United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant To Rule 13a-16 or 15d-16
of the
Securities Exchange Act of 1934
For the month of
December 2003
VALLEY OF THE RIO DOCE COMPANY
(Translation of Registrant's name into English)
Avenida Graca Aranha, No. 26
20005-900 Rio de Janeiro, RJ, Brazil
(Address of principal executive office)
(Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.)
(Check One) Form 20-F X Form 40-F ___
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing information to the Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
(Check One) Yes ___ No X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b). 82-___.)
Appraisal Report of the Net Assets of VALE DO RIO DOCE
ALUMINIO S.A. - ALUVALE, MINERACAO VERA CRUZ S.A.,
MINERACAO SERRA DO SOSSEGO S.A. AND RIO DOCE GEOLOGIA E
MINERACAO S.A.which are to be consolidated into
Companhia Vale do Rio Doce
Deloitte Touche Tohmatsu Auditores Independentes
VALE DO RIO DOCE ALUMINIO S.A. - ALUVALE
APPRAISAL REPORT OF THE NET ASSETS TO BE CONSOLIDATED INTO
COMPANHIA VALE DO RIO DOCE
BASE DATE - NOVEMBER 30, 2003
DELOITTE TOUCHE TOHMATSU, a company which provides auditing and accounting
services with head offices located at Avenida Presidente Wilson 231, 22nd floor,
Rio de Janeiro, corporate taxpayer number (CNPJ) - 49,928,567/0002-00,
registered at the Sao Paulo state Regional Accounting Council CRC-SP under
number 11,609/S-RJ, has been assigned to appraise the value of the net assets of
VALE DO RIO DOCE ALUMINIO S.A. - ALUVALE, to be consolidated by its holding
company COMPANHIA VALE DO RIO DOCE, under the terms of the Acquisition
Justification and Presentation dated December 12, 2003. This appraisal report is
hereby issued in due accordance with the provisions of Law 6,404/76.
PURPOSE OF THE APPRAISAL REPORT
The purpose of this appraisal report is to ascertain the book value of the net
assets of VALE DO RIO DOCE ALUMINIO S.A. - ALUVALE which is to be consolidated
into COMPANHIA VALE DO RIO DOCE.
The net assets of VALE DO RIO DOCE ALUMINIO S.A. - ALUVALE, which is to be
consolidated into COMPANHIA VALE DO RIO DOCE, shall be made up of the balance
sheets set forth in the appendix, whose values have been taken from the
accounting books of VALE DO RIO DOCE ALUMINIO S.A. - ALUVALE as on November
30,2003, which is the base date used in the valuation of the net assets to be
consolidated into COMPANHIA VALE DO RIO DOCE.
APPRAISAL CRITERIA
The appraisal of the net assets of VALE DO RIO DOCE ALUMINIO S.A. - ALUVALE, to
be consolidated into COMPANHIA VALE DO RIO DOCE has been carried out using the
accounting books of VALE DO RIO DOCE ALUMINIO S.A. - ALUVALE as on November 30,
2003, in due accordance with the accounting practices used in Brazil.
1
The appraisal of the net assets of VALE DO RIO DOCE ALUMINIO S.A. - ALUVALE, to
be consolidated into COMPANHIA VALE DO RIO DOCE, was performed according to the
limited review procedures in accordance with the Auditing Standards and
Procedures (NPA No. 04), as issued by the Brazilian Institute of Independent
Auditors (IBRACON), as set forth below:
1. Analytical review procedures are applied to the Company's balance sheet
for the period December 31, 2002 through November 30, 2003 in order to
ascertain the veracity of the book-entered balances or the existence of
individual entries which appear abnormal;
2. The minutes from the shareholders', board of director's and management
meetings are read in order to ascertain the existence of any decisions
which could significantly affect the financial statements undergoing
review;
3. Obtainment of reports elaborated by other auditors responsible by the
limited revision of companies booked as investments;
4. The employees, managers and directors responsible for the accounting,
operating and financial areas are asked:
- Whether the financial statements undergoing review have been
put together in due accordance with the accounting practices
used in Brazil;
- Whether any changes have been made to the accounting practices
with respect to the practices used in the previous financial
year;
- Whether, during the review period, The Company's business
operations have changed significantly, including new business
activities and the discontinuation of operations;
- Whether any events or transactions have taken place after the
financial statements undergoing review were issued, which
could significantly affect the contents thereof;
5. The financial statements are checked against the accounting books,
including investment valuation by the equity income method, based in the
financial statements of November 30, 2003;
6. Quantitative assessment of stocks and the criteria for its evaluation and
eliminations;
7. The bases used to compose provisions are reviewed, including: bad debt
reserves, accrued depreciation, 13th salaries, vacations etc;
8. Calculation criteria for provisions for income tax and social
contribution;
9. The analyses and conciliation compiled by the Entity for the other
significant assets and liabilities are reviewed;
2
10. Information is obtained from the Company's legal advisers as to the
existence or inexistence of litigation which could significantly affect
contingent assets or liabilities;
11. Based on the information obtained during the review, it is ascertained
whether the financial statements have been prepared in due accordance with
the accounting practices used in Brazil and in line with those used for
the previous financial year;
12. It is ascertained whether the payments to suppliers and other bills have
been paid after the balance sheet was put together, with the aim of
establishing the veracity of the company's liabilities as on November 30,
2003 (all bills due in November 2003 must have been duly allowed for on
that date);
13. Limited revision as described in the procedures 1 to 12 above, to the
invested companies (ALUNORTE - Alumina do Norte do Brasil S.A., ALBRAS -
Aluminio Brasileiro S.A., Mineracao Rio do Norte S.A. and Valesul Aluminio
S.A.).
INDEPENDENCE
In compliance with article 5 of Instruction 319 issued by the CVM on December
03, 1999, we hereby declare that (a) we have no links to the companies Companhia
Vale do Rio Doce and Companhia Vale do Rio Doce Aluminio S.A. - Aluvale and its
subsidiaries, in accordance with the standards issued by the Federal Accounting
Council; and (b) the scope of our work has not been directed, restricted,
impeded or prejudiced by the controlling shareholder or managers of the Company
undergoing our appraisal.
CONCLUSION
Following the appraisal performed, we hereby conclude that the book value of the
net assets of COMPANHIA VALE DO RIO DOCE ALUMINIO S.A. - ALUVALE, to be
consolidated into Companhia Vale do Rio Doce, in the terms of the Approval and
Justification report dated December 12, 2003 is R$ 1,481,308,345.87 (one
billion, four hundred and eighty one million, three hundred and eight thousand,
three hundred and forty five reais and eighty seven cents) as of November 30,
2003, as shown in the appendix to this appraisal report.
Rio de Janeiro, December 13, 2003
DELOITTE TOUCHE TOHMATSU
CRC - SP 11,609 S/RJ
Marcelo Cavalcanti Almeida
CRC - RJ 36,206-3
3
APPENDIX
APPRAISAL REPORT OF THE NET ASSETS OF VALE DO RIO DOCE ALUMINIO S.A. -
ALUVALE TO BE CONSOLIDATED INTO COMPANHIA VALE DO RIO DOCE
DETERMINATION OF THE VALUE OF THE NET ASSETS
AMOUNT IN R$
----------------
CURRENT ASSETS
Cash and equivalents 74,533,428.62
Subsidiaries and affiliates 14,562,920.11
Taxes to recover 5,741,805.47
Other 502,099.98
LONG TERM ASSETS
Deferred income tax 4,841,452.61
Other 74,402.63
FIXED ASSETS
Investments 1,411,311,811.01
Property plant and equipment 172,266.36
CURRENT LIABILITIES
Subsidiaries and affiliates (22,411.46)
Taxes payable (8,946,553.00)
Other (202,089.31)
LONG TERM LIABILITIES - provision for contingencies (21,260,787.15)
----------------
NET ASSETS 1,481,308,345.87
================
SUMMARY OF THE MAIN ACCOUNTING PRACTICES
a) The adoption of an appropriate accounting system for financial
years.
b) Assets and liabilities due after a twelve month period after
financial statements base date are considered long term.
c) Cash and equivalents are represented by short term marketable
securities, evaluated at cost, with interest accrued until financial
statements base date.
d) The rights and obligations are monetarily corrected, when
applicable, according to contractual indexes.
d) Contingencies considered as probable losses were provisioned as
liabilities.
