Companhia Brasileira de Distribuiçao Netherlands B : Policy on Transactions with Related Parties

Policy on Transactions with Related Parties of Companhia Brasileira de Distribuição (CBD)

1. - Introduction

1. The Board of Directors of Companhia Brasileira de Distribuição (hereinafter, "CBD" or the "Company") has decided to improve current procedures to ensure that transactions between (i) CBD and/or (ii) its subsidiaries ("Subsidiaries") and parties related thereto are performed in the best interest of CBD and/or said Subsidiary, as the case may be, and are based on the principles of transparency and commutativity (i.e., agreements executed under principles of fairness, good faith, and legal certainty, through which both contracting parties are aware of their rights and obligations). Likewise, this Policy(hereinafter, the "Policy") aims at preventing and managing situations involving potential conflict of interests when transactions with such related parties are made.

1. - Definitions

1. Company means CBD or its Subsidiaries.
2. Subsidiary means the company in which the Company, whether directly or through other Subsidiaries, holds shareholder rights that permanently assure such shareholder a preponderance in corporate resolutions and the power to elect a majority of management members.
3. Controlling Company means the individual, the company, or a group of individuals or companies bound by a voting agreement that, whether directly or through other Subsidiaries, holds shareholder rights that permanently assure its preponderance in the corporate resolutions of a given company and the authority to elect most of its management members.
4. Significant Influence means the authority to take part in a company's political, financial, and operational decisions, but without any individual or joint control over those decisions..
5. Close members of a person's family means members of whom one can expect to be able to influence or to be influenced by such person when those members do business with the Company, and they include:

1. the children of such person, the spouse or common-law spouse;
2. the children of the spouse of the person or common-law spouse; or
3. dependents of the person, his/her spouse or common-law spouse.

2.6. Related Party means, for the purposes of this Policy, pursuant to applicable regulations, in particular CVM Deliberation No. 642/10 and CVM Instruction No. 480/09, the individual or organization that is connected to the Company, as follows:

1. An individual, or a close family member, is related to the Company if:
2. 1. he/she has full or shared control of the Company;
   2. he/she has a Significant Influence over the Company; or
   3. is a member of the key management staff of the Company or its Controlling Company;
3. An organization is related to the Company if any of the following conditions are met:
4. 1. such organization and the Company are members of the same economic group (meaning that the Controlling Company and each subsidiary are interrelated, and the organizations under common control are also interrelated among them);
   2. such organization is affiliated or controlled jointly (in a joint venture) with the Company (or affiliated or controlled jointly by an organization making part of an economic group of which the Company is a member);
   3. such organization and the Company are under joint control (joint venture) of a third organization;
   4. such organization is under joint control (joint venture) of a third organization and the Company is affiliated with that third organization;
   5. such organization is a post-employment benefit plan the beneficiaries of which are employees of both organizations, the Company and the related organization;
   6. such organization is controlled, either fully or jointly, by an individual as described in section (a) above;
   7. an individual identified in letter (a)(i) has Significant Influence on the organization, or is a member of key management staff of such organization (or the Controlling Company of such organization);
   8. such organization, or any member of a group of which it is a member, provides key personnel services to the management of the reporting organization or to the Controlling Company of the reporting organization.

For the purposes of defining a Related Party, an affiliate company includes subsidiaries of that affiliate, and a joint venture includes subsidiaries of a joint venture. Thus, for example, the subsidiary of an affiliate company and the investor that has Significant Influence over such affiliate company are related parties to each other.

2.7. Unrelated Parties means, for the purposes of this Policy, any individual or organization that is not included or covered under the definition of Related Party, including:

1. organizations that have only one management member or other key management personnel in common with the Company, or in which a key member of the Company's management exercises Significant Influence over the other organization;
2. two entrepreneurs together simply by sharing joint control over a joint venture;
3. organizations that provide financing;
4. trade unions;

1. organizations that provide public services;
2. government departments and agencies that do not control, fully or jointly, or exercise Significant Influence over the reporting organization, simply because of its normal business with the organization (even if they may affect such organizations's freedom of action or take part in its decision-making process); and
3. customer, supplier, franchisor, dealer, distributor, or general agent with which the organization has a significant business volume, merely because of the resulting economic dependence.

2.8. Key Personnel of the Management means individuals who have the authority and responsibility for planning, directing, and controlling the Company's activities, directly or indirectly, including any manager (executive officer or otherwise) of that Company.

For the purposes of this Policy, Key Personnel of the Management, for instance, are considered to be members of the Board of Directors, the Fiscal Council (if established), the Company's Advisory Committees and Executive Officers of both the Company and the companies controlled by the Company.

1. A Transaction with a Related Party means the transfer of goods, rights, resources, services or obligations, directly or indirectly, between the Company and a Related Party, regardless of whether a price in return is charged or not.
2. Significant Amount means the amount of twenty-five million Reals (R$ 25,000,000). For the purposes of this Policy, a Transaction with Related Party involvinga Significant Amount is one that, in a single deal or a set of deals over 12 (twelve) months, reaches an amount higher than the Significant Amount.

1. - Procedures, Principles and ApprovalsIdentification of Related Parties

1. Each key person of the Management shall answer every year a questionnaire intended to collect information on the parties related thereto, in accordance with the definitions of this Policy, and any transactions between them and the Company of which he/she is aware of, provided that he/she must also ask to the close members of his/her family about it.
2. The Company's Legal Department will keep a record with the Related Parties' registration data, which must be consulted by those responsible for transactions to ascertain whether the transaction in question should be considered a Transaction with a Related Party.

Identification of Potential Transactions with Related Parties

5. Key personnel of the Company's Management shall be provided with guidance, and periodically directed, about their obligation to report to the Company's Legal Department any potential Transaction with Related Party of which he/she becomes aware.

6. Each potential Transaction with Related Party reported will be reviewed by the Company's Legal Department to determine whether the transaction is actually a Transaction

with Related Party subject to the procedures of this Policy.

7. If a transaction is deemed as a Transaction with a Related Party, the Company's Legal Department must rate it by the amount involved in determining the procedures to be followed as set forth in this Policy.

Formalization

1. The Transactions with Related Parties must be made formal by the execution of a document in writing, specifying their main characteristics and conditions, such as: overall price, unit price, terms, guarantees, liability for collecting taxes, payment of fees, permits to be obtained, among other. These characteristics should also expressly include the possibility for the Company to terminate any Transaction with Related Party of continuous nature, under conditions equivalent to those available in contracts with unrelated parties.
2. The Company's managers and employees must respect the existing ordinary flowfor negotiation, analysis and approval of transactions within the Company, and should not intervene in order to influence the contracting of Related Parties in disagreement with such flow.

Governance for Assessing Transactions with Related Parties

1. As soon as a transaction is deemed as a Transaction with a Related Party, an assessment committee ("Assessment Committee") will be created, composed of members (i) of the Corporate Legal Department; (ii) of the area responsible for contracting the Transaction with Related Party; (iii) of accounting area; (iv) of the Indirect Purchasing Center area (if there is a competitive process for such hiring); and (v) other areas deemed necessary. Such Assessment Committee will be responsible for reviewing the Transaction with Related Party and checking compliance with the conditions set forth in this Policy.
2. During the negotiation of the Transaction with a Related Party, the principle of competitiveness must be observed, and all such transactions must be formalized with prices and conditions of services compatible with those practiced in the market, and the principle of equity, observing the same principles and procedures that guide negotiations conducted by the Company with independent parties.

Transactions with Related Parties for an amount equal to or lower than the Significant Amount

12. If the Transaction with Related Party involves an amount equal to or less than the Significant Amount, it will be subject to (i) prior review by the Assessment Committee; and (ii) formal approval by the Company's Corporate Governance and Sustainability Committee.

Transactions with Related Parties for an amount exceeding the Significant Amount

13. If the Transaction with Related Party involves an amount exceeding the Significant Amount, it will be subject to (i) prior review by the Assessment Committee; (ii) review by the

Corporate Governance and Sustainability Committee; and (iii) formal approval by the Board of Directors, subject to the provisions of paragraph 15 below.

14. The Board of Directors, at its discretion, shall have access to all documents

connected to Transactions with Related Parties, including any technical opinions received by the prior instances and their own reviews, as the case may be.

1. The Board of Directors, on its own initiative or upon recommendation by the Corporate Governance and Sustainability Committee, may determine that the transaction, due to its relevance or other characteristics that the Board of Directors may consider relevant, to be reviewed by a independent special committee that has been created and deliberates pursuant to CVM Guidance Opinion No. 35 (the "Special Committee").
2. The Board of Directors or the Corporate Governance, Sustainability and Innovation Committee, as the case may be, may approve the Transaction with Related Party if it concludes, in good faith, that such transaction is fair and in the best interest of the Company.
3. The Board of Directors or the Corporate Governance and Sustainability Committee may, at its discretion, make the approval of the Related Party Transaction subject to such changes as it deems necessary for the transaction to be executed fairly and in the best interest of the Company or its Subsidiary, as the case may be.

Annual Revision

1. The Corporate Governance and Sustainability Committee and the Board of Directors will annually review all Transactions with Related Parties on a continuous basis ("Continuous Transactions") to determine whether it is in the Company's interest that such transactions continue or, if applicable, determine that the Board of Executive Officers terminate or renegotiate such contracts in order to adapt them and make them to comply with best market practices then in force1.
2. For the purposes of this Policy, Continuous Transactions are considered to be those transactions (i) that were effective as of December 31 of the previous fiscal year, unless early maturity or termination of contracts occurs (as the case may be); and (ii) on an ongoingbasis, that is, whose obligations and/or rights must be exercised on a continuous basis for a certain period of time, as set forth in the contract, including, during such period, periodic installments or counterparts agreed between the parties.
3. The Corporate Legal Department, which is the area responsible for contracting the Transaction with Related Party and the Management Control area shall prepare every year a Memorandum on to the Continuous Transactions, accompanied of studies and recommendation of the contracting area responsible for keeping the Transaction with Related Party Transaction, considering the proof that such transaction still occurs under market conditions and if the reasons that justify its contracting are still kept.

Approval of Transactions with Related Parties that must be submitted to the general meeting of shareholders by virtue of law

21. In the case of Transactions with Related Parties that must be approved by the general