Your life project, our satisfaction.

2010 Sustainability Report TABLE OF CONTENTS

1 04 Make yourself at home 2 32 Performance, management 06 Message from Management and innovation

08 Main indicators 34 Scenario analysis

12 30 years building life projects 35 Operating performance

21 Brazilian and regional 40 Financial performance

24 Diversified and flexible 44 Capital market

29 Awards and recognition 46 Corporate governance

50 Sustainability

57 Engineering, management and processes

3 64 Made for people by people

66 Team

76 Clients

81 Suppliers

82 Partners

83 Investors

83 The media

2 Rossi | 2010 Sustainability Report 4 87 Sustainability report

87 About this Report

88 GRI Index

5 92 Glossary

6 94 Corporate information

Your life project, our satisfaction. 3 1.

4 Rossi | 2010 Sustainability Report Make yourself at home

Your life project, our satisfaction. 5 Make yourself at home | Message from Management

MESSAGE FROM MANAGEMENT [GRI 1.1]

2010 was a year of growth and maturity. Motivated by the celebration of our 30-year history, which has naturally afforded us a great deal of expertise in the construction sector, we reflected on our management, which has put us among the country’s leading builders and real estate developers. It is an exceptionally positive moment for us and we are determined to grow in a sustainable manner while consolidating our relationships.

The change in our organizational structure at the end of 2009 entailed a need to invest in team development and management. This concern was reflected in the perceptible enthusiasm of our employees, who saw more reasons to remain and establish their careers at Rossi. In the Customer Relations area, we continued to invest in transparent operations and improving our procedures and mechanisms for identifying our clients’ needs and level of satisfaction.

In addition, the strengthening of relations with our regional partners ensured increasingly strategic alliances and partnerships, combining the benefits of a national structure with local knowledge and operations, and we formed two new joint ventures in 2010. Finally, investors perceived our maturity, exemplified by our solid results: 74% more launches than in 2009, total contracted sales of R$ 4.0 billion (71% up on the year before) and exceptionally healthy financial indicators (more details in the Performance section).

We are aware that the substantial growth in 2010 was also due to our extensive regional distribution and to our previous decision to diversify our product portfolio into commercial projects, residential projects and low-income projects (which this year gained the Rossi Mais line). As a result, we are now able to offer properties to clients with the most varied profiles and income levels, and we closed the year with a presence in more than over 85 cities throughout Brazil, ensuring lower all-round risk.

The increasing changes in the sector and our growing concern with risk management forced us to adopt an even more innovative business strategy. In 2010, the Engineering area invested systematically in building technologies for the low-income segment, with an emphasis on our pre-cast production centers. We set up a specific Sustainability Department, even though this concept has underpinned our decisions and processes for years, whose mission is to concentrate, motivate and propagate solutions for the sustainability of the business. The Information Technology Department maintained its pioneering approach and expanded the use of Hyperion, a performance management system that permits the analysis of different scenarios and results in more assertive decisions.

6 Rossi | 2010 Sustainability Report The Institutional Marketing area also played a critical role in strengthening the Company’s brand by heading a series of special initiatives in celebration of our 30th anniversary and helping disseminate our branding to all the Company’s areas and processes. We remain the same Rossi, with the same quality that our clients recognize in São Paulo, Manaus, Rio Grande do Sul and wherever we operate. This unique way of being gives us the confidence to move into new cities and approach the local teams. Everybody recognizes our ethical standards and knows exactly what to expect from us.

We are beginning 2011 in the absolute certainty that we could not have achieved all we did in 2010 and over the last thirty years without the enthusiasm and dedication of all our employees. Enthusiasm is one of Rossi’s values and a fundamental factor in building a company that values relationships and is determined to always keep ahead of the market. This determination is also expressed in the satisfaction of helping fulfill our clients’ life projects and transmits the feeling that, together, we can do more and better in the future.

At the age of 30, we have a very promising future ahead of us. Time gives us experience, our business strategy opens up new horizons, innovation systematically increases our growth potential, and sustainability keeps us humble in order to progress with wisdom. This is how we will keep our commitment to life projects alive, strengthening our belief that it is our clients projects that fuel our satisfaction and the characteristics of these projects that make us unique in the sector.

Heitor Cantergiani João Rossi Cuppoloni Chief Executive Officer Chairman of the Board of Directors

Your life project, our satisfaction. 7 Make yourself at home | Main indicators

MAIN INDICATORS

LAUNCHES

Launches (R$ million)

4,798 5000 74%

4000 1,451 2,758 3000 602 2000 3,347 1000 2,156 Breakdown by region (%)

0 2% 1% 2009 2010 3% 1% São Paulo (other cities) Rossi Partners 4% 22% Rio Grande do Sul 4% São Paulo Metropolitan Region 4% Amazonas 4% Goiás 4% Rio de Janeiro Espírito Santo 6% 16% Rio Grande do Norte

6% Minas Gerais Ceará 7% 16% Paraná Federal District Bahia Mato Grosso do Sul * These states represent less than 1% each. Santa Catarina* Pará* Breakdown by segment (%)

14% 50% Low-income segment Residential segment Commercial segment 36%

8 Rossi | 2010 Sustainability Report sales

Contracted sales (R$ million) 3,994 4000 71% 3500 910

3000 2,340 2500

2000 515 1500 3,084 1000 1,825 500

0 2009 2010 Breakdown by region (%) 1% Rossi Partners 2% 1%1% 2% São Paulo (other cities) 3% 3% 22% São Paulo Metropolitan Region 4% Rio Grande do Sul 4% Rio de Janeiro Paraná 6% Minas Gerais Espírito Santo 7% Federal District 21% Amazonas 10% Goiás Ceará 13% Rio Grande do Norte Mato Grosso do Sul Bahia Pernambuco* * These states represent less than 0.5% each. Santa Catarina* Pará* Breakdown by segment (Rossi’s share) Alagoas*

15% 49% Low-income segment Residential segment Commercial segment 36%

Your life project, our satisfaction. 9 Make yourself at home | Main indicators

LANDBANK

Breakdown by segment (%)

5% Low-income segment 6% 41% From R$ 200,000 to R$ 350,000

9% From R$ 350,000 to R$ 500,000 More than R$ 500,000 Commercial segment

12% Lots

Breakdown by region (%) 27% 2% 2% 1%1%

3% São Paulo (other cities) 3% 33% Rio Grande do Sul 4% Federal District 4% São Paulo Metropolitan Region 4% Minas Gerais Goiás 6% Rio de Janeiro Bahia 7% Paraná

Acquisition through swaps 8% 12% Espírito Santo Rio Grande do Norte 10% 36% Ceará Amazonas 30% Paraíba Rio de Janeiro* * These states represent less than 1% each. Rio Grande do Norte* Rio Grande do Sul* São Paulo*

304 sites in 85 cities 34% 11 million m2 to be built Financial swaps Unit swaps 140,000 units Cash

10 Rossi | 2010 Sustainability Report FINANCIAL INDICATORS

Net revenue (R$ million) Gross income (R$ million) and gross margin (%)

2,496 788 2500 59% 800 64% 700 2000

1,572 600

1500 481 500

400 1000 31.6%

300

500 30.6% 200

100 0

0 2009 2010 2009 2010

EBITDA (R$ million) and EBITDA margin (%) Net income (R$ million) and net margin (%) 350 600 350 533 72%

62% 300 500

250 400 330 204 200 300 14.0% 150 21.4%

200 21.0% 100 12.9%

100 50

0 0 2009 2010 2009 2010

Distribution of value added in 2010 [GRI EC1]

Employees 18% Government Third Parties 39% Shareholders

19% Distribution of value added: R$ 884 million

24%

Your life project, our satisfaction. 11 Make yourself at home | 30 years building life projects

30 YEARS BUILDING LIFE PROJECTS

OUR HISTORY

On October 27, 1980, Grupo Rossi, one of the leaders in the Brazilian engineering, construction and real estate development sectors, founded Rossi Residencial S.A., a company specializing in the real estate segment. In 2010 we celebrated 30 years of operations, with a presence in 85 cities, over [GRI 2.1/2.6] 38,000 units delivered and approximately 78,600 clients served. To learn more about our history, go to Throughout our history, we have improved and updated our administrative and operational methods, www.rossiresidencial.com.br established a regionalized management system, developed products for all income groups, invested in consolidating our relationships and structured an exceptionally able team that seeks to express who we are and do business on every front.

For us, building a home where a family will live, or offices where people will spend a good part of their lives gives us considerable satisfaction and requires knowledge, respect and complete commitment to our clients’ life projects.

Below are some of the most important landmarks in our history.

MAIN HIGHLIGHTS

- Start-up of operations in the low-income segment with the creation of Plano 100, which made it easier to purchase - The Company’s IPO raises US$ 100 million on the Bovespa and NYSE. properties by offering - Opening of a regional long-term financing to - Rossi pioneers the securitization of real office in Rio de Janeiro state, homebuyers (more than based in the state capital. 14,000 units delivered)*. estate receivables.

- Launch of the Vida Nova project (more than 5,000 units delivered)**. - Launch of Villa Flora in Sumaré (São Paulo State), a new housing - Foundation of Rossi concept targeting the low- Residencial S.A. focused income segment. on the development of

residential properties - Opening of a regional office in in the São Paulo - Opening of a the South, with headquarters in Metropolitan Region. regional office in Campinas. Porto Alegre, Rio Grande do Sul. - Implementation of the SAP business management system.

1992 1996 1999

1980 1994 1997 2000

12 Rossi | 2010 Sustainability Report - The Company adopts branding as a management tool and renews its visual identity, aligning its business activities and communications with the Rossi brand’s desired values and attributes. - Rossi’s shares were included in the Ibovespa Index - R$ 150 million share subscription.

- New share offering raises R$ 1 billion. - Listed in the Bovespa’s Novo Mercado corporate governance trading segment. - Opening of the São Paulo City regional office, - Opening of the Brasília regional office, based in the focusing on properties located in this city (except for Federal District. products targeting the low-income segment). - Establishment of partnerships with other developers. - Launch of the Rossi Mais product line, geared - Entry into the urban planning project segment. towards the low-income segment. - Establishment of joint ventures with Toctao Engenharia and Grupo GMS. - Rossi celebrates its 30th anniversary. - Opening of a regional office in the Northeast, based in Salvador, Bahia. - Creation of Rossi Vendas, the Company’s in-house brokerage team. - Opening of the Western regional - New share offering office, based in São José do Rio Preto raises R$ 80 million. (São Paulo State). - Launch of Rossi Ideal, a product - Launch of Rossi Praças, another that qualifies for incentives under - Adherence to the new housing concept targeting the the federal government’s “Minha Bovespa’s Level 1 of residential segment. Casa, Minha Vida” (My Home, My corporate governance. Life) housing program.

- Opening of a regional office in the North through a joint venture with Construtora Capital (www. - Acquisition of construtoracapital.com.br), based America Properties, in Manaus, Amazonas state. a company focusing on the construction of differentiated residential properties in the city of São Paulo.

2008 2006 2009 2010 2002 2007 2003

*Through July 2008, after which time the project was discontinued and replaced with other projects and more modern financing methods. **Through September 2005, at which time the project was discontinued due to recent innovations and launches.

Your life project, our satisfaction. 13 Make yourself at home | 30 years building life projects

VISION, MISSION AND VALUES [GRI 4.8]

Over the past 30 years, we have established ourselves as a company underpinned by such values as innovation, sustainability and respect for people, a company that believes in building long-term relationships with its stakeholders and which understands that its mission goes well beyond the construction of homes and offices.

We are committed to life projects. This is expressed in our essence and the opinion of people who are part of our history.

Vision We believe that in seeking happiness and quality of life, people are constantly developing their housing, leisure and professional aspirations.

Mission To develop innovative real estate solutions of recognized quality, having people, the community and the environment as a reference, while creating value for shareholders and ensuring the continuity of the business.

Values

Knowledge People turn information into knowledge. Knowledge is the key to understanding the dynamics of life, society and the market, and making better decisions regarding our actions. We must foster the acquisition, processing and sharing of information in all our relationships.

Humility Humility is wisdom. By recognizing ourselves as imperfect beings who make mistakes, we have the opportunity to learn and develop as human beings, professionals and entrepreneurs. We must praise those who admit and share their mistakes in order to prevent others from repeating them.

Innovation Innovation results from our understanding of society’s development and a critical view of reality. It is the capacity to propose new and better solutions for the challenges we face.

14 Rossi | 2010 Sustainability Report Integrity Integrity is to have firm values and to act in a conscientious manner, inspired and guided by such values. People with integrity build credible relationships.

Valuing People We believe in the people who work with us and encourage the personal and professional development of all those who contribute with their talent and effort to building our brand and the circle of relationships supporting it.

Sustainability We recognize that the solutions for our living in society must include the interdependence of human, financial and natural resources. Our future depends on both big and small innovations which respect and are inspired by this balance.

Enthusiasm People are enthusiastic whenever they have a sense of purpose and meaning in order to overcome obstacles more easily and live with more happiness, pleasure and a sense of humor. The word “enthusiasm” comes from the Greek term entheos, which means “inspired by a god”.

Rossi by its clients

“We feel we are part of Rossi’s history, as we bought into one of its earliest projects. Today, 16 years after moving here, we can see just how much Rossi has grown. Congratulations, Rossi, on the success of your projects, today and always!” Sérgio and Joseli Ricci, residents of Top One, in São Paulo (SP)

“People say that first impressions count for everything. With us it was exactly like that, it was love at first sight! We were always made to feel very welcome (...). Today we feel part of this large family, the Rossi family, because it was through Rossi’s help that we fulfilled our dream of becoming homeowners.” Carlos and Sandra Brasil, residents of Liberty Green, in Rio de Janeiro (RJ)

“In our opinion, Rossi has always had credibility. We have a friend who is an engineer and he told us that Rossi always adopts exceptionally high standards in its projects. For us this apartment is fundamental because it is a victory for our relationship. Receiving the keys was a dream come true.” Leonardo Backes Fritzen and Elen Pereira Martins, residents of Ampla, in Porto Alegre (RS)

“This is our third Rossi apartment. We chose Rossi because of our long-standing confidence in the company, its excellent customer service and because it is a great business opportunity. We love living in Rossi apartments and that’s why we are faithful clients. We are certainly part of this history!” Gilson and Marisa Simenes, residents of Ruas da Villa Eco Residenza, in Campinas (SP)

Your life project, our satisfaction. 15 Make yourself at home | 30 years building life projects

STRATEGY AND COMPETITIVE ADVANTAGES [gri 1.2]

Our strategy is focused on creating value for our shareholders through the expansion of our real estate development operations and revenues in a profitable manner, by making full use of our many competitive advantages. In 2010, we continued to exploit our strengths, including:

Growth in the low-income segment: Given the highly favorable macroeconomic conditions at the moment, exemplified by increased credit and reduced interest rates for real estate financing, GDP growth, inflation under control and falling unemployment, we believe demand for this type of property will increase substantially. The experience gained over more than ten years operating in this segment puts us in a privileged position compared to our competitors in regard to exploring this opportunity in the most effective manner.

Geographical expansion: In addition to growing in our existing markets, we intend to expand our activities into new regions with growth potential, i.e. regions that are economically attractive but which have not yet experienced the real estate boom that has taken hold in the state capitals and other large cities.

Partnerships with local developers: Our regionalization strategy is based on partnerships with local developers, thereby ensuring knowledge of regional cultures and characteristics, access to a high-quality landbank, negotiations with local suppliers, and experience in dealing with municipal legislation. Our role is to add value to the developments through our experience of real estate and construction management, sales strategies and financial and legal structuring, as well as through the possibility of creating economies of scale in regard to raw material purchases.

Operational flexibility: We intend to maintain the flexibility to adjust our product portfolio in order to meet differing demands for real estate in the various income segments and cities where we operate, allowing us to benefit from a variety of opportunities.

Maintaining discipline and financial strength: Real estate operations are heavily dependent on credit, both to cover construction costs and for client financing. Our strategy is to preserve a solid financial position by maintaining strict discipline during project evaluation, budgeting, financial structuring and execution, in order to manage our cash flow in the most effective manner possible.

Integrated operation, focusing on cost reductions and streamlining of the construction process: We maintain an integrated operation that allows us to manage and control all the stages of real estate development, thus reducing building costs and increasing margins and profitability. In order to keep construction costs as low as possible, we centralize the acquisition of building materials, which increases purchased volume and gives us greater bargaining power with suppliers, generating economies of scale that in turn bring down the final price of the units.

Competitive advantages

Competition in the real estate sector is local, and often our competitors in a given region are our partners in other regions. We have therefore established a number of differentials designed to strengthen the Company as a whole and allow for local flexibility, underpinned by national controls, negotiations and knowledge.

16 Rossi | 2010 Sustainability Report Geographical distribution Proximity to local markets. We are present in 85 Brazilian cities, with nine regional offices. Excellent understanding of local characteristics and demand, with a team trained to meet the expectations of each client group in order to ensure the comfort and security of all our clients. Regional partners that permit immediate access to a landbank and qualified building services, streamlining production. Rapid approval processes, operational credibility in new regions and respect for the particular characteristics of each city.

Product diversity Diversified product portfolio that caters to every income segment, thereby ensuring the flexibility to respond to market demands. Extensive knowledge of building and engineering processes in the low-income segment.

Fully-implemented SAP technology Business largely guided by processes, ensuring efficiency and control. Integrated, nationwide operations permitting expansion with centralized management. Ability to manage a constantly growing client portfolio. Financial control and performance review for the definition of solid, consistent strategies.

Experienced Leadership Leading executives have more than 25 years of experience in the sector. Extensive expertise in managing businesses in several different markets and in the execution of long-term strategies. Personnel development and benefit program focused on talent retention.

Rossi Vendas Valuable interface for strengthening customer relations, thereby generating more rapid sales growth.

Team of brokers trained in-house, who understand the details of each project and are committed to the company’s values and goals.