4
MINERACAO SERRA DO SOSSEGO S.A.
APPRAISAL REPORT OF THE NET ASSETS TO BE CONSOLIDATED INTO
COMPANHIA VALE DO RIO DOCE
BASE DATE - NOVEMBER 30, 2003
DELOITTE TOUCHE TOHMATSU, a company which provides auditing and accounting
services with head offices located at Avenida Presidente Wilson 231, 22nd floor,
Rio de Janeiro, corporate taxpayer number (CNPJ) - 49.928.567/0002-00,
registered at the Sao Paulo state Regional Accounting Council CRC-SP under
number 11.609/S-RJ, has been assigned to appraise the value of the net assets of
MINERACAO SERRA DO SOSSEGO S.A, to be consolidated by its holding company
COMPANHIA VALE DO RIO DOCE, under the terms of the Acquisition Justification and
Presentation dated December 12, 2003. This appraisal report is hereby issued in
due accordance with the provisions of Law 6,404/76.
PURPOSE OF THE APPRAISAL REPORT
The purpose of this appraisal report is to ascertain the book value of the net
assets of the company MINERACAO SERRA DO SOSSEGO S.A. which is to be
consolidated by COMPANHIA VALE DO RIO DOCE.
The net assets of the company MINERACAO SERRA DO SOSSEGO S.A., which is to be
consolidated into COMPANHIA VALE DO RIO DOCE S.A., shall be made up of the
balance sheets set forth in the appendix, whose values have been taken from the
accounting books of MINERACAO SERRA DO SOSSEGO S.A. as on November 30,2003,
which is the base date used in the valuation of the net assets to be
consolidated into COMPANHIA VALE DO RIO DOCE.
APPRAISAL CRITERIA
The appraisal of the net assets of the company MINERACAO SERRA DO SOSSEGO S.A,
to be consolidated into COMPANHIA VALE DO RIO DOCE has been carried out using
the accounting books of MINERACAO SERRA DO SOSSEGO S.A. as on November 30, 2003,
in due accordance with the accounting practices used in Brazil.
5
The appraisal of the net assets of the company MINERACAO SERRA DO SOSSEGO S.A.,
to be consolidated into COMPANHIA VALE DO RIO DOCE, was performed according to
the limited review procedures in accordance with the Auditing Standards and
Procedures (NPA No. 04), as issued by the Brazilian Institute of Independent
Auditors (IBRACON), as set forth below:
1 Analytical review procedures are applied to the Company's balance sheet
for the period December 31, 2002 through November 30, 2003 in order to
ascertain the veracity of the book-entered balances or the existence of
individual entries which appear abnormal;
2 2 The minutes from the shareholders', board of director's and management
meetings are read in order to ascertain the existence of any decisions
which could significantly affect the financial statements undergoing
review;
4 The employees, managers and directors responsible for the accounting,
operating and financial areas are asked:
- Whether the financial statements undergoing review have
been put together in due accordance with the accounting
practices used in Brazil;
- Whether any changes have been made to the accounting
practices with respect to the practices used in the
previous financial year;
- Whether, during the review period, The Company's business
operations have changed significantly, including new
business activities and the discontinuation of operations;
- Whether any events or transactions have taken place after
the financial statements undergoing review were issued,
which could significantly affect the contents thereof;
5 The financial statements are checked against the accounting books;
6 The bases used to compose provisions are reviewed, including: bad debt
reserves, accrued depreciation, 13th salaries, vacations etc;
7 The analyses and conciliation compiled by the Entity for the other
significant assets and liabilities are reviewed;
8 Information is obtained from the Company's legal advisers as to the
existence or inexistence of litigation which could significantly affect
contingent assets or liabilities;
9 Based on the information obtained during the review, it is ascertained
whether the financial statements have been prepared in due accordance
with the accounting practices used in Brazil and in line with those used
for the previous financial year;
6
10 It is ascertained whether the payments to suppliers and other bills have
been paid after the balance sheet was put together, with the aim of
establishing the veracity of the company's liabilities as on November 30,
2003 (all bills due in November 2003 must have been duly allowed for on
that date);
11 The accounting system shall be studied in order to discover how
transactions are registered, classified and summarized for the
preparation of the financial statements;
12 It is ascertained whether the accounting books are periodically
conciliated with the subsidiary books (for example, fixed assets,
suppliers);
13 Fixed assets. It is ascertained whether:
- The criteria for establishing fixed assets are reasonable;
- The depreciation bases, criteria and calculations are
suitable ;
- The fixed assets are related to the activities which
constitute the Company's purposes;
- There exist controls to identify obsolete or unused items;
- The controls on goods under guaranty are suitable;
14 Deferred Assets. It is ascertained whether:
- The criteria used to determine and record the amounts are
adequate;
- It is possible to recover the deferred expenses;
15 Wages and payroll charges. It is ascertained whether:
- These have been properly entered into the accounting books;
- The provisions bases, criteria and calculations are
appropriate;
7
INDEPENDENCE
In compliance with article 5 of Instruction 319 issued by the CVM on December
03, 1999, we hereby declare that (a) we have no links to the companies Companhia
Vale do Rio Doce and Mineracao Serra do Sossego S.A, in accordance with the
standards issued by the Federal Accounting Council; and (b) the scope of our
work has not been directed, restricted, impeded or prejudiced by the controlling
shareholder or managers of the Company undergoing our appraisal.
CONCLUSION
Following the appraisal performed, we hereby conclude that the book value of the
net assets of the Company MINERACAO SERRA DO SOSSEGO S.A., is R$
1,206,437,162.00 (one billion, two hundred and six million, four hundred and
thirty seven thousand, one hundred and sixty two reais) as of November 30, 2003,
as shown in the appendix to this appraisal report.
Rio de Janeiro, December 13, 2003
DELOITTE TOUCHE TOHMATSU
CRC - SP 11.609 S/RJ
Marcelo Cavalcanti Almeida
CRC - RJ 36.206-3
8
APPENDIX
APPRAISAL REPORT OF THE NET ASSETS OF THE COMPANY MINERACAO SERRA
DO SOSSEGO S.A. TO BE CONSOLIDATED INTO COMPANHIA VALE DO RIO DOCE
DETERMINATION OF THE VALUE OF THE NET ASSETS
AMOUNT IN R$
----------------
CURRENT ASSETS
Cash 934,047.95
Taxes receivables 198,119.32
Third parties pre payments 260,733.69
LONG TERM RECEIVABLES - Judicial Deposits 981,214.70
FIXED ASSETS
Property Plant and Equipment 1,102,301,115.57
Deferred 146,406,759.28
CURRENT LIABILITIES
Suppliers (15,365,896.69)
Deferred taxes (153,446.01)
Others (2,125,487.81)
LONG TERM LIABILITIES - Advance for future capital increase
(Companhia Vale do Rio Doce) (26,999,998.00)
NET ASSETS 1,206,437,162.00
================
COMPANY OPERATIONS
Mineracao Serra do Sossego S.A. is a subsidiary of Companhia Vale do Rio Doce,
constituted in September 18th, 1998. The company's purposes is to exploit
minerals, research, prospect, extract, product, mine and beneficiate,
transportation, industrialization and commercialization of all and any mineral,
being able to sell and distribute of its products, derived and by products, in
Brazil or abroad, importing and exporting materials, raw or beneficiated and
industrialized, as well as perform studies, projects and technological research.
