSTOCOMPETEASCOMMODITIES 4HEFEMININESECTORSHOWEDTHESECOND HIGHESTGROWTH INCREASINGBYINREVENUES INVOLUMEANDINAVERAGE PRICE4HELAUNCHOFPRODUCTSINTHESESEGMENTS BACKEDBYNEWADVERTISEMENTCAMPAIGNS MADEASIGNI½CANTCONTRIBUTIONTO THISRESULT!DVERTISEMENTSFORTHE)PANEMAFEMININELINEFEATURED'ISELE"~NDCHEN WHILETHE'RENDHALINEFEATUREDCELEBRITIES SUCHAS$ANIELA#ICARELLI #AROLINA$IECKMAN !DRIANE'ALISTEUAND)VETE3ANGALO!NEW'IANECCHINI#OLLECTIONWASALSOONEOFTHE MOSTRECENTLAUNCHES ASPARTOFTHE3PRINGAND3UMMERCOLLECTION




'RENDENE\!NNUAL2EPORT

!LLTHESEGMENTSPRESENTEDSALESGROWTHIN4HEHIGHLIGHTSWERE THE MASS CONSUMPTION SEGMENT THAT REGISTERED AN INCREASE OF  IN REVENUES AND  IN VOLUME AND THE FEMININE SEGMENT WITH INCREASESOFANDRESPECTIVELY

4HEMASCULINESEGMENTALSOSHOWEDABIGRISEINREVENUES VOLUMEANDTHEAVERAGEPRICEOF ANDRESPECTIVELY BOOSTINGGROWTHONTHEDOMESTICMARKET4HE±,ET´S2IDER²CAMPAIGNLINKEDTOTHEBEACH ADVENTUREANDSPORTLINECOLLECTION WAS ASUCCESSWITHTHEADVERTISINGTHEMESONG±6AMOS&UGIR²,ET´SRUNAWAY BYTHEPOPGROUP 3KANK )N THE CHILDREN´S SEGMENT THERE WAS AN INCREASE OF  IN REVENUES  IN VOLUME AND  IN THE AVERAGE PRICE $URINGTHEYEAR ADSWERELAUNCHEDORCONTINUEDTOBESHOWNFEATURING+ELLY+EY 7ANESSA#AMARGO 3ANDY 8UXAAND'UGA WHILE NEWPRODUCTSWERELAUNCHEDTHROUGHTHE"ARBIE (ELLO+ITTYAND3ENNINHALICENSES 4HE DOMESTIC MARKET´S SHARE OF GROSS REVENUESROSEFROMIN TOIN RESULTINGINHIGHERVOLUMEOF ANDRESPECTIVELY4HISPERFORMANCERE¾ECTSTHE#OMPANY´SSTRATEGYOFCONSOLIDATINGBRANDSANDMARKETPOSITIONING INVESTINGMOREINADVERTISINGANDPUBLICITY ASWELLASTHELOWEREXPORTS




'RENDENE\!NNUAL2EPORT

 



 













%XPORTMARKET %XPORTING HAS A SEASONAL ASPECT WITH A CERTAIN CONCENTRATION IN THE ½RST QUARTER OF EVERY YEAR )N  THERE WAS A RISE OF  IN EXPORT VOLUME BUT A DROP OF  IN GROSS REVENUES FROM EXPORTS DUE TO A FALL OF  IN THE AVERAGE SALE PRICE YEAR ON YEAR4HISGROWTHINVOLUMEWASIMPRESSIVE CONSIDERINGTHATEXPORTSINHADINCREASEDBYOVER4HEFALLIN GROSSREVENUESFROMEXPORTSINOCCURREDONABASEWHICHHADGROWNSIGNI½CANTLYINTWOCONSECUTIVEYEARS¯IN ANDIN 4HEEXTERNALMARKET´SSHAREOFREVENUESFELLFROMIN TOIN4HISWASDUE TO THESPECIALSALESOF THE -ELISSA,OVE3YSTEMPRODUCTONTHE!MERICANMARKETWHEREITWASSOLDDIRECTLYTORETAILERSBYTHE'RENDHA3HOESSUBSIDIARYIN BUTNOTIN'RENDHA3HOESNORMALLYOPERATESASAREPRESENTATIVEANDDISTRIBUTORFORSMALLVOLUMESWHILE'RENDENE´SDIRECT EXPORTSATTENDTHELARGERETAILERS



%XPORTS-ILLION0AIRS !SAOF3ALES6OLUME

.%43!,%3 .ET SALES AMOUNTED TO 2  MILLION IN  AN INCREASE OF  OVER THE 2  MILLION REPORTED IN  4HENETSALESINWEREHITBYTHERISEINTHE#/&).3TAXFROMTOIN&EBRUARY NETOFCREDITSFORPURCHASING INPUTANDRAWMATERIALS

 



 















%XPORTS2-ILLION !SAOF'ROSS2EVENUES

#/34/&'//$3!.$3%26)#%33/,$ 4HECOSTOFGOODSANDSERVICESSOLDINCAMETO2MILLION ANINCREASEOFOVERTHEPREVIOUSYEAR´S½GUREOF 2MILLION4HISWASCOMPATIBLEWITHTHEINCREASEINSALESVOLUME WHICHROSEBYTOMILLIONPAIRSCOMPAREDWITH MILLIONIN4HEINCREASEINTHECOSTOFGOODSANDSERVICESSOLDWASDUETOHIGHERLABORCOSTSARISINGFROMNORMALWAGE NEGOTIATIONSANDNEWHIRESINTHEPERIOD SINCETHEWORKFORCEINCREASEDFROM ATTHEENDOFTO ATTHEENDOF /THERCONTRIBUTORYFACTORSWEREHIGHERRAWMATERIALCOSTS SUCHAS06#RESINSANDPLASTICIZINGOILS4HEHIGHERDEPRECIATION WASDUETOTHEINCREASEINPROPERTY PLANTANDEQUIPMENTIN WHICHWASFELTIN ANDINCREASESINOTHERCOSTSRE¾ECTING THEINCREASEINUTILITYPRICES




'RENDENE\!NNUAL2EPORT

(IGHERPRICESOF THEMAINRAWMATERIALS 06#RESINSANDPLASTICIZINGOILS ANDPAYINCREASESFORTHEWORKFORCEWERETHEMAINREASONSFORTHEHIGHER COSTOFGOODSSOLD

#/34/&'//$3!.$3%26)#%33/,$¯2MILLION 2AWMATERIAL INPUT INTERMEDIATEMATERIAL FREIGHTANDPACKAGING ,ABOR





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'2/3302/&)4 'ROSSPRO½TINCAMETO2MILLION HIGHERTHANTHE2MILLIONREPORTEDIN WITHGROSSMARGINSOF ANDRESPECTIVELY4HEGROSSMARGININROSEDUE TO THEMACROECONOMICCONDITIONSAND THEFAVORABLEMARKET 4HERECOVERYINTHEGROSSMARGINWASDUETOTHEREDUCTIONINTHE½XEDCOSTSTHROUGHTHEHIGHERVOLUMESOLDANDTHESTABILITYOF 06#PRICESIN2EAISINTHELASTQUARTEROFTHEYEAR 3!,%3%80%.3%3 4HERE WAS A  RISE IN SALES EXPENSES IN  CAUSED BY THE HIGHER SALES VOLUME AND INCREASED MARKETING EXPENSES 3ALESEXPENSESINAMOUNTEDTOOFNETSALESCOMPAREDWITHIN4HEHIGHERADVERTISEMENTANDMARKETING EXPENSESWEREPARTOF THE#OMPANY´SSTRATEGY TOEXHIBITITSBRANDS THROUGH THEMEDIA4HISBENE½TED THEBUSINESSIN TERMSOF SALESBYLAUNCHINGPRODUCTSLINKEDTOCELEBRITIES4HEAIM PARTICULARLYINTHETHIRDANDFOURTHQUARTERS WASTOBRINGABOUTAHIGH TURNOVEROFPRODUCTSATTHERETAILLEVELWHICHLEFT'RENDENEWITHMINIMUMSTOCKSATTHEENDOF4HISINVESTMENTWASMADE TOCONSOLIDATETHE#OMPANY´SBRANDSANDMARKETPOSITIONING)TWILLBRINGFUTURERETURNS HELPINGTHEBRANDRECALLIN JUSTASIT

'ROSS0RO½T?2-ILLION 'ROSS-ARGIN? 







 

 







'ROSS0RO&)T 'ROSS-ARGIN






'RENDENE\!NNUAL2EPORT







 





BROUGHTIMMEDIATERESULTS WITHGAINSINMARKETSHARESEENINALLSEGMENTSWHERETHE#OMPANYOPERATESIN#OSTSRELATEDTO ADVERTISEMENTANDMARKETINGINSHOULDRETURNTOTHEAVERAGERATIOOFNETSALESSEENBETWEENAND "ESIDESTHIS NEWLICENSINGAGREEMENTSWERENEGOTIATEDATTHEENDOF ASPARTOFTHE#OMPANY´SSTRATEGYOFCONSTANTLY INNOVATINGPRODUCTSANDBRINGINGNEWCHARACTERSTOFUTURECOLLECTION'RENDENE´SPORTFOLIOWILLINCLUDETHELICENSEFOR"ATMAN (OT7HEELS "ARNEY 3TRAWBERRY#OLLECTIONANDNEWPRODUCTSFROMTHELICENSEWITH7ALT$ISNEY SUCHAS.EMO 7INNIETHE0OOHAND THE0RINCESS











!DVERTISEMENTANDMARKETINGEXPENSES 2-ILLION !SAOF.ET3ALES

!DJUSTED%")4$!?2-ILLION %")4$!MARGIN?









 

'%.%2!,!.$!$-).)342!4)6%%80%.3%3 4HEGENERALANDADMINISTRATIVEEXPENSESAMOUNTEDTO2MILLIONIN REPRESENTINGOFTHENETSALES COMPARED WITH2MILLIONANDRESPECTIVELYIN4HEINCREASEWASDUEMAINLYTOTHEEXPENSESARISINGFROMTHESECONDARYPUBLIC COMMONSHARESOFFERINGWHICHOCCURREDINTHEFOURTHQUARTEROF !T THE END OF  THE EXPENSES ARISING FROM THE PUBLIC OFFER FOR THE SECONDARY DISTRIBUTION OF COMMON SHARES ISSUED BY'RENDENE3! AMOUNTINGTO2MILLION WEREACCOUNTED4HESEINCLUDEDLEGALFEES EXTERNALAUDIT PRINTINGPROSPECTUSES LEGAL ADVERTISEMENT MINUTES AND ANNOUNCEMENTS AND OTHER EXPENSES INVOLVED IN THE REGISTRATION PROCESS OF THE "RAZILIAN 3ECURITIESAND%XCHANGE#OMMISSION#6- ANDTHE.OVO-ERCADOOFTHE"/6%30!STOCKEXCHANGE ANDTHE#OMPANY´SINITIAL PUBLICOFFERING

!$*534%$%")4$! 4HEADJUSTED%")4$!FORCAMETO2MILLIONCOMPAREDWITH2MILLIONIN AFALLOF WITH MARGINS OF  AND  RESPECTIVELY4HIS LOWER ADJUSTED %")4$! MARGIN WAS MAINLY DUE TO THE LOWER REVENUES FROMEXPORTS THEAPPRECIATIONOFTHE2EALAGAINSTTHEDOLLAR THEPRODUCTMIX THECOSTOFTHEMAINRAWMATERIAL 06# THEHIGHERRATEOFTHE#/&).3TAX ANDHIGHERINVESTMENTSINADVERTISEMENTANDMARKETING4HEFOLLOWINGTABLESHOWS THECONCILIATIONOFTHEADJUSTED%")4$!FORTHEPERIODSINQUESTION !$*534%$%")4$!2MILLION



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'RENDENE\!NNUAL2EPORT

.%4&).!.#)!,2%35,4 4HENETFINANCIALRESULTINWASADEFICITOF2MILLION COMPRISEDOFFINANCIALEXPENSESOF2MILLION AND FINANCIAL INCOME OF 2 MILLION )N  THE NET FINANCIAL RESULT WAS A DEFICIT OF 2 MILLION COMPRISED OF 2MILLIONINEXPENSESANDFINANCIALINCOMEOF2MILLION 2MILLION &INANCIALEXPENSES #LIENTDISCOUNTS %XPENSESFROMEXCHANGERATEVARIATION %XPENSESFROM½NANCING /THER½NANCIALEXPENSES 4OTAL½NANCIALEXPENSES &INANCIALINCOME )NCOMEFROM½NANCIALINVESTMENTS )NCOMEFROMEXCHANGERATEVARIATION )NTERESTRECEIVEDFROMCLIENTS /THER½NANCIALINCOME 4OTAL½NANCIALINCOME .ET½NANCIALRESULT