Strategic brand management Branding-based management, guided by the Company’s essence and not only by market trends and competition. National standard for using the Rossi brand in association with the name of the project, ensuring trust and consistency. Nationally-coordinated media relations activities. Local marketing and sales strategy, ensuring assertiveness and an understanding of regional demand, thereby speeding up sales. Structuring of powerful and highly visible corporate marketing campaigns to promote national brand recognition, thereby helping the regional campaigns.

Your life project, our satisfaction. 17 Make yourself at home | 30 years building life projects

BRAND APPRECIATION AND MANAGEMENT

th Rossi’s 30 anniversary was marked by reflection on the Company’sbranding Branding is a strategic corporate project and the values we have constructed along these years. As part of management system based on this process, we published a special insert in the 14th issue of the internal the company’s way of being, newsletter Momento Rossi (June/July 2010) to inspire employees and acting and thinking, whose aim is to build a strong and relevant reinforce the importance of their individual contribution to consolidating brand identity with stakeholders. the identity of the Rossi brand. With this goal, the cover read: “Welcome to the Rossi we want to be.”

Branding step by step – A project called Rossi

Rossi’s branding project was initially introduced in three stages. The first, called Rossi Identity, was designed to capture the brand’s essence. At this stage, we identified our mission, vision and values and put down on paper the way we wished to be perceived by our stakeholders, i.e. what qualities we would like to be remembered for.

After identifying these attributes, we entered the second stage and developed a plan of what we had to do in order to create this brand perception. This was called the Implementation Plan.

The third stage, Rossi Language, began with the change in our logo and reflected the way in which we demonstrate our essence in practice, at every moment of interaction with the brand. By incorporating the brand’s language into all of our relationships, we show, through our attitudes, projects and campaigns, that we have our own way of being, which is relevant and appropriate to what others expect from us and what we expect from the world.

Rossi’s branding is alive and will develop in accordance with the population’s housing, work and leisure aspirations. Today, the results of these initial stages Special insert in the in-house newspaper are part of the daily lives of all Rossi’s employees, who do everything possible to Momento Rossi celebrating our 30th anniversary ensure that the brand is respected and continues to evolve.

18 Rossi | 2010 Sustainability Report “ROSSI 30 YEARS” CAMPAIGN

In celebration of our 30th anniversary, we held a series of institutional events during 2010 and created a commemorative seal to be included in our institutional material and products until the end of 2011. Some of these events and initiatives are detailed below:

“Rossi: 30 years of experience” promotion

Buying a home is, for many, one of the most important events in their life. This campaign sought to strengthen ties with our clients and transform this experience into an even more memorable and unforgettable moment. We launched an innovative nationwide campaign based on the experience marketing concept and awarded clients who acquired a Rossi property in August with a different type of prize: life experience.

The projects included in the promotion were divided into four categories and a menu of different experiences was created for each. Clients could choose the experience they would most like to have from the available options, which included a VIP dinner for four, a shopping weekend in Buenos Aires, home appliance and bed, bath & table linen kits, a feng-shui consultation, a fine dining tour of São Paulo and a photo safari in the Pantanal, among others. People who had acquired a Rossi property before the promotion began and had nominated friends or relatives who bought one during the promotion period were also awarded.

An exclusive hotsite (www.rossiresidencial.com.br/30anos) was created, containing details such as regulations, prizes, participating properties, and, subsequently, the list of winners. By the end of 2010, 172 projects had taken part in the promotion and 184 clients had received prizes.*

*The prizes will continue until April 2011, pursuant to its regulations.

Special anniversary communications

In addition to the campaign for clients, the beginning of Rossi’s anniversary was also marked by a series of communications campaigns designed to strengthen the brand and the values that we have consolidated over time.

Internal communications emphasized the importance of Rossi’s people, highlighting how much the performance and enthusiasm of each has contributed to our excellent results and demonstrating what we are doing to encourage their growth and well-being.

In order to expand the reach of our commemorative communications, we produced an online birthday card that was sent to clients, employees, partners, suppliers and investors. On the institutional website, an animated banner caught users’ attention by proposing a creative harmony between the image of a birthday cake and a group of Rossi buildings, Internal communication emphasizing the subsequently directing users to the card. importance of our employees in building Rossi’s 30-year success story

Your life project, our satisfaction. 19 Make yourself at home | 30 years building life projects

Scenes from our institutional video where we tried to show the respect and enthusiasm that have played such an vital part over the last 30 years in realizing our customers’ dreams of owning their own home

In order to consolidate the anniversary image, we also produced an institutional video, showing a couple walking along the city’s streets while expressing their thoughts, dreams and plans. The idea was to demonstrate that we strive with enthusiasm and respect to fulfill one of life’s most important dreams: owning one’s own home. To add versatility, the film was developed in three formats – 30, See the complete institutional 60 and 120 seconds – to be shown in stands, sales conventions, condominium video at www.youtube.com/ events, meetings with analysts and investors and also as a TV commercial. watch?v=k36CTDkGbeI

This campaign also included the print media, through advertisements in nationally circulated newspapers published during anniversary week. “Rossi: 30 Years with Ivete Sangalo: the Home is Yours”

At the end of 2010 we hired the singer Ivete Sangalo to represent the Rossi brand during the anniversary celebrations, which will last until December 2011.

Ivete Sangalo was chosen primarily because she embodies the brand’s values, through her enthusiasm, integrity and close relations with the public that Rossi is targeting.

A nationwide campaign is scheduled to begin in the second half of 2011.

20 Rossi | 2010 Sustainability Report BRAZILIAN AND REGIONAL [GRI 2.3/2.7/2.8/2.9] REGIONALIZED OPERATIONAL STRUCTURE

Since the Company first expanded to Campinas, its regional structure has proved decisive in ensuring Rossi’s rapid and secure growth. The regional offices operate through corporate procedures, utilize the same systems and controls, and receive the support of strategic departments based at the Company’s headquarters, such as Legal Affairs, Personnel Management and Customer Relations, but are given flexibility in land prospection, supplier negotiations and the development of products that are appropriate to the particular characteristics of the city or region in question.

The regional office structure was improved in 2009, when we reorganized the In biology, cells are structural offices intoBusiness Cells in order to streamline operations and focus on and functional units of living prospection efforts in strategic locations. organisms, which allow the organism to survive. Similarly, In December 2010, we maintained our operational structure and expanded the Rossi’s cells are autonomous number of regional offices from eight to nine, giving a total of 33 business cells, units that embody and all of which under the national command of São Paulo headquarters. [GRI 2.4] propagate the “Rossi way of being and doing” and which, The criteria for setting up a new business cell include population, average when they grow and reach income, growth and the presence of competitors. We are currently working on their limit, subdivide into other expanding our operations to a total of 120 cities by the end of 2012. cells which also embody this knowledge and survive on their One of the 2010 highlights was the creation of the São Paulo City Regional own, influenced by the DNA of Office, which joined the São Paulo, Brasília, Campinas, Rio de Janeiro, South, the previous generation. Northeast, West and North regional offices. This opportunity came about as a result of Rossi’s excellent performance in the city of São Paulo and the latter’s importance to the real estate market. We therefore decided to intensify the development of new residential and commercial buildings, as well as differentiated projects, allowing for the establishment of strategic partnerships and the creation of ambitious launch and sales targets in the coming years. This regional office will focus on projects with unit prices of more than R$ 250,000.

At year-end we were present in 85 cities (17 more than in 2009) in 17 Brazilian states, in addition to the Federal District: Amazonas, Bahia, Ceará, Espírito Santo, Goiás, Mato Grosso, Mato Grosso do Sul, Minas Gerais, Pará, Paraíba, Paraná, Pernambuco, Rio de Janeiro, Rio Grande do Norte, Rio Grande do Sul, Santa Catarina and São Paulo.

Your life project, our satisfaction. 21 Make yourself at home | Brazilian and regional

geographical distribution [GRI 2.5] in December 2010 RR AP

Present in 85 cities in 17 states AM PA MA CE and the Federal District RN PI PB State where Rossi operates AC PE Prospective state RO TO AL SE MT BA

GO DF

MG MS ES

SP RJ West Region PR Paraná São Paulo City Region Londrina SC São Paulo São Paulo Marília São Paulo RS São José do Rio Preto

Rio de Janeiro Region Campinas Region Rio de Janeiro São Paulo Duque de Caxias Campinas Itaboraí Hortolândia Niterói Indaiatuba Nova Iguaçu South Region Jaguariúna Rio de Janeiro Jundiaí Volta Redonda Paraná Limeira Espírito Santo Colombo Paulínia Serra Curitiba Piracicaba Vila Velha Santa Catarina Ribeirão Preto Vitória Florianópolis São Carlos Minas Gerais São José Sorocaba Juiz de Fora Rio Grande do Sul Sumaré Canoas Valinhos Esteio Votorantim North Region Novo Hamburgo Minas Gerais Porto Alegre Uberaba Xangri-la Uberlândia Amazonas Manaus Pará Ananindeua São Paulo Region Belém Brasília Region

São Paulo Distrito Federal Araraquara Águas Claras Barueri Northeast Region Brasília Cotia Gama Guarujá Bahia Samambaia Guarulhos Camaçari Goiás Jacareí Lauro de Freitas Cidade Ocidental Mogi das Cruzes Salvador Goiânia Osasco Sobradinho Novo Gama Praia Grande Ceará Valparaiso Santana do Parnaíba Aquiraz Mato Grosso Santo André Fortaleza Cuiabá Santos Pernambuco Mato Grosso do Sul São Bernardo do Campo Camaragibe Campo Grande São Caetano do Sul Paulista Minas Gerais São José dos Campos Recife Belo Horizonte São Paulo Rio Grande do Norte Betim Suzano Natal Contagem Taubaté Parnamirim Nova Lima

22 Rossi | 2010 Sustainability Report STRATEGIC ALLIANCES AND JOINT VENTURES

In order to obtain the best possible sales and launch results, we base our business on partnerships with local developers. Such partnerships bring added knowledge of the expectations and specific characteristics of each region’s population and allow for rapid access to a high-quality landbank. We seek to add our own experience to the partnerships, transforming them into strategic alliances.

In December 2010, we had a total of 92 partners, including three joint ventures in distinct regions of the country.

At the end of 2009, the joint venture with Construtora Capital S/A gave rise to Capital Rossi, a construction company operating in the Northern region of the country. Most of Construtora Capital’s original team was retained in order to ensure the success of the venture. Together, the companies To learn more, go to invested in training and promoted the integration of the Rossi Capital and www.capitalrossi. Rossi teams. They also invested in adapting benefits, aligning systems and processes and com.br adopting of a single visual identity that expressed the strength of both brands.

In 2010, we replicated the joint-venture model with Toctao Engenharia and Grupo GMS.

The new company Toctao Rossi arose from a joint venture with Toctao Engenharia, one of the country’s leading real estate developers and construction companies and part of a group specializing in the building and development of industrial facilities, hydro power plants and shopping malls. It was responsible for the first residential development in Goiás state featuring a system for collecting and reusing rain water (Residencial Lagoinha), which in 2007 received the ECO award, sponsored by the American Chamber of Commerce, in the Environment Category for its social responsibility practices.

The joint venture with GMS expanded our operations in the country’s Midwest. GMS is one of the leaders in the Mato Grosso real estate market and has built more than 800,000 m2 over its 30 years of operations, including industrial, commercial and residential projects.

Your life project, our satisfaction. 23 Make yourself at home | Diversified and flexible

DIVERSIFIED AND FLEXIBLE [GRI 2.2/2.7]

Our product portfolio is highly diversified, catering to all income segments throughout Brazil. Each product line has specific project development, management and communications guidelines. Products may be residential or commercial and are subdivided into:

Low-income segment, comprising properties with units costing up to R$ 250,000: Rossi Ideal ­ Rossi Praças ­ Rossi Mais

Residential segment, comprising properties costing more than R$ 250,000: Residential projects ­ Niche projects

Commercial projects

Urban planning projects: Vila Flora ­ Lots and planned neighborhoods

At the end of December 2010, 241 projects were under construction, 55.6% of which low-income projects, 31.5% residential projects and 12.9% commercial projects.

Photomontage of Trio Ribeirão, in Ribeirão Preto (SP)

24 Rossi | 2010 Sustainability Report Aerial photograph of Villa Flora, in Sumaré (SP).

Low-income segment

Over the years we have acquired a great deal of experience and credibility in the construction of real estate for the low-income segment, characterized by standardized, rationalized projects that generate scale gains and reduce costs, construction times and sale prices.

In the 90s, when real estate financing was scarce, we launched the innovative Plano 100 and Vida Nova projects, with a self-financing system and competitive prices.

Since then, our low-income segment portfolio has been altered in line with market demand. Building techniques were improved in 2008 to reduce the work cycle while maintaining Rossi’s high quality standards, and in 2009, we created a specific Low-Income Segment area, which centralized decisions and strategies for this segment.

One of the first decisions of the new department, made in the same year, was the creation of the Rossi Ideal product line to absorb demand generated by the federal government’s “Minha Casa, Minha Vida” (My Home, My Life) program. In 2010, we created the Rossi Mais residential product line, with apartments of up to 85 m2, mainly aimed at young, low-income families.

The main characteristics of the Rossi Mais products are: privileged location, appropriate leisure facilities for the buyer profile (up to 30 items per project), buildings with at least ten floors, with up to two parking spaces per unit, in addition to floor plans that include unique elements, such as gourmet verandas.

Your life project, our satisfaction. 25 Make yourself at home | Diversified and flexible

Launches began in Rio de Janeiro (RJ), Brasília (DF), Florianópolis (SC), Porto Alegre (RS) and Manaus (AM), with potential for expansion into every region where Rossi operates. The most important projects in this segment are Rossi Ideal Água Branca (SP), Rossi Ideal Vila Itacaré (ES) and Rossi Ideal Boulevard (MG).

Below is a table comparing our three lines of low-income segment products:

Rossi Ideal Rossi Praças Rossi Mais

Target public Clients who have just entered the Clients seeking to satisfy their Upwardly mobile clients, whose property market and have to balance need for a home with a difference: lives are undergoing change: their savings and purchasing power the desire to live in small, careers moving forward or children with their desire and need to acquire quiet countryside towns in an beginning (or continuing) to arrive. their own home. economically viable manner. These units are for buyers who are concerned with balancing the investment in the property, but also seeking that little bit more, either in the layout, the location or the life style.

Basic concept Low cost / low price / first home. Homes and apartments of up to Homes and apartments of up to 85 m². 85 m².

General Transport and commercial Transport and commercial Close to consolidated urban characteristics of infrastructure. infrastructure with rapid access to centers. the location downtown areas.

Aiming to ensure productivity and quality, in 2010 we improved our working methods and production processes for the low-income segment, including the installation of pre-cast production centers, the standardization of communications, the opening of fixed andmobile stores in areas with intense flows of target clients and commercial promotions in partnership with large companies.

Mobile store in areas with an intense flow of target clients, focusing on the low-income segment

26 Rossi | 2010 Sustainability Report Residential segment

Following the model of the Low-Income Segment area, in 2010 we also consolidated the Residential and Commercial Product area to take advantage of opportunities in this market, characterized by residential developments with unit prices of more than R$ 250,000.

Our residential segment products are characterized by the size of their units, their privileged location and an exceptionally wide range of leisure and comfort facilities. Clients in this segment tend to want more than mere functional aspects – they want features that reinforce their particular life style. As of 2011, these products will be known as Rossi Atual and Rossi Ativa.

We are also aware that some target groups and regions require what we call niche products, designed for people with differentiated demands, in regard to location, design, finishing or the way in which the unit will be used.

The most important projects in this segment include VG Fun Residence (CE), Premier Espaço Cerâmica (SP), Reserva Espaço Cerâmica (SP), Trio – Ribeirão (SP) and Rossi Fiateci (RS).

Rossi Atual Rossi Ativa

Target public Traditional urban families who want to live with Families seeking an active life style, with a wide a certain measure of comfort in neighborhoods range of social, leisure and sporting activities. that are well-endowed with infrastructure. As families who put more value on location, they take greater advantage of the project, the neighborhood and the city.

Basic concept Houses and apartments starting at 85 m². Houses and apartments starting at 85 m². Lots of 400 m².

General characteristics of Locations in or around consolidated urban centers. Large areas in neighborhoods with good the location infrastructure.

Commercial segment

Commercial projects are also under the responsibility of the Residential and Commercial Product area, but have their own specific department. These projects include office buildings, large corporate towers and retail developments, featuring state-of-the-art technology and infrastructure and exemplary quality standards.

In 2010, our most important commercial projects were Ipiranga One (São Paulo), Solis Office Moema (São Paulo) and Palhano Business Center (Paraná).

Illustration of Solis Office Moema, in São Paulo (SP)

Your life project, our satisfaction. 27 Make yourself at home | Diversified and flexible

Urban planning projects

We have been undertaking urban planning projects for more than ten years, “Rossi’s ten years of beginning with the Vila Flora project in Sumaré (SP) and progressing to lots experience in urban planning and planned neighborhoods such as Rossi America (RS) and Paulistano projects began with Villa Bairro Privativo (SP). Flora in Sumaré. In this type of project, which has a lengthy maturity period, the These projects are developed within an architectural and urbanistic concept that urbanization concept goes well favors community living, the integration of commercial and residential centers, beyond the mere building of balanced neighborhood development and excellent traffic conditions. Benefits homes. Everything down to the are reflected in health, quality of life and the well-being of the inhabitants. Such smallest detail is planned in undertakings are generally extremely large with a lengthy maturity period and advance, from the preparation can be adopted for both the residential and low-income segments. of the site to the development of a planned neighborhood.” In 2010, the Urban Project Department reorganized its team in order to prepare José Rocha Filho, Urban Planning for new projects in Brasília (DF), Goiânia (GO) and São Luiz (MA). Project Officer

NEW ROSSI PRODUCT MATRIX

At the end of 2010, we took an innovative step and changed the method for “When we look carefully classifying and segmenting our projects in order to reduce costs and construction at our clients’ life projects, times, increase sales speed and guarantee that the “Rossi way of being” spreads we discover a new way of to all the cities where we operate. looking at our own products. This is why we created the Rossi Product Matrix, We began developing and announcing projects as Product Lines and this process a guide providing specific will be consolidated in 2011. We compiled a guide called the Rossi Product Matrix, project, management and which addresses project development and communications, offering guidelines communications instructions on how the Business Cells should ensure that products are handled in line with in line with our operational our branding principles. focus: Family, Commercial, Niche and Urban Planning.” The Rossi Product Matrix segregated products into four groups according to Valdemar Gargantini, Residential and target – Family, Commercial, Niche and Urban – each of which subdivided into Comercial Product Officer categories, with each category being represented by its product lines. There will be a specific guide book for each group, which should prove invaluable for the Development, New Business and Marketing areas.