The Company is currently undergoing a pre-operating phase and, according to
CVRD projections, the investment spent on organization, development and pre
operation shall be fully offset by earnings from future operations.
9
SUMMARY OF THE MAIN ACCOUNTING PRACTICES
a) The adoption of an appropriate accounting system for financial years.
b) Assets and Liabilities due after a twelve month period after financial
statements base date are considered long term.
c) Fixed assets are evaluated using the cost of acquisition, with accrued
depreciation being deducted, according to the linear method at annual
rates, which take into consideration the estimated working life of the
assets.
d) Deferred assets take into consideration the expenditure in the
pre-operating period, which shall be amortized when the Company begins
operating.
e) The rights and obligations are monetarily corrected, when applicable,
according to contractual indexes.
10
MINERACAO VERA CRUZ S.A.
APPRAISAL REPORT OF THE NET ASSETS TO BE CONSOLIDATED INTO
COMPANHIA VALE DO RIO DOCE
BASE DATE - NOVEMBER 30, 2003
DELOITTE TOUCHE TOHMATSU, a company which provides auditing and accounting
services with head offices located at Avenida Presidente Wilson 231, 22nd floor,
Rio de Janeiro, corporate taxpayer number (CNPJ) - 49.928.567/0002-00,
registered at the Sao Paulo state Regional Accounting Council CRC-SP under
number 11.609/S-RJ, has been assigned to appraise the value of the net assets of
MINERACAO VERA CRUZ S.A., to be consolidated by its holding company COMPANHIA
VALE DO RIO DOCE, under the terms of the Acquisition Justification and
Presentation dated December 12, 2003. This appraisal report is hereby issued in
due accordance with the provisions of Law 6.404/76.
PURPOSE OF THE APPRAISAL REPORT
The purpose of this appraisal report is to ascertain the book value of the net
assets of the company MINERACAO VERA CRUZ S.A. which is to be consolidated by
COMPANHIA VALE DO RIO DOCE.
The net assets of MINERACAO VERA CRUZ S.A., which is to be consolidated into
COMPANHIA VALE DO RIO DOCE, shall be made up of the balance sheets set forth in
the appendix, whose values have been taken from the accounting books of
MINERACAO VERA CRUZ S.A. as on November 30,2003, which is the base date used in
the valuation of the net assets to be consolidated into COMPANHIA VALE DO RIO
DOCE.
APPRAISAL CRITERIA
The appraisal of the net assets of the company MINERACAO VERA CRUZ S.A., to be
consolidated into COMPANHIA VALE DO RIO DOCE has been carried out using the
accounting books of MINERACAO VERA CRUZ S.A. as on November 30, 2003, in due
accordance with the accounting practices used in Brazil.
11
The appraisal of the net assets of MINERACAO VERA CRUZ S.A., to be consolidated
into COMPANHIA VALE DO RIO DOCE, was performed according to the limited review
procedures in accordance with the Auditing Standards and Procedures (NPA No.
04), as issued by the Brazilian Institute of Independent Auditors (IBRACON), as
set forth below:
1 Analytical review procedures are applied to the Company's balance
sheet for the period December 31, 2002 through November 30, 2003
in order to ascertain the veracity of the book-entered balances or
the existence of individual entries which appear abnormal;
2 The minutes from the shareholders', board of director's and management
meetings are read in order to ascertain the existence of any decisions
which could significantly affect the financial statements undergoing
review;
3 The employees, managers and directors responsible for the accounting,
operating and financial areas are asked:
- Whether the financial statements undergoing review have
been put together in due accordance with the accounting
practices used in Brazil;
- Whether any changes have been made to the accounting
practices with respect to the practices used in the
previous financial year;
- Whether, during the review period, The Company's business
operations have changed significantly, including new
business activities and the discontinuation of operations;
- Whether any events or transactions have taken place after
the financial statements undergoing review were issued,
which could significantly affect the contents thereof;
4 The financial statements are checked against the accounting books;
5 The bases used to compose provisions are reviewed, including: bad debt
reserves, accrued depreciation, 13th salaries, vacations etc;
6 The analyses and conciliation compiled by the Entity for the other
significant assets and liabilities are reviewed;
7 Information is obtained from the Company's legal advisers as to the
existence or inexistence of litigation which could significantly affect
contingent assets or liabilities;
8 Based on the information obtained during the review, it is ascertained
whether the financial statements have been prepared in due accordance
with the accounting practices used in Brazil and in line with those used
for the previous financial year;
12
9 It is ascertained whether the payments to suppliers and other bills have
been paid after the balance sheet was put together, with the aim of
establishing the veracity of the company's liabilities as on November 30,
2003 (all bills due in November 2003 must have been duly allowed for on
that date);
10 The accounting system shall be studied in order to discover how
transactions are registered, classified and summarized for the
preparation of the financial statements;
11 It is ascertained whether the accounting books are periodically
conciliated with the subsidiary books (for example, fixed assets,
suppliers);
12 Fixed assets. It is ascertained whether:
- The criteria for establishing fixed assets are reasonable;
- The depreciation bases, criteria and calculations are
suitable ;
- The fixed assets are related to the activities which
constitute the Company's purposes;
- There exist controls to identify obsolete or unused items;
- The controls on goods under guaranty are suitable;
13 Deferred Assets. It is ascertained whether:
- The criteria used to determine and record the amounts are
adequate;
- The amortization is being carried out properly;
- It is possible to recover the deferred expenses;
14 Wages and payroll charges. It is ascertained whether:
- These have been properly entered into the accounting books;
- The provisions bases, criteria and calculations are
appropriate;
13
INDEPENDENCE
In compliance with article 5 of Instruction 319 issued by the CVM on December
03, 1999, we hereby declare that (a) we have no links to Companhia Vale do Rio
Doce and Mineracao Vera Cruz S.A, in accordance with the standards issued by the
Federal Accounting Council; and (b) the scope of our work has not been directed,
restricted, impeded or prejudiced by the controlling shareholder or managers of
the Company undergoing our appraisal.
CONCLUSION
Following the appraisal performed, we hereby conclude that the book value of the
net assets of the Company MINERACAO VERA CRUZ S.A., to be consolidated by
COMPANHIA VALE DO RIO DOCE, is R$ 56,703,441.88 (fifty-six million, seven
hundred and three thousand, four hundred and forty-one real and eighty-eight
cents) as of November 30, 2003, as shown in the appendix to this appraisal
report.