    

    

     

     

 !NON RECURRINGINCOMEOF2MILLIONFROMMONETARYUPDATINGOFLEGALGAINSRELATEDTOTHE0)3AND&INSOCIALTAXESINWASACCOUNTED

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'RENDENE\!NNUAL2EPORT

/4(%2/0%2!4).').#/-% /THEROPERATINGINCOMEINAMOUNTEDTO2MILLION REPRESENTINGOFNETSALES4HESEWERE2MILLIONINGAINS FROMHEDGEOPERATIONSONTHE"-&FUTURESMARKET NON RECURRINGINCOMEFROMTHERECOVERYOFTHE#/&).3TAX,AW  AMOUNTINGTO2MILLIONAND2MILLIONINCREDITFROMTHEASSUMED)0)4AXON)NDUSTRIALIZATION0RODUCTS ASWELLAS2 MILLIONFROMTHESALEOFINPUTMATERIAL)N OTHEROPERATINGINCOMETOTALED2MILLION OROFNETSALES /4(%2/0%2!4).'%80%.3%3 )N OTHEROPERATINGEXPENSESTOTALED2MILLION EQUIVALENTTOOFNETSALES DUEMAINLYTOTHENEGATIVEADJUSTMENT OF THE HEDGE ON THE "-& AMOUNTING TO 2 MILLION TAXES ON OTHER OPERATING INCOME OF 2 MILLION AND PROVISIONS ON OBSOLETESTOCKSANDLABORCONTINGENCIESOF2MILLION

).#/-%4!8!.$3/#)!,#/.42)"54)/.4!8 0ROVISIONSFOR)NCOME4AXINCAMETO2MILLION BELOWTHEYEAR ON YEAR½GUREOF2MILLION)N A½SCAL BENE½TFROMINCOMETAXOF2MILLIONWASOBTAINEDCOMPAREDWITH2MILLIONIN4HE3OCIAL#ONTRIBUTIONTAX#3,, IN AMOUNTEDTO2MILLIONCOMPAREDWITH2MILLIONIN)NCOMETAXANDTHE#3,,WASLOWERTHANIN ASTHE PRE TAXPRO½TWASLOWERTHANIN !STHETABLESHOWS THEREWASAPAYMENTOFCASHFROMINCOMETAXOF2MILLIONINAND2MILLIONINPROVISION FOR#ORPORATE)NCOME4AX)20* ¯INCENTIVEOF)20* 




'RENDENE\!NNUAL2EPORT

02/6)3)/.&/2).#/-%4!8!.$3/#)!,#/.42)"54)/.#/.3/,)$!4%$ )TEM





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!$*534%$.%4).#/-% )N THE!DJUSTED.ET)NCOMEFELLBYTO2MILLIONCOMPAREDWITH2MILLIONIN4HENETMARGIN CAMETOINCOMPAREDWITHIN 3INCE THE INCOME FROM FISCAL INCENTIVES IS ACCOUNTED DIRECTLY IN 3HAREHOLDERS´ %QUITY IN THE FISCAL INCENTIVE RESERVE ACCOUNT WITHOUTPASSINGTHROUGHTHE3TATEMENTSOF)NCOME THEADJUSTEDNETINCOMEON$ECEMBER  WASRECONCILED ASSHOWNINTHEFOLLOWINGTABLE 2MILLION





!DJUSTEDNETINCOMEBEFORE½SCALINCENTIVESPROFORMACONSOLIDATED





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'RENDENE\!NNUAL2EPORT

.ETCASHAMOUNTINGTO2MILLIONATTHEENDOFTHEYEARRE¾ECTS .ETCASHOF 2MILLIONIN

THE #OMPANY´S ABILITY TO GENERATE CASH ITS SOLID ½NANCIAL POSITION AND ENSURES THAT RESOURCES ARE AVAILABLE FOR CAPITAL EXPENDITURE IN

 

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/N$ECEMBER  THE#OMPANYHADNETCASHOF2MILLION HIGHERTHANTHE2MILLIONREPORTEDON$ECEMBER  4HISINCREASEAROSEFROMTHECASHGENERATIONINTHEPERIOD RESULTINGFROMTHEINCREASEINACCOUNTSRECEIVABLEANDTHE LOWERINVENTORIES




'RENDENE\ !NNUAL2EPORT 

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'RENDENE\!NNUAL2EPORT

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'RENDENE\!NNUAL2EPORT

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?PRODUCTIVEPROCESS 'RENDENES PRODUCTIVE PROCESS IS DIFFERENTIATED )T IS UNDERTAKEN IN MODERN MANUFACTURING PLANTS USING SCALE AND VERTICALIZATION AND GIVES THE #OMPANY A COMPETITIVEDIFFERENTIALONTHEMARKET'RENDENEHASALWAYSDEVELOPEDITSFOOTWEAR THROUGHANINJECTIONPROCESSINVOLVINGTHERMO PLASTIC)TUSESITSOWNTECHNOLOGY DEVELOPEDOVERMORETHANYEARS INCLUDINGITSOWNMOLDS)TALSOFORMULATESTHE 06#INITSOWNPLANTANDSHOEPRODUCTIONISAUTOMATED WITHTHEFUSIONOFTHEUPPER ANDTHECOMPONENTPARTSTOTHESOLEDURINGTHEINJECTIONPROCESS 0RODUCINGITSMAINRAWMATERIAL 06# INITSOWNPLANTSMAKES'RENDENEMORE ¾EXIBLE)TDOESNOTDEPENDON THIRDPARTIESANDCANDEVELOPSPECI½CFORMULAS FOR EACH KIND OF COMPONENT AND SHOE 4HE #OMPANY CAN ALSO QUICKLY RESOLVE PROBLEMSWHICHMAYARISEWITHTHERAWMATERIALDURINGTHEPRODUCTIVEPROCESS 4HE MACHINERY AND EQUIPMENT ACQUIRED FROM INTERNATIONAL SUPPLIERS ARE ADAPTED AND ASSEMBLED BY 'RENDENES TEAM ACCORDING TO THE #OMPANYS OWN SPECI½CATIONSANDMAINTAINEDINSECRECY !S A RESULT PRODUCTION HAS BECOME ECONOMICALLY VIABLE FAST DIFFERENTIATED AND WITH BETTER QUALITY ,ARGE VOLUMES CAN BE PRODUCED IN A SHORT TIME 4HIS COMPARES WITH MOST COMPETITORS WHICH USE THE TRADITIONAL PRODUCTION METHODS INVOLVING MANUAL LABOR AND MORE EXPENSIVE COSTS 'RENDENE CAN THEREFORE CREATE DIFFERENTIATED MODELS OR REMOVE EXISTING MODELS FROM THE MARKETRAPIDLY INLINEWITHFASHIONTRENDSANDCUSTOMERACCEPTANCE 4HISPRODUCTIONSTRUCTURERESULTSINAHIGHQUALITYSHOEWHICHISHIGHLYCOMPETITIVE INTERMSOFCOST


'RENDENE\!NNUAL2EPORT

CAPITALMARKETS 4HE #OMPANY´S )0/ WAS A SECONDARY PUBLIC OFFER OF COMMON SHARES WHICH BEGAN TRADING ON THE 3jO 0AULO 3TOCK %XCHANGE FROM /CTOBER   'RENDENE JOINED THE .OVO -ERCADO WHERE COMPANIES WITH DIFFERENTIATEDCORPORATEGOVERNANCEPRACTICESARELISTED ANDHASAFREE ¾OATOFOFITSSHARES 'RENDENE WAS LISTED THROUGH A 3ECONDARY 0UBLIC /FFERING OF #OMMON 3HARES $ISTRIBUTION BEGAN ON /CTOBER   ANNOUNCEDINTHE6ALOR%CONxMICONEWSPAPER ACCORDINGTOARTICLEOF#6-)NSTRUCTION.OOF$ECEMBER ANDTHE -ARKET.OTICEOF/CTOBER 4HEINITIALPUBLICOFFERINGTOOKPLACEWITHINTHE.OVO-ERCADOOFTHE"/6%30!4HISSTOCKMARKET TRADESSHARESOFCOMPANIESWHICHPRACTICETHEHIGHESTLEVELOF#ORPORATE'OVERNANCEINTHE"RAZILIAN#APITAL-ARKETS4HESHARES BEGANTRADINGON/CTOBER  UNDERTICKER'2.$ !STHE#OMPANYWASLISTEDONTHE.OVO-ERCADOOFTHE"OVESPA ITBECAMEPARTOFTHE)'#)NDEXOF3HARESWITH$IFFERENTIATED #ORPORATE'OVERNANCE4HISINDEXAIMSTOFOLLOWTHEPERFORMANCEOFATHEORETICALPORTFOLIOCONSISTINGOFSHARESINCOMPANIES WHICHHAVEGOODLEVELSOFCORPORATEGOVERNANCE "ETWEEN/CTOBERAND$ECEMBER    COMMONSHARESWERETRADED4HEREWERE TRADINGOPERATIONS ANDTHE½NANCIALVOLUMEAMOUNTEDTO2  $URINGTHESAMEPERIOD THE#OMPANYTRADEDADAILYAVERAGEOF  COMMONSHARESWITHANAVERAGE½NANCIALVOLUMEOF2  ANDDAILYTRADESONAVERAGE4HEFOLLOWINGCHARTSHOWS THEPERFORMANCEOFTHE'RENDENECOMMONSHARES/. COMPAREDWITHTHE"/6%30!INDEXANDTHE)'#INDEX4HEBASEOFIS /CTOBER ¯THEDATEOFTHEPUBLICATIONOFTHESTARTOFTHESECONDARYPUBLICOFFERINGATAPRICEOF2PERSHARE

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'RENDENE\!NNUAL2EPORT

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3(!2%#!0)4!, 4HE#OMPANYHASMILLIONCOMMONSHARESOUTSTANDING ANDTHECONTROLLINGSELLERSOFFEREDOFTHECAPITAL CORRESPONDING TO  COMMONSHARESATANISSUEPRICEOF2FORATOTALAMOUNTOF2  4HENUMBEROFSHARESOFFEREDWAS INCREASEDBYANOTHER  ASASUPPLEMENTARYLOT DUETOTHEFACTTHATDEMANDEXCEEDEDSUPPLY4HETENDERDOCUMENTCLOSINGTHE SECONDARYISSUEOFTHECOMMONSHARESWASPUBLISHEDON$ECEMBER 4HEMARKETCAPITALIZATION BASEDONTHETRADINGPRICEOF 2ON$ECEMBER  WAS2 MILLION

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'RENDENE\!NNUAL2EPORT

$IVIDENDS OF 2 MILLION WERE EQUIVALENT TO  OF THE ADJUSTED NETINCOMEPROFORMA OF2MILLIONINANDREPRESENTEDA PAY OUTOFOFTHEPARENTCOMPANY´SDISTRIBUTABLENETINCOME

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4HE SECONDARY DISTRIBUTION OF COMMON SHARES INCREASED THE NUMBER OF SHAREHOLDERS BY   /F THESE   WERE PRIVATE INDIVIDUALSWHOACQUIREDMILLIONSHARES EQUIVALENTTOOFTOTALSHARES&OREIGNINVESTORSSUBSCRIBEDTOOFTHEOFFER



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3(!2%(/,$%22%-5.%2!4)/. )N ATOTALOF2MILLIONINDIVIDENDSWASDISTRIBUTEDFROMTHEPRO½TSACCUMULATEDINTHEYEARENDING$ECEMBER   BEFORETHEINITIALPUBLICOFFERING3HAREHOLDERSWHOSENAMESWEREREGISTEREDWITHTHE#OMPANYONTHEDATEOFTHE MEETINGWHICHAPPROVEDTHE&INANCIAL3TATEMENTSFORTHEYEARENDING$ECEMBER HADTHERIGHTTORECEIVETHEENTIRE DIVIDEND WITHPAYMENTFROM-AY 4HEPROPOSALBYTHE"OARDOF$IRECTORSFORTHEDISTRIBUTIONOFDIVIDENDSTOTALING 2 MILLION REPRESENTING A DIVIDEND OF 2 PER COMMON SHARE WAS APPROVED IN THE ORDINARY GENERAL MEETING OF SHAREHOLDERSON!PRIL 