In this way, we are seeking to streamline project development and communications, ensuring nationwide alignment and adopting a unique and innovative method of developing and announcing real estate projects, guaranteeing clarity of information, the expected perception of each product’s differentials and the strengthening of the institutional brand. We expect to complete development of the Rossi Product Mix and conclude the training of the Development and Marketing teams by June 2011.

28 Rossi | 2010 Sustainability Report AWARDS AND RECOGNITION [GRI 2.10]

In 2010, we received several important awards, reflecting market recognition of our achievements.

Master Imobiliário Award

In 2010, Capital Rossi received the Master Imobiliário award in the Professionals category, in recognition of its case “Successful Sales of Villa Jardim Torquato”, a project located in Manaus, Amazonas. The award is sponsored by the Rio de Janeiro chapter of the Association of Real Estate Market Directors (Ademi). In 2009, Rossi was recognized in the Creative Real Estate and Housing Project of Social Interest categories.

The award resulted from a highly successful sales strategy, involving the creation of the “Minha Casa, Minha Vida Fair”, promoted exclusively by Capital Rossi in one of the region’s shopping malls.

Over 5,000 visitors and 800 sales were recorded in just three days. Between the pre-launch period and the end of the Fair, 100% of the project’s first two phases were sold, prompting the Company to launch the subsequent phases a year early. In the 20 days following the event, 1,300 units were sold, setting a new record for the region.

Rossi’s “Minha Casa, Minha Vida Fair” in Manaus (AM), which helped boost sales of the Villa Jardim Torquato project

Your life project, our satisfaction. 29 Make yourself at home | Awards and recognition

Abrasca Award

Abrasca (the Brazilian Association of Publicly-Held Companies) awarded Rossi with the Top of Sector 2010 in the Construction and Real Estate Market category, in recognition of its performance in generating value in the real estate market between 2007 and 2009. The prize is granted to companies that present the market’s best corporate governance practices, including sustainable results, exemplary risk control, transparency and social and environmental initiatives.

Developed by the University of Navarre, in Spain, and adapted for the Statistical Yearbook of Publicly-Held Companies, the award ranks those companies with the best corporate governance practices. The panel of judges included representatives from the BM&FBOVESPA, the Association of Capital Market Analysts and Investment Professionals (Apimec), the Financial, Accounting and Actuarial Research Foundation (Fipecafi), the Brazilian Corporate Governance Institute (IBCG) and the Brazilian Investor Relations Institute (IBRI). On the right, Cássio Audi, Rossi’s CFO and Investor Relations Officer receives the “Top of The award ceremony was held on August 12 at Villa Bisutti, in São Paulo, Sector 2010 - Construction and Real Estate and was presided over by the president of the Brazilian Development Bank Market” award (BNDES), Professor Luciano Coutinho. It was attended by the 15 winning firms, each of which recognized as the company that generated the most value in their particular sector in 2009.

500 Grandes da Construção

In 2010 Rossi achieved a privileged position in the list of the 500 Largest Construction Companies, being ranked 1st among the 36 largest in São Paulo state and 26th among the 100 largest in Brazil. This ranking is the result of an exclusive survey conducted every year by O Empreiteiro magazine through questionnaires sent to more than 2,500 companies nationwide and with the involvement of the state trade associations.

Companies were classified according to their gross revenue in 2009, as published in their 2009 income statement, and divided into four categories: Construction, Mechanical & Electrical Construction, Projects & Consulting, and Special Engineering Services. The survey is audited by Deloitte Touche Tohmatsu Auditores Independentes in accordance with procedures agreed on with the management of O Empreiteiro magazine.

Construction of Giardino Paraíso, in São Paulo (SP)

30 Rossi | 2010 Sustainability Report TOP Imobiliário Award

The 17th edition of the TOP Imobiliário Awards elected João Rossi Cuppoloni, one of Rossi’s founding partners and current chairman of the Board of Directors, as the Real Estate Personality of the Year. Sponsored by O Estado de S. Paulo newspaper and the Brazilian Equity Studies Company (Embraesp), TOP Imobiliário rewards professionals who have contributed substantially to the sector’s performance in the year.

Votes were cast on the Awards’ official website and were open to all comers. Voters could choose one of the three professionals nominated by real estate sector specialists.

The award ceremony was held on June 1, 2010, at Terraço Daslu in São Paulo. During his acceptance speech, João Rossi gave an optimistic analysis of the sector, which has benefited from economic stability and the expansion of credit, and pointed out that the Company owed the award largely to its regionalized operations, the strengthening of its relations with local partners and the entire team’s commitment to the highest quality standards.

Outstanding Company - I Pini Incorporadora do Ano

We were elected an Outstanding Company in the Behavior Towards Employees and Suppliers in the first edition of the PINI Developer of the Year Award, sponsored by the Pini publishing house (publisher of Construção Mercado, AU – Arquitetura e Urbanismo, Téchne and Equipe de Obra magazines) with the support of the Real Estate Center of the Polytechnic School of the University of São Paulo (NRE Poli-USP).

The Company was recognized for its decentralized management strategy (regional offices and business cells) and its respect for employees and partners, who are responsible for its geographical expansion.

Evaluation was based on a mix of attributes subdivided into four large groups: 1) financial performance (from 2007 to 2009); and the company’s behavior (in 2009) towards 2) clients; 3) employees and suppliers; and 4) society and the environment. The companies answered a questionnaire compiled by Pini, which also researched and confirmed the information on their investor relations websites. The marks received for each attribute were based on criteria established by NRE Poli-USP.

Project meeting at headquarters in São Paulo Your life project, our satisfaction. 31 2.

32 Rossi | 2010 Sustainability Report Performance, management and innovation

Your life project, our satisfaction. 33 Performance, management and innovation | Scenario analysis

SCENARIO ANALYSIS

The 2010 macroeconomic conditions were favorable for the construction sector and the real estate market. GDP closed the year with growth of 7.5%, underlining the substantial recovery over 2009, when it shrank by 0.2% due to the impact of the global financial crisis. This is the highest growth since 1986, in which the Company also posted a 7.5% increase.

The Brazilian real appreciated by 4.42% against the dollar, which closed at R$ 1.67, and the Selic base rate stood at 10.75% p.a., two percentage points above the 8.75% recorded at the end of 2009.

Other positive indicators included the 6.7% decline in the average unemployment rate – down 1.4 p.p. from 2009 – and the increase in the population’s average monthly income to R$ 1,490.61, up 3.8% on the previous year and the biggest upturn since 2003.

It is worth noting that the federal government maintained its credit incentives, including the “Minha Casa, Minha Vida” (My Home, My Life) program launched in April 2009, and continued contributing to the healthy performance of the construction market. According to the Caixa Econômica Federal, by the end of 2010 this program had financed the acquisition of more than one million homes, with investments totaling R$ 52.98 billion.

In March 2010, the government launched the second phase of the program, with a declared financing target of two million units by 2014, three-fifths of which for families with a monthly income of up to three minimum wages. For the low-income segment, this measure means the possibility of purchasing their homes, and for Rossi it means maintaining its excellent launch and sales performance.

Illustration of Rossi Fiateci, launched in 2010 in Porto Alegre (RS)

34 Rossi | 2010 Sustainability Report OPERATING PERFORMANCE ROSSI VENDAS – OPERATIONS AND EXPANSION

Rossi Vendas is made up of the Company’s own brokers who sell only Rossi “2010 was an exceptional products. They receive training in several specialized subjects, including financial year for Rossi Vendas. We mathematics, legal matters, and sales and marketing techniques, in order to acquire expanded our share of total an in-depth knowledge of every product and conduct themselves in accordance sales, increased our workforce with the “Rossi way of being”. and moved into cities where we had no previous presence. In 2010, Rossi Vendas recorded an excellent performance, with contracted Rossi Vendas is increasingly sales of R$ 1.561 billion, accounting for 40% of the Company’s total sales. It also becoming the Company’s main sales force. Sales means announced the expansion of its operations to Goiânia, Brasília and Fortaleza and enthusiasm and enthusiasm is increased its number of stores from four to six. One of the features of the Rossi part of Rossi’s DNA.” Vendas stores is their permanence, as opposed to the limited operational period Klaus Monteiro, Head of Rossi Vendas of the sales stands. Consequently, they are very carefully sited, taking into account such criteria as the geographical distribution of the landbank and the projected number of projects, as well as attractiveness and the flow of people in the area where the store will be located.

At year-end, Rossi Vendas had stores in 12 cities: Belo Horizonte, Brasília, Campinas, Campo Grande, Curitiba, Fortaleza, Goiânia, Manaus, Porto Alegre, Rio de Janeiro, São Paulo and Vitória, with total staff of 827 brokers. In 2011, it plans to expand to Cuiabá, Natal and Salvador.

Rossi store in Brasília (DF) – sales team comprising brokers specializing in the Company’s products, all of whom receive training in several sales tools

In addition to the positive performance and the expansion of its structure, Rossi Vendas invested in the Market Intelligence Department, which provides strategic support for headquarters and the regional offices by collecting data on products, the competition, local markets and the acceptance of launched projects. It also undertakes studies to analyze Rossi’s entry into new cities and find potential regions for future investments, as well as having the important task of analyzing the CRM database, which contains around 32,000 registered customers, allowing the Company to offer specific products that cater to the needs of old clients.

Your life project, our satisfaction. 35 Performance, management and innovation | Operating performance

Team of Qualified Brokers

In order guarantee transparency and effective communications at the time of sale, all brokers, including the Rossi Vendas team and those of third parties, receive up-to-date information on the Company and its products through the Broker’s Guide, which seeks to increase brokers’ knowledge of Rossi, strengthen their sales pitch and reinforce the brand’s values.

In addition, all of Rossi’s stands are equipped with a Sales Tool Chart, an informative mural showing brokers all the institutional material they need to keep informed about the Company and ensure that they act in accordance with the “Rossi way of being.”

Special Products Broker’s Guide provides information In 2010, we created the Special Projects and Retail department focused on developing on Rossi and sales pitches partnerships with large companies in order to maximize sales and help the business cells with their sales strategies. The main annual highlights were the partnerships with Demillus and the Brazilian Navy and the creation of a Guide for optimizing the Company’s sales stands nationwide.

The partnership with Demillus, a lingerie manufacturer with more than 135,000 resellers throughout the country, is a pioneering retail initiative in the Rio de Janeiro metropolitan area which encourages resellers to present Rossi’s projects – through sales commissions and greater facility of property acquisitions – using material prepared specifically for this target public. The initiative will be expanded to the entire country, together with new reseller approach possibilities.

For members of the Brazilian Navy, we launched an initiative entitled “Encontro Naval Rossi” that grants promotions, gifts and easier acquisition conditions for Rossi properties in Rio de Janeiro, Fortaleza (CE) and Natal (RN). In Natal, we also offer discounts and prizes such as white-line product kits made up of refrigerators, kitchen ranges and microwave ovens. The program will continue in 2011 and prospective participants can register through the website www.encontronavalrossi.com.br or by phone (55 21) 4003-0980.

“Encontro Naval Rossi” homepage

36 Rossi | 2010 Sustainability Report

Operating Indicators [GRI 2.8]

Operating highlights

2010 2009 % Chg. LAUNCHES Projects launched 104 68 53% Useable area launched (‘000 m²) 1,413 915 54% Launches (R$ million) Units launched 23,239 16,456 41% PSV of launches – total (R$ million) 4,798 2,758 74% 4,798 5000 PSV of launches – % Rossi (R$ million) 3,347 2,156 55% 74% SALES 4000 1,451 Contracted sales – total (R$ million) 3,994 2,340 71% 2,758 3000 Contracted sales – % Rossi (R$ million) 3,084 1,825 69% 602 Useable area launched (‘000 m²) 2000 1,167 873 34% 3,347 Units sold 17,805 11,876 50% 1000 2,156 LANDBANK

Potential PSV 0 27 23 18% Potential PSV – % Rossi 19 15 22% 2009 2010 % swap 70% 76% -

Rossi Partners

Launches

We launched 23,239 projects in 2010 with a total PSV of R$ 4,798 million, of which 70% (or R$ 3,347 million) corresponded to Rossi’s share. Of this total, 20,350 units were residential projects, 16,766 of which in the low-income segment (82%) and 3,584 in the residential segment (18%). The commercial segment recorded 2,889 units launched, equivalent to 12% of the total. The states with the highest PSV were São Paulo (outside the metropolitan area), Amazonas and Rio Grande do Sul.

Breakdown by segment (%) Breakdown by region (%)

2% 1% 3% 1% São Paulo (other cities) 14% 50% 4% 22% Rio Grande do Sul 4% São Paulo Metropolitan Region 4% Amazonas 4% Goiás 36% 4% Rio de Janeiro Espírito Santo 6% 16% Rio Grande do Norte

6% Minas Gerais Ceará 7% 16% Paraná Federal District Bahia Low-income segment Mato Grosso do Sul Residential segment * These states represent less than 1% each. Santa Catarina* Commercial segment Pará*

Your life project, our satisfaction. 37 Performance, management and innovation | Operating performance

Projects delivered in 2010

Quarter Number of projects Units delivered Total PSV (R$ million) VGV Rossi (R$ million)

1Q10 7 1,551 442,465 442,465

2Q10 7 1,590 318,995 269,115

3Q10 9 1,157 337,387 245,562

4Q10 11 1,956 592,293 371,669

2010 34 6,254 1,691,140 1,328,811

Contracted sales

We sold 17,805 units in 2010, with contracted sales of R$ 3,994 million, 71% higher than in 2009. Of this total, 78%, or R$ 3,084 million, corresponded to Rossi’s share.

Contracted sales in Total PSV Rossi PSV Contracted sales (R$ million) Units 2010 (R$ million) (R$ million) 3,994 Residential properties 15,468 3,246 2,6434000 71% Low-income 3500 910 10,940 1,449 1,1053000 segment 2,340 2500 Residential segment 4,528 1,797 1,538 2000 515 Commercial properties 2,337 748 4411500 3,084 1000 Total 17,805 3,994 3,084 1,825 500

0 2009 2010

Rossi Partners Breakdown by region (%)

1% 2% 1%1% 2% São Paulo (other cities) Breakdown by segment (Rossi’s share) 3% 3% 22% São Paulo Metropolitan Region 15% 4% Rio Grande do Sul 49% 4% Rio de Janeiro Paraná 6% Minas Gerais Espírito Santo 7% 36% Federal District 21% Amazonas 10% Goiás Ceará 13% Rio Grande do Norte Mato Grosso do Sul Bahia Pernambuco* Low-income segment * These states represent less than 0.5% each. Santa Catarina* Residential segment Pará* Commercial segment Alagoas*

38 Rossi | 2010 Sustainability Report landbank

Breakdown by segment (%)

5% Low-income segment 6% 41% From R$ 200,000 to R$ 350,000

9% From R$ 350,000 to R$ 500,000 More than R$ 500,000 Commercial segment

12% Lots

Breakdown by region (%) 27% 2% 2% 1%1%

3% São Paulo (other cities) 3% 33% Rio Grande do Sul 4% Federal District 4% São Paulo Metropolitan Region 4% Minas Gerais Goiás 6% Rio de Janeiro Bahia 7% Paraná

Acquisitions through swaps 8% 12% Espírito Santo Rio Grande do Norte 10% 36% Ceará Amazonas 30% Paraíba Rio de Janeiro* * These states represent less than 1% each. Rio Grande do Norte* Rio Grande do Sul* São Paulo*

304 sites in 85 cities 34% 11 million m2 to be built Financial swaps Unit swaps 140,000 units Cash

Your life project, our satisfaction. 39 Performance, management and innovation | Operating performance

FINANCIAL PERFORMANCE [GRI 2.8] Financial indicators

2010 2009 % Chg.

Net operating revenue (R$ million) 2,496 1,572 58.7%

Gross income (R$ million) 788 481 63.7%

Gross margin 31.6% 30.6% 1.0 p.p.

Operating income (R$ million) 420 241 74.2%

Operating margin 17.7% 16.5% 1.2 p.p.

EBITDA (R$ million) 533 330 61%

EBITDA margin 21.4% 21.0% 0.4 p.p.

Net income (R$ million) 350 204 71.8%

Net margin 14.0% 12.9% 1.1 p.p.

Earnings per share (R$ million) 1.31 0.97 35%

The financial information is presented in accordance with the accounting practices adopted in Brazil, comprising the rules issued by the Securities and Exchange Commission of Brazil (CVM) and the pronouncements and guidelines issued by the Accounting Pronouncements Committee (CPC), and is also in conformity with those international financial reporting standards (IFRS) applicable to real estate companies in Brazil.

Net revenue

On December 31, 2010, net operating revenue totaled R$ 2,496 million, 58.7% higher than the R$ 1,572 million reported in 2009.

Net revenue (R$ million) “Our performance in 2010 was outstanding. Among other factors, our growth was based 2,496 on portfolio diversification, geographical 2500 59% distribution, which brought us closer to

2000 local markets, internal managerial and 1,572 procedural improvements and strategic 1500 operations in the IR area.” 1000 Cássio Audi, Chief Financial and Investor Relations Officer

500

0 2009 2010

In the real estate development sector, sales revenue is recognized according to the POC method (percentage of completion), which is the ratio of costs incurred to budgeted costs. Accordingly, the increase in revenue recognition is directly related to the progress of the projects under construction.