Rio de Janeiro, December 13, 2003
DELOITTE TOUCHE TOHMATSU
CRC - SP 11,609 S/RJ
Marcelo Cavalcanti Almeida
CRC - RJ 36,206-3
14
APPENDIX
APPRAISAL REPORT OF THE NET ASSETS OF THE COMPANY MINERACAO VERA
CRUZ S.A. TO BE CONSOLIDATED INTO COMPANHIA VALE DO RIO DOCE
DETERMINATION OF THE VALUE OF THE NET ASSETS
AMOUNT IN R$
-------------
CURRENT ASSETS - cash and associated companies 11,426.68
PERMANENT ASSETS
Fixed Assets 6,099,774.98
Deferred Assets 50,592,240.22
-------------
NET ASSETS 56,703,441.88
=============
COMPANY OPERATIONS
Mineracao Vera Cruz holds the mining rights in the Paragominas region, Para
state, which has estimated metallurgical grade bauxite reserves of 878
million tons, as is already to the knowledge of Companhia Vale do Rio Doce
(CVRD). These reserves lie in a region adjacent to the mining resources of
CVRD, which together shall form one of the largest bauxite reserves in the
world. The strategic location of these reserves, located approximately 250
kilometers from ALUNORTE - Alumina do Norte do Brasil S.A. (Alunorte),
makes it easier to use the logistical infrastructure of CVRD. Furthermore,
the bauxite in the Paragominas region is of world-class quality, which is
why this consolidation is very important if these reserves are to be
developed to supply future expansions to the business of Alunorte. This
takeover is part of the implementation of CVRD's aluminum business
strategy, which shall mainly be undertaken through the exploitation of
opportunities for growth in aluminum and bauxite related activities.
The Company is currently undergoing a pre-operating phase and, according to
CVRD projections, the investment spent on organization, development and pre
operation shall be fully offset by earnings from future operations.
SUMMARY OF THE MAIN ACCOUNTING PRACTICES
a) The adoption of an appropriate accounting system for financial years.
b) Fixed assets are evaluated using the cost of acquisition, and monetarily
corrected until December 31, 1995 with accrued depreciation being deducted
(until December 31, 1995), according to the linear method at annual rates
which take into consideration the estimated working life of the assets.
c) Deferred assets take into consideration the expenditure in the
pre-operating period, monetarily corrected until December 31, 1995, which
shall be amortized when the Company begins operating.
15
RIO DOCE GEOLOGIA E MINERACAO S.A. - DOCEGEO
APPRAISAL REPORT OF THE NET ASSETS TO BE CONSOLIDATED INTO
COMPANHIA VALE DO RIO DOCE
BASE DATE - NOVEMBER 30, 2003
DELOITTE TOUCHE TOHMATSU, a company which provides auditing and accounting
services with head offices located at Avenida Presidente Wilson 231, 22nd floor,
Rio de Janeiro, corporate taxpayer number (CNPJ) - 49.928.567/0002-00,
registered at the Sao Paulo state Regional Accounting Council CRC-SP under
number 11.609/S-RJ, has been assigned to appraise the value of the net assets of
RIO DOCE GEOLOGIA E MINERACAO S.A. - DOCEGEO, to be consolidated by its holding
company COMPANHIA VALE DO RIO DOCE, under the terms of the Acquisition
Justification and Presentation dated December 12, 2003. This appraisal report is
hereby issued in due accordance with the provisions of Law 6,404/76.
PURPOSE OF THE APPRAISAL REPORT
The purpose of this appraisal report is to ascertain the book value of the net
assets of the company RIO DOCE GEOLOGIA E MINERACAO S.A. - DOCEGEO which is to
be consolidated by COMPANHIA VALE DO RIO DOCE.
The net assets of RIO DOCE GEOLOGIA E MINERACAO S.A. - DOCEGEO, which is to be
consolidated into COMPANHIA VALE DO RIO DOCE, shall be made up of the balance
sheets set forth in the appendix, whose values have been taken from the
accounting books of RIO DOCE GEOLOGIA E MINERACAO S.A. - DOCEGEO, as on November
30,2003, which is the base date used in the valuation of the net assets to be
consolidated into COMPANHIA VALE DO RIO DOCE.
APPRAISAL CRITERIA
The appraisal of the net assets of RIO DOCE GEOLOGIA E MINERACAO S.A. - DOCEGEO,
to be consolidated into COMPANHIA VALE DO RIO DOCE has been carried out using
the accounting books of RIO DOCE GEOLOGIA E MINERACAO S.A. - DOCEGEO as on
November 30, 2003, in due accordance with the accounting practices used in
Brazil.
16
The appraisal of the net assets of the company RIO DOCE GEOLOGIA E MINERACAO
S.A. - DOCEGEO, to be consolidated into COMPANHIA VALE DO RIO DOCE, was
performed according to the limited review procedures in accordance with the
Auditing Standards and Procedures (NPA No. 04), as issued by the Brazilian
Institute of Independent Auditors (IBRACON), as set forth below:
1 Analytical review procedures are applied to the Company's balance sheet for
the period December 31, 2002 through November 30, 2003 in order to ascertain
the veracity of the book-entered balances or the existence of individual
entries which appear abnormal;
2 The minutes from the shareholders', board of director's and management
meetings are read in order to ascertain the existence of any decisions which
could significantly affect the financial statements undergoing review;
3 The employees, managers and directors responsible for the accounting,
operating and financial areas are asked:
- Whether the financial statements undergoing review have been put
together in due accordance with the accounting practices used in
Brazil;
- Whether any changes have been made to the accounting practices with
respect to the practices used in the previous financial year;
- Whether, during the review period, The Company's business operations
have changed significantly, including new business activities and the
discontinuation of operations;
- Whether any events or transactions have taken place after the financial
statements undergoing review were issued, which could significantly
affect the contents thereof;
4 The financial statements are checked against the accounting books;
5 The bases used to compose provisions are reviewed, including: bad debt
reserves, accrued depreciation, 13th salaries, vacations etc;
6 The calculation for income tax provisions and social contribution;
7 The analyses and conciliation compiled by the Entity for the other
significant assets and liabilities are reviewed;
17
8 Information is obtained from the Company's legal advisers as to the existence
or inexistence of litigation which could significantly affect contingent
assets or liabilities
9 Based on the information obtained during the review, it is ascertained
whether the financial statements have been prepared in due accordance with
the accounting practices used in Brazil and in line with those used for the
previous financial year
10 It is ascertained whether the payments to suppliers and other bills have been
paid after the balance sheet was put together, with the aim of establishing
the veracity of the company's liabilities as on November 30, 2003 (all bills
due in November 2003 must have been duly allowed for on that date)
INDEPENDENCE
In compliance with article 5 of Instruction 319 issued by the CVM on December
03, 1999, we hereby declare that (a) we have no links to the companies Companhia
Vale do Rio Doce and Rio Doce Geologia e Mineracao S.A. - Docegeo, in accordance
with the standards issued by the Federal Accounting Council; and (b) the scope
of our work has not been directed, restricted, impeded or prejudiced by the
controlling shareholder or managers of the Company undergoing our appraisal.
CONCLUSION
Following the appraisal performed, we hereby conclude that the book value of the
net assets of the Company RIO DOCE GEOLOGIA E MINERACAO S.A. - DOCEGEO, to be
consolidated into COMPANHIA VALE DO RIO DOCE, is R$ 2,434,943.91 (two million,
four hundred and thirty four thousand, nine hundred and forty three reais and
nine one cents ) as of November 30, 2003, as shown in the appendix to this
appraisal report.
Rio de Janeiro, December 13, 2003
DELOITTE TOUCHE TOHMATSU
CRC - SP 11.609 S/RJ
Marcelo Cavalcanti Almeida
CRC - RJ 36.206-3
18
APPENDIX
APPRAISAL REPORT OF THE NET ASSETS OF THE COMPANY RIO DOCE GEOLOGIA
E MINERACAO S.A. - DOCEGEO, TO BE
CONSOLIDATED INTO COMPANHIA VALE DO RIO DOCE
DETERMINATION OF THE VALUE OF THE NET ASSETS
AMOUNT IN R$
-------------
CURRENT ASSETS
Cash 43,469.73
Marketable Securities 5,017,639.84
Receivables from related parties 13,388,625.70
Other 381,515.79
LONG TERM
Judicial Deposits 12,668,052.98
Other 5,350.29
FIXED ASSETS
Investments 10,120.88
Property Plant and Equipment 10,342.69
CURRENT LIABILITIES
Payable to related parties (16,927,097.94)
Supliers (38,714.45)
Social Contribution payable (64,380.01)
Income tax payable (7,756.60)
Other tax payable (60,557.01)
Proposed dividends (58.29)
Other payables (1,337,014.49)
LONG TERM LIABILITIES - TAX CONTINGENCIES (10,654,595.20)
-------------
ACERVO LIQUIDO 2,434,943.91
=============
19
COMPANY OPERATIONS
Rio Doce Geologia e Mineracao S.A. - DOCEGEO was constituted in July 7,
1971, being a service provider to its parent company, Companhia Vale do
Rio Doce - CVRD, exploiting mineral deposits in Brazil, including the
search, research and mining of minerals, as well as the commercialization
and distribution of its products. Given the contractual relation to its
parent company, Rio Doce Geologia e Mineracao S.A. - DOCEGEO, is
remunerated as a percentage of the expenses incurred in the research,
being an entity that operates under the will of its controlling
shareholder CVRD.
SUMMARY OF THE MAIN ACCOUNTING PRACTICES
a) The adoption of an appropriate accounting system for financial years.
b) Marketable securities are evaluated at cost, with interest accrued
until financial statements base date.
c) Assets and Liabilities due after a twelve month period after financial
statements base date are considered long term.
e) Fixed assets are evaluated using the cost of acquisition, and
monetarily corrected until December 31, 1995 with accrued depreciation
being deducted (until December 31, 1995), according to the linear
method at annual rates which take into consideration the estimated
working life of the assets.
f) Contingencies considered as probable losses were provisioned as
Liabilities.
20
PRESENTATION AND JUSTIFICATION FOR THE CONSOLIDATION OF MINERACAO
SERRA DO SOSSEGO S/A INTO COMPANHIA VALE DO RIO DOCE, AS SET OUT BELOW:
The undersigned members of the administrative bodies of
MINERACAO SERRA DO SOSSEGO S/A, with head offices in the city of Rio de Janeiro,
Rua da Gloria, 306, 4th floor, Corporate Taxpayer (CNPJ/MF) No.
02,800,218/0001-56, hereinafter referred to as SOSSEGO; and
COMPANHIA VALE DO RIO DOCE, with head offices in the city of Rio de Janeiro,
Avenida Graca Aranha 26, Centro, Corporate Taxpayer (CNPJ/MF) No.
33,592,510/0001-54, hereinafter referred to as "CVRD",
Hereby undersign this Presentation and Justification concerning the
consolidation, which contains the terms and conditions agreed by the management
of CVRD and SOSSEGO with respect to the consolidation of the latter by the
former, in accordance with the terms and objectives of articles 224 and 225 of
Law No. 6.404 of December 15th 1976 and other applicable legal provisions, as
follows:
1. SOSSEGO is a company which has the corporate objective of exploiting and
using mineral reserves, involving research, prospecting, extraction, mining,
production, beneficiation, transportation, industrialization and sale of any and
all mineral substances, and can also distribute and sell its products,
derivatives and byproducts in Brazil or overseas, import and export production
inputs, raw materials, either "in natura", enriched or industrialized, in
addition to carrying out technological studies, projects and research;
2. CVRD is a publicly-held company, listed on stock exchanges in Brazil and
abroad, which does business in several sectors of national production. CVRD is
the largest producer and exporter of iron ore and pellets and one of the main
producers of manganese and ferrous alloys in the world. It also produces
bauxite, gold, kaolin, potash, alumina and aluminum and is involved in logistics
and electric energy generation;
3. Whereas SOSSEGO is a wholly-owned subsidiary of CVRD and there are synergies
between both companies, this consolidation is in line with CVRD's strategic
guidelines of administrative and financial simplification and racionalization;
4. SOSSEGO is an unlisted company with a share capital of R$1,206,437,162. (one
billion, two hundred and six million, four hundred and thirty-seven thousand,
one hundred and sixty-two reais), represented by 1,206,437,162 (one billion, two
hundred and six million, four hundred and thirty-seven thousand, one hundred and
sixty-two) registered shares of no nominal value, which are in turn composed of
1,206,074,162 (one billion, two hundred and six million, seventy-four thousand,
one hundred and sixty-two) common shares and 363,000 (three hundred and
sixty-three thousand) preferred shares, all of which are entirely held by CVRD;
5. SOSSEGO's assets will be transferred to CVRD at the respective book value.
This is
21
justified by the fact that, as SOSSEGO is a wholly-owned subsidiary of CVRD, its
net worth is already the exclusive property of CVRD and are represented by
CVRD's shares. Once the 1,206,437,162 (one billion, two hundred and six million,
four hundred and thirty-seven thousand, one hundred and sixty-two) registered
shares issued by SOSSEGO and belonging to CVRD are extinct, as a result of the
consolidation, the value of these shares in CVRD's accounting books shall be
replaced by the value of SOSSEGO's assets, without any alteration to the book
value;
6. The value of SOSSEGO's net worth to be transferred to CVRD shall be
determined by a specialized company, pursuant to Art. 8 of Law 6.404/76, with
such company being nominated at the General Shareholders' Meeting of SOSSEGO and
CVRD at which the present proposal is to be analyzed, with such company
composing the valuation report, as established in paragraph 1, article 227 of
Law 6.404/76, with such valuation being made using the book value, based upon
the balance sheet of SOSSEGO as of November 30, 2003;
7. Net Changes to the value of the assets taking place between November 30, 2003
and the effective consolidation date of SOSSEGO by CVRD will be appropriated by
each of the corresponding companies, and the repercussions of all the acts and
events occurring after the transaction being contemplated herein will be
absorbed by CVRD;
8. Given that CVRD holds all the shares composing SOSSEGO's share capital, which
shall be extincted by the intended consolidation, there will be no share issues
of CVRD's capital, which shall remain unchanged. Consequently, no amendments
will be made to the By-Laws of CVRD;
9. As a result of the above, SOSSEGO and CVRD will hold extraordinary general
shareholders' meetings to formalize what was stablished in this instrument,
pursuant to article 227 of Law 6.404/76, and CVRD shall be responsible for
filing the minutes of the acquisition at the appropriate registration entities;
10. Under the terms of corporate law, CVRD shall unconditionally assume the
entire assets, obligations and liabilities of SOSSEGO, be they legal or
conventional.
Rio de Janeiro, December 12, 2003.