'RENDENE\!NNUAL2EPORT

4HEACCOUNTABLENETINCOMEFORTHEYEARENDING$ECEMBER AMOUNTEDTO2MILLION ANDWILLBEDISTRIBUTEDAS FOLLOWSINLINEWITHTHE"OARDOF$IRECTORS´PROPOSAL ,EGALRESERVE¯4HEAMOUNTOF2MILLION CORRESPONDINGTOOFTHENETINCOME $IVIDENDDISTRIBUTIONPROPOSAL¯4HE"OARDOF$IRECTORSPROPOSESTHATTHE/RDINARY'ENERAL-EETINGOF3HAREHOLDERSAPPROVE THEDISTRIBUTIONOFDIVIDENDSEQUIVALENTTOOFTHEAVAILABLEACCOUNTABLENETINCOME CALCULATEDASFOLLOWS

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)NTHESTATEMENTOFTHEACCOUNTABLERESULTOFTHEBALANCESHEETON$ECEMBER THEAMOUNTOF2MILLIONHAS BEENDEDUCTEDTOCOVERTHEFOLLOWINGITEMSPROVISIONSFORSTOCKADJUSTMENT 0ROVISIONFOR"AD$EBTS PUNCTUALITYDISCOUNTS UNREALIZED PRO½T FROM PARENT COMPANY STOCKS LABOR CONTINGENCIES AND OBSOLETE STOCK 4HESE ITEMS BEGAN BEING ACCOUNTED FROM DUETOTHE#OMPANY´S)0/ SINCETHESEPROVISIONSHADNOTBEENACCOUNTEDUNTILTHEYEAR!SARESULT THE ACCOUNTINGBALANCESHEETDIDNOTSHOWTHEREVERSALOFTHEPROVISIONSFOR AMOUNTINGTO2MILLION THERESULTOFTHE PARENTCOMPANY´SLOWERACCOUNTABLENETINCOME




'RENDENE\!NNUAL2EPORT

INVESTMENTSANDOUTLOOK )NVESTMENTS OF 2 MILLION IN THE LAST FOUR YEARS WERE DIRECTED AT EXPANDING PRODUCTIVE CAPACITY AND UPDATING MACHINERY AND EQUIPMENT TO SUSTAIN THE #OMPANY´S GROWTH STRATEGY AND MAINTAIN THERATEOFINNOVATIVEPRODUCTLAUNCHES)N INVESTMENTSOF2 MILLIONAREPLANNED WITHTHEEMPHASISONNEWEXPANSIONPROJECTS

'RENDENEHASINVESTED2MILLIONOVERTHELASTFOURYEARS OFWHICH2MILLIONWASSPENTIN4HEINVESTMENTS AREGUIDEDBYTHE#OMPANY´SSTRATEGYOFINCREASINGITSACTIVITIESONTHEDOMESTICANDINTERNATIONALMARKETS&ORTHISREASON THE GREATESTVOLUMEISBEINGDIRECTEDATEXPANDINGCAPACITYINORDERTOATTENDTHEGROWINGDEMANDFORPRODUCTS ANDUPGRADING MACHINERYANDEQUIPMENT 4HESEINVESTMENTSWERERESPONSIBLEFORANINCREASEOFINVOLUMESINCEANDTHELAUNCHOFINNOVATIVEPRODUCTS ONTHEMARKET




'RENDENE\!NNUAL2EPORT

#APITAL%XPENDITURE

2$)NVESTMENTS

?2-ILLION

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)N THE#OMPANYINTENDSINVESTING2MILLION OFWHICH2MILLIONWILLGOTOWARDSEXPANDINGCAPACITY4HEUNITAT 3OBRAL#% WHICHISCURRENTLYRESPONSIBLEFOROFTOTALPRODUCTION WILLCONCLUDEPROJECTSINTHEMIDDLEOFANDINCREASE VOLUMEBYANADDITIONALMILLIONPAIRSOFSHOESATANINVESTMENTCOSTOF2MILLION




'RENDENE\!NNUAL2EPORT

#APITAL%XPENDITURES¯#!0%8 







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?CLIENTS 'RENDENES RELATIONSHIP WITH ITS CLIENTS IS BASED ON MAINTAINING A LONG TERM PARTNERSHIPWHICHBRINGSCONSISTENTRESULTSFORTHE#OMPANYANDTHERETAILER 4HE#OMPANYCARRIESOUTPERMANENTRESEARCHANDIDENTI½ESMARKETTRENDSIN ORDERTOPROVIDESUITABLEPRODUCTSFORTHESALESPOINTINLINEWITHTHECONSUMER PRO½LEOFEACHRETAILSTORE0ERIODICALLY AGROUPOFTOCLIENTSISINVITEDTO VISITONEOFTHE#OMPANYSPLANTSTOFOLLOWTHEPRODUCTIONPROCESSANDBECOME FAMILIARWITHTHEDIFFERENTIALOFTHEPRODUCTIONLINESANDTHETECHNOLOGYADDED TOTHEPRODUCTS 4HEROLEOFTHECOMMERCIALREPRESENTATIVESANDTHEIRTEAMSISFUNDAMENTALIN THISPROCESS4HEYACTASCONSULTANTSTOTHERETAILERSANDINCREASETHEIRABILITYTO ATTRACTANDRETAINCUSTOMERS4HESALESREPRESENTATIVESUSEASPECIALSOFTWARE ADAPTEDTO'RENDENESNEEDS WHICHISADIFFERENTIATEDTOOLINTHESALESPROCESS 4HEPROGRAMISUPDATEDONADAILYBASISANDPRESENTSTHEWHOLELINEOFPRODUCTS ANDBACKGROUNDINFORMATIONABOUTTHEMODELS SIZESANDCOLORSACQUIREDBYTHE CLIENTS THEADVERTISEMENTCAMPAIGNSANDMEDIAPLAN WITHTHEDATESANDTIMES OFAPPEARANCE4HEPROCESSHELPSTHECLIENTSBUYINGNEEDSINLINEWITHTHEKIND OFESTABLISHMENTITOPERATESANDPRO½LEOFTHE½NALCONSUMER'RENDENEALSO PROVIDESMARKETINGANDPOST SALESSUPPORT


'RENDENE\!NNUAL2EPORT

CORPORATEGOVERNANCE 7HENITOPENEDITSCAPITALIN/CTOBER'RENDENESUBSCRIBEDTOTHEHIGHEST STANDARDSOFCORPORATEGOVERNANCEBYLISTINGITSSHARESONTHE.OVO-ERCADOOF THE 3jO 0AULO 3TOCK %XCHANGE "Y DOING SO IT COMMITTED ITSELF TO DIFFERENTIATED MANAGEMENT PRACTICES TRANSPARENCY AND PROTECTION FOR MINORITY SHAREHOLDERS ANDPROVIDINGIN DEPTHINFORMATIONABOUTITSBUSINESSPERFORMANCE !SACOMPANYLISTEDONTHE.OVO-ERCADO 'RENDENETRADESONLYCOMMONSHARES4HESEGIVEVOTINGRIGHTSATGENERALSHAREHOLDERMEETINGS ELECTIONSTOTHE"OARDOF$IRECTORS¯WHICH INTURN CHOOSESTHE%XECUTIVE-ANAGEMENT"OARD¯ANDALLOWSHAREHOLDERSTOPARTICIPATEINTHE #OMPANY´SSTRATEGICDECISIONS DIRECTLYANDINDIRECTLY!LLSHAREHOLDERSALSOENJOY THESAMECONDITIONSAS THEMAJORITYSHAREHOLDERSIN THE EVENTOFCONTROLBEINGSOLDIETAG ALONGRIGHTS!MINIMUMOFOFTHE#OMPANY´SSHARESWILLBETRADEDONTHESTOCKEXCHANGEWITHIN THREEYEARS!TTHEENDOF THEFREE¾OATCAMETO'RENDENEISALSOCOMMITTEDTOPREPAREITSANNUALBALANCESHEETACCORDINGTOTHE 5NITED3TATES'ENERALLY!CCEPTED!CCOUNTING0RINCIPLES53'!!0 OR)NTERNATIONAL!CCOUNTING3TANDARDS)!3 WITHINAPERIODOFTWOYEARS !MONGOTHEROBLIGATIONS ITISALSOADHEREDTOTHE-ARKET!RBITRATION0ANELTORESOLVECORPORATECON¾ICTS




'RENDENE\!NNUAL2EPORT

!SPARTOFITSPOLICYOFTRANSPARENCYANDWIDE RANGINGCOMMUNICATION THE)NVESTOR2ELATIONSTEAMPROVIDESUPDATEDINFORMATIONANDKEEPSIN CONTACTWITHREPRESENTATIVESOFTHECAPITALMARKETS

"/!2$/&$)2%#4/23 4HE "OARD OF $IRECTORS IS RESPONSIBLE FOR ESTABLISHING THE #OMPANY´S GENERAL BUSINESS POLICIES INCLUDING ITS LONG TERM STRATEGY AND SUPERVISION OF THE %XECUTIVE -ANAGEMENT AMONGST OTHER TASKS 4HE #OMPANY´S "Y LAWS ESTABLISH A MINIMUM OF½VEANDAMAXIMUMOFSEVENBOARDMEMBERS WHOAREELECTEDATAGENERALSHAREHOLDERS´MEETINGFORAPERIODOFONEYEAR ANDMAYBERE ELECTED4HECURRENT"OARDOF$IRECTORSCONSISTSOFSIXMEMBERSWHOWEREELECTEDATTHE%XTRAORDINARY'ENERAL -EETING OF SHAREHOLDERS ON !UGUST   )T HAS A MANDATE UNTIL THE GENERAL MEETING OF SHAREHOLDERS TO BE HELD IN !PRIL  4HEY WERE RE ELECTED ON !PRIL   WITH MANDATE UNTIL THE GENERAL MEETING TO BE HELD IN !PRIL  4HE CURRENT CHAIRMAN OF THE "OARD OF $IRECTORS IS ALSO THE CHIEF EXECUTIVE OF½CER OF 'RENDENE /F THE SIX BOARD MEMBERS !LEXANDRE 'RENDENE "ARTELLE AND 0EDRO 'RENDENE "ARTELLE ARE THE FOUNDERS OF THE #OMPANY AND ALONG WITH THEIR SISTER %LIZABETH "ARTELLE ,AYBAUER ARE MAJORITY SHAREHOLDERS WITH A DIRECT ANDOR INDIRECT OWNERSHIP OF THE#OMPANYCAPITAL4HEOTHERTHREEMEMBERSAREINDEPENDENT4HEYARE-AqLSON&ERREIRADA.vBREGA ANECONOMIST2ENATO /CHMAN A LAWYER AND /SWALDO DE !SSIS &ILHO AN ENGINEER AND ECONOMIST4HE #OMPANY HAS A SEAT AVAILABLE ON THE "OARD OF $IRECTORS FOR A REPRESENTATIVE OF THE MINORITY SHAREHOLDERS




'RENDENE\!NNUAL2EPORT

.ONEOFTHEADVISERSORDIRECTORSHASARIGHTTORECEIVEANYPAYMENTSHOULDTHEYTERMINATETHEIRACTIVITIES4HEREARENO CURRENTPLANSFORSTOCKOPTIONSPURCHASINGRIGHTSISSUEDBYTHE#OMPANY5NDERTHERELEVANTCORPORATELAW MEMBERSOFTHE "OARD OF $IRECTORS ARE PROHIBITED FROM VOTING AT ANY MEETING OF SHAREHOLDERS OR TO TAKE PART IN ANY OPERATION OR BUSINESS WHICHBRINGSACON¾ICTOFINTERESTSWITHTHE#OMPANY %8%#54)6%"/!2$ 4HEEXECUTIVEBOARDOFDIRECTORSARELEGALREPRESENTATIVESOFTHE#OMPANYANDARERESPONSIBLEFORITSDAY TO DAYOPERATIONSAND THEIMPLEMENTATIONOFTHEPOLICIESANDGENERALDIRECTIVESESTABLISHEDBYTHE"OARDOF$IRECTORS4HEYAREELECTEDBYTHE"OARDOF $IRECTORS WITHAMANDATEOFTHREEYEARSANDMAYBEDISMISSEDATANYTIME 4HECURRENT%XECUTIVE-ANAGEMENT"OARDCONSISTSOF½VEDIRECTORS FOURELECTEDATA"OARDOF$IRECTORSMEETINGHELDON!UGUST  ANDONEELECTEDATA"OARDOF$IRECTORSMEETINGHELDON!PRIL )THASAMANDATEUNTILTHE½RSTMEETINGOFTHE"OARD OF$IRECTORSTOBEHELDAFTERTHE/RDINARY'ENERAL-EETINGOFSHAREHOLDERSIN