40 Rossi | 2010 Sustainability Report Cost of properties and services sold

The cost of properties and services sold came to R$ 1,708 million, 57% more than the R$ 1,091 million recorded in 2009. Financial charges arising from production financing, debt from acquired sites, debentures and working capital loans whose funds are used in production, through site acquisitions or project construction, are capitalized under inventories and recognized proportionally to the number of units sold.

Gross income

Gross income stood at R$ 788 million in 2010, 63.7% more than the R$ 481 million reported in the previous year, while the gross margin widened by 1.0 p.p., from 30.6% to 31.6%.

Gross income (R$ million) and gross margin (%)

788 800 64% 700 600 481 500

400 31.6%

300 30.6% 200

100

0 2009 2010

Administrative and selling expenses

In 2010 we strengthened our teams to support the increase in our launch and sales targets and administrative expenses kept pace with this growth, climbing by 68% over 2009 to R$ 185 million, while selling expenses moved up by 70% to R$ 216 million.

Your life project, our satisfaction. 41 Performance, management and innovation | Operating performance

EBITDA

EBITDA totaled R$ 533 million in 2010, 62% up on 2009, while the EBITDA margin widened by 0.4 p.p., from 21.0%, in 2009, to 21.4%.

EBITDA (R$ million) and EBITDA margin (%)

600 62% 533

500

400 330 300 21.4%

200 21.0% 100

0 2009 2010

Depreciation and amortization expenses stood at R$ 20 million in 2010, 11% less than the R$ 22 million recorded in 2009.

The provision for income tax and social contribution totaled R$ 71 million in 2010, versus R$ 37 million in 2009, R$ 25 million of which referring to current taxes and R$ 45 million to deferred taxes. The business model adopted by Rossi uses distinct SPEs for each development, each of which is autonomous in terms of its taxation. The provision for income taxes was constituted in accordance with corporate law, for companies subject to both the taxable and presumed income regimes, and differs from fiscal law.

Net income

Rossi closed 2010 with net income of R$ 350 million, a substantial 71.8% improvement over the R$ 204 million reported in 2009, while the net margin increased by 1.1 p.p., from 12.9% to 14.0%.

Net income (R$ million) and net margin (%) 350 350 72%

300 250 204 200 14.0% 150

100 12.9%

50

0 2009 2010

42 Rossi | 2010 Sustainability Report Balance sheet

Cash and cash equivalents, comprising cash, banks, financial investments and marketable securities. closed the year at R$ 970 million.

Total debt came to R$ 2.1 billion, 77% of which in real estate financing operations (including the CEF debentures), i.e., financing for the construction of properties; 15% in debentures; and 8% in working capital loans. The long-term portion of total debt was 63%.

2010 Balance sheet (R$ million)

Indebtedness 2,111

Cash and cash equivalents 970

Shareholders’ equity 2,522

Total assets 5,697

Breakdown of total debt Debt profile

8%

77% 63% 15% 37%

Long term Construction financing* Short term Debentures Working capital

*Including the CEF debentures

Your life project, our satisfaction. 43 Performance, management and innovation | Capital market

CAPITAL MARKET [GRI 2.9]

On December 31, 2010, Rossi’s capital stock totaled R$ 2,022,921 billion, comprising 266,436,388 shares. On the same date, the free float accounted for 62.3% of the total.

Ownership structure

The table below shows the number of common shares held by each of Rossi’s shareholders:

Shareholders Number of shares* %*

Controlling group 99,220,981 37.3%

Treasury 1,512,200 0.2%

Members of the Board of Directors 67,258 0.2% Market 165,635,949 62.3% *Shareholding structure at the end of 2010. Updated information can be found on the IR TOTAL 266,436,388 100.0% website, www.rossiresidencial.com.br/ir

Main shareholders and their holdings (December 2010)

5% Others 6% 45% Controlling Shareholders

9% Carminac Gestion Alliance Bernstein Newton Investment Free float 62.3%

37%

Geographical distribution of shareholding base (December 2010)

Asia 5% Europe 22% United States 16%

Brazil 37% Controlling Shareholders 18% Local Investors Latam 1%

Other 1%

44 Rossi | 2010 Sustainability Report Market Indicators

We are listed in the Novo Mercado trading segment of the Bovespa and are included in a total of 130 indices, some of which are listed below.

Ibovespa – Bovespa Index IEE – Electrical Power Index IBrX50 – Brazilian Index of the 50 most liquid shares IBrX100 – Brazilian Index of the 100 most liquid shares IGC – Differentiated Corporate Governance Index Itag – Differentiated Tag-Along Index MCSI ACWI (All Country World Index) MSCI Emerging Markets MSCI Latin America MSCI Brazil (MSCI Global Value Index)

Dividend Policy

Pursuant to our Bylaws, shareholders resolve on the distribution of dividends at the Annual Shareholders Meeting which is held up to April 30 of each year. All shareholders registered as such on the day the dividends are declared are entitled to receive payment.

Rossi Residencial’s mandatory dividend is at least 25% of adjusted net income in the non-consolidated income statement, in accordance with Brazilian Corporation Law and the Company’s Bylaws.

The table below presents dividend payment dates and amounts between 2005 and 2010:

Dividend payment history (R$ ‘000) 2005 2006 2007 2008 2009 2010 Dividends 4,796.5 10,380.0 31,238.3 28,181.6 51,800 83,071.0

Number of shares 386,814,516 78,460,114 157,703,628 192,186,388 266,436,388 266.436.388

R$ per share 0.0124 0.1323 0.20 0.1478 0.1946 0.3123

Your life project, our satisfaction. 45 Performance, management and innovation | Corporate governance

CORPORATE GOVERNANCE [GRI 4.1/4.7]

We continuously strive to improve our corporate governance model, seeking to ensure professional management, corporate responsibility, the highest levels of transparency, and equality of treatment for all our shareholders. Our shares are listed in the Bovespa’s Novo Mercado trading segment, which comprises those companies with the highest standards of corporate governance and the most transparent accountability.

In order to reinforce this commitment, we hold annual public meetings in conjunction with APIMEC (the Association of Capital Market Investment Analysts and Professionals) to discuss our results, outlook and strategy. In 2010, we received the Gold Seal for our 8th Apimec meeting.

Overall organizational chart*

Board of Directors

Chief Executive O cer

Chief Financial and Engineering Investor Relations Legal Commercial O cer O cer O cer O cer

Business Administrative Controllership Low Income Marketing Sales Residential and Management Segment Commercial O cer O cer O cer O cer O cer O cer Product O cer

São Paulo Campinas Brasília Northeast West North São Paulo Rio de Janeiro Region Region South Region Region Region Region Region City Region Region O cer O cer O cer O cer O cer O cere O cer O cer O cer

* Chart at the end of 2010.

46 Rossi | 2010 Sustainability Report Board of Directors [GRI 4.2/4.3]

Rossi’s Board of Directors was created in 1997 and, pursuant to the Company’s Bylaws, is composed of five members, one of whom independent, elected by the Annual Shareholders’ Meeting for a one- year term, re-election being permitted. It has its own internal regulations and a monthly agenda that includes monitoring performance and risks to shareholders. Its main duties are defining the To see the updated Company’s overall business strategy, electing the executive officers and monitoring management. résumés of the members of our Board of Directors, Name* Position please visit www. João Rossi Cuppoloni Chairman rossiresidencial.com. br/ir. Edmundo Rossi Cuppoloni Vice-chairman

Rafael Rossi Cuppoloni Member

Sérgio Pedroso Rossi Cuppoloni Member

Eduardo Alfredo Levy Júnior Independent member

*Board of Directors at the end of 2010.

Board of Executive Officers [GRI 4.2]

Pursuant to the Company’s Bylaws, the Board of Executive Officers comprises five members (who may or may not be shareholders) elected by the Board of Directors, including a Chief Executive Officer, an Investor Relations Officer and other officers without a specific designation. The executive officers are responsible for implementing the resolutions adopted by the Board of To see the Directors and for the direct management of the Company. The current executive officers were updated résumés elected in April 2010 for a three-year term (which may be renewed for a further three years) until of the members the Annual Shareholders’ General Meeting to be held on April 30, 2013. of our Board of Executive Officers, please visit www. Name* Position rossiresidencial. Heitor Cantergiani Chief Executive Officer com.br/ir.

Cássio Elias Audi Chief Financial and Investor Relations Officer

Leonardo Nogueira Diniz Commercial Officer

Palmarino Frizzo Neto Legal Officer

Renato Gamba Rocha Diniz Engineering Officer

*Executive Officers at the end of 2010.

Fiscal Council

Our Bylaws provide for a non-permanent Fiscal Council comprising a minimum of three and a maximum of five sitting members and an equal number of alternates, to be installed at the request of the Company’s shareholders. Rossi’s current Fiscal Council was installed for fiscal year 2010 until the Annual Shareholders’ Meeting of 2011. To see the updated Name* Position résumés of the members of our Eriberto Monteiro Member Fiscal Council, Ademar Gonzalez Casquet Member please visit www. rossiresidencial.com. Vitor Hugo dos Santos Pinto Member br/ir. *Fiscal Council at the end of 2010.

Your life project, our satisfaction. 47 Performance, management and innovation | Corporate governance

Strategic and Executive Committees [GRI 4.9]

Management is supported by four strategic committees and six executive committees, advisory bodies that study day-to-day matters and the management of the business, as well as preparing proposals to help the Board of Directors and Executive Officers in their decision-making processes.

Strategic committees Executive committees

Personnel Launch management and Board of committee compensation Directors committee Legal committee

Business Board of committee Executive O cers Communication committee

Branding implementation Strategy Project meeting at headquarters in São Paulo committee committee

Construction start-up committee Financial committee Sustainability committee

Strategic institutional communication committee

48 Rossi | 2010 Sustainability Report Strategic committees:

Finance committee: manages cash flow, analyzing land acquisitions approved by the business committee and evaluating funding alternatives. Meets on a weekly basis or whenever there is any business to be approved.

Strategy committee: currently being implemented, this committee will analyze the Company’s strategic affairs, giving its opinion and advice in regard to market studies, the competition, construction techniques and the development of new business niches.

Business committee: together with the regional offices, evaluates and approves partnerships and business opportunities, such as land purchases, based on a project feasibility study, projected returns and the business risks presented by the offices. Meets on a weekly basis.

People management and compensation committee: analyzes the Company’s criteria and policies in this area, and monitors succession and compensation programs aligned with the Company’s objectives. It also defines strategies for retaining talented employees and proposes further professional development programs.

Executive committees:

Project launch committee: evaluates and analyzes each launch based on budget planning, performance and feasibility, focusing on the profitability of each project. This committee has no defined schedule, meeting whenever necessary.

Legal committee: examines proposed land purchases in relation to legal and ownership aspects, analyzing the risks involved, and can countersign or veto acquisitions based on their legal status. Meets on a weekly basis.

Communications committee: managed by the Institutional Marketing Department, it defines the communications strategy for Rossi’s different stakeholders, focusing on transparency and the alignment of information in order to build and maintain long-term relationships with these stakeholders. This committee has no defined schedule, meeting whenever necessary.

Strategic institutional communications committee: brings together the main communications agencies that provide services for Rossi nationwide and the Marketing and Product areas in order to consolidate, evaluate and establishing institutional marketing initiatives. Meets twice a month.

Branding implementation committee: defines the actions to be taken related to the implementation of branding in the Company’s strategy. Meets once a month.

Works initiation committee: responsible for scheduling the initiation of works, based on the opinions of the Engineering, Commercial and Financial areas, as well as the CEO, CFO and Controllership and Planning Departments. Meets once a month.

Sustainability committee: responsible for identifying, studying and promoting the adoption of sustainable practices in Rossi’s offices and worksites, as well as in its surrounding communities. Meets once a month.

Your life project, our satisfaction. 49 Performance, management and innovation | Sustainability

SUSTAINABILITY

Sustainability is one of our values and, as such, is already part of our day- “It is an enormous challenge, to-day routine. In May 2010 we created a specific department to develop but it is part of our mission to this issue, acting in conjunction with Rossi’s other departments. The idea consider environmental well- was to reinforce its importance in the daily lives of our employees and being when developing our real provide them with guidance, organize and improve existing initiatives, estate solutions and we believe research new technologies and processes and ensure that the resulting a specific area specializing in practices become an integral part of all the Company’s projects and the matter will speed up the regional offices. process.” Leonardo Diniz, Rossi’s Commercial Officer In the department’s first months of operations, the aim was to become familiar with and document all the Company’s internal initiatives related to sustainability. During this process, employees suggested projects which were then evaluated and, when approved, disclosed and put into practice. The department can also rely on the support of the Sustainability Committee.

INVESTMENTS IN SUSTAINABLE PRACTICES [GRI EN26]

Sustainability is also expressed by promoting the quality of life and respect for the environment in all the projects we develop. This is why we are investing increasing amounts in sustainability-aligned initiatives in our projects.

During the works phase, for example, we take all the necessary steps to avoid contamination of the soil and water tables by employing sewage treatment stations.

During the study and project development phase, we are always seeking means of improving the implantation and effectiveness of our solutions in terms of making the best possible use of natural lighting and ventilation in our apartments. In the condominiums’ common areas, proximity sensors and smart elevators encourage rational energy use. In addition, for some time now many of our projects have been developed with more extensive green areas than required by law.

50 Rossi | 2010 Sustainability Report Wind power system used by Ambient Park Residencial (GO)

Reservoir with separate tank for reusable water

Collection of rain water

Tower roof

Use of wind power Rainwater pipe

Use of water for flushing

Use of water for cleaning buildings and watering plants 35 drainage wells for collecting surface water and refilling the water table

Underground reservoir for reusable water

Groundwater pipe

Reservoir water pump Water table

Other important measures to reduce environmental impact are built in to a number of projects, such as the use of reforested wood for roofing, doors made of certified wood, and ofwind power, as well as the treatment of rain water for reuse in garden irrigation. Simpler actions like the installation of faucets equipped with aerators or automatic shut-off also help encourage rational water use.

Several projects are renowned for their environmentally responsible practices and abundance of green areas, including, among others Ambient Park Residencial (GO), Rossi Atlântida (RS), Rossi Navegantes (CE), Villa Jardim Torquato (AM) and Arboretto Praças Residenciais (AM).

Throughout 2011, during the works phase of our projects, we will be following the Works Environmental Control and Monitoring Program to ensure that all building and worksite operation services for the implantation of infrastructure are carried out in accordance with the best environmental control practices.

All activities related to project works will be monitored by professionals, so that they can be effectively managed, their quality can be controlled and their environmental impact monitored by ensuring that the projects as a whole and certain pre-specified procedures are correctly executed. The teams involved in the projects’ various implantation phases will be given guidance on basic environmental conservation concepts, with the aid of an educational, training and awareness-raising program.

In addition, we will be looking into means of making more effective use of the Conscientious Consumption Guide. This guide, which was launched in 2009 to teach people how to include environmental conservation in their daily activities, captured the interest of our employees and stakeholders, and not only our clients, for whom it was originally designed.

Your life project, our satisfaction. 51 Performance, management and innovation | Sustainability

Community development

As a result of our belief in the importance and impact of our operations in promoting a healthy community spirit, for more than ten years we have been engaged in community development activities in association with the NGO Gira Sonhos. This consists of promoting integration among the residents of urban projects (Villa Flora projects or planned neighborhoods), requiring the establishment of specific rules and guidelines for living together in harmony. These initiatives helped us identify important aspects of the projects, which had not been effectively identified through surveys, allowing us to foster community development more effectively.

Material from an activity during an NGO Gira It is our responsibility to offer conditions that enable residents of this type of Sonhos event at the Villa Flora Votorantim project project to take care of their own home in a responsible manner. The NGO has helped us spread important values regarding living together and day-to-day practices, such as the implementation of selective garbage collection in the condominiums and the rational use of water, among others.

Additionally, on April 24, 2010, we sponsored the first Social DNA Forum, held by the NGO Gira Sonhos, organized around the theme “Sharing beneficial initiatives with the world”, in order to raise and discuss questions about community life and human relations in the 21st century through an interchange of experience among the participants. The event borrowed its name “Social DNA” from a project that the NGO has undertaken for more than 12 years For more information on this NGO, go to and on which the development of Villa Flora was based. Its proposals include www.girasonhos.org.br strengthening integration and cooperation between residents, thereby encouraging community solidarity. [GRI 4.12]

Founding member of GCB Brasil

Aiming to adapt international sustainable building standards to the Brazilian situation, we were one of the founding members of the São-Paulo-based GBC Brasil (Green Building Council Brazil), the local representative of the World Green Building Council, whose purpose is to examine the characteristics of the Brazilian real estate market and propose adaptations to the requirements for Learn more about GBC Brasil at www. obtaining LEED (Leadership in Energy and Environmental Design) certification, gbcbrasil.org.br granted to sustainable buildings by the GBC. [GRI 4.12/4.13]

52 Rossi | 2010 Sustainability Report Earth Hour Campaign

In 2010, we supported Earth Hour for the first time. Promoted by the WWF (World Wide Fund for Nature, an international NGO), the campaign has more than one billion participants worldwide every year and consists of mobilizing companies, public institutions, universities and homes to switch off their lights for an hour. As a symbolic means of alerting people to the need to conserve natural resources – an increasingly relevant issue – we encourage our clients and employees to take part.

In order to mobilize the greatest number of people possible and make an effective contribution to Earth Hour, we developed a series of actions: sending e-mails to employees, clients, investors, analysts, partners and suppliers; distributing banners and posters in our offices and points of sale; supplying employees with promotional kits; posting messages on our Twitter; and creating a specific hotsite to promote the campaign (www.rossiresidencial.com.br/horadoplaneta), where people could register their mobile phone number and receive an SMS reminder 30 minutes before the switch-off. In addition, the 100 internet users who completed the phrase: “I am going to participate in Earth Hour because...” in the most creative manner received an Earth Hour T-shirt.

We were pleasantly surprised by the participation of our employees. Consequently, we will continue to support the Campaign in 2011, with a particular emphasis on our staff.

Preserve o planeta a toda hora.