COMPANHIA VALE DO RIO DOCE
BOARD OF DIRECTORS
22
/s/ Sergio Ricardo Silva Rosa /s/ Mario da Silveira Teixeira Junior
---------------------------------- ----------------------------------------
Sergio Ricardo Silva Rosa Mario da Silveira Teixeira Junior
Chairman Vice-Chairman
/s/ Erik Persson /s/ Ricardo Carvalho Giambroni
---------------------------------- ----------------------------------------
Erik Persson Ricardo Carvalho Giambroni
Board Member Board Member
/s/ Arlindo Magno de Oliveira /s/ Luiz Alexandre Bandeira de Mello
---------------------------------- ----------------------------------------
Arlindo Magno de Oliveira Luiz Alexandre Bandeira de Mello
Board Member Board Member
/s/ Renato da Cruz Gomes /s/ Isao Yasozumi
---------------------------------- ----------------------------------------
Renato da Cruz Gomes Isao Yasozumi
Board Member Board Member
/s/ Oscar Augusto de Camargo Filho /s/ Claudio Bernardo Guimaraes de Moraes
---------------------------------- ----------------------------------------
Oscar Augusto de Camargo Filho Claudio Bernardo Guimaraes de Moraes
Board Member Board Member
/s/ Francisco Valadares Povoa
-----------------------------
Francisco Valadares Povoa
Board Member
EXECUTIVE DIRECTORSHIP
/s/ Roger Agnelli /s/ Armando de Oliveira Santos Neto
---------------------------------- ----------------------------------------
Roger Agnelli Armando de Oliveira Santos Neto
CEO Executive Director
Ferrous Minerals
23
/s/ Gabriel Stoliar /s/ Fabio de Oliveira Barbosa
--------------------------------- ------------------------------------------
Gabriel Stoliar Fabio de Oliveira Barbosa
Executive Director of CFO
Planning and Control
/s/ Guilherme Rodolfo Laager /s/ Carla Grasso
--------------------------------- ------------------------------------------
Guilherme Rodolfo Laager Carla Grasso
Executive Director Executive Director of the Human Resources
Logistics and Corporate Services
/s/ Antonio Miguel Marques /s/ Diego Hernandez
--------------------------------- ------------------------------------------
Antonio Miguel Marques Diego Hernandez
Executive Director of Executive Director of Non-Ferrous Minerals
Shareholdings and
Business Development
MINERACAO SERRA DO SOSSEGO S/A
EXECUTIVE DIRECTORSHIP
/s/ Paulo Eduardo Antunes Libanio /s/ Roberto Reis de Freitas
--------------------------------- ------------------------------------------
Paulo Eduardo Antunes Libanio Roberto Reis de Freitas
CEO Director
24
PRESENTATION AND JUSTIFICATION FOR THE CONSOLIDATION OF VALE DO RIO DOCE
ALUMINIO S.A. - ALUVALE INTO COMPANHIA VALE DO RIO DOCE, AS FOLLOWS:
COMPANHIA VALE DO RIO DOCE, with head offices in the city of Rio de Janeiro,
Avenida Graca Aranha 26, Centro, Corporate Taxpayer Registration (CNPJ/MJ) No.
33,592,510/0001-54, hereinafter referred to as "CVRD", and
VALE DO RIO DOCE ALUMINIO S.A. - ALUVALE, with head offices in the city of Rio
de Janeiro, Avenida Graca Aranha 26/7th floor, Centro, Corporate Taxpayer
Registration (CNPJ/MF) No. 42,283,226/0001-97, hereinafter referred to as
"ALUVALE",
hereby execute this Presentation and Justification for Consolidation, which
contains the terms and conditions agreed by the directors of CVRD and ALUVALE
with respect to the acquisition of the latter by the former, in accordance with
the terms and objectives of articles 224 and 225 of Law No. 6.404 of December
15th 1976 and other applicable legal provisions, as follows:
1. CVRD is the biggest producer and exporter of iron ore and pellets and one of
the main producers of manganese and ferrous alloys in the world, in addition to
producing bauxite, gold, kaolin, potash, alumina and aluminum and having
business in the logistics and power generation areas;
2. ALUVALE is a closely held joint stock company which has the main purpose of
researching and using mineral reserves, which comprises of prospecting,
researching, commercializing and transporting mineral substances, specially
bauxite, alumina and aluminum, its raw materials and related products, in
addition to participating, under any modality, in other companies with any
objectives;
3. Whereas ALUVALE is a subsidiary of CVRD and there is administrative synergies
between both companies, the consolidation of ALUVALE into CVRD is justified
since it complies with the strategic guidelines of CVRD of simplifying and
rationalizing its administrative and financial structure, as well as of
developing directly activities related to exploitation of bauxite, alumina and
aluminum;
4. The share capital of ALUVALE is R$ 634,830,425.87 (six hundred thirty-four
million, eight hundred and thirty thousand, four hundred and twenty-five reais
and eighty-seven cents) represented by 32,105,822,448 (thirty-two billion, one
hundred and five million, eight hundred and twenty-two thousand, four hundred
and forty eight) common shares and 1,782,576,500 (one billion, seven hundred and
eighty-two million, five hundred and seventy sIx thousand and five hundred)
preferred Class A shares, all of no nominal value, which are entirely held by
CVRD;
5. ALUVALE's assets will be transferred to CVRD at the respective book value.
This is justified by the fact that, as ALUVALE is a wholly-owned subsidiary of
CVRD, its net assets
25
are already the exclusive property of CVRD and are represented by the shares of
ALUVALE. Once the shares issued by ALUVALE and held by CVRD are cancelled, as a
result of the consolidation, the value of these shares in CVRD's accounting
books shall be replaced by the value of ALUVALE 's assets, without any
alteration to the book value;
6. The value of ALUVALE 's net assets to be transferred to CVRD shall be
ascertained by a specialist company, pursuant to Art. 8 of Law 6.404/76, with
such company being nominated at the General Shareholders' Meeting of ALUVALE and
of CVRD at which the present proposal is to be analyzed, with such company
composing the appraisal report, as established in paragraph 1, article 227 of
Law 6.404/76, with such valuation being made using the book value, based upon
the balance sheet of ALUVALE as prepared on November 30, 2003;
7. Changes to the value of the assets taking place between November 30, 2003 and
the effective consolidation date of ALUVALE will be appropriated in each of the
corresponding companies, and the repercussions of all the acts and facts
occurring after the date of the acquisition being contemplated herein will be
absorbed by CVRD;
8. Given that CVRD holds all the shares composing ALUVALE 's share capital,
which shall be cancelled by the intended consolidation, there will be no share
issues of CVRD's capital, which shall remain unchanged. Consequently, no
amendments will be made to the By-Laws of CVRD;
9. As a result of the above, ALUVALE and CVRD will each hold Extraordinary
General Shareholders' meetings to formalize the provisions of the present
instrument, pursuant to article 227 of Law 6.404/76, and CVRD shall be
responsible for filing the minutes of the consolidation at the appropriate
registration entities;
10. Under the terms of corporate law, CVRD shall unconditionally assume the
entire assets, rights and liabilities of ALUVALE, be they legal or conventional.
In light of the above, the consolidation of ALUVALE into CVRD is in the best
interests of its (CVRD's) shareholders.
Rio de Janeiro, December 12, 2003
COMPANHIA VALE DO RIO DOCE
BOARD OF DIRECTORS
26
/s/ Sergio Ricardo Silva Rosa /s/ Mario da Silveira Teixeira Junior
---------------------------------- ----------------------------------------
Sergio Ricardo Silva Rosa Mario da Silveira Teixeira Junior
Chairman Vice-Chairman
/s/ Erik Persson /s/ Ricardo Carvalho Giambroni
---------------------------------- ----------------------------------------
Erik Persson Ricardo Carvalho Giambroni
Board Member Board Member
/s/ Arlindo Magno de Oliveira /s/ Luiz Alexandre Bandeira de Mello
---------------------------------- ----------------------------------------
Arlindo Magno de Oliveira Luiz Alexandre Bandeira de Mello
Board Member Board Member
/s/ Renato da Cruz Gomes /s/ Isao Yasozumi
---------------------------------- ----------------------------------------
Renato da Cruz Gomes Isao Yasozumi
Board Member Board Member
/s/ Oscar Augusto de Camargo Filho /s/ Claudio Bernardo Guimaraes de Moraes
---------------------------------- ----------------------------------------
Oscar Augusto de Camargo Filho Claudio Bernardo Guimaraes de Moraes
Board Member Board Member
/s/ Francisco Valadares Povoa
-----------------------------
Francisco Valadares Povoa
Board Member
EXECUTIVE DIRECTORSHIP
27
/s/ Roger Agnelli /s/ Armando de Oliveira Santos Neto
---------------------------- ------------------------------------------
Roger Agnelli Armando de Oliveira Santos Neto
CEO Executive Director
Ferrous Minerals
/s/ Gabriel Stoliar /s/ Fabio de Oliveira Barbosa
---------------------------- ------------------------------------------
Gabriel Stoliar Fabio de Oliveira Barbosa
Executive Director of CFO
Planning and Control
/s/ Guilherme Rodolfo Laager /s/ Carla Grasso
---------------------------- ------------------------------------------
Guilherme Rodolfo Laager Carla Grasso
Executive Director Executive Director of the Human Resources
Logistics and Corporate Services
/s/ Antonio Miguel Marques /s/ Diego Hernandez
---------------------------- ------------------------------------------
Antonio Miguel Marques Diego Hernandez
Executive Director of Executive Director of Non-Ferrous Minerals
Shareholdings and
Business Development
VALE DO RIO DOCE ALUMINIO S.A. - ALUVALE
BOARD
/s/ Antonio Miguel Marques /s/ Murilo Pinto de Oliveira Ferreira
---------------------------- ------------------------------------------
Antonio Miguel Marques Murilo Pinto de Oliveira Ferreira
CEO Director
28
PRESENTATION AND JUSTIFICATION FOR THE CONSOLIDATION OF RIO DOCE GEOLOGIA E
MINERACAO S.A. - DOCEGEO INTO COMPANHIA VALE DO RIO DOCE, AS FOLLOWS:
COMPANHIA VALE DO RIO DOCE, with head offices in the city of Rio de Janeiro,
Avenida Graca Aranha 26, Centro, Corporate Taxpayer Registration (CNPJ/MJ) No.
33,592,510/0001-54, hereinafter referred to as "CVRD", and
RIO DOCE GEOLOGIA E MINERACAO S.A. - DOCEGEO, with head offices in Minas Gerais,
at Rodovia BR 262, Km 296, Bairro Simao da Cunha, Distrito Industrial I, Santa
Luzia, Corporate Taxpayer Registration (CNPJ/MF) No.34,230,763/0001-40,
hereinafter referred to as "DOCEGEO",
hereby execute this Presentation and Justification for Consolidation, which
contains the terms and conditions agreed by the directors of CVRD and DOCEGEO
with respect to the acquisition of the latter by the former, in accordance with
the terms and objectives of articles 224 and 225 of Law No. 6.404 of December
15th 1976 and other applicable legal provisions, as follows:
1. CVRD is the biggest producer and exporter of iron ore and pellets and one of
the main producers of manganese and ferrous alloys in the world, in addition to
producing bauxite, gold, kaolin, potash, alumina and aluminum and having
business in the logistics and power generation areas;
2. DOCEGEO is a closely held joint stock company which has the main purpose of
researching and using mineral reserves, which comprises of prospecting,
researching, and mining mineral substances, as well as commercializing, in
Brazil and abroad, iron ore and related products, and the establishment and
exploration of any industry which, directly or indirectly, is related to this
objectives, besides providing services in this area;
3. Whereas DOCEGEO is a subsidiary of CVRD and was verified the perfect
integration of DOCEGEO assets and investments to CVRD operational activities,
CVRD and DOCEGEO understand that the consolidation of the latest by CVRD are in
accordance with strategic guidelines of both companies for administrative and
financial rationalization;
4. The share capital of DOCEGEO is R$ 1,324,491.23 (one billion, three hundred
and twenty-four million, four hundred and ninety-one reais and twenty-three
cents) represented by 9,000 (nine thousand) common shares, of no nominal value,
which are entirely held by CVRD;
5. DOCEGEO's assets will be transferred to CVRD at the respective book value.
This is justified by the fact that, as DOCEGEO is a wholly-owned subsidiary of
CVRD, its net assets are already the exclusive property of CVRD and are
represented by the shares of
29
DOCEGEO. Once the shares issued by DOCEGEO and held by CVRD are cancelled, as a
result of the consolidation, the value of these shares in CVRD's accounting
books shall be replaced by the value of DOCEGEO's assets, without any alteration
to the book value;
6. The value of DOCEGEO's net assets to be transferred to CVRD shall be
ascertained by a specialist company, pursuant to Art. 8 of Law 6.404/76, with
such company being nominated at the General Shareholders' Meeting of DOCEGEO and
of CVRD at which the present proposal is to be analyzed, with such company
composing the appraisal report, as established in paragraph 1, article 227 of
Law 6.404/76, with such valuation being made using the book value, based upon
the balance sheet of DOCEGEO as prepared on November 30, 2003;
7. Changes to the value of the assets taking place between November 30, 2003 and
the effective consolidation date of DOCEGEO will be appropriated in each of the
corresponding companies, and the repercussions of all the acts and facts
occurring after the date of the acquisition being contemplated herein will be
absorbed by CVRD;
8. Given that CVRD holds all the shares composing DOCEGEO's share capital,
which shall be cancelled by the intended consolidation, there will be no share
issues of CVRD's capital, which shall remain unchanged. Consequently, no
amendments will be made to the By-Laws of CVRD;
9. As a result of the above, DOCEGEO and CVRD will each hold Extraordinary
General Shareholders' meetings to formalize the provisions of the present
instrument, pursuant to article 227 of Law 6.404/76, and CVRD shall be
responsible for filing the minutes of the consolidation at the appropriate
registration entities;
10. Under the terms of corporate law, CVRD shall unconditionally assume the
entire assets, rights and liabilities of DOCEGEO, be they legal or conventional,
including mineral rights held by DOCEGEO.
In light of the above, the consolidation of DOCEGEO into CVRD is in the best
interests of its (CVRD's) shareholders.
Rio de Janeiro, December 12, 2003
COMPANHIA VALE DO RIO DOCE
BOARD OF DIRECTORS
30
/s/ Sergio Ricardo Silva Rosa /s/ Mario da Silveira Teixeira Junior
---------------------------------- ----------------------------------------
Sergio Ricardo Silva Rosa Mario da Silveira Teixeira Junior
Chairman Vice-Chairman
/s/ Erik Persson /s/ Ricardo Carvalho Giambroni
---------------------------------- ----------------------------------------
Erik Persson Ricardo Carvalho Giambroni
Board Member Board Member
/s/ Arlindo Magno de Oliveira /s/ Luiz Alexandre Bandeira de Mello
---------------------------------- ----------------------------------------
Arlindo Magno de Oliveira Luiz Alexandre Bandeira de Mello
Board Member Board Member
/s/ Renato da Cruz Gomes /s/ Isao Yasozumi
---------------------------------- ----------------------------------------
Renato da Cruz Gomes Isao Yasozumi
Board Member Board Member
/s/ Oscar Augusto de Camargo Filho /s/ Claudio Bernardo Guimaraes de Moraes
---------------------------------- ----------------------------------------
Oscar Augusto de Camargo Filho Claudio Bernardo Guimaraes de Moraes
Board Member Board Member
/s/ Francisco Valadares Povoa
-----------------------------
Francisco Valadares Povoa
Board Member
31
EXECUTIVE DIRECTORSHIP
/s/ Roger Agnelli /s/ Armando de Oliveira Santos Neto
----------------------------------- --------------------------------------
Roger Agnelli Armando de Oliveira Santos Neto
CEO Executive Director
Ferrous Minerals
/s/ Gabriel Stoliar /s/ Fabio de Oliveira Barbosa
----------------------------------- --------------------------------------
Gabriel Stoliar Fabio de Oliveira Barbosa
Executive Director of CFO
Planning and Control
/s/ Guilherme Rodolfo Laager /s/ Carla Grasso
----------------------------------- --------------------------------------
Guilherme Rodolfo Laager Carla Grasso
Executive Director Executive Director of the Human Resources
Logistics and Corporate Services
/s/ Antonio Miguel Marques /s/ Diego Hernandez
----------------------------------- --------------------------------------
Antonio Miguel Marques Diego Hernandez
Executive Director of Executive Director of Non-Ferrous Minerals
Shareholdings and
Business Development
RIO DOCE GEOLOGIA E MINERACAO S.A. - DOCEGEO
BOARD
/s/ Jose Auto de Lancaster Oliveira /s/ Armando Alvares de Campos Cordeiro
----------------------------------- --------------------------------------
Jose Auto de Lancaster Oliveira Armando Alvares de Campos Cordeiro
CEO Director
32
PRESENTATION AND JUSTIFICATION FOR THE CONSOLIDATION OF MINERACAO VERA CRUZ S.A.
INTO COMPANHIA VALE DO RIO DOCE, AS FOLLOWS:
COMPANHIA VALE DO RIO DOCE, with head offices in the city of Rio de Janeiro,
Avenida Graca Aranha 26, Centro, Corporate Taxpayer Registration (CNPJ/MJ) No.
33,592,510/0001-54, hereinafter referred to as "CVRD", and
MINERACAO VERA CRUZ S/A, with head offices in the city of Belem, Para state, Rua
Bartolomeu de Gusmao, no. 280, Corporate Taxpayer Registration (CNPJ/MF) No.
34,136,606/0001-70, hereinafter referred to as "MVC",
hereby execute this Presentation and Justification for Consolidation, which
contains the terms and conditions agreed by the directors of CVRD and MVC with
respect to the acquisition of the latter by the former, in accordance with the
terms and objectives of articles 224 and 225 of Law No. 6.404 of December 15th
1976 and other applicable legal provisions, as follows:
1. CVRD is the biggest producer and exporter of iron ore and pellets and one of
the main producers of manganese and ferrous alloys in the world, in addition to
producing bauxite, gold, kaolin, potash, alumina and aluminum and having
business in the logistics and power generation areas;
2. MVC is a closely held joint stock company which has the main purpose of
researching, mining, exploiting, extracting, processing, smelting and refining
metal, distributing, selling, transporting and exporting bauxite and any other
ores or mineral substances, in addition to any and all activities related to its
corporate objectives, including the holding of stakes in other companies;
3. Whereas MVC is a subsidiary of CVRD and there is administrative synergies
between both companies, the consolidation of MVC into CVRD is justified since it
complies with the strategic guidelines of CVRD of simplifying and rationalizing
its administrative and financial structure;
4. The share capital of MVC is R$31,408,155.49 (thirty-one million, four hundred
and eight thousand, one hundred and fifty-five reais and forty-nine cents)
represented by 10,200,000 (ten million two hundred thousand) common shares of no
nominal value, which are entirely held by CVRD;
5. MVC's assets will be transferred to CVRD at the respective book value. This
is justified by the fact that, as MVC is a wholly-owned subsidiary of CVRD, its
net assets are already the exclusive property of CVRD and are represented by the
shares of MVC. Once the shares issued by MVC and held by CVRD are cancelled, as
a result of the consolidation, the value of these shares in CVRD's accounting
books shall be replaced by the value of MVC's
33
assets, without any alteration to the book value;
6. The value of MVC's net assets to be transferred to CVRD shall be ascertained
by a specialist company, pursuant to Art. 8 of Law 6.404/76, with such company
being nominated at the General Shareholders' Meeting of MVC and of CVRD at which
the present proposal is to be analyzed, with such company composing the
appraisal report, as established in paragraph 1, article 227 of Law 6.404/76,
with such valuation being made using the book value, based upon the balance
sheet of MVC as prepared on November 30, 2003;
7. Changes to the value of the assets taking place between November 30, 2003 and
the effective consolidation date of MVC will be appropriated in each of the
corresponding companies, and the repercussions of all the acts and facts
occurring after the date of the acquisition being contemplated herein will be
absorbed by CVRD;
8. Given that CVRD holds all the shares composing MVC's share capital, which
shall be cancelled by the intended consolidation, there will be no share issues
of CVRD's capital, which shall remain unchanged. Consequently, no amendments
will be made to the By-Laws of CVRD;
9. As a result of the above, MVC and CVRD will each hold Extraordinary General
Shareholders' meetings to formalize the provisions of the present instrument,
pursuant to article 227 of Law 6.404/76, and CVRD shall be responsible for
filing the minutes of the consolidation at the appropriate registration
entities;
10. Under the terms of corporate law, CVRD shall unconditionally assume the
entire assets, rights and liabilities of MVC, be they legal or conventional,
including the mining rights owned by MVC.
In light of the above, the consolidation of MVC into CVRD is in the best
interests of its (CVRD's) shareholders.
Rio de Janeiro, December 12, 2003
COMPANHIA VALE DO RIO DOCE
34
BOARD OF DIRECTORS
/s/ Sergio Ricardo Silva Rosa /s/ Mario da Silveira Teixeira Junior
---------------------------------- ----------------------------------------
Sergio Ricardo Silva Rosa Mario da Silveira Teixeira Junior
Chairman Vice-Chairman
/s/ Erik Persson /s/ Ricardo Carvalho Giambroni
---------------------------------- ----------------------------------------
Erik Persson Ricardo Carvalho Giambroni
Board Member Board Member
/s/ Arlindo Magno de Oliveira /s/ Luiz Alexandre Bandeira de Mello
---------------------------------- ----------------------------------------
Arlindo Magno de Oliveira Luiz Alexandre Bandeira de Mello
Board Member Board Member
/s/ Renato da Cruz Gomes /s/ Isao Yasozumi
---------------------------------- ----------------------------------------
Renato da Cruz Gomes Isao Yasozumi
Board Member Board Member
/s/ Oscar Augusto de Camargo Filho /s/ Claudio Bernardo Guimaraes de Moraes
---------------------------------- ----------------------------------------
Oscar Augusto de Camargo Filho Claudio Bernardo Guimaraes de Moraes
Board Member Board Member
/s/ Francisco Valadares Povoa
-----------------------------
Francisco Valadares Povoa
Board Member
EXECUTIVE DIRECTORSHIP
35
/s/ Roger Agnelli /s/ Armando de Oliveira Santos Neto
------------------------------------- -----------------------------------------
Roger Agnelli Armando de Oliveira Santos Neto
CEO Executive Director
Ferrous Minerals
/s/ Gabriel Stoliar /s/ Fabio de Oliveira Barbosa
------------------------------------- -----------------------------------------
Gabriel Stoliar Fabio de Oliveira Barbosa
Executive Director of CFO
Planning and Control
/s/ Guilherme Rodolfo Laager /s/ Carla Grasso
------------------------------------- -----------------------------------------
Guilherme Rodolfo Laager Carla Grasso
Executive Director Executive Director of the Human Resources
Logistics and Corporate Services
/s/ Antonio Miguel Marques /s/ Diego Hernandez
------------------------------------- -----------------------------------------
Antonio Miguel Marques Diego Hernandez
Executive Director of Executive Director of Non-Ferrous Minerals
Shareholdings and
Business Development
MINERACAO VERA CRUZ S.A.
BOARD
/s/ Murilo Pinto de Oliveira Ferreira /s/ Roberto Lopes Machado
------------------------------------- -----------------------------------------
Murilo Pinto de Oliveira Ferreira Roberto Lopes Machado
CEO Director
/s/ Ricardo Eugenio Jorge Saad
------------------------------
Ricardo Eugenio Jorge Saad
Director
36
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COMPANHIA VALE DO RIO DOCE
(Registrant)
Date: December 17, 2003
By: /s/ Fabio de Oliveira Barbosa
-----------------------------
Fabio de Oliveira Barbosa
Chief Financial Officer