Springs Global Participacoes : 2018 Financial Statements

(Convenience Translation into English from the Original Previously Issued in Portuguese)

Springs Global Participações S.A.

Individual and Consolidated Financial Statements for the Year Ended December 31, 2018 and Independent Auditor's Report on the Financial Statements

Deloitte Touche Tohmatsu Auditores Independentes

(Convenience Translation into English from the Original Previously Issued in Portuguese)

INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS

(Convenience Translation into English from the Original Previously Issued in Portuguese)

SPRINGS GLOBAL PARTICIPAÇÕES S.A.

BALANCE SHEETS AS OF DECEMBER 31, 2018 and 2017

	(In thousands of Brazilian Reais)
		ASSETS
		Company					Consolidated
	Note	2018	2017			2018		2017
CURRENT:
Cash and cash equivalents	3	49	103			139,474		155,442
Marketable securities	4	-	-			16,995		35,163
Derivative financial instruments		-	-			4,798		-
Accounts receivable	5	-	-			503,798		497,647
Inventories	6.a	-	-			405,352		538,175
Advances to suppliers	6.b	-	-			56,614		37,159
Recoverable taxes	18.c	148	148			17,736		28,662
Other receivables		1,168	1,044			33,783		52,307
Assets held for sale	29	-	-			308,244		-
		--------------	--------------			--------------		--------------
Total current assets		1,365	1,295			1,486,794		1,344,555
		--------------	--------------			--------------		--------------
NONCURRENT:
Long-term assets:
Marketable securities	4	-	-			75,729		63,819
Receivable - clients	7	-	-			39,934		37,388
Receivable - sale of
property	8	-	-			-		54,587
Related parties	22	-	-			18,946		39,711
Advances to suppliers	6.b	-	-			53,914		-
Recoverable taxes	18.c	-	-			228,231		14,895
Deferred taxes	18.b	1,905	1,905			150,033		89,357
Property, plant and equipment
held for sale	11.b	-	-			37,444		33,731
Escrow deposits	19	-	-			12,541		13,678
Others		-	-			41,601		34,568
		--------------	--------------			--------------		--------------
		1,905	1,905			658,373		381,734
Investments in subsidiaries	9.a	1,383,186	1,193,335			-		-
Investment properties	10	-	-			347,823		211,176
Property, plant and equipment	11.a	-	-			649,181		669,165
Intangible assets	12	27,303	27,303			81,873		114,788
		--------------	--------------			--------------		--------------
Total noncurrent assets		1,412,394	1,222,543			1,737,250		1,376,863
		--------------	--------------			--------------		--------------
Total assets		1,413,759	1,223,838			3,224,044		2,721,418
		========	========			========		========

The accompanying notes are an integral part of these financial statements.

(Convenience Translation into English from the Original Previously Issued in Portuguese)

SPRINGS GLOBAL PARTICIPAÇÕES S.A.