O combate ao aquecimento global e às mudanças climáticas pode ser feito a partir de simples atitudes. A maior prova disso ocorreu no dia 27 de março, quando milhões de pessoas em todo mundo participaram da Hora do Planeta apagando as luzes por sessenta minutos.

Nós participamos deste evento e aproveitamos a oportunidade para agradecer a todos que também participaram. E para que este ideal permaneça sempre aceso, nós convidamos você a manter no seu dia a dia hábitos que contribuam para a sustentabilidade do planeta.

Acesse www.rossiresidencial.com.br, clique no banner Consumo Consciente e veja como é possível preservar o meio ambiente a toda hora, na sua casa. Left, the Earth Hour Campaign announcement; right, the banner disclosing the event

anuncio.indd 1 3/12/10 8:12:27 PM

Your life project, our satisfaction. 53 Performance, management and innovation | Sustainability

National Residential Building Energy Conservation Seal

In November 2010, Eletrobrás and Procel Edifica (National Program for Energy “Receiving this seal is very Efficiency in Buildings) launched the Procel Edifica Seal. Based on Procel Edifica important for Rossi. Its requirements, the projects (entered voluntarily), were examined by Inmetro meaning goes well beyond our (Brazil’s National Bureau of Standards). commitment to life projects, representing the Company’s responsibility to achieving goals Similar to the Procel Seal for electronic equipment, the Procel Edifica Seal is that have a positive impact on awarded to buildings whose energy efficiency is classified on a scale from “A” the environment and the lives of (maximum) to “E” (minimum). future Rossi Atlântida buyers.” Gustavo Kosnitzer, South Region Officer Rossi was one of the companies who voluntarily adhered to the program, entering the Rossi Atlântida project, located on the coast of Rio Grande do Sul, which was granted an “A” rating. Given that this was a project analysis, the Seal will only be effectively delivered when the development is complete, at which point further technical analysis will be carried out to confirm the level of energy efficiency.

From the outset, Rossi Atlântida was developed in accordance with sustainability concepts. Procel highlighted several of the undertaking’s characteristics, including low buildings, with white as the predominant external color, which reduces the internal temperature of the units, and the high ratio of cross ventilation, which reduces the need for air conditioning and improves thermal comfort.

The project also includes natural lighting, a pool and leisure area heating system based on solar energy, gas-powered water heaters in the residential units, the use of renewable energy and proximity sensors in common areas in order to reduce energy consumption, the installation of dual-flush toilets in all units, and individual metering of water, electricity and gas consumption.

Event in which the National Residential Building Energy Conservation Seal was launched. On the right, Fernando Pergoraro, manager of one of the Rossi cells in Porto Alegre, receives an “A” rating for the Rossi Atlântida project

54 Rossi | 2010 Sustainability Report ENVIRONMENTAL INDICATORS

Water, electricity and solid waste

In 2010, the Company’s headquarters in São Paulo (Miami Building) consumed 4,731 m³ of water from artesian wells and public supply mains, in addition to 274,000 kWh of electricity. [GRI EN8/EN4]

Also in 2010, Rossi disposed of 219,900 m³ of water via the public sewage system for biological treatment by the responsible concessionaires. [GRI EN21]

Hazardous waste generated during the year totaled 257.4 tonnes, which was disposed of in accordance with legal requirements, while the 158,000 tonnes of non-hazardous waste was disposed of as follows. [GRI EN22/EN24]

Waste Amount (tonnes) Disposal Rubble 56,158.56 Accredited locations

Glass, plastic, metal and cardboard 5,174.60 Recycled

Plaster and wood 8,496.31 Landfills

Soil 88,193.90 Accredited locations

Total 158,023.37

Environmental investments [GRI EN30]

Department/ Regional Office Investments Reason External environmental management Urban Projects R$ 3.9 million services and extra expenses with the installation of cleaner technologies. Improving the road system around the works (Pateo Catalunya) and the São Paulo R$ 242,000 purchase of a rubble crusher (Cores de Mogi, Jardinatti). Soil replacement to a depth of around 2.5 meters in the Verdi Humaitá project and environmental monitoring South R$ 5.0 million of gases for the works in Porto Alegre due to the old miscellaneous waste tip in the area.

Your life project, our satisfaction. 55 Performance, management and innovation | Sustainability

Reduction in the consumption of energy and natural resources [GRI EN6]

As we pointed out in the “Investments in sustainable practices” section, we have paid special attention to environmentally responsible initiatives in our administrative and operational areas, as well as our developments. Our determination to reduce the consumption of energy and natural resources is an integral part of many of our projects, especially those in the residential segment. These initiatives are listed below:

The use of fluorescent lighting in garages and common areas;

The use of proximity sensors in common areas;

Individual metering of water, electricity and gas, ensuring greater control over and a reduction in consumption;

Capture of rain water for use in the gardens and for cleaning garages;

The use of solar power for heating; Parking spaces with drainage, ensuring soil permeability;

The use of certified raw material products;

Smart elevators for more efficient traffic control;

The use of gas-heated showers instead of electric showers;

The use of native species in landscaping projects (increasing lifespan and reducing maintenance costs);

Installation of bicycle racks; The use of glass with a higher thermal performance and appropriate shading coefficient in commercial buildings, thereby improving energy efficiency and thermal comfort and reducing the need for air-conditioning; Separate tip for organic material and selective recyclable collection;

The use of access flooring in commercial projects, avoiding demolition and reducing the amount of rubble generated;

The installation of inspection chambers on the heliport floor to separate the oil and rainwater collected by the drains;

Split system air-conditioning, ensuring use in locations and at times when strictly necessary only;

The development of lighting projects;

The development of specific frame projects to allow for the more efficient use of materials used in the works during manufacture and assembly;

Dual-flush toilets with attached cisterns and shut-off devices to reduce water consumption.

Every day we seek new means of expanding our activities in relation to the responsible use of natural resources, while encouraging a conscientious attitude on the part of our employees, clients and other stakeholders.

56 Rossi | 2010 Sustainability Report ENGINEERING, MANAGEMENT AND PROCESSES Building methods

With growing demand for real estate, the need for higher productivity in construction also increases. In this scenario, building techniques such as the use of pre-cast concrete structures have become attractive options for the industry, and, consequently, for Rossi, which has been investing in more efficient construction technologies for the low-income segment. Currently, the Company employs four such techniques:

1. Structural masonry with slabs cast on-site; 2. Monolithic walls and slabs with aluminum molds; 3. Structural masonry with pre-cast slabs; 4. System of panels and slabs in pre-cast concrete.

In order to speed up the building process while ensuring the highest standards of quality and reducing costs, in 2010 we opened two new production centers, for a total of seven, one producing aluminum molds and six producing pre-cast walls, slabs, staircases, and other special concrete structures. The centers are located in their own lots in regions containing several Company sites.

Construction technology Location Capacity (units p.a.) Aluminium molds Manaus 1,200

Pre-cast concrete structures

Walls and slabs Porto Alegre 2,000 Campinas 3,000 Slabs Serra 1,000 Hortolândia 1,000 Porto Alegre 2,000 Campo Grande 1,000 Seven production centers 11,200

Advantages of pre-cast concrete panels and slabs Speed

Preservation Improved of the Rossi quality standard

Used in large-scale constructions

Approved Continuous by the CEF improvement

Lower cost

Your life project, our satisfaction. 57 Performance, management and innovation | Engineering, management and processes

Components can be transported within a 30 kilometer radius. Pre-cast technology is essential to ensure the feasibility of large-scale construction projects. Rossi has invested a great deal in this method in the last few years and is one of the only Brazilian builders with expertise in a variety of construction technologies, allowing us to apply them in accordance with the characteristics of each project in order to maximize shareholder returns.

Left to right, pre-cast aluminum and concrete production centers in Manaus (AM), Serra (ES) and Porto Alegre (RS)

Business Management Area

In order to speed up our growth and geographical expansion strategy, we created the Business Management area, which is responsible for monitoring our businesses, ensuring long-lasting relations with our partners and managing these strategic alliances in several Brazilian cities. It operates together with all the business cells and is divided into Engineering and Project areas.

The area’s structure permits greater alignment with our partners, the sharing of experience, high- quality project standards and a better understanding and more efficient adoption of processes by our partners. Thus Rossi reinforces its image as a company that has come to a given city to stay, not just to undertake a project or two and leave. Thanks to this attitude of respect and responsibility vis-à-vis our partners and clients, we have achieved even stronger alliances, such as those that gave rise to the joint ventures with Capital, Toctao and GMS.

One of our business management tools is the Project Panel. Developed in 2010 based on the information requested by our partners, the Panel is a Business-Intelligence-implemented solution that allows strategic information available in the SAP system to be viewed online.

58 Rossi | 2010 Sustainability Report Quality

In 2010, we received ISO 9001:2008 recertification and complied fully with “For the Engineering area, the requirements of Level A of the Brazilian Habitat Quality and Productivity the training offered by the Program (PBPQH), crucial achievements given that these certifications are a Engineering School and the federal government requirement for project approval by the Caixa Econômica Future Engineer Program were Federal and for inclusion in the “Minha Casa, Minha Vida” (My Home, My Life) the highlights in 2010. We program. They also demonstrate our concern over each detail and process to must also mention the Quality the market and our stakeholders. department, which became more and more a part of Rossi’s DNA and began to focus For Rossi’s Quality Department, the recertifications are the culmination of increasingly on construction several initiatives in 2010, one of which was the structuring of the area itself, processes, and the Planning whereby each regional office was equipped with engineers and architects department, which became dedicated exclusively to quality issues. One of the challenges faced by these more focused on production. professionals was to deepen their knowledge of the new building techniques The pre-cast plants have also adopted for the low-income segment. become more important for the Company.” Another important initiative was the mapping of the main training and upgrading Renato Diniz, Chief Engineering Officer needs, which generated content for the Rossi School of Engineering and the Rossi uture Engineer Program. The area also produced videos on structural masonry to improve training procedures.

The area is also responsible for heading a multidisciplinary study group on the new NBR 15575:2008 performance standard, which will become effective as of March 2012 and deals with thermal, lighting, ventilation and acoustic comfort, the safe use of the building and durability, as well as water reuse in buildings and electrical efficiency proven by the Procel Edifica Seal. Even though the introduction of the new norm was postponed (it was originally scheduled to come into effect in 2010), the group is already preparing for full compliance, analyzing several factors, such as processes for minimizing the impact of the external environment and finding material suppliers that meet the required technical specifications, among others.

The area also strengthened its relations with Rossi’s other business departments, including People Management, Sustainability, Information Technology, Customer Service and Technical Support, among others, in order to share strategic information, identify areas for improvement, plan remedial and preventive measures, and, together, ensure that our stakeholders, particularly clients, are aware of our continuous improvements.

Your life project, our satisfaction. 59 Performance, management and innovation | Engineering, management and processes

Controllership and Risk Mapping Area [GRI 1.2/4.11]

The Corporate and Fiscal Accounting, Controllership and Audit Departments are “We expanded the Internal all under the responsibility of the Controllership area, which is also responsible Audit department in 2010, for generating information to assist in decision-making processes. conducted a comprehensive risk mapping project and presented In regard to risk management, the Audit Department conducted an extensive the diagnostics. Since then, we mapping in partnership with Deloitte, which involved interviews with all have been discussing means of mitigating risks and prioritizing the executives as well as questionnaires directed towards employees from improvements. This is a major management level upwards. long-term challenge that we are committed to overcoming.” Based on the results of this process, Rossi’s Board of Executive Officers has Gerson Cohen, Controllership Officer been meeting to discuss the risks involved and the best means of mitigating them, developing action plans based on criteria such as the urgency of the risk in question and how easy it is to introduce improvements. One such initiative has to do with the structure of the Supply department, which has to be adjusted to take account of improvements to and the integration of purchasing processes, in addition to more effective cost controls. This process began in 2010.

Another initiative was the expansion of the Internal Audit Department, created in 2009. In order to allow all employees to become familiar with the department, in 2010 it was presented via an internal communications program through which people could ask questions about its operations. Furthermore, the TOP (Process Optimization Team) project and the implementation of new Business Intelligence technologies continued to give Rossi opportunities for improving its management.

The Accounting Department concluded the implementation of IFRS (International Financial Reporting Standards), which ensure convergence with international accounting standards. IFRS was adopted by Brazilian publicly-held companies, financial institutions and large corporations. The 2010 financial statements are in accordance with IFRS, as are the comparisons with 2009.

Sales revenue is recognized using the POC (percentage of completion) method, i.e. in accordance with the percentage of completion measured by the cost incurred in relation to the total expected cost of each project.

60 Rossi | 2010 Sustainability Report Control instruments [GRI 1.2/4.11]

Along with the new process for mapping and diagnosing risk and implementing improvements, we continue to employ instruments that identify, evaluate and minimize the risks related to our business, in line with our mission to generate value for shareholders and ensure the continuity of our Company, prioritizing people, the community and the environment.

Strategic risks: Our growth strategy, along with our product and geographical diversification, exposes our operation to a complex scenario in terms of consumer demand, regional macroeconomic and political situations, and legal requirements specific to each area. Control: Our regional organizational structure and operations with local partners give us an inside track in terms of getting to know any given region. We constantly monitor the scenario in which we operate, together with any changes in legal requirements or consumer demands, in order to anticipate and meet them.

Image risks: Possible problems during the construction and delivery stages of a project related to the environment, legislation and community relations, among others, that could negatively affect our market image. Control: The Land Purchase and Project Launch Committees, as well as teams from several different areas in the Company, constantly monitor any changes in the sector’s legal instruments and maintain open and close relations through dialogue with our various stakeholders in order to detect and correct any possible points that need to be improved in our operations. Furthermore, our products and regional diversification reduce our exposure to one-off or local risks. Additionally, a single communications consulting firm, with a nationwide presence, provides assistance with crisis management, media relations and the preparation and constant training of spokespersons.

Operational risks: The sheer size and complexity of our business, which involves professionals and partners throughout the country, requires well-structured and defined systems and processes to maintain operations and ensure compliance with all legal requirements, including obtaining the necessary permits and licenses at all stages of our operation and in relation to all the stakeholders involved in our activities. Control: Information technology systems provide the basis for our unified operations in all regions and segments, integrating those processes and controls that must be observed at all stages of project construction. We also rigorously comply with all labor obligations and employ specific teams to ensure the contracting of the most appropriate suppliers in terms of price, quality and social and environmental responsibility. Those suppliers considered most suitable from Rossi’s point of view must develop close relations with the regulatory bodies in the municipalities where they operate and monitor local demands, striving to guarantee the supply of high-quality products, while ensuring social development and environmental preservation.

Financial risks: Adverse market trends or factors related to macroeconomic policy in Brazil, such as increases in inflation and/or interest rates or the shrinkage of credit, among other factors, can affect our business by reducing demand for our products or making it difficult to access the financial resources we need. Control: We have a Finance Committee and instruments for monitoring market developments, as well as policies and directives to guide our decisions regarding investments and cash-flow management, always keeping a particularly close eye on the indices that affect our business.

Your life project, our satisfaction. 61 Performance, management and innovation | Engineering, management and processes

Cash flow risks: Several risk factors, business-linked or not, can adversely affect the Company’s future cash flows. Control: We have an efficient system for managing the inflow and outflow of resources at all project stages, via the business management software SAP, and use the data collected and monitored to determine strategies that minimize financial risks over the long term. Additionally, our annual planning is revised on a quarterly basis and responsibility for the management of financial resources is distributed among management and shared with employees.

Engineering risks: Any increase in the cost of raw materials used in project construction can have a negative impact on our results. Control: We prepare a pre-planned budget for 100% of the work to be undertaken, including direct and indirect costs, which has to be approved before any project can begin. The Engineering Department monitors the projects through budget reports to prevent any possible inconsistencies during construction.

Work safety risks: Given the characteristics of the real estate sector, our construction employees and partners are exposed to a series of risks related to accidents at work. Control: Our management of health and safety is designed to prevent accidents at work. Consequently, we provide intensive training in protection tools and procedures for our own workers and outsourced labor, using printed and audiovisual material, in order to encourage preventive conduct at the workplace. Our engineering team also employs a Workplace Health and Safety Management manual that focuses on ensuring the permanent protection and safety of workers on the building site, and which also helps to improve quality and productivity. These processes are audited annually in terms of their compliance with ISO standard 9001:2008, which includes safety requirements.

Legal risks: Our investments in the acquisition of land are subject to several legal and ownership questions, which may adversely affect us if acquisitions are made without taking possible impediments to future use into consideration. Control: We have a centralized Legal Department to facilitate decisions regarding land acquisitions and ensure greater security and control regarding legal issues related to the Company’s landbank investments.

62 Rossi | 2010 Sustainability Report Information Technology

The main developments of the Information Technology Department in 2010 resulted from two previous projects, the first being the 1999 implementation of SAP ERP (Enterprise Resource Planning), which integrates operational and financial management throughout the Company, thereby helping with corporate resource planning, project and supply chain management, client management and the analysis of management procedures. The other was Oracle EPM (Enterprise Performance Management), a Business-Intelligence-integrated solution, capable of generating several analyses, predicting market scenarios and monitoring client perception, sales and the work schedule, thus allowing for more effective planning.

The department’s challenges over the year focused on training employees on how to use the new tools, implementing the technological infrastructure of the pre-cast production centers and developing new solutions for different departments.

Another important advance was the increase in the indicators covered by Hyperion, a Business Intelligence tool that allows data to be consolidated and transformed into useful information for strategic decision making through the creation of scenarios and sophisticated simulations of our operations. Implemented in 2009, this tool offers a series of benefits, including faster calculations and presentation of process evolution; sales performance analyses per period, region and agency; sales performance per period; and client perception monitoring and analysis.

Electronic document management was implemented in the Legal department and subsequently extended to the Engineering department. The Financial Department benefited from a SAP-driven cash flow solution, which integrated bank statements and allowed the financial items of each project to be identified. A detailed project cycle panel, which is based on work flows and gives a more accurate view of each department’s compliance with deadlines, is currently being developed. In order to serve the new product mix, the IT department also implemented system improvements that will provide a more efficient breakdown of management information.