&)3#!,#/5.#), 4HE&ISCAL#OUNCILISANON PERMANENTBODY INDEPENDENTOFTHEEXECUTIVEMANAGEMENTANDTHE#OMPANY´SEXTERNALAUDITOR 4HE#OUNCIL´SMAINRESPONSIBILITYISTOREVIEWMANAGEMENT´SACTIVITIESANDTHE½NANCIALSTATEMENTS ANDREPORTITSOBSERVATIONSTO THEGENERALMEETINGSOFSHAREHOLDERS/NCEESTABLISHED ITCONSISTSOFTHREEMEMBERSANDTHREESUBSTITUTEMEMBERS ELECTEDFORA MANDATEOFONEYEARWHOMAYBERE ELECTED4HE)0/OCCURREDON/CTOBER ANDTHE½RST'ENERAL-EETINGOF3HAREHOLDERSAS APUBLICLYHELD#OMPANYWASON!PRIL .OREQUESTWASMADEFORTHESTABLISHMENTOFA&ISCAL#OUNCIL

42!$).'0/,)#9 )NLINEWITHITSCOMMITMENTTOMAINTAINTHEHIGHESTSTANDARDSOFCORPORATEGOVERNANCE BASEDONTHE"RAZILIAN3ECURITIESAND %XCHANGE#OMMISSION#6- )NSTRUCTION.O OF*ANUARY  ANDTHEREGULATIONSOFTHE.OVO-ERCADOOFTHE"OVESPA THE"OARD OF$IRECTORSOF'RENDENE3! APPROVEDA4RADING0OLICYFORSECURITIESISSUEDBY'RENDENEITSELF4HISDECISIONWASMADEON*ANUARY  ANDSTATEDTHERULESABOUTTRADINGTHATMAYBECARRIEDOUTBYTHEMANAGEMENTANDRELATEDPEOPLE4HE)NVESTOR2ELATIONS $IRECTORWILLASSUMERESPONSIBILITYFORTHEOVERALLIMPLEMENTATIONOFTHENECESSARYPROCEDURESANDTHEOBSERVANCEOFTHERULESAND GENERALADMINISTRATIONOFTHE4RADING0OLICY4HEPOLICYAIMSTOENSURETHEADOPTIONOFCONTROLMECHANISMSANDTRANSPARENCYINTHE TRADINGOFSECURITIESISSUEDBY'RENDENE3!TOALLTHOSEINTERESTED WITHOUTPRIVILEGETOANYONEANDTOTHEDETRIMENTOFNONE




'RENDENE\!NNUAL2EPORT

).6%34/22%,!4)/.3 4HE)NVESTORRELATIONSHIPAREA)2 CREATEDAT THE TIMEOF THESECONDARYPUBLICOFFERINGOFSHARES CONSISTSOFADIRECTOR A MANAGERANDTWOANALYSTS4HISAREAISRESPONSIBLEFORREMAININGINCONTACTWITHTHECAPITALMARKETSANDRELEASINGINFORMATION FOR INVESTORS AND ANALYSTS /N THE DAY WHEN THE #OMPANY WAS LISTED ON THE .OVO -ERCADO A BILINGUAL )2 SITE WAS LAUNCHED PROVIDING ACCESS TO INFORMATION ON THE )NITIAL 0UBLIC /FFERING )T ALSO INCLUDED ALL THE OBLIGATORY INFORMATION REQUIRED BY THE "RAZILIAN 3ECURITIES AND %XCHANGE #OMMISSION #6- AND THE "OVESPA AS WELL AS OCCASIONAL INFORMATION PROVIDED BY THE #OMPANY ANDANANNUALDIARYOFCORPORATEEVENTS 4HE)2TEAMTOOKPARTINDOMESTICANDINTERNATIONALDEALANDNON DEALROAD SHOWSAHEADOFTHECAPITALOPENINGANDALSO HELD MANY MEETINGS WITH ANALYSTS AND INVESTORS IN 2IO DE *ANEIRO AND 3jO 0AULO )T TOOK PART IN ½VE CONFERENCES AND EVENTS ORGANIZEDBY½NANCIALINSTITUTIONSIN"RAZILANDABROAD4HE)NVESTOR2ELATIONSAREAALSOPUBLISHEDTHEQUARTERLYRESULTSTHROUGH PRESSRELEASESANDHELDTELE CONFERENCECALLSTODISCUSSTHERESULTSFORTHETHIRDANDFOURTHQUARTERSOF AND½RSTQUARTER OF4HE#OMPANYANTICIPATEDTHE.OVO-ERCADOREQUIREMENTANDPUBLISHEDITSCASH¾OWSTATEMENTFORTHEYEARENDING IN4HE)2TEAMHELDALSOPUBLICMEETINGSWITHANALYSTSFROMTHE!SSOCIATIONOF#APITAL-ARKET)NVESTMENT0ROFESSIONALS !PIMEC IN3jO0AULO 2IODE*ANEIRO 0ORTO!LEGREAND"ELO(ORIZONTE BETWEEN-ARCHAND!PRIL 

).$%0%.$%.4!5$)4/23 4HE #OMPANY´S RELATIONSHIP WITH THE INDEPENDENT AUDITORS FOLLOWS THE PRINCIPALS OF INDEPENDENCE WHICH STATE THAT THE AUDITORMUSTNOTAUDITHISHEROWNWORKORPROVIDEMANAGEMENTORLEGALSERVICESTOTHECLIENT4HISPOSITIONENSURESTHATTHERE WILLBENOCON¾ICTSOFINTEREST4HESECONDITIONSARELAIDDOWNIN#6-)NSTRUCTION.O OF*ANUARY  ANDCIRCULAR#6- 3%03.#.O OF-ARCH 4HEEXTERNALAUDITINGSERVICESPROVIDEDBY%RNST9OUNG!UDITORES)NDEPENDENTES33INTHE½SCALYEAROFINCLUDEDI AUDITINGTHEANNUAL½NANCIALSTATEMENTSII AUDITINGTHE½NANCIALSTATEMENTSFORTHEPERIODENDINGON*UNE WITHTHE AIMOFSUPPORTINGTHEINITIALPUBLICOFFERINGPROCESSANDIII REVISINGTHEACCOUNTINGBALANCESHEETS INCLUDEDINTHEPUBLICSHARE ISSUEPROSPECT4HECOMPANYALSOPROVIDEDREVISIONSERVICESOFTAXESANDCONTRIBUTIONONINCOMEPREPAREDBY'RENDENE AND




ENE\ !NNUAL2EPORT 

GAVEANSWERSANDADVICEONTHE½SCALPROCEDURESADOPTED4HEFEESFORTHESESERVICESTOTALED2  REPRESENTINGOF TOTALFEESRELATEDTOTHEEXTERNALAUDIT)TISTHEVIEWOFTHE#OMPANYANDTHEINDEPENDENTAUDITORSTHATTHESESERVICESDONOT AFFECTTHEINDEPENDENCEANDOBJECTIVITYOFTHEAUDITORSINRELATIONTOTHEAUDITOFTHE½NANCIALSTATEMENTS




?INFORMATIONTECHNOLOGY 'RENDENE USES A HIGHER LEVEL OF INFORMATION TECHNOLOGY THAN THE INDUSTRY AVERAGE 3INCE  IT HAS USED A NEW %NTERPRISE 2ESOURCE 0LANNING %20 PROGRAM WHICH WAS TOTALLY ADAPTED TO MEET THE NEEDS OF ALL THE #OMPANYS AREAS 4HE WEB INTERFACE IS A DIFFERENTIAL FEATURE OF THIS NEW %20 AND ALLOWS ACCESSBY)NTRANETANDTHE)NTERNETTOALLTHESYSTEMSBUSINESSFUNCTIONS !TTHESAMETIME ITENSURESTHATTHEINFORMATIONISCENTRALIZEDANDSECURE!LL THEUNITSARECONNECTEDTOANINTEGRATEDCORPORATESYSTEMWITHASINGLEDATA BASEWHICHISSTOREDANDREPLICATEDINTWOSEPARATEAREASWITHSIMULTANEOUS UPDATING4HISACTIVECONTINGENCYSITEENSURESTHEINTEGRITYOFTHEINFORMATION AND BRINGS A HIGH LEVEL OF SECURITY IN CARRYING OUT ACTIVITIES WITH RESOURCE MANAGEMENTRUNNINGHOURSADAY SEVENDAYSAWEEKINREAL TIME 4HESYSTEMSALLOWALLTHEINTERNALCONTROLSTOBEAUTOMATEDWITHTHECONSTANT MONITORING OF PRODUCTION AND SHIPMENTS $ATA IS SENT IN REAL TIME TO THE ADMINISTRATIVE CENTER IN &ARROUPILHA AND MAKES CLIENT SERVICE FASTER AND MOREEFFICIENT /N TOP OF THIS THE TELECOMMUNICATIONS SYSTEM HAS TWO LAND LINES AND ONE SATELLITE LINK 4HIS MEANS THERE IS A CONSTANT CONNECTION BETWEEN THE INDUSTRIALUNITSANDTHESALESREPRESENTATIVES$ATA VOICEANDVIDEOSERVICES ARE TRANSMITTED SECURELY IN AN ENVIRONMENT WHICH IS CONSTANTLY CONTROLLED ANDGUARANTEED


'RENDENE\!NNUAL2EPORT

RISKMANAGEMENT +NOWLEDGE OF INHERENT OPERATIONAL RISK FACTORS IS FUNDAMENTAL IN MAINTAINING BUSINESS SUSTAINABILITY &OR THIS REASON THE #OMPANY HAS BEENIMPLEMENTINGMANAGEMENTPRACTICESTOANALYZEPOSSIBLEINTERNAL ANDEXTERNALRISKSANDSPECI½CCONTROLMETHODSTOREDUCEORELIMINATE THEIMPACTONRESULTS

'RENDENETRIESTOIDENTIFYRISKFACTORSANDADOPTPREVENTIVEMEASURESTOELIMINATEORREDUCETHEEFFECTSOFANYRISKWHICH MAYCOMPROMISEITSOPERATIONSAND½NANCIALSITUATION /0%2!4)/.!, 4HERISKSOFSTOPPAGESTHROUGHOPERATIONALPROBLEMSAREREDUCEDBYTHEFACTTHATTHE#OMPANYHASITSOWNPLANTSTRUCTURE IN WHICH PRODUCTION IS CARRIED OUT IN DIFFERENT INDUSTRIAL UNITS !T THE SAME TIME IT ALSO HAS ITS OWN 06# PRODUCTION PLANT %VENTHEMAINPLANTWHICHISLOCATEDIN3OBRAL INTHESTATEOF#EARf ANDISRESPONSIBLEFOROFAVERAGEPRODUCTIONVOLUMEHAS ADECENTRALIZEDSTRUCTURE WITHSEVENUNITSINTHESAMEAREA4OCOPEWITHPOSSIBLEELECTRICALENERGYSHORTAGES THE#OMPANYHAS ITSOWNGENERATORSCAPABLEOFGENERATINGOFTHEENERGYNEEDED 4HEINSTALLATIONSANDEQUIPMENTHAVEINSURANCECOVERAGAINSTDAMAGEANDREPLACEMENTINAWAYWHICHISCOMPATIBLEWITH THE PRACTICES OF THE "RAZILIAN FOOTWEAR INDUSTRY )NSURANCE POLICIES ALSO COVER NATURAL DISASTERS DAMAGE TO ASSETS AND STOCKS ANDMONTHSPAYROLL ASWELLASOTHEREXPENSES4HEINSURANCEALSOCOVERSCIVILRESPONSIBILITYCLAIMSEXCEPTTHOSEINVOLVINGTHE ENVIRONMENTAL)NSURANCEHASNOTBEENCONTRACTEDTOCOVERENVIRONMENTALCLAIMSCAUSEDBYTHEINDUSTRIALOPERATIONSSINCEAN EVALUATIONSHOWSTHATTHEIMPACTSWOULDNOTBESUBSTANTIAL




'RENDENE \!NNUAL2EPORT 

-!2+%4 4HE#OMPANY´SSALESAREEQUALLYDISTRIBUTEDACROSSTHEFOURMARKETAREASINWHICHITOPERATESMASCULINE FEMININE CHILDREN´S ANDMASSCONSUMPTION 3ALESARENOTDEPENDENTONONESPECI½CSEGMENTANDAREVERYDIVERSI½EDINTERMSOFPRODUCTS&ORTHIS REASON ANYPOSSIBLEFALLINSALESOFPRODUCTSFROMASPECI½CSEGMENTWOULDNOTHAVEASIGNI½CANTADVERSEOVERALLEFFECTONRESULTS WHICHMAYBEOFFSETBYABETTERPERFORMANCEINANOTHERAREA!TTHESAMETIME THEMARKETISALSODIVERSI½ED WITHOFSALES VOLUMECOMINGFROMTHEDOMESTICMARKETANDFROMEXPORTS4HE#OMPANY´SABILITYTOINNOVATE SEENINTHELAUNCHOFAN AVERAGEOFPRODUCTSADAY ISANOTHERWAYOFREDUCINGTHEMARKETRISKS ).&/2-!4)/.4%#(./,/'9 )NFORMATION TECHNOLOGY AND INNOVATION ARE AMONG THE #OMPANY´S MAIN COMPETITIVE DIFFERENTIALS 4HE SYSTEMS ARE ALL OPERATEDBY)4ANDTHEREISACONTINGENCYPLANTORECOVERALLTHEDATABASEANDRETURNTONORMALOPERATIONSWITHINAPERIODOFLESS THANEIGHTHOURS4HEDATABASEISREPLICATEDANDAUTOMATICALLYUPDATEDINTWOSEPARATELOCATIONS




'RENDENE\!NNUAL2EPORT

0)2!#9 4HE#OMPANYAIMSTOPRESERVETHEVALUEANDIDENTITYOFITSBRANDSANDTAKESINITIATIVESTOCOMBATTHERISKOFITSPRODUCTS BEINGFORGEDORCOPIED)TTAKESLEGALPROCEEDINGSTOELIMINATEUNFAIRCOMPETITION THROUGHSEARCHANDSEIZUREPROCESSES )TALSOCONSTANTLYRENEWSITSPRODUCTLINESANDTHERELATIONSHIPSWITHDISTRIBUTORSANDRETAILERSTOREDUCETHEEFFECTS OF COMPANIES WHICH COPY SUCCESSFUL MODELS 4O PREVENT INTERNATIONAL PIRACY 'RENDENE REGISTERS ITS MAIN BRANDS IN AROUNDCOUNTRIES 3500,)%23 4HEMAININPUTSUSEDARE06#RESINANDPLASTICIZINGOILS ANDSYNTHETICLEATHERCOVERLINE 4HE#OMPANYUSESTHESERESINS ANDOILSTOPRODUCE06# THEMAINRAWMATERIALUSEDINSHOEPRODUCTION4HESERAWMATERIALS ADDEDTOOTHERCOMPOSITES ALLOW THEPRODUCTIONOFTHESOLESANDUPPERSUSEDINSHOESPRODUCTION3INCETHERAWMATERIALSARECOMMODITIES THEPRICES¾UCTUATE INLINEWITHTHEINTERNATIONALMARKET BASEDONTHEPRICEOFPETROLEUMANDTHESWINGSOFSUPPLYANDDEMAND&ORTHISREASON CONTRACTSARENOTMAINTAINEDWITHTHESUPPLIERSOFTHESERAWMATERIALS4HE½NISHINGISUSUALLYCONCENTRATEDONAFEWSUPPLIERS FOREACHTYPEOFRAWMATERIAL4HISBRINGSMORECOMPETITIVEPRICESANDPRODUCTSANDMATERIALSWHICHAREMADETOORDERINLINE WITHTHEREQUESTEDFEATURES

0APERANDPACKAGINGISUSUALLYSUPPLIEDTHROUGHALONG TERMRELATIONSHIPWITHAMAINPROVIDERWHICHSELLSCARDBOARDAND MACHINE GLAZEDPAPERUSEDINTHE½NISHINGOFINDIVIDUALSHOEBOXES4HEPRICESOFTHESEINPUTMATERIALSARERELATIVELYVOLATILE SINCETHEYACCOMPANYTHEPRICEOFPULPONTHEINTERNATIONALMARKET&ORTHISREASON STOCKSOFCARDBOARDANDMACHINE GLAZED PAPERAREMAINTAINEDANDABUYINGPROGRAMISARRANGEDINADVANCE %.6)2/.-%.4!, 4HEINDUSTRIALPROCESSESPRESENTALOWRISKOFCAUSINGENVIRONMENTALDAMAGE4HERAWMATERIALISRECYCLABLE¯ THE 06#LEFTOVERSARECOMPLETELYREUSEDINTHEPRODUCTIVEPROCESS¯ANDALLTHEPRODUCTIONUNITSHAVEADOPTEDPROCESSESTOCONTROL EMISSIONS LIQUIDEF¾UENTSANDSOLIDWASTE %8#(!.'%2!4% 4HE #OMPANY HAS NO LOANS OR ½NANCING CONTRACTED OR INDEXED TO ANY FOREIGN CURRENCY !PPROXIMATELY  OF THE COST OF PRODUCTS AND SERVICES SOLD IN  WERE LINKED TO THE EXCHANGE RATE !LMOST ALL WERE REPRESENTED BY RAW MATERIAL COSTS %VENWHENACQUIREDONTHEDOMESTICMARKET 06#ISPRICEDINDOLLARS SINCEITISANINTERNATIONALCOMMODITY(OWEVER MOSTOFTHE COSTSRELATEDTOTHEDOLLARHAVEAPARTIALNATURALHEDGESINCEEXPORTSACCOUNTSFORAROUNDOFGROSSREVENUES




'RENDENE\!NNUAL2EPORT

).4%2%342!4%3 /N$ECEMBER  2MILLIONOFTHELONGANDSHORT TERMDEBT EQUIVALENTTOOFTOTALDEBT WASSUBJECTTOTHE )'0 -INDEXWITHOUTINTEREST 2MILLION ORATA½XEDINTERESTRATEOFPAAND2MILLION ORATLONG TERM INTEREST RATES 4*,0  /N $ECEMBER   THESE RATIOS WERE   AND  RESPECTIVELY OF THE TOTAL DEBT OF 2 MILLION3HOULDINTERESTRATESRISEIN"RAZIL THEADDITIONALNET½NANCIALEXPENSESFROMINTERESTWOULDNOTBESIGNI½CANT THANKSTO THEDEBTPRO½LE4HISPRO½LESHOWSTHATOFTOTALDEBTOF2MILLIONON$ECEMBER  AROSEFROMTHE½NANCINGOF ½SCALBENE½TS )#-36!4 ANDEXPORTCREDITSFROMTHELOCATIONOFITSPLANTSINTHESTATEOF#EARf #2%$)4 3ALESARESPREADACROSSMORETHAN CLIENTS OFWHOMTHELARGESTWERERESPONSIBLEFORAPPROXIMATELYOFALL SALESIN4HELARGESTCLIENTREPRESENTEDAROUNDOFTOTALSALESANDTHESECONDANDTHIRD LARGESTHADEACH'RANTING CLIENTSCREDITISBASEDONANIN DEPTHANALYSISUSINGADATABASE THECLIENT´SHISTORY ANDIMPOSINGACREDITLIMITBYAREA "ESIDES THIS SALES TEAM CHECK THE CREDIT MANAGEMENT SYSTEM BEFORE VISITING CLIENTS AND OBTAIN REPORTS ON THEIR CREDIT POSITION4HE#OMPANYALSOADOPTSAPOLICYOFONLYSHIPPINGGOODSTOCLIENTSWHOARENOTBEHINDWITHPAYMENTSORINDEBT 4HELEVELOFDEFAULTAFFECTING'RENDENEISVERYLOW4AKINGDELAYEDPAYMENTSINTOACCOUNT ITAMOUNTSTOAROUNDANDTHE EFFECTIVELOSSONREVENUESIS ,)15)$)49 4HE #OMPANY HAS A STRONG GENERATION OF OPERATING CASH AND KEEPS ITS RESOURCES INVESTED WITH TOP LINE FINANCIAL INSTITUTIONS /N $ECEMBER   AROUND  OF ITS CASH AND CASH EQUIVALENTS WAS HELD IN INVESTMENTS DENOMINATED IN FOREIGN CURRENCY4HIS POSITION WAS ADOPTED IN  AND AIMS TO DIVERSIFY AND MEET THE NEEDS FOR RESOURCES FROM THE #OMPANY´S FOREIGN SUBSIDIARIES #ASH AND CASH EQUIVALENTS ARE USED TO COVER LOANS CARRY OUT INVESTMENTS MEET WORKING CAPITALNEEDSANDPAYDIVIDENDS

7IDESPREAD SALES AND A PORTFOLIO OF MORE THAN   CLIENTS PLUS SELECTIVE CRITERIA IN OFFERING CREDIT REDUCE THE RISKS OF DEFAULT AND ITS IMPACTONREVENUES




'RENDENE\!NNUAL2EPORT

&)3#!,"%.%&)43 4HEINDUSTRIALUNITSLOCATEDINTHESTATEOF#EARfENJOY½SCALBENE½TSTHROUGHLONG TERMCOMMITMENTSCONTRACTEDWITH THE STATE GOVERNMENT AND IN ACCORDANCE WITH THE LAW WHICH REGULATES SUCH BENE½TS4HE #OMPANY ALSO HAS FEDERAL ½SCAL BENE½TSWHICHFORESEE THEREDUCTIONOREXEMPTION ACCORDING TO THECASE OFINCOME TAXANDNON REFUNDABLEEXTRAS BASED ONTHEPRO½T SUCHASINCENTIVESISSUEDBYTHEFORMER3UDENEREGIONALDEVELOPMENTAGENCY NOWCALLED!DENE.ORTHEASTERN $EVELOPMENT!GENCY  !TSTATELEVEL THE#OMPANYHASTWO½SCALINCENTIVEMODELS 0ROVIN ABENE½TRELATEDTOTHE)#-3TAX WITHAREDUCTION OFONSALESTAXONTHEDOMESTICMARKET 0ROPAPI ANINCENTIVEONTHEEXPORTED&/"VALUE WHICHREPRESENTSOFTHE EXPORTREVENUES 4HEPERIODSDURINGWHICHTHE)#-36!4 FISCALBENEFITSLASTHAVEBEENEXTENDEDBYANOTHERYEARS IEFROMTO IN3OBRAL FROMTOIN#RATOANDFROMTOIN&ORTALEZA4HISENSURESTHATTHESETAXBENEFITSWILLBE SUFFICIENTLYLONGTERM 4HE #OMPANY COMPLIES WITH ALL THE REQUIREMENTS RELATED TO THESE BENE½TS AND BELIEVES THERE IS NO RISK OF THEM BEING SUSPENDED DUETOTHESIZEOFTHE#OMPANY THEQUALITYOFITSPROJECTSANDTHEFACTTHAT'RENDENEISTHEBIGGESTPRIVATESECTOR EMPLOYERINTHESTATEOF#EARf!TTHESAMETIME THESEBENE½TSAREENSUREDBYFEDERALANDSTATELAW !T FEDERAL LEVEL THE #OMPANY HAS A ½SCAL BENE½T WHICH REDUCES INCOME TAX BY  GRANTED BY THE FEDERAL GOVERNMENT THROUGH!DENE4HEPERIODOFTHISBENE½TISYEARS)TWILLLASTUNTILATTHE3OBRALUNIT UNTILATTHE&ORTALEZAANDUNTIL ATTHE#RATOUNIT




?ACKNOWLEDGEMENTS 'RENDENESMANAGEMENTPRACTICESWERERECOGNIZEDINWHENTHE#OMPANY WASAWARDEDTHE&'60RIZEINTHE"USINESS%XCELLENCECATEGORYFROMTHE&UNDAljO 'ET{LIO6ARGASBUSINESSSCHOOL4HE&'6SELECTSTHEBESTCOMPANIESIN"RAZIL FROMTHERANKINGOFTHELARGESTCOMPANIESINTHECOUNTRYANDAWARDSTHOSE WHICHAREOUTSTANDINGINTERMSOFTHEIRCOMMERCIALAND½NANCIALPERFORMANCE INTHEIROPERATINGSECTORS 'RENDENE WAS ALSO CHOSEN AS THE BEST COMPANY IN THE ½NISHING TEXTILES AND FOOTWEAR INDUSTRIAL SECTOR BY THE MAGAZINE %XAME 4HE MAGAZINE PRODUCES ANANNUALSUPPLEMENTOFTHE"ESTAND"IGGESTCOMPANIESIN"RAZILINVARIOUS SECTORS'RENDENEWONTHISSAMECATEGORYIN AND4HEMAGAZINE ALSOCHOSE'RENDENEASTHETHIRDBESTCOMPANYINTHE.ORTHAND.ORTHEASTOF "RAZILIN 'RENDENE WAS ALSO CHOSEN AS THE7AL -ART )NTERNATIONAL 3UPPLIER OF  4HISRECOGNITION WHICHWASANNOUNCEDIN-ARCH WASATTRIBUTEDTOTHE QUALITYOF'RENDENESPRODUCTS SHIPMENTSANDDELIVERYTIME ANDCOOPERATION WITH7AL -ARTSBUSINESSGROWTH7AL -ARTISTHELARGESTRETAILERINTHEWORLD )THADSALESOF53BILLIONINTHE½SCALYEARENDINGON*ANUARY  AND SERVESMORETHANMILLIONCLIENTSAWEEK


'RENDENE\!NNUAL2EPORT

SOCIALRESPONSIBILITY 'RENDENE´S COMMITMENT TO SOCIAL DEVELOPMENT IS SEEN IN ITS CLOSE RELATIONSHIPWITHITSEMPLOYEESANDTHECONTRIBUTIONITMAKESTOIMPROVING THELIVESOFTHEPEOPLEINTHECOMMUNITIESWHEREITOPERATESINTHEBELIEF THATSUSTAINEDGROWTHINTEGRATESTHE#OMPANY´SOPERATIONALSTRATEGY

'RENDENE HAS DEVELOPED A SERIES OF INITIATIVES DIRECTED AT ITS EMPLOYEES AND THE COMMUNITIES WHERE IT OPERATES AIMED AT IMPROVINGPROFESSIONALSKILLS ACCEPTINGDIVERSITYANDENCOURAGINGSOCIALINCLUSION4HIS COMBINEDWITHPRESERVINGTHEENVIRONMENT ANDTHECONSTANTPURSUITOFPRO½TABILITYANDGROWTH FORMSATHREE PRONGEDAPPROACHTOCORPORATERESPONSIBILITYANDISDIRECTLY RESPONSIBLEFORMORETHAN JOBSPROVIDEDBYTHE#OMPANY

(5-!.2%3/52#%3 !TTHEENDOF 'RENDENEEMPLOYED DIRECTWORKERSANDANOTHEROUTSOURCEDWORKERS-OSTEMPLOYEES¯ ¯WEREBELOWAND GIVENTHENATUREOFTHEBUSINESS WORKINTHEOPERATINGAREA  4HEEMPLOYEESARECOMMITTEDTOQUALITYINTERMSOFPRODUCTION!SARESULT THEYHAVETHEFREEDOMTOGIVEOPINIONSAND SUGGESTIONS TO HELP IMPROVE THE PROCESSES %QUALLY WHEN THEY LEAVE THE #OMPANY WHETHER WILLINGLY OR OTHERWISE THEY ARE INTERVIEWEDONTHEREASONSFORLEAVINGANDORPOSSIBLEFAILURESWHICHHAVEBROUGHTTHISDECISION4HISAPPROACHALLOWS'RENDENE TO½NDWAYSOFSATISFYINGITSWORKFORCE




%DUCATIONALLEVEL ?

  

   



)NCOMPLETE"ASIC "ASIC )NCOMPLETEHIGHSCHOOL (IGHSCHOOL )NCOMPLETE#OLLEGE #OLLEGE -ASTERANDPOSTGRADUATEDEGREE

7ORKINGTIMEATTHE#OMPANY ?

4HE#OMPANYALSOHASADIVERSITYPOLICY)TEMPLOYSPEOPLEWITHSPECIALNEEDSANDHAS WORKERSWHOAREBLACKOROF MIXEDRACE 4HISWAYOFOPERATINGISRE¾ECTEDPOSITIVELYINTHEPRODUCTIVITYINDEXPEREMPLOYEE)N THEREVENUEANDSALESVOLUMEPER EMPLOYEECAMETO2 AND PAIRSRESPECTIVELY









.UMBEROF%MPLOYEES 



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4OYEAR

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&ROMTOYEARS

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&ROMTOYEARS

#RATO

 



&ROMTOYEARS

#ARLOS"ARBOSA

&ROMTOYEARS

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'RENDENE\!NNUAL2EPORT

*OB0OSITION"REAKDOWN ?  

4RAINING 'RENDENEBELIEVESTHATQUALI½EDWORKERSMAKEMOREASSERTIVEDECISIONSAND FORTHISREASON INVESTSINTRAINING)N EMPLOYEES RECEIVED   HOURS OF TRAINING EQUIVALENT TO  HOURS PER WORKER COMPARED WITH   HOURS IN  4HISTRAININGINCLUDEDTECHNICALANDBEHAVIOURALINSTRUCTION4HETRAININGPROGRAMFOCUSESONINGRAININGTHEPRINCIPLESANDVALUES WHICHDIRECTTHE#OMPANYPERFORMANCE STRENGTHENINGTEAMWORKANDBOOSTINGEMPLOYEES´COMMITMENTTOTHEBUSINESS 4HE#OMPANYALSOUNDERTAKESPROGRAMSFORINTERNS AIMEDATCREATINGSUITABLESTAFFFORITSWORKFORCE!TTHEENDOF THE #OMPANYHADINTERNS.EWEMPLOYEESRECEIVEAN)NTEGRATION-ANUALCONTAININGALLTHECONTRACTEDWORKINGREGULATIONS PLUS ANAPPENDIX-ANUALON!GREEMENTS "ENE½TSAND(OURSOF7ORK



/PERATIONAL!REA 4ECHNICAL!REA !DMINISTRATIVE!REA

!GE$ISTRIBUTION ?

(EALTHAND3AFETY 'RENDENEHASAN)NTERNAL#OMMITTEEFORTHE0REVENTIONOF!CCIDENTSKNOWNAS#IPA INALLITSPLANTSANDA3PECIALIST3ERVICEIN 3AFETY%NGINEERINGAND/CCUPATIONAL-EDICINEKNOWNAS3%3-4 4HELATTERISRESPONSIBLEFORADVISINGANDSUPPORTINGTHEPRODUCTION AREAANDPROVIDINGTHEMOSTEF½CIENTSAFETYPROCEDURES NOTONLYTOPRESERVETHEHEALTHANDPHYSICALWELL BEINGOFTHEEMPLOYEEBUT ALSOTOFACILITATETHEAREA´SOBJECTIVES 4HE#OMPANYALSOPROVIDESITSEMPLOYEESWITHUSEFULINFORMATIONTOENSURETHEIRSAFETYANDCONTINUOUSIMPROVEMENTOFWORK CONDITIONS!LLEMPLOYEESRECEIVEA7ORK3AFETY-ANUALWHICHCOVERSTHEIMPORTANCEOFACCIDENTPREVENTION BASICSAFETYANDHYGIENE HOWTHECLOAKROOMS DELIVERYANDSTORAGEAREASFUNCTION THECONCEPTSOFTHE±3²PROGRAMSENSEOFTIDINESS CLEANLINESS ORDER NEATNESS ANDDISCIPLINES ½REPREVENTIONANDTHECORRECTUSEOFINDIVIDUALPROTECTIONEQUIPMENT AMONGSTOTHERTOPICS 4HE7ORK3AFETY-ANUALALSOCONTAINSINFORMATIONENCOURAGINGTHESELECTIVECOLLECTIONOFGARBAGEANDCORRECTDISPOSALOFPAPER ANDCARDBOARD PLASTIC METAL GLASSANDORGANICANDINDUSTRIALWASTE





 



5PTOYEARS &ROMTOYEARS &ROMTOYEARS &ROMTOYEARS -ORETHANYEARS




'RENDENE\!NNUAL2EPORT

"ENE½TS !STHECREATOROFALARGENUMBEROFDIRECTANDINDIRECTJOBS 'RENDENEISAWAREOFITSCOMMERCIAL SOCIALANDENVIRONMENTAL RESPONSIBILITIES!SPARTOFTHESE ITPROVIDESITSEMPLOYEESWITHASERIESOFBENE½TS OFWHICHTHEFOLLOWINGAREWORTHHIGHLIGHTING &OOD"ASKET¯4HISCONTAINSBASICFOODSTUFFSANDISPROVIDEDMONTHLY -EALS¯&IVERESTAURANTSSERVETHREEMEALSADAY4HEMEALSARESUBSIDIZEDATARATEOFANDTHEMENUSARECREATED BYNUTRITIONISTS -EDICINE¯4HE#OMPANYHASAGREEMENTSWITHDRUGSTORESWHICHALLOWEMPLOYEESTOPURCHASEMEDICINESATLOWERPRICES WITHTHECOSTSDISCOUNTEDFROMTHEPAYCHECK4HEREAREALSODRUGSTORESWITHINTHEGROUNDSOFTHE#EARfUNITS /PTICAL¯%MPLOYEESCANALSOBUYGLASSESANDLENSATLOWERPRICESANDPAYININSTALLMENTS WITHTHECOSTSDISCOUNTEDFROMTHE PAYCHECK4HE#OMPANYALSOHASAGREEMENTSWITHOPTICIANSTOCARRYOUTCONSULTANCIESATACOSTEQUIVALENTTOTHATOFTHE5.)-%$ PRIVATEHEALTHPLAN WITHTHEPRICEBEINGDISCOUNTEDFROMTHEPAYCHECKINUPTOTWOINSTALLMENTS $ENTAL¯&REEDENTALASSISTANCEISPROVIDEDINSIDETHE#OMPANYTHROUGHANAGREEMENTWITHTHE3OCIAL3ERVICEFOR)NDUSTRY BODY3ESI WHICHPROVIDESALLTHEEQUIPMENTANDINSTRUMENTS (EALTH¯-EDICALASSISTANCE¯INCLUDINGGENERAL GYNECOLOGYANDOBSTETRICSTREATMENT ASWELLASHYGIENEANDWORKSAFETY¯IS PROVIDEDONTHE#OMPANYPREMISES )N½RMARY¯/UT PATIENTATTENDANCEISAVAILABLEINTHE#OMPANYHOURSADAY (EARING¯!LLEMPLOYEESHAVEACCESSTOINTERNALSERVICESTOCHECKTHEIRHEARING




'RENDENE\!NNUAL2EPORT

4OGIVEITSEMPLOYEESJOBSATISFACTION THE#OMPANYPROVIDESINTENSIVE TRAININGPROGRAMSANDVARIOUSBENE½TS¯MANYOFWHICHAREEXTENDED TOTHEIRFAMILIES

.URSERY¯4HE#OMPANYPROVIDESFREEDAYCAREFACILITIESFOREMPLOYEESANDLOOKSAFTERCHILDRENFROMTHREEMONTHSTOSIXYEARS 0SYCHOLOGY¯0SYCHOLOGICALATTENDANCEISAVAILABLEINTERNALLY WITHREFERRALTOEXTERNALTREATMENTIFNECESSARY ,ABORATORY¯!GREEMENTFORPREVENTIVEEXAMSOFTHEWOMBATACOSTWHICHMAYBEDISCOUNTEDFROMTHEEMPLOYEE´SPAYCHECK INUPTOTWOINSTALLMENTS 3OCIAL3ERVICE¯4HISSERVICEHELPSEMPLOYEESANDTHEIRDEPENDENTSRESOLVESOCIALANDWORKPROBLEMS BYPROVIDINGGUIDANCE ANDACCOMPANIMENT WITHREFERRALTOEXTERNALTREATMENTIFNECESSARY "ANKING3ERVICES¯4HE#OMPANYHASINSTALLED$AYAND.IGHTBANKINGPOSTS!4- INTHEPLANTSFORSALARY RELATEDMATTERS ADVANCES HOLIDAYSANDOTHERSERVICES ,OANS¯,OANSAREMADETOEMPLOYEESWITHOVERTHREEMONTHSSERVICETOHELPBUILDTHEIROWNHOMESANDCOVERCOSTSOFHEALTH ANDEDUCATION4HEAMOUNTCANBEDISCOUNTEDFROMTHEEMPLOYEE´SPAYCHECKINUPTOSIXINSTALLMENTS &AMILY7ELL BEING¯4HISSERVICEPROVIDESEMPLOYEESWITHGUIDANCEONSEXUALANDREPRODUCTIVEHEALTH !IDS FAMILYPLANNING ANDSEXUALLY TRANSMITTEDDISEASES)TALSOPROVIDESFREECONTRACEPTIVEMETHODS &UNERAL!SSISTANCE¯4HISSERVICEHELPSCOVERTHEFUNERALCOSTSINCASESWHEREANEMPLOYEEDIES 0RESENTS¯!LLEMPLOYEESRECEIVEACHOCOLATEBASKETAT%ASTER)NTHEWEEKBEFORE#HRISTMAS EMPLOYEESHOLDAPARTYDURING WHICHCHILDRENAGEDUPTORECEIVETOYSANDKITSCONTAININGCHOCOLATE BISCUITS SWEETS POPCORN HOTDOGSANDSOFTDRINKS




'RENDENE\!NNUAL2EPORT

#/--5.)49 &OR'RENDENE CORPORATERESPONSIBILITYINCLUDESCOMMITMENTTOTHECOMMUNITIESWITHWHICHITHASRELATIONSANDSUPPORTING INITIATIVESWHICHHELPSOCIALDEVELOPMENT4OPUTTHISCONCEPTINTOPRACTICE THE#OMPANYSUPPORTSVARIOUSINITIATIVES INCLUDING THEFOLLOWING 3OCIALAND%DUCATIONAL#AMPAIGNS¯)N SEVENCAMPAIGNSANDLECTURESWEREORGANIZEDONTHEFOLLOWINGSUBJECTS$ENGUE DISEASE WITH PARTICIPANTS#ONJUNCTIVITIS WITHPARTICIPANTS.OISE WITHPARTICIPANTS3EXUALLY 4RANSMITTED$ISEASES AND!IDS WITHPARTICIPANTS(IGHBLOODPRESSURE WITHPARTICIPANTS/RAL(EALTH WITHPARTICIPANTSAND0ATHOLOGYOF THE3PINAL#OLUMNAND"AD0OSTURE(ABITS WITHPARTICIPANTS4HELECTURESWEREHELDATTHE#OMPANY´SINDUSTRIALUNITS #ORPORATE #ITIZEN 0ROGRAM ¯4HE #OMPANY IS INVOLVED IN WIDE RANGING SOCIAL INITIATIVES AND SUPPORTS VARIOUS CHARITABLE BODIES ORPHANAGES CHILDREN´S HOMES OLD FOLKS HOMES HOSPITALS PUBLIC SECURITY BODIES ½RE SERVICES ASSOCIATIONS OF PARENTS OFHANDICAPPEDCHILDREN ASSOCIATIONSTOCOMBATCANCER PUBLICSCHOOLSANDTHE*UNIOR!CHIEVEMENT!SSOCIATION%MPLOYEESIN ALLITSMANUFACTURINGPLANTSALSO TAKEPARTINCAMPAIGNS TODONATEWARMCLOTHING FOODSTUFFSANDBLOOD/NEEXAMPLEIS THE PARTNERSHIP THE #OMPANY HAS WITH THE (EMATOLOGY #ENTER OF #EARf WHICH INVOLVES A MONTHLY CAMPAIGN ON BLOOD DONATION 4WOHUNDREDEMPLOYEESAT3OBRALWEREINVOLVEDINTHISPROJECTINANDTOOKPARTINALECTUREONTHEBENE½TSOFDONATING BLOOD4HANKSTOTHISCAMPAIGN BAGSOFBLOODWERECOLLECTED !DOPT A 0UBLIC 0LACE ¯ 'RENDENE IS RESPONSIBLE FOR LOOKING AFTER PUBLIC PLACES IN THE TOWNS WHERE ITS PLANTS ARE LOCATED /NEEXAMPLEISTHERECOVERYOFTHE3jO*OjOSQUARE IN3OBRAL ONEOFTHETOWN´SMOSTPOPULARLEISUREAREAS $ONATION#AMPAIGN¯%MPLOYEESHAVETAKENPARTINTHISCAMPAIGNSINCE4HE±#HRISTMASWITHOUT(UNGER²CAMPAIGN HELPEDNEEDYCOMMUNITIES)N EMPLOYEESCOLLECTEDCLOTHES SHOES TOYSAND KILOSOFFOODSTUFFFORDISTRIBUTIONINTHE URBANANDRURALAREAS 3HOE $ONATIONS ¯ &ROM  TO  'RENDENE IS CARRYING OUT A DONATION PROGRAM TO DISTRIBUTE THREE MILLION PAIRS OF SHOESTONEEDYCHILDRENINTHEPUBLICSCHOOLNETWORKIN#EARf4HEDISTRIBUTIONISCOORDINATEDBYTHESTATEGOVERNMENTTHROUGH THE3OCIAL!CTIONAND%DUCATIONSECRETARIATS)N ONEMILLIONPAIRSWEREDONATEDONCOMMEMORATIVEDAYSSUCHAS%ASTER 3T *OHN´S$AY #HILDREN´S$AYAND#HRISTMAS

/THER $ONATIONS ¯ "ASIC FOOD BASKETS ARE DONATED EVERY MONTH TO VARIOUS CHARITABLE ORGANIZATIONS IN NEIGHBORING COMMUNITIES SUCHASTHE-OTHERS´(OME LOCATEDNEARTHE3ANTA#ASADE-ISERICvRDIA(OSPITALIN3OBRAL4HISINSTITUTIONHOUSES MOTHERSWITHNEW BORNBABIESWHOAREUNDERLONG TERMTREATMENT!NOTHERINITIATIVEIS'RENDENE´SPARTNERSHIPWITH.UTRINOR ¯ACOMPANYWHICHADMINISTERSTHEINDUSTRIALUNITS´RESTAURANTS¯TOPROVIDEDAILYSOUPDONATIONSTOTHE'OOD3AMARITAN(OME ANDTOTHECHILDRENOFTHE!LTO.OVODISTRICTIN3OBRAL 'RENDENE IS ALSO A PARTNER IN VARIOUS NATIONAL SOCIAL PROJECTS SUCH AS THE FEDERAL GOVERNMENT´S LITERACY CAMPAIGN !LFABETIZAljO3OLIDfRIA MAINLYINUNITSWITHAHIGHLEVELOFILLITERACY$URINGTHETH,ITERACY7EEKIN THE#OMPANYRECEIVED ANAWARDFROMTHEGOVERNMENTFORITSPARTICIPATION




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'RENDENE\!NNUAL2EPORT

4HEAIMOFSUSTAINABLEGROWTHISEXPRESSEDINTHEEFFORTSTOMINIMIZE THEIMPACTOFTHE#OMPANY´SOPERATIONSONTHEENVIRONMENT ANDIN THEREDUCTIONANDRECYCLINGTHEWASTEANDRAWMATERIALS

%.6)2/.-%.4!,2%30/.3)"),)49 4OPRESERVEANDIMPROVETHEENVIRONMENT 'RENDENEISCONSTANTLYAIMINGTOREDUCE REUSEANDRECYCLETHEWASTEANDRAW MATERIALSUSEDINTHEPRODUCTIVEPROCESS 4HELEFTOVERSFROM06#ANDSYNTHETICLEATHERARECOMPLETELYREUSED THEWASTEFROM%6!ISREPROCESSEDANDTHEPACKAGINGFOR PRODUCTSISREUSEDBYTHE#OMPANYANDRECYCLEDBYTHIRDPARTIES)NTHEPAINTINGCABINS WHEREEXHAUSTANDAIR CLEANINGSYSTEMS AREMAINTAINED ALLTHEWASTEISUSEDBYGLUEANDPAINTSPRODUCERS ANDTHEACETONEISRECYCLEDANDUSEDINWASHINGTHEMOLDS !LTHOUGHTHEPRODUCTIONPROCESSONLYUSESWATERTOCOOLCERTAINEQUIPMENT THE#OMPANYSTILLUSESACLOSEDCIRCUITSYSTEMWHICH REDUCESTHENEEDFORNATURALWATERRESOURCES LIMITINGITSWASTE 4HELEFTOVERSFROMTHERESTAURANTSAREALSOSTOREDINREFRIGERATEDAREAS COLLECTEDDAILYANDUSEDFORTHEPRODUCTIONOFANIMAL FEED /NLY ORGANIC WASTE FROM THE INDUSTRIAL AREAS OF½CES AND EMPLOYEES´ PERSONAL HYGIENE AREAS IS DISPOSED OF IN LAND½LLS -ATERIALSUCHASEMPTYCANS METALDRUMSANDPAPERANDCARDBOARDPACKAGINGARESTOREDANDSOLDTOWASTEMERCHANTS "ESIDES THIS THE #OMPANY HAS ITS OWN SEWAGE SYSTEM IN THE #RATO PLANT AND IN TWO OF THE 3OBRAL MANUFACTURING UNITS 4HESYSTEMUSESANAEROBIC½LTERS DIGESTERDECANTERS ASTABILIZATIONPONDANDSYSTEMFORAERATINGTHEWATER !LLTHESEMEASURESFORMTHE#OMPANY´SENVIRONMENTALPRESERVATIONPOLICY4HANKSTOTHISPOLICY 'RENDENEHASMANAGEDTO MAKECONTINUOUSREDUCTIONSINTHECOSTOFPRODUCTION PARTICULARLYINACQUIRINGRAWMATERIALS)N THERECYCLINGOFLEFTOVERS FROMSANDALSAND06# FOREXAMPLE AMOUNTEDTOAROUND TONNES IEAPPROXIMATELYOFTOTAL06#CONSUMEDOVERTHE YEARINSHOEPRODUCTION




!SPARTOFTHEENVIRONMENTALPOLICY THETECHNOLOGYUSEDTODEVELOPTHE06#ISTHEMOSTECOLOGICALLYCORRECTANDSUSTAINABLE INTHEWORLD)TINVOLVESCONSTANTLABORATORYTESTINGOFPRODUCTSANDFORMULACONTROLS)TUSES¾ATTENED ROLLED06#WITHPOLYESTER UNDERLAY THEWASTEOFWHICHISTOTALLYRECYCLABLE4HISMEETSA%UROPEANSTANDARDWHICHISPLANNEDTOBEMETONLYIN 4HEINDUSTRIALPROCESSESOFEACHPRODUCTIVECHAINOF06#ARESAFEANDREGULATEDWORLDWIDE THEREBYELIMINATINGANYCHANCE OFENVIRONMENTALRISKSRELATEDTOTHEPRODUCTIONOFPLASTIC ,ICENSES 'RENDENEHASVALIDENVIRONMENTALLICENSINGFORALLITSINDUSTRIALUNITSANDCOMPLIESRIGOROUSLYWITHTHECONDITIONSREQUIRED BYTHELICENSINGAUTHORITIES4HEPLANTSAT3OBRAL &ORTALEZAAND#RATOARELICENSEDBYTHE3TATE%NVIRONMENTAL3UPERINTENDENT´S /F½CE3EMACE OF#EARf ANDTHEUNITSAT&ARROUPILHAAND#ARLOS"ARBOSABYTHE(ENRIQUE,UIS2OESSLER3TATE&OUNDATIONFOR %NVIRONMENTAL0ROTECTION&EPAM OF2IO'RANDEDO3UL4HE#OMPANYMANAGESTHESOLIDWASTEACCORDINGTOAPLANANDSENDS QUARTERLYREPORTSONTHESTATEOFEACHUNITTOTHE3EMACEAND&EPAM 4HE#OMPANYALSORIGOROUSLYRESPECTSTHEVARIOUSLAWSANDREGULATIONSRELATEDTOTHEENVIRONMENTATNATIONAL STATEAND MUNICIPALLEVEL


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'RENDENE\!NNUAL2EPORT

?CORPORATEINFORMATION "OARDOF$IRECTORS #HAIRMAN !LEXANDRE'RENDENE"ARTELLE $EPUTYCHAIRMAN 0EDRO'RENDENE"ARTELLE $IRECTORS -AqLSON&ERREIRADA.vBREGA 2ENATO/CHMAN %LIZABETH"ARTELLE,AYBAUER /SWALDODE!SSIS&ILHO %8%#54)6%"/!2$/&$)2%#4/23 !LEXANDRE'RENDENE"ARTELLE¯#HIEF%XECUTIVE/F½CER 0EDRO'RENDENE"ARTELLE¯6ICE0RESIDENT 'ELSON,UIS2OSTIROLLA¯!DMINISTRATIVEAND#ONTROLLER$IRECTOR -ARCUS0EIXOTO¯#HIEF&INANCIAL/F½CERAND)NVESTOR2ELATIONS$IRECTOR 2UDIMAR$ALL´/NDER¯)NDUSTRIALAND#OMMERCIAL$IRECTOR (%!$15!24%23 !VENIDA0IMENTEL'OMES ?3OBRAL¯#% :IPCODE  4ELEPHONE  &AX  !$-).)342!4)6%#%.4%2 !VENIDA0EDRO'RENDENE ?&ARROUPILHA¯23 :IPCODE  4ELEPHONE  &AX  WWWGRENDENECOMBR

-EMBERSOFTHE"OARDOF$IRECTORSAND%XECUTIVE"OARD/F½CERS !LEXANDRE 'RENDENE "ARTELLE ¯ #HAIRMAN OF THE "OARD OF $IRECTORS AND #HIEF%XECUTIVE/F½CER -R"ARTELLEHASADEGREEIN,AWFROMTHE5NIVERSITY OF#AXIASDO3UL(EFOUNDED'RENDENEIN ALONGWITHHISGRANDFATHER 0EDRO 'RENDENE/VERTHEYEARSHEHASBEENAMONGTHOSERESPONSIBLEFORREDIRECTING THE #OMPANY´S BUSINESS LINE BY DEVELOPING NEW CONCEPTS PRODUCTS AND INNOVATIVEDESIGN ASWELLASTHEDECISIONTOTRANSFERTHEMAININDUSTRIALUNIT TOTHESTATEOF#EARf(EISINVOLVEDINOTHERBUSINESSESIN"RAZILANDABROAD INCLUDING4ELASUL3! APRODUCEROFTUBULARFURNITURE $ELL´!NNO-vVEIS,TDA A MODULAR WOOD KITCHEN AND CLOSET MANUFACTURING #OMPANY !GROPECUfRIA *ACAREZINHO,TDA ASUGARMILLANDCATTLE RAISINGENTERPRISE AND2EEBOK#HILE AFOOTWEARCOMPANY 0EDRO'RENDENE"ARTELLE¯$EPUTYCHAIRMANOFTHE"OARDOF$IRECTORSAND EXECUTIVEVICEPRESIDENT (EWASAMONGTHOSERESPONSIBLEFORREDIRECTINGTHE #OMPANY´S BUSINESS LINE BY DEVELOPING NEW CONCEPTS PRODUCTS AND INNOVATIVE DESIGN ASWELLASTHEDECISIONTOTRANSFERTHEMAININDUSTRIALUNITTOTHESTATEOF #EARf(EISINVOLVEDINOTHERBUSINESSESIN"RAZILANDABROAD INCLUDING6ULCABRfS AND6ULCABRfSDO.ORDESTE AFOOTWEARCOMPANYWHEREHISISCHIEFEXECUTIVEOF½CER ANDCHAIRMANOFTHE"OARDOF$IRECTORS !GROPECUfRIA-ANACf,TDA ASUGARMILL ANDCATTLE RAISINGENTERPRISE AND2EEBOK#HILE AFOOTWEARCOMPANY -AILSON &ERREIRA DA .vBREGA ¯ $IRECTOR   !FTER GRADUATING IN ECONOMICSAT#ENTRO5NIVERSITfRIODE"RASqLIA#%5" -R.vBREGABEGANHIS CAREERWITH"ANCODO"RASIL3! ASHEADOFTHERURALANDINDUSTRIALCREDITAREA INTHE0ERNAMBUCOBRANCH!FTERNINEYEARSWITH"ANCODO"RASIL HEBECAME HEADOFTHE%CONOMIC!DVISORYAREAOFTHE)NDUSTRYAND4RADE-INISTRYAND THEN HEADED THE SAME AREA IN THE &INANCE -INISTRY (E HAS BEEN GENERAL SECRETARY OF THE &INANCE -INISTRY ON TWO OCCASIONS AND BETWEEN  AND WAS&INANCE-INISTERANDCHAIRMANOFTHE.ATIONAL-ONETARY#OUNCIL THE.ATIONAL&OREIGN4RADE#OUNCIL#/.#%8 THE.ATIONAL0RIVATE)NSURANCE #OUNCIL #.30 THE &EDERAL 0RIVATIZATION #OUNCIL AND THE &INANCIAL 0OLICY #OUNCIL #/.&!:  (E IS CURRENTLY A PARTNER IN THE 4ENDoNCIAS #ONSULTORIA




'RENDENE\!NNUAL2EPORT

)NTEGRADA CONSULTANCY AND IS INVOLVED IN VARIOUS SOCIAL AND BUSINESS ORGANIZATIONS (E IS A MEMBER OF THE BOARDS OF DIRECTORS OF A NUMBER OF COMPANIESIN"RAZILANDABROAD INCLUDINGTHEOF½CIAL"RAZILIANSTATISTICSBODY THE)"'% ANDTHE"RAZILIAN $UTCH#HAMBEROF#OMMERCE(EISALSOONTHE EDITORIALCOMMITTEEOFTHE%STADODE3jO0AULONEWSPAPERANDTHE"OARDOF $IRECTORSOFTHE3jO0AULO3TATE)NDUSTRY&EDERATION&IESP -R.vBREGAHAS ALSOACTEDASAREPRESENTATIVEOF THE"RAZILIANGOVERNMENTATINTERNATIONAL EVENTSANDCOMMITTEESANDISTHEAUTHOROFANUMBEROFBOOKSANDARTICLES ONTHE"RAZILIANECONOMYPUBLISHEDIN"RAZILANDABROAD 2ENATO /CHMAN ¯ $IRECTOR   -R /CHMAN GRADUATED IN ,AW FROM THE#ATHOLIC5NIVERSITYOF2IO'RANDEDO3ULANDHASAMASTER´SDEGREEAND POSTGRADUATEDEGREEIN"USINESS,AWFROMTHE#ATHOLIC5NIVERSITYOF3jO0AULO 05#30 (EBEGANHISCAREERASANASSISTANTPROFESSOROFCIVILLAWAT05#30 ANDLECTUREDATTHE&UNDAljO'ET{LIO6ARGASBUSINESSSCHOOLBETWEEN AND ANDBETWEENAND3INCE HEHASBEENAPARTNERIN THE/CHMAN 2EAL!MADEO!DVOGADOS!SSOCIADOSLEGAL½RMWHICHSPECIALIZES INCORPORATELAWANDCAPITALMARKETS(EISINVOLVEDINANUMBEROFSOCIALAND BUSINESSORGANIZATIONSANDISCURRENTLYAMEMBEROFTHE"OARDOF$IRECTORS OF 5LTRAPAR 0ARTICIPAlzES 3! AND A MEMBER OF THE &ISCAL #OUNCIL OF THE !SSOCIATIONTO!SSIST(ANDICAPPED#HILDREN!!#$ (EISALSOTHEAUTHOROF VARIOUSLEGALARTICLESPUBLISHEDINSPECIALISTNEWSPAPERANDMAGAZINES %LIZABETH"ARTELLE,AYBAUER¯$IRECTOR -RS,AYBAUERGRADUATEDIN "IOLOGYATTHE5NIVERSITYOF4AUBATm IN,ITERATUREATTHE3CIENCEAND0EDAGOGY #OLLEGE ANDWITHHONORSIN0SYCHOLOGYFROMTHE5NIVERSITYOF#AXIASDO3UL 3HEHASALSOTAKENPARTINCONGRESSESANDSEMINARSINALLHER½ELDSOFSTUDY "ETWEEN  AND  SHE WAS ADMINISTRATIVE MANAGER OF &ASTER ,TDA A FOOTWEAR COMPANY 3HE HAS ALSO BEEN ADMINISTRATIVE MANAGER OF /TTONE )MPORTAlzESE%XPORTAlzES,TDA /SWALDODE!SSIS&ILHO¯$IRECTOR (EGRADUATEDININ%LECTRONIC %NGINEERING AT THE 4ECHNOLOGICAL )NSTITUTE OF !ERONAUTIC )4! AND HAS A MASTER´SDEGREEIN%CONOMICSFROMTHE%CONOMICSAND"USINESS-ANAGEMENT

COLLEGEOF3jO0AULOUNIVERSITY"ETWEENAND HEWASADIRECTOROF "ANCO -ERCANTIL DE 3jO 0AULO &ROM  TO  HE WAS A PARTNER IN THE 0LANIBANC#ORRETORADE6ALORES ABROKERAGEHOUSE ANDFROMTOWAS APARTNERINTHE#ONVENljO#ORRETORADE6ALORES ABROKERAGEHOUSE)N HE BECAME VICE PRESIDENT OF "ANCO )TAMARATI A POSITION HE OCCUPIED UNTIL &ROMTO HEWASVICEPRESIDENTOF"ANCODE#RmDITO.ACIONAL "#. ANDINBECAMEAPARTNERIN"ANCO0ACTUAL3! APOSITIONHESTILL HOLDS(EISCURRENTLYAMEMBEROFITS#ORPORATE&INANCEGROUP 'ELSON ,UIS 2OSTIROLLA ¯ !DMINISTRATIVE AND #ONTROLLER $IRECTOR   -R 2OSTIROLLA GRADUATED IN "USINESS -ANAGEMENT AND !CCOUNTING AT THE /ESTE#ATARINENSEUNIVERSITY(EENTEREDTHE#OMPANYINAS½NANCIAL MANAGER AND IN  BECAME ½NANCIAL DIRECTOR A POSITION HE HELD UNTIL !PRIL OF  (E BEGAN HIS CAREER IN  AS ADMINISTRATIVE AND ½NANCIAL MANAGER OF ,ETqCIA !VqCOLA 3! A COMPANY WHICH OPERATES IN THE POULTRY AREAANDSUPPLIES3ADIA3! 0ERDIGjO3! &RANGOSUL3!AND3EARA!VqCOLA 3! (E IS VICE PRESIDENT OF 3ADDLE #ORP AND A MEMBER OF THE "OARD OF $IRECTORSOF6ULCABRfSDO.ORDESTE -ARCUS0EIXOTO¯#HIEF&INANCIAL/F½CERAND)NVESTOR2ELATIONS$IRECTOR   (E GRADUATED IN  IN %LECTRONIC %NGINEERING AT THE 4ECHNOLOGICAL )NSTITUTE OF !ERONAUTIC )4!  (E WORKED AS AN %QUITIES !NALYST IN  (E WAS AN INVESTMENT ANALYST FOR NEAR A DECADE AT 'ARANTIA#3&" ¯  ANDJOINED"ANCO0ACTUALIN$ECEMBEROF(EJOINED'RENDENEON !PRIL (EHASBEENACHARTERED&INANCIAL!NALYST#&! SINCE 2UDIMAR $ALL´/NDER ¯ )NDUSTRIAL AND #OMMERCIAL DIRECTOR   (EGRADUATEDIN-ECHANICAL%NGINEERINGATTHE5NIVERSITYOF#AXIASDO3UL ANDENTEREDTHE#OMPANYINASMANAGEROFTHE)NFORMATION4ECHNOLOGY DEPARTMENT)N HEBECAME)NDUSTRIALAND#OMMERCIALDIRECTOR APOSITION HESTILLHOLDS




'RENDENE\!NNUAL2EPORT

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Grendene - Annual Report 2004  

Grendene - Annual Report 2004

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