BALANCE SHEETS AS OF DECEMBER 31, 2018 and 2017

	(In thousands of Brazilian Reais)
	LIABILITIES AND EQUITY
			Company					Consolidated
	Note		2018	2017		2018			2017
LIABILITIES
CURRENT:
Loans and financing	13		4,759	21,866		527,241			444,861
Debentures	14		-	-		74,653			11,952
Suppliers	15		-	4		112,830			163,265
Taxes			189	120		19,451			13,553
Income and social contribution
taxes payable			-	-		17,766			1,186
Payroll and related charges			79	109		62,983			59,691
Government concessions	16		-	-		21,361			19,473
Noneconomic leases	17		-	-		8,765			7,202
Other payables			-	-		59,928			41,698
Liabilities related to assets held
for sale	29		-	-		240,086			-
			-------------	-------------		-------------			-------------
Total current liabilities			5,027	22,099		1,145,064			762,881
			-------------	-------------		-------------			-------------
NONCURRENT:
Loans and financing	13		-	-		417,818			582,180
Debentures	14		-	-		73,669			36,643
Noneconomic leases	17		-	-		14,456			13,816
Related parties	22		83,690	50,176		58			-
Government concessions	16		-	-		44,087			42,784
Miscellaneous accruals	19		-	-		12,933			18,610
Employee benefit plans	20		-	-		103,968			95,536
Deferred taxes	18.b		-	-		64,394			4,287
Other obligations			-	2,056		22,555			15,174
			-------------	-------------		-------------			-------------
Total noncurrent liabilities			83,690	52,232		753,938			809,030
			-------------	-------------		-------------			-------------
EQUITY:	21
Capital			1,860,265	1,860,265		1,860,265			1,860,265
Capital reserves			79,381	79,381		79,381			79,381
Assets and liabilities valuation
adjustments			114,036	82,435		114,036			82,435
Cumulative translation
adjustments			(241,807)	(274,173)		(241,807)			(274,173)
Earnings reserves			-	25,170		-			25,170
Accumulated deficit			(486,833)	(623,571)		(486,833)			(623,571)
			-------------	-------------		-------------			-------------
Total equity			1,325,042	1,149,507		1,325,042			1,149,507
			-------------	-------------		-------------			-------------
Total liabilities and equity			1,413,759	1,223,838		3,224,044			2,721,418
			========	========		========			========

The accompanying notes are an integral part of these financial statements.

(Convenience Translation into English from the Original Previously Issued in Portuguese)

SPRINGS GLOBAL PARTICIPAÇÕES S.A.

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(In thousands of Brazilian Reais)
			Company						Consolidated
	Note		2018		2017		2018			2017
NET REVENUES	27		-		-		1,370,837			1,414,168
COST OF GOODS SOLD	26		-		-		(945,686)			(962,907)
			-------------		-------------		-------------			-------------
GROSS PROFIT			-		-		425,151			451,261
OPERATING INCOME (EXPENSES):
Selling expenses	26		-		-		(261,667)			(250,568)
General and administrative expenses	26		(3,314)		(3,290)		(105,075)			(102,209)
Management fees	26		(1,029)		(973)		(12,116)			(10,538)
Equity in subsidiaries	9.a		72,210		(28,436)		-			-
Tax recovery	23		-		-		208,924			-
Others, net			-		-		6,178			23,306
			-------------		-------------		-------------			-------------
INCOME (LOSS) FROM OPERATIONS			67,867		(32,699)		261,395			111,252
			-------------		-------------		-------------			-------------
Financial expenses - interests			(8,493)		(8,253)		(124,696)			(137,914)
Financial expenses - bank charges and others			(1,481)		(989)		(49,333)			(59,601)
Financial income			1		117		24,916			26,959
Exchange rate variations, net			-		-		(46,925)			(9,663)
			-------------		-------------		-------------			-------------
INCOME (LOSS) FROM OPERATIONS BEFORE
TAXES			57,894		(41,824)		65,357			(68,967)
Income and social contribution taxes:
Current	18.a		-		-		(19,562)			266
Deferred	18.a		-		-		12,099			27,458
			------------		------------		------------			------------
NET INCOME (LOSS) FOR THE YEAR -
CONTINUING OPERATIONS			57,894		(41,824)		57,894			(41,243)
			------------		------------		------------			------------
Equity in subsidiary - discontinued operations	29		53,674		62,867		-			-
Net income from subsidiary - discontinued
operations	29		-		-		53,674			62,867
			------------		------------		------------			------------
NET INCOME FOR THE YEAR			111,568		21,043		111,568			21,624
			=======		=======		=======			=======
ATTRIBUTED TO:
Owners of the Company
Continuing operations							57,894			(41,824)
Discontinued operations	29						53,674			62,867
Non-controlling interests							-			581
							------------			------------
							111,568			21,624
							=======			=======
BASIC AND DILUTED EARNINGS (LOSS) PER
SHARE - R$	28
Continuing operations			1.1579		(0.8364)
Discontinued operations			1.0735		1.2573
			------------		------------
Total			2.2314		0.4209
			======		======

The accompanying notes are an integral part of these financial statements.