As the Company grew and demand for IT increased, the department was subdivided into the SAP, Infrastructure, Internet/Intranet and Information Security departments. Infrastructure-related services are provided by an outsourced company, which receives approximately 2,000 calls per month. In regard to information security, GRC tools (Governance, Risk Management and Compliance) were implemented, and in 2011 control of SAP users’ accesses will be mapped and a responsibility matrix will be developed.

The IT Department also invested in more up-to-date equipment, purchasing new SAP servers, which take up less space and use less power, allowing server virtualization and improving link capacity and connections. In order to facilitate managers’ access to the systems, it also invested in mobile tools, allowing SAP and Hyperion to be accessed via phone.

Your life project, our satisfaction. 63 3.

64 Rossi | 2010 Sustainability Report Made for people by people

Your life project, our satisfaction. 65 Made for people by people | Team

TEAM [GRI 4.14/4.15]

Development and the Rossi Academy [GRI LA11]

The 2010 People Management highlight was the creation of the Rossi “The People Management department faced a number Academy, which focuses on employee training and development, career of challenges in 2010, many of improvement and specialist qualifications, so that the entire workforce which were the result of the is prepared for and committed to achieving our expected growth in the Company’s growth. We created coming years. the Rossi Academy, continued to invest in the Rossi Well Being The Rossi Academy is divided into nine program, and launched the programs with several training options and Professional Friend program content covering various fields of expertise: and a series of other initiatives Leadership Development Program (PDL), focused on motivation, SAP Training Sessions, Behavioral Training quality of life, health, safety, Program, Focus on the Client, TOP (Process Optimization Team) Program, compensation and benefits.” Business School, Engineering School, Future Engineer and Improvement Renata Rossi, Administrative Officer Training Programs.

The modules are geared towards different professional profiles and reach up to management level. Future Engineer, for example, is aimed at employees who are still studying for a Civil Engineering or Architecture degree, while the Behavioral Training program seeks to develop and improve important skills in line with our values. The objectives of each Rossi Academy module are outlined below.

Including the Rossi Academy and other development initiatives, in 2010 we conducted 2,866 hours of training and recorded 4,323 participations, representing an average of 1.03 hours of training per employee (considering total employees, not just those undergoing training). The Leadership Development Program was administered to 74 managers (84.6% of the total); the Engineering School had 275 participants (94% more than planned), and Improvement Training benefited 137 employees. In addition, 106 employees benefited from the Educational Support program, which encourages undergraduate, specialization and graduate courses by subsidizing a percentage of monthly tuition (which varies according to time of service). [GRI LA10]

It is also worth noting that 55.21% of the workforce (1,532 employees) received specific training in anti-corruption policies and procedures based on our Code of Ethics and Conduct, which is also available on the intranet and our website. [GRI 4.8/S03]

66 Rossi | 2010 Sustainability Report Rossi Academy Programs

PDL – Leadership Development Program Objective: Improvement of behavioral management skills. Target public: Headquarters and Regional Office Managers.

SAP Objective: Training in the SAP system in accordance with the employee’s duties. Target public: All employees.

Behavioral Training Objective: Development of behavioral skills, ensuring a professional approach to daily activities. Target public: All employees.

Focus on the Client Objective: Immersion in excellent customer services. Target public: Employees in the Customer Relations, Contract Management, Loan Analysis, Technical Assistance, Real Estate, Legal and Work Engineering departments.

TOP Objective: Alignment of processes and procedures through a series of workshops. Target public: Employees from all of the departments involved.

Business School Objective: Technical improvement of several areas, expanding knowledge of the business and its interfaces. Target public: Multidisciplinary managers and supervisors.

Engineering School Objective: Development of technical and behavioral skills, including external consultants and internal knowledge multipliers. Target public: Managers, coordinators and construction engineers and architects.

Future Engineer Objective: Expansion of the business’s vision and training of future engineering professionals, enabling technical and behavioral training. Target public: Construction employees in their 4th or 5th year of Civil Engineering or Architecture.

Improvement Objective: Internal and external content related to the business and its strategy designed to improve their day-to-day activities. Includes external consultants and internal knowledge multipliers. Target public: All employees (in line with departmental demand).

Your life project, our satisfaction. 67 Made for people by people | Team

Rossi Well Being (Bem-Estar)

The Rossi Well Being Program, created in 2008 and coordinated by the People Management Department, focuses on improving the quality of life of our employees, encouraging a healthier life style and proposing activities that seek a balance between their personal and professional lives.

One of the program’s goals is to strengthen relations between Rossi and its employees, ensuring that harmony and enthusiasm in the workplace have a positive influence on their motivation and satisfaction. The program is divided into six pillars on which every initiative is based:

Rossi Physical Well Being Encourages the practice of sports, such as running, trekking and soccer.

Rossi Social Well Being Initiatives focused on social responsibility.

Rossi Leisure Well Being Leisure activities that promote integration in order to strengthen relationships among employees.

Rossi Mind Well Being Activities associated with psychological health.

Rossi Health Well Being Activities focused on healthcare and disease prevention.

Rossi Commemorate Well Being Activities associated with commemorative dates.

Rossi Well Being events include rafting (left) and the Eco Run marathon, in which headquarters and São Paulo Regional Office staff took part

68 Rossi | 2010 Sustainability Report To commemorate our 30th anniversary and put increasing emphasis on quality of life, we complemented these initiatives with the “I Practice Rossi Well Being” (“Eu Pratico Ross Bem- Estar”) loyalty program, in which employees get a point for each activity in which they take part, and every two points gives them the right to an exclusive gift and a coupon to compete for further prizes and experience vouchers. In 2010, 684 employees took part the various Rossi Well Being activities.

Banners from the “I Practice Rossi Well Being,” showing how employees can participate in activities that match their lifestyle

The Quality of Life Committee plays a crucial role in ensuring Rossi Well Being’s national coverage. Comprising employees from every area and regional office, this group is responsible for managing the program’s actions in the locations where they work, in addition to encouraging practices that promote a better quality of life. Participation in the committee is voluntary and each year new employees can volunteer to take part. The success of this program is directly related to the enthusiasm of those involved.

Your life project, our satisfaction. 69 Made for people by people | Team

Motivation and results

In 2010 we altered the frequency of Profit Sharing Program performance assessments and payments to semiannual. This program applies to all employees and is directly related to the performance of each area in regard to achieving the established targets and results. We distribute up to 8% of net book income to all employees, Officers and members of the Board of Directors in an amount proportional to their salary and time with the Company, based on performance indicators and the achievement of goals established in advance for each department. Consequently, we encourage teams to make every effort to meet these goals, thereby reinforcing our merit-based culture. In addition, when targets are exceeded, the bonus may be as much as 50% more than the originally established amount. [GRI LA12]

Professional friend

Given the growth of the construction industry, it has become increasingly difficult to find skilled labor, leading us to seek alternatives for attracting professionals who identify with Rossi’s “way of being,” in addition to encouraging the hiring of local labor. One such solution was the so-called Professional Friend (“Profissional Amigo”) program, which encourages employees to nominate an acquaintance to work at Rossi. If the person in question is hired, the employee wins a cash prize of R$ 100 or R$ 150, as the case may be. The Company also invested in technology to automate the opening of vacancies, allowing managers to monitor and manage them in a more efficient manner. [GRI EC7]

Internal communications

In order to keep our staff informed of our achievements throughout Brazil and make sure they are fully up-to-date regarding strategic matters, we employ four important internal communication channels: the bi-monthly internal newsletter Momento Rossi, the De Olho na Obra (Keeping an Eye on the Work) and De Olho no Escritório (Keeping an Eye on the Office) notice boards, the weekly Giro Semanal online bulletin and the news section on the intranet. The Welcome Pamphlet is also updated annually in order to provide newcomers with complete information on the Company, including guidance on rules, policies and procedures.

16th edition of the De Olho no Obra newspaper, 16th edition of the De Olho no Escritório newspaper, published in October/November 2010 published in October/November 2010

70 Rossi | 2010 Sustainability Report Compensation and benefits

Our compensation policy – valid for all levels and all Regional Offices in the Company – seeks to provide employees with competitive salary levels in accordance with the market value of their job (arrived at through surveys), always respecting salary floors and collective bargaining agreements (all workers are covered by such agreements), always in line with the available budget. [GRI LA4]

Benefits were adjusted to conform to the market in each region where we operate. The 2010 highlight was the implementation of the Rossi Prev private pension plan (to which Rossi contributes between 50% and 100%, depending on how long the employee has been with the Company). By the end of the year, 50% of the administrative team had signed up. Furthermore, we increased our life insurance contribution from 30% to 50% and stepped up our encouragement of language learning. [GRI EC3/LA3]

It is through this approach that we expect to attract, reward and retain the best Banner for Rossi Previ, the Company’s and most qualified professionals. Moreover, we adopt fair appraisal criteria private pension plan to ensure a competitive balance between internal and external salaries and position structures, as well as a benefit plan.

Your life project, our satisfaction. 71 Made for people by people | Team

The benefits offered by the Company include:[GRI LA3]

Health plan (for all employees and, in some cases, for their dependents, with different standards of coverage; Maternity/paternity leave (in accordance with the legislation); Medical check-ups (for all members of Management, under the same standards of coverage); Dental plan (optional for all employees, with different standards of coverage); Agreements with pharmacies; Private pension plans (optional for all employees, the contribution percentage being in accordance with salary levels); Life insurance (for all employees; optional for the administrative area); Meal vouchers (for all employees, the discount percentage being in accordance with salary levels); Transportation vouchers (all positions, for use in public transport only); Parking (all parking fees for management positions and upward paid by the Company); Discounts on the purchase of properties (for all employees, the discount percentage varying in accordance with their time with the Company); Christmas basket and a toy for each child (for all employees); Retirement fund, stock option plan (for managers and officers); Educational support; Prize for nominations through the Professional Friend program; Application Prize for construction.

Climate survey

One of Rossi’s goals is ensure an increasingly comfortable working environment and in November 2010, with the help of the Great Place to Work Institute, we conducted a corporate climate survey, whose theme was borrowed from the title of the campaign “Ideas that Transform”.

The survey’s results revealed a number of positive aspects, being comparable to those companies ranked among the 100 best to work for. One of the main highlights was the fact that 60% of participants selected the opportunities for growth and development offered by Rossi as the main retention factor. In addition, 87% of participants agreed that Rossi was an excellent company to work for, despite there being grounds for improvement – a view confirmed by the Company’s turnover ratio (the number of resignations divided by the total number of employees), which stood at 8.93% in 2010, with a monthly average of 3.71%. This is exceptionally low when compared to the monthly construction industry average of 7.09% (Ministry of Labor and Employment figure). [GRI LA2]

72 Rossi | 2010 Sustainability Report Health and Safety at Work

In 2010 we developed a number of important health and safety initiatives. The first was the creation of a Health Management program in association with SulAmérica to monitor and prevent illness among employees and their dependants. Our hourly workers were provided with health insurance through Intermédica and Clínica Gaúcha. [GRI LA8]

We also continued to monitor our construction sites through the Safety Committees, which develop training and awareness programs to control work safety risks and consist of a work safety specialist, a foreman and a representative from each building company.

These programs include issues such as the prevention and control of risks associated with below- standard activities and conditions, collective protection systems, personal protection equipment (PPE), hearing and respiratory protection, workplace safety and medical regulations, fire prevention and control, first aid, and the prevention and control of accidents with machinery and equipment.

In addition to the Committee, each construction site has at least one occupational health and safety representative, whether a member of the Internal Accident Prevention Commission (Cipa) – constituted in those projects where it is a labor law requirement – or a representative from each building company who has received training in occupational health and safety. [GRI LA6]

We also held an Internal Accident Prevention Week (Sipat), a Rossi Well-Being event, which in 2010 was organized around the topic “Quality of Life” focusing on the latter’s benefits to physical and mental health, including increased concentration during daily activities and a reduced risk of accidents.

To ensure greater engagement in the event, we promoted a photo contest called Focus on Well- Being, in which employees were encouraged to share their own photos that transmit the idea of “Quality of Life.” The five best photographs each won a new digital camera.

All of Rossi’s employees were allowed to participate in the event, which was held simultaneously in São Paulo (SP), Campinas (SP), Porto Alegre (RS), Rio de Janeiro (RJ) and Vitória (ES). The program included a theatrical piece and lectures on topics such as safety, valuing people and enthusiasm, in addition to prizes and an afternoon coffee break.

We also conducted several types of training session, including for new employees, motorcyclists and fire brigades, as well as programs devoted to risk mapping, among others.

Employee at the pre-cast production center in Manaus (AM)

Your life project, our satisfaction. 73 Made for people by people | Team

[GRI LA7]

Occupational health and safety indicators Own employees 2010 2009 No. of workplace accidents with and without medical leave 20 1

No. of days lost – workplace accidents with medical leave 127 10

Frequency rate1 7.43 1.63

Degree of severity2 111.93 16.33

Fatal accidents 0 0

Employees of contracted companies 2010 2009

No. of hours exposed to risk 10,881,357 9,362,760

No. of workplace accidents with medical leave 64 36

No. of workplace accidents with and without medical leave 119 48

No. of days lost – workplace accidents with medical leave 822 334

Frequency rate1 5.88 3.65

Degree of severity2 95.02 246.94

Fatal accidents 0 0

1 Number of workplace accidents with medical leave per million man-hours of risk exposure.

2 Number of days lost as a result of workplace accidents with medical leave per million man-hours of risk exposure.

Employee profile [GRI 2.8/LA1/LA13]

Number of employees (CLT regime) Breakdown by region (headquarters and regional offices)

2% 1% 1% 3000 2,779 0% Headquarters (São Paulo) 2500 3% 14%

2000 São Paulo Regional Office 10% 1500 1,059 Campinas Regional Office 896 1000 South Regional Office

500 14% Rio de Janeiro Regional Office 0 Brasília Regional Office 2008 2009 2010 Northeast Regional Office

32% North Regional Office West Regional Office

23% São Paulo City Regional Office

74 Rossi | 2010 Sustainability Report Employees by type of Employees by gender (CLT regime) employment contract 1% 1%

98% 24% 76%

36%

CLT regime Men Interns Women Apprentices

Employees by age group (CLT regime) Breakdown by occupation

11% 72% 39% 24% 3%

3% 1% 0%

50%

Less than 30 Operators, maintenance technicians and administrative staff Between 30 and 50 Board of Directors More than 50 Executive Officers Managers Analysts, engineers and specialists

Your life project, our satisfaction. 75 Made for people by people | Clients

CLIENTS [GRI 4.14/4.15]

Contributing to our clients’ life projects is a reason for celebration. We are fully aware of our responsibility and this inspires us to develop projects that put the highest value on well-being and quality of life. Consequently, we do everything possible to maintain transparent, positive relations with our clients, beginning with the actual sale and continuing through the construction phase to beyond the delivery of the keys.

Acquiring a property is a momentous event in anyone’s life, and when that property is purchased before it us even built, we know that our clients have entrusted their projects and expectations to us. Consequently, we do everything possible to improve our communications and build closer ties with them through series of several initiatives entitled “Rossi Client Relationship Phases”.

Rossi Client Relationship Phases

We make a point of establishing close and transparent communications with our clients at every stage of our relationship. From the first meeting to delivery of the keys, we are involved in more than 30 relationship actions, including phone calls, the sending of institutional materials (newsletters, letters and e-mails) and delivery of Rossi’s exclusive kits, among others.

Before dismantling the sales stand or beginning construction works, we send a letter presenting Rossi to the neighbors explaining the changes in their surroundings, in addition to contact information for our Customer Relations department. In 2010, we invested in communications with the communities adjacent to our worksites, an initiative that is still in the experimental stage. The projects chosen in the state of São Paulo were: Ipiranga One, Lumina, Rossi Cores de Mogi and Rossi Cidade Jardim. We aim to gradually increase these communications initiatives in the future.

Even though we rigorously observe the laws of each municipality in terms of noise pollution and working hours, we are fully aware that our presence will lead to changes in the surrounding community, which is why we strive to maintain an open communications channel with our neighbors based on respect and transparency.

In addition to our proactive contacts, clients can call or send an e-mail to the Customer Service Center or use an exclusive channel on our web site, with restricted access, to view and issue payment slips, update personal registration details, and check their financial situation, among other services. Around 50 employees, including operators, back-office clerks and analysts, are dedicated to keeping clients well informed and providing them with solutions.

76 Rossi | 2010 Sustainability Report 1 2 3 4 5

Installation of Signing of the Site Events Condominium & Contract Visit to the construction Delivery site, allowing clients to We send the client the Clients are invited to a verify the progress of ownership folder condominium the works, and containing the contract installation meeting Measurement Day, and all documents and delivery of the when clients can related to the property. project. measure the property and plan the interior One-off design project. Notices Works Inspection & Deed and Real Estate IPTU During every stage, An e-mail is sent Advisory (property tax) clients receive notifying clients of the Services* newsletters, letters and beginning of e-mails with all construction, and a Another visit to the information regarding progress update is sent site, accompanied by actions by the every month. an engineer or Customer Relations architect, there will Department. also be a real estate adviser on hand to offer advice on financing.

*In the case of projects with associative financing (Caixa Econômica Federal), the Real Estate Advisory Service phase will take place upon signature of the contract, before construction begins.

Signing of the contract and Client Guide

Once a sale has been finalized, we present the customer with all of the documents regarding the purchased property and the Rossi Client Guide. This Guide is a complete manual on the Company and the property, containing important information and guidelines on the agreement, financing, payments, site visits, delivery of the keys and communication channels, among other types of information. The material is available in two different versions, one for low- income residential segment customers and one for residential segment clients.

The Client Guide is given to all buyers of Rossi properties

Your life project, our satisfaction. 77 Made for people by people | Clients

Beginning of the works and safety information Our clients are informed of when construction begins and how they can keep abreast of progress. For example, we provide monthly updates on the status of the works via Follow Your Construction (Acompanhe sua obra).

In addition, all of our worksites have Safety Booklets, which are given to clients by our works team if they arrive at the site without having scheduled a visit with Customer Relations. This material provides information on safety issues and site visit procedures.

The Safety Booklet is available at all worksites

Site events and delivery of keys

At the Visit the Worksite event, which includes the participation of our Engineering and Customer Relations teams, our clients are invited for a personal tour of the site, allowing them to witness the quality of construction first hand and clarify any doubts they might have.

The delivery kit for one of the most important events in the purchase of a property: delivery of the keys

Closer to completion, we also hold Measurement Day, during which clients can once against check on the progress of construction and measure the property in order to plan the decoration of their house or apartment. To facilitate this process, we provide each client with a kit that includes floor plans, a tape measure, a notebook and a clip board, among other items. At the end of construction we hold Inspection Day, when clients can schedule a visit accompanied by an engineer or architect.

After settlement or approval of the financing and the inspection, we contact customers by phone to schedule one of the most important moments of the entire process – delivery of the keys, either at the property or at our office. On this occasion, the customer will receive theKey Delivery Kit.

Should there be any problems, clients can call the Customer Service Center and we will send members of our Technical Support team to inspect the property and carry out any repairs that may be necessary.

78 Rossi | 2010 Sustainability Report

Client Satisfaction

In 2010 we improved and expanded the scope of our client satisfaction surveys. We created a specific survey for Measurement Day in order to measure client perception before the inspection process, allowing us to anticipate solutions for potential problems and conduct increasingly efficient inspections. The new questionnaire is an addition to existing initiatives to determine the degree of client satisfaction on such occasions as after-sales, after-service (to ascertain whether requests were met) and the site visit.

We also improved our satisfaction surveys by developing an analysis tool using Rossi’s Business Intelligence system. Data are compiled in an efficient manner, including breakdown by regional office, allowing us to make a more accurate analysis of how clients perceive our brand and the services we provide.

In 2011, we will be including the Net Promoter Score (NPS), an index which measures the degree of client satisfaction via a brand recommendation scale, as one of the criteria for determining employees’ bonuses, aiming to strengthen their commitment to exceeding client expectations. The index is based on the question “Would you recommend Rossi to a friend?”, which is answered on a scale of zero to ten, where zero means “I would definitely not recommend it” and ten means “I would definitely recommend it”, after which respondents will be placed in three categories: promoters (brand enthusiasts), satisfied and detractors – the latter being a group be focus heavily on.

Rossi Magazine

Left to right, the front pages of the 19th, 20th, 21st and 22nd editions of Revista Rossi, published in 2010

In 2010, we overhauled Revista Rossi, including new projects (editorial and graphics) and sections, in order to create a stronger bond with readers. Print-runs were also increased by 50%, from 30,000 to 45,000 copies. Access editions of The new content includes sections on decor, architecture, design, sustainability, gastronomy and Revista Rossi at www. behavior, featuring topics of interest to home buyers presented in a light-hearted manner. rossiresidential.com. br/revista-rossi.aspx. Coordinated by the Institutional Marketing Department, the publication has become an important client relationship tool, since it propagates the Company’s values. It is distributed for two years to our clients and is also available at sales stands and in electronic form on our web site.

Your life project, our satisfaction. 79 Made for people by people | Clients

Passatempo Magazine

In 2010 we created a magazine specifically for children. Passatempo em Casa targets the children of prospective clients who visit our stands, and features activities and games, as well as illustrations and info graphics. Published semiannually, the magazine reinforces our attributes and values by presenting topics associated with Rossi in a creative, fun manner. Topics featured in the first issue, published in June 2010, included sustainability, long-term relationships, the characteristics of Rossi’s projects and profiles of professionals who work in the construction sector.

Front pages of the 1st and 2nd editions of Passatempo em Casa magazine, published in 2010

Credit Analysis

The Client Relations and Credit Analysis Departments play a key role in ensuring quality sales and transparent dialogue. In 2010, they concentrated their efforts on improving processes and investing in team training.

The Credit Analysis Department operates in conjunction with the Commercial Department and Rossi Vendas in order to ensure quality sales through the analysis of several client profile criteria (e.g. income, assets, relationship history, age, etc.). This allows us to provide our clients with better guidance on obtaining financing from banks, thereby reducing the risk of contract terminations.

The Department also provides training for real estate agencies and outsourced credit analysis for the low-income residential segment, in order to clear up specific doubts such as the qualification criteria for the federal government’s “Minha Casa, Minha Vida” (My Home, My Life) program. In 2011, we aim to streamline credit analysis and approval flows with the aid of the SAP system.

80 Rossi | 2010 Sustainability Report SUPPLIERS [GRI 4.14/4.15/EC6]

Suppliers are one of our fundamental stakeholders, as we depend on solid, long-lasting partnerships in order to develop our projects and ensure exemplary quality standards nationwide.

The Supply Management Department adopts policies and guidelines that establish the criteria for selecting and evaluating suppliers of building materials, services and administrative support systems. These criteria involve legal, technical, economic and socio-environmental issues. The entire process is recorded in the SAP system, so that several indicators can be monitored.

Supplier qualification, which is valid for two years, includes, among other matters, inspection visits to industries to verify supply capacity and product quality, and requests for documents such as labor and debt clearance certificates. We also evaluate our suppliers semiannually in regard to the following items: work site cleanliness, good service, delivery deadlines, product quality, compliance with safety requirements and delivery of tax documents.

Supplier development and qualification

Procurement Procurement of services of materials and systems Supply management

Logistics and Information storage systems

Your life project, our satisfaction. 81 Made for people by people | Suppliers

Whenever possible, we contract local suppliers, thereby reducing transport costs, speeding up deliveries and helping develop the economy of our surrounding communities.

Our suppliers also receive a personalized publication, called “Conexão Rossi & Fornecedores” (Rossi Connection & Suppliers), a bi-monthly electronic bulletin containing relevant information on the Company, including operational strategy, expansion of activities, project innovations and awards received.

The 16th edition of the electronic Conexão Rossi & Fornecedores newsletter, published in October/ November 2010

PARTNERS [GRI 4.14/4.15]

Relationship with partners was further enhanced in 2010 with even stronger strategic alliances throughout Brazil and the creation of joint ventures in the states of Goiás and Mato Grosso. By the end of 2010 the number of partners nationwide totaled 92.

Currently, we rely on various resources to help us ensure closer, more transparent communications with our partners, such as the Project Panel, the online bulletin Conexão Rossi & Sócios (Rossi Connection & Partners), which provides important information on Rossi every two months, as well as personalized bulletins sent every two weeks to partners about the projects in which they are involved.

The 16th edition of the electronic Conexão Rossi & Sócios newsletter, published in October/November 2010

82 Rossi | 2010 Sustainability Report INVESTORS [GRI 4.14/4.15]

Strategic relations with investors and analysts are handled by our Investor Relations Department. Currently, Rossi has an exclusive area for these stakeholders on its web site, where they can find all the information they need on the Company’s management and performance. Investors and The IR department publishes earnings releases, material facts and notices to the market; holds analysts can daily meetings with analysts and investors and quarterly conference calls for the presentation of the keep up to date Company’s results; and takes part in market update conferences and national and international road by visiting www. rossiresidencial. shows organized by investment banks and partners. com.br/ir

Every year, we also publish details of our performance in national newspapers, as well as in our Management Report and Sustainability Report.

THE MEDIA [GRI 4.14/4.15]

Aware of the role the media plays in society and the market, we seek to maintain planned and consistent relations with communications vehicles. The relationship strategy is defined by the Company’s Board of Executive Officers, which relies on a single communications firm to disclose institutional and product information and establish transparent dialogue with the media, aiming to convey the Media relations brand’s attributes and innovations. The communications firm works together with the business cells contacts and material to disclose launches and local relationship initiatives. All initiatives are monitored on a weekly basis by on Rossi is available in the Press Room the National Marketing area. section of our website: www.rossiresidencial. Corporate spokespersons hold very trusted positions and undergo constant training in media relations. com.br/sala-de- Every quarter, they receive a Spokesperson’s Guide containing guidance and strategic information on imprensa.aspx. the period to ensure they are fully up to date on the information disclosed.

Regional teams also receive the Media Relations Manual, which contains a series of guidelines designed to ensure that the media are provided with rapid, accurate, consistent and transparent information, always complying with internal and external communications policies and sector practices.

Your life project, our satisfaction. 83 Made for people by people | The media

Rossi in the news

Many of our initiatives draw people’s attention thanks to their originality and mass-market appeal. They are therefore disclosed in a strategic manner by the Institutional Marketing and Media Relations in order to capture the attention of the Company’s various stakeholders.

In 2010 Rossi made the headlines on several occasions and for various reasons, including its operating and financial performance, 30th anniversary, building techniques for the low-income residential segment, awards and market recognition, outstanding projects and developments, marketing and relationship initiatives and communications campaign. Some of the highlights are listed below:

Rossi participates in BBB for the second consecutive year

We have invested in brand exposure in the last two editions of TV Globo’s reality show Big Brother Brasil, demonstrating our experience in residential construction within the most famous and most- watched house in the country.

In the tenth edition, shown in 2010, we awarded the vice-champion Fernanda with an apartment worth R$ 250,000, located in the Barra da Tijuca (RJ) region. At the end of the program, she was also hired as Rossi’s poster girl and represented the Company in a number of real estate events throughout the country.

With a view to expanding our BBB brand exposure in 2011, at the end of last year we helped build the BBB11 house. A behind-the-scenes look at the construction was shown on the BBB channel of the Globo.com website beginning in December 2010, a period when viewers are normally eagerly awaiting the start of the new show.

Making-of the Big Brother Brazil 11 house program shows production progress by Rossi

84 Rossi | 2010 Sustainability Report The world’s biggest augmented reality project

In 2010 we invested in augmented reality projects for the launch of our projects. We first used this technology at the launch of Ipiranga One, in São Paulo. Shortly afterwards, we innovated once more by implementing the world’s biggest augmented reality project in the Fibrasa Connection development, in Vitória, Espírito Santo, which was featured in the officialGuinness World Records™. In both cases clients could visualize the project in 3D even before it was built.

Due to the sheer size of the projection, the technology had to be different than normal. In regular augmented reality processes, a person points a marker (a type of paper with black and white marks) at the computer webcam, which then reads the image and recreates it on screen as a three-dimensional illustration.

In the case of Ipiranga One, a three-square-meter marker was installed on the site at a height off ten meters. Visitors received a special screen with a built-in camera, which, when pointed at the marker, generated a real-size image of the building.

Fibrasa Connection’s augmented reality project, however, had truly Guinness- worthy dimensions. The marker alone measured 900 square meters and the three-dimensional image was viewed through a notebook screen from a helicopter flying over the site where the project will be built. Official certification from Guinness World RecordsTM awarded to the Fibrasa This initiative once again underlined our determination to be in the forefront Connection augmented reality project, the through the adoption of the most up-to-date technologies, whether in marketing largest in the world initiatives or in project construction.

Unprecedented aerial test-view of a project

We provided an unprecedented experience for the 100 first buyers of the Rossi Fiateci development in Porto Alegre, Rio Grande do Sul, showing them what the view from their apartment will be like three years before the construction work is complete. And this had nothing to do with virtual reality. We offered the test-view during a special dinner served at a table suspended by crane over Watch the video of this pioneering initiative at www.youtube.com/watch?v=BxfImq4xEGU. 35 meters in the air.

The Dinner in the Sky project was the major big attraction at the development’s stand for three weekends. Clients had a privileged view of the Guaíba lake while enjoying an aerial banquet. Dinner lasted for around an hour and was prepared by several renowned chefs: Michele Fischer (Coisa Boa Gastronomia, RS), Philippe Remondeau (Chez Philippe, RS), Marcelo Tanus (Zozo, RJ), Floriano Spiess (Dublin, RS) and Carlos Kristensen (Hashi, RS).

Dinner in the Sky project

Your life project, our satisfaction. 85 Made for people by people | The media

Rossi sponsors CineMaterna session

In 2010, we sponsored one of the events of the “CineMaterna” project, a special movie session where mothers can take their babies of up to 18 months. The movie theaters are equipped to provide babies with every possible comfort, including low sound, diaper changers, milder air conditioning and muted lighting.

For the sponsored session in the Villa Lobos shopping mall cinema, we set up an exclusive lounge in the theater, where families were welcomed with breakfast, and the children could play and rest on cushions and beanbags while their parents watched the movie.

Families who attended received a Baby Diary from Rossi and could take pictures to register their first movie sessions with their children. The pictures could be picked up at a later date at the sales stand of the Jardim Leopoldina project.

We are aware that maternity brings with it a series of new challenges and achievements, in addition to changing the way that parents think and live, by A family that participated in CineMaterna teaching new ways of loving. That is why we support this project – because we appreciate the value of this moment and we want to strengthen our relations with these families.

Apartment penny auction

Once again underlining our pioneering nature, in 2010 we conducted the real estate market’s first penny auction, in which the bids are for one Brazilian centavo only. The R$ 250,000 apartment is located in the Liberty Garden condominium, in Barra da Tijuca, Rio de Janeiro, next to the future 2016 Olympic Games facilities. It is the most expensive product ever auctioned on a Brazilian web site. Cover of Diário do Bebê, presented to families The auction was conducted in conjunction with the specialized portal Olho that took part in CineMaterna no Click, the sale’s legal proceedings were handled by a Rossi Vendas broker and the entire process was monitored by an independent audit firm.

To take part in the auction, users registered on the web site www. meuapecom1centavo.com.br, and automatically received the right to make five bids. They could also buy additional bids to take part as many times as they wished.

The web site allowed fifteen seconds for the bids to be made and after each bid the timer went back to zero. The auction ended when the timer returned to zero without any bids. The winning bid was made on December 20, 2010 for R$ 931.61, after 93,161 bids, more than 2,000 of which by the winner Laise Taranto. Laise Taranto in her new home, accompanied by Rafael Cardoso (Rio de Janeiro Regional Officer), João Harter (National Marketing Manager) and Guilherme Pizzini (Olho no Click Portal Director)

86 Rossi | 2010 Sustainability Report SUSTAINABILITY REPORT ABOUT THIS REPORT

Rossi’s 2010 Sustainability Report was prepared by Rossi Residencial S.A. in accordance with the guidelines of the Global Reporting Initiative (GRI), an international reporting standard that includes a series of indicators regarding the Company’s practices, management and performance in the economic, social and environmental spheres. The information was collected through an internal process that involved representatives from several different areas of the Company in the presentation of management and performance data. [GRI 3.1/3.3/3.5]

By adopting the GRI guidelines, we allow our data to be compared with those of other companies that also use the same standard and with our own data from different periods. It also allows us to monitor performance indicators, establish transparent communications with our stakeholders and adopt a unique market position, strengthening our brand and demonstrating our awareness of the global need for performance reports, as well as our commitment to sustainable development. This is the second time we have adopted these guidelines as a basis for preparing our annual report.

This report presents a balance sheet for Rossi and its subsidiaries for the fiscal year ended December 31, 2010, at the close of which we had 781 subsidiaries in the form of SPEs (Specific Purpose Enterprises). Each SPE represents one or more business projects developed by the Company, which makes decision-making more flexible and segregates financial risks, thereby avoiding any possible contamination of the parent company. It also facilitates financial management, accounting, the raising of third-party funding and the formation of associations, for example landbank partnerships. [GRI 3.6/3.8]

Given the scope of this report, it falls within Level C of the GRI report structure, which comprises three different levels (A, B and C) related to the number of indicators incorporated and other factors. This report is published on an annual basis and is available on the site www.rossiresidencial.com.br/ir in both Portuguese and English.

2002 In Accordance C C+ B B+ A A+

Self Declared Mandatory

Third Party Checked Optional Report ExternallyAssured Report ExternallyAssured Report ExternallyAssured Report GRI Checked

Your life project, our satisfaction. 87 Sustainability Report | GRI Index

GRI Index [GRI 3.12]

Indicator Page Chapter 1. Strategy and Analysis Statement from the most senior decision-maker of Welcome to our home: Message from 1.1 the organization about the relevance of sustainability 6-7 Management for the organization. Welcome to our home: 30 years of 16-17 building life projects 1.2 Description of key impacts, risks and opportunities. 60-63 Performance, management and innovation: Engineering, management and processes 2. Organizational profile Welcome to our home: 30 years of 2.1 Name of the organization 12 building life projects Welcome to our home: 2.2 Primary brands, products and/or services. 24-28 Diversified and flexible Operational structure of the organization, including Welcome to our home: 2.3 main divisions, operating companies, subsidiaries, 21-23 Brazilian and regional and joint ventures. Welcome to our home: 2.4 Location of organization’s headquarters. 21 Brazilian and regional Number of countries where 2.5 All of Rossi’s operations are located in Brazil. the organization operates. Welcome to our home: 30 years of 2.6 Type and nature of ownership and legal form. 12 building life projects Welcome to our home: 21-23 Markets served (including geographic breakdown, Brazilian and regional 2.7 sectors served, and types of customers/ 24-28 beneficiaries). Welcome to our home: Diversified and flexible Welcome to our home: Brazilian and regional 21-23 Performance, management and 2.8 Scale of the organization. 37-43 innovation: Operating performance / Financial performance 74-75 Made for people by people: Team Welcome to our home: 21-23 Brazilian and regional Significant changes during the reporting period 2.9 regarding size, structure, or ownership. 44-45 Performance, management and innovation: Capital market Performance, management and 2.10 Awards received in the reporting period. 29-31 innovation: Capital market 3. Report parameters Sustainability Report: 3.1 Reporting period. 87 About this Report The most recent Sustainability Report was published in 2010, 3.2 Date of most recent previous report. reporting on the Company’s performance in 2009. It is available at: www.mz-ir.com/rossi/rao2009/rao.asp?i=1 Sustainability Report: 3.3 Reporting cycle. 87 About this Report 3.4 Contact information. 100-101 Corporate information Sustainability Report: 3.5 Process for defining report content. 87 About this Report

88 Rossi | 2010 Sustainability Report Sustainability Report: 3.6 Boundary of the report. 87 About this Report Statement on any specific limitations on the scope or There are no specific limitations on the scope 3.7 boundary of the report. or boundary of the report. Basis for reporting on joint ventures, subsidiaries, Sustainability Report: 3.8 leased facilities, outsourced operations and 87 About this Report other entities. Explanation on the effect of any re-statements of 3.10 There are no re-statements of information provided in the 2009 report. information provided in earlier reports. Significant changes from previous reporting periods in There are no significant changes in the scope, boundary 3.11 the scope, boundary or methods applied in the report. or methods in relation to the 2009 report. 3.12 Table identifying the location of information in the report. 88-91 GRI Index

4. Governance, Commitments and Engagement Performance, management and 4.1 Governance structure. 46-49 innovation: Corporate governance Indicate whether the Chair of the highest governance Performance, management and 4.2 47 body is also an executive officer. innovation: Corporate governance For organizations that have a unitary board structure, state the number of members of the highest Performance, management and 4.3 47 governance body that are independent and/or non- innovation: Corporate governance executive members. Mechanisms for shareholders and employees to At General Meetings, minority shareholders are entitled to make 4.4 provide recommendations or direction to the highest recommendations and to advise the Board on its decisions. governance body. Linkage between compensation for members of Management receives a variable amount related to the Company’s 4.5 the highest governance body, senior managers and profit sharing plan, which is approved by the Board of Directors. executives, including the organization's performance. Rossi’s code of ethical professional conduct establishes the duty of all employees to avoid situations or circumstances that may result in conflicts of interest with the Company and presents channels Process in place for the highest governance body to 4.6 for the solution of such situations of conflict, if any. In addition, ensure conflicts of interest are avoided. the Company’s Bylaws prohibit the exercise of voting rights in the election of members of the Board of Directors in cases of possible or actual conflicts of interest. Process for determining the qualifications and expertise of the members of the highest governance Performance, management and 4.7 46-49 body for guiding the organization's strategy on innovation: Corporate governance economic, social and environmental topics. Internally developed statements of mission or 14 Welcome to our home: 30 years of values, codes of conduct and principles relevant to building life projects 4.8 economic, environmental and social performance 66 and the status of their implementation. Made for people by people: Team Procedures of the highest governance body for overseeing the organization's identification and Performance, management and 4.9 48-49 management of economic, environmental, and innovation: Corporate governance social performance. Processes for evaluating the highest governance body's There is no performance self-evaluation process established 4.10 own performance, particularly with respect to economic, by the Company’s Board of Directors. environmental, and social performance. The Company uses instruments that identify, assess and minimize risks related to its business, but that are not based on the Explanation of whether and how the precautionary 4.11 precautionary principle. More information on risk management can principle is addressed by the organization. be found in the chapter “Performance, Management and Innovation: Engineering, Management and Processes” Externally developed economic, environmental, and Performance, management and 4.12 social charters, principles, or other initiatives to 52 innovation: Sustainability which the organization subscribes or endorses. Memberships in associations and/or national/ international advocacy organizations in which the Performance, management and 4.13 organization: has positions in governance bodies; 52 innovation: Sustainability participates in projects or committees; provides substantive funding beyond routine membership dues.

Your life project, our satisfaction. 89 Sustainability Report | GRI Index

Made for people by people: List of stakeholders groups engaged 4.14 66-83 Team/ Clients/ Suppliers/ Partners/ by the organization. Investors/ The media Made for people by people: Basis for identification and selection of stakeholders 4.15 66-83 Team/ Clients/ Suppliers/ Partners/ with whom to engage. Investors/ The media Performance indicators: Economic Welcome to our home: EC1 Direct economic value generated and distributed. 11 Main indicators Coverage of the organization's defined benefit EC3 71 Made for people by people: Team plan obligations. Policy, practices, and proportion of spending EC6 on locally-based suppliers at significant locations 81-82 Made for people by people: Suppliers of operation. Procedures for local contracting and percentage of EC7 senior management recruited from the local community 70 Made by people for people: Team to work in important operating units (partial). Performance indicators: Environment Indirect energy consumption listed as primary Performance, management and EN4 55 energy source. innovation: Sustainability Initiatives to provide energy-efficiency or renewable Performance, management and EN6 energy based products and services, and reduction in 56 innovation: Sustainability energy requirements as a result of these initiatives. Performance, management and EN8 Total water withdrawal by source. 55 innovation: Sustainability Performance, management and EN21 Total water discharge by quality and destination. 55 innovation: Sustainability Performance, management and EN22 Total weight of waste by type and disposal method. 55 innovation: Sustainability Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Performance, management and EN24 55 Convention Annex I, II, III, and VIII, and percentage of innovation: Sustainability transported waste shipped internationally. Initiatives to mitigate environmental impacts of Performance, management and EN26 50-56 products and services, and extent of impact mitigation. innovation: Sustainability Monetary value of significant fines and total number Rossi did not receive any significant fines in 2010 (above EN28 of non-monetary sanctions for non-compliance with R$ 500,000.00) resulting from the failure to comply with environmental laws and regulations. environmental laws and regulations. Total environmental protection expenditures and Performance, management and EN30 55 investments by type. innovation: Sustainability Performance indicators: Labor practices and decent work Total workforce by employment type, employment LA1 74-75 Made for people by people: Team contract, and region. Total number and rate of employee turnover by age LA2 72 Made for people by people: Team group, gender, and region. Benefits provided to full-time employees that are not LA3 provided to temporary or part-time employees, by 71-72 Made for people by people: Team major operations. Percentage of employees covered by collective LA4 71 Made for people by people: Team bargaining agreements. Minimum notice period(s) regarding significant For all matters related to operational changes and changes of general LA5 operational changes, including whether it is specified or specific interest, the minimum notice period is determined in in collective agreements. accordance with the impact of the change. Percentage of total workforce represented in formal joint management-worker health and safety LA6 73 Made for people by people: Team committees that help monitor and advise on occupational health and safety programs.

90 Rossi | 2010 Sustainability Report Rates of injury, occupational diseases, lost days, and LA7 absenteeism, and number of work-related fatalities 74 Made for people by people: Team by region. Education, training, counseling, prevention, and risk-control programs in place to assist workforce LA8 73 Made for people by people: Team members, their families, or community members regarding serious diseases. Average hours of training per year per employee by LA10 66 Made for people by people: Team employee category. Programs for skills management and lifelong learning LA11 that support the continued employability of employees 66-67 Made for people by people: Team and assist them in managing career endings. Percentage of employees receiving regular LA12 70 Made for people by people: Team performance and career development reviews. Composition of governance bodies and breakdown of employees per category according to gender, LA13 74-75 Made for people by people: Team age group, minority group membership, and other indicators of diversity. Performance indicators: Human rights Total number of incidents of discrimination and HR4 No cases of discrimination were identified in 2010. actions taken. Operations identified in which the right to exercise freedom of association and collective bargaining may HR5 No operations of this nature were identified in 2010. be at significant risk, and actions taken to support these rights. Operations identified as having significant risk for HR6 incidents of child labor, and measures taken to No cases of child labor were identified in 2010. contribute to the elimination of child labor. Operations identified as having significant risk for HR7 incidents of child labor, and measures taken to No cases of forced or compulsory labor were identified in 2010. contribute to the elimination of child labor. Total number of incidents of violations involving rights No cases of violations involving rights of indigenous people were HR9 of indigenous people and actions taken. identified in 2010. Performance indicators: Society Percentage of employees trained in organization's S03 66 Made for people by people: Team anti-corruption policies and procedures. No cases of corruption were identified or reported in 2010 involving Rossi, its subsidiaries or employees. Penalties are provided for in the SO4 Actions taken in response to incidents of corruption. Code of Ethics and cases are submitted to the Legal Department for legal procedures (if applicable). Total number of legal actions for anti-competitive The Company does not have any legal actions for anti-competitive S07 behavior, anti-trust, and monopoly practices and behavior, anti-trust, and monopoly practices and their outcomes. their outcomes. Monetary value of significant fines and total number Rossi did not receive any significant fines in 2010 (above R$ 500,000.00) SO8 of non-monetary sanctions for non-compliance with resulting from the failure to comply with environmental laws and regulations laws and regulations. Performance indicators: Product responsibility Total number of incidents of non-compliance with regulations and voluntary codes concerning health PR2 No cases were registered of non-compliance of this type. and safety impacts of products and services during their life cycle, by type of outcomes. Programs for adherence to laws, standards, The Company is in strict compliance with the laws and regulations and voluntary codes related to marketing PR6 related to marketing communications, but it did not adopt any voluntary communications, including advertising, promotion, code regarding this matter during the period covered by the Report. and sponsorship. Total number of incidents of non-compliance with regulations and voluntary codes concerning PR7 No such cases were identified in 2010. marketing communications, including advertising, promotion, and sponsorship by type of outcomes.

Your life project, our satisfaction. 91 GLOSSARY Floor plan option: A unit floor plan that differs from the basic unit floor plan of a given project. The overall unit area remains Blueprint: Graphic representation of a projected plan of part of the same, but the type, location and size of the various internal all of the building. spaces may vary.

BM&FBOVESPA: A Brazilian company created in 2008 by GDP: Gross Domestic Product. integrating the operations of the São Paulo Stock Exchange and the Commodities & Futures Exchange. Gourmet veranda: A common area within the condominium used to hold parties, meetings or receptions, equipped with a BR GAAP (accounting practices adopted in Brazil): The barbecue grill. accounting principles and practices established by Brazilian Corporation Law, the CVM, IBRACON and the CFC. Ibovespa: Index of the São Paulo Stock Exchange that measures the variations in the price of the most traded shares on the Branding: A corporate management process based on the BM&FBOVESPA. brand’s essence. Ibracon: Brazilian Institute of Independent Auditors. Bylaws: The Company’s Bylaws. IPTU: While the precise name may vary between Brazilian cities, Company or Rossi: Rossi Residencial S.A. the Urban Property Tax is a rate based on the sale price of the property and levied on the owners by the municipal government. Condominium: An apartment building or group of houses that divides common expenses. The term also refers to the charges Joint Venture: Agreement between two parties for the the group pays. The condominium rate is arrived at by dividing joint development of a project. Does not imply a merger or common expenses (including water and electricity in common incorporation. areas, employees’ salaries and elevator maintenance) in accordance with the proportion, or quota, of each property. Landbank: Bank of sites for future development.

Co-owner: The typical term for a member of a condominium. Lots: Land subdivided into lots, requiring the construction or extension of public roads. Creci: Regional Council of Real Estate Brokers. Lounge: A room or area for social interaction, meetings and CVM: Securities and Exchange Commission of Brazil. other events.

Debentures: Simple, non-convertible, unsecured debentures Mock-up: A miniature scale model of a project, designed to give with a fixed or floating guarantee, issued by the Company within an idea of what the project will look like upon completion. the Distribution Program. My Home, My Life (Minha Casa, Minha Vida): A federal EBITDA: According to CVM Official Letter 1/2005, EBITDA government housing plan launched in April 2009 to help low- refers to earnings before financial expenses net of income income families purchase their own home. tax and social contribution, depreciation and amortization. EBITDA is not a measurement recognized by accounting Novo Mercado: A special securities trading segment on the practices adopted in Brazil, does not represent cash flow for BM&FBOVESPA. the fiscal years in question and should not be considered as an alternative to net income as an indicator of our operating Partnerships: Partnerships and/or joint ventures with companies performance or as an alternative to cash flow as an indicator in the real estate development sector for the acquisition of land of our liquidity. EBITDA does not have a standardized definition and the joint development of new real estate projects. and Rossi’s definition of EBITDA may differ from those used by other companies. Thus, our EBITDA includes financial revenue Pre-launch: Phase prior to the official launch of a real estate from financing granted to our clients. project, disclosed to a limited public. During pre-launch, units are not yet for sale but clients invited to pre-launch events can reserve them for future purchase.

92 Rossi | 2010 Sustainability Report Project: General plan of a building, including floor plans, cross- SAP: Systems Applications and Products in Data Processing, a sections and elevations, and the details of each construction company specialized in system integration. area, such as electrical and plumbing installations, architecture, landscaping, etc. Settlement: The act of paying a debt in full. Also considered as the declaration that the debt was paid in full (receipt, PSV: Potential sales value or the value obtained or potentially term of settlement). obtained from the sale of all launched units in a given real estate project, including through swaps, based on the price in the Shareholders: Owners of shares in a publicly-held company. financing table at the moment of launch. Site plan: Geometric representation marking the areas to be Real estate broker: Responsible for bringing together buyers built, in addition to the placement of external elements, such as and sellers in a real estate transaction. In order for brokers to squares, gardens, courts and other spaces to be installed on the intermediate property sales, they must be inscribed in Creci property, in accordance with the architectural project. (Regional Council of Real Estate Brokers). Solar heating: The use of solar panels to heat or pre-heat water Real estate consultant (real estate broker): A sales professional for showers, substantially reducing electricity consumption. in the real estate segment with sufficient knowledge to develop pro-active relations with customers, with an overall market view. Stakeholders: All the groups of people with whom the Company relates and which impact or are impacted by its activities. Real estate development: The realization of a real estate project, comprising a series of activities through which a Structural masonry with pre-fabricated slabs: The use of walls company or individual can construct a building and promote made of pre-fabricated masonry that can be built at the work the total or partial sale of the units making up the building. A site or in a warehouse. Walls arrive at the construction with process that allows for the legal sale of a building that is still attachments on both sides and already fitted with electrical and on paper or under construction. plumbing installations.

Rossi Group: The group of companies either directly or indirectly Work site: A group of temporary installations at a construction held by members of the Rossi Cuppoloni family, excluding the site where ancillary construction services are carried out. Company and its subsidiaries.

Rossi Vendas: A team that exclusively sells Rossi real estate.

Sales stand: A temporary building, normally located at the project site, where consultants welcome potential clients and provided them with information. Sales stands typically include a mock-up of the project, floor plans for private and common areas and, in some cases, a decorated model apartment assembled on-site to give visitors an idea of the exact characteristics of the product being sold.

Your life project, our satisfaction. 93 CORPORATE INFORMATION [GRI 3.4]

Headquarters South Region São Paulo Office Porto Alegre Office – Regional HQ Av. Major Sylvio de Magalhães Padilha, 5200. Av. Nilo Peçanha, 2825, 10º andar. Ed. Miami, 3º andar, Morumbi, São Paulo, SP. 05693-000 Chácara das Pedras, Porto Alegre, RS. 91330-001

São Paulo Region Curitiba Office São Paulo Office – Regional HQ Al. Dr. Carlos de Carvalho, 555, conjunto 55. Rua James Joule, 65, Ed. Torre Sul, 4º e 5º andar. Centro, Curitiba, PR. 80430-180 Brooklin Novo, São Paulo, SP. 04576-080 Florianópolis Office Santos Office Av. Rio Branco, 847 - Ed. Centro Executivo Wilmar Becker Av. Ana Costa, 151, conjunto 34. - Sala 305 Gonzaga, Santos, SP. 11060-001 Centro, Florianópolis, SC. 88015 205

São José dos Campos Office Brasília Region Av. Dr. João Guilhermino, 261, Edifício Metropolitan, Brasília Office –Regional HQ 2º andar, sala 26. Setor Hoteleiro Sul, quadra 6, conjunto A, bloco A, sala 405. Centro, São José dos Campos, SP. 12210-131 Centro Empresarial Brasil XXI, Brasília, DF. 70322-915

São Paulo City Region Belo Horizonte Office São Paulo Office –Regional HQ Rua Felipe dos Santos, 901, 8º andar. Av. Major Sylvio de Magalhães Padilha, 5200. Bairro Lourdes, Belo Horizonte, MG. 30180-160 Ed. Miami, 3º andar, Morumbi, São Paulo, SP. 05693-000 Goiânia Office Campinas Region Rua João de Abreu, 1155, sala A84, Condomínio Aton Campinas Office –Regional HQ Business Style. Av. José Rocha Bonfim, 214, Condomínio Praça Capital, Setor Oeste, Goiânia, GO. 74120-110 Ed. Tokyo. Center Santa Genebra, Campinas, SP. 13080-650 Cuiabá Office Av. Miguel Sutil nº6.620 - Santa Rosa Cuiabá/MT Rio de Janeiro Region CEP: 78.040-635 - Fone: (55 65) 3055-9900. Rio de Janeiro Office – Regional HQ Av. das Américas, 500, Shopping Downtown, Northeast Region bloco 18, sala 105. Salvador Office – Regional HQ Barra da Tijuca, Rio de Janeiro, RJ. 22640-100 Rua Coronel Almerindo Rehem, 126, sala 903. Caminho das Árvores, Salvador, BA. 41820-768 Vitória Office Av. Nossa Senhora da Penha, 699, sala 601, torre A. Natal Office Santa Lúcia, Vitória, ES. 29056-250 Av. Engenheiro Roberto Freire, 1850, Seaway Shopping, loja 29. West Region Capim Macio, Natal, RN. 59078-600 São José do Rio Preto Office – Regional HQ Rua Dr. Raul Silva, 340. Recife Office Redentora, São José do Rio Preto, SP. 15015-020 Av. Governador Agamenon Magalhães, 4779. Emp. Isaac Newton, sala 1001. Londrina Office Ilha do Leite, Recife, PE. 50070-160 Av. Higienópolis, 1601, sala 1405, Edifício Eurocenter. Jardim Higienópolis, Londrina, PR. 86015-010 Fortaleza Office Rua Vicente Linhares, 500, sala 107. Aldeota, Fortaleza, CE. 60135-270

94 Rossi | 2010 Sustainability Report North Region Manaus Office – Regional HQ Rua Comendador Clementino, 183. Centro, Manaus, AM. 69025-000

São Luís Office Av. dos Holandeses, quadra 33, nº 3, sala 102, Galeria Appiani. Calhau, São Luís, MA. 65071-380

Investor Relations

Cássio Elias Audi, CFO and Investor Relations Officer Maria Claudia Biolchini, Financial Planning Manager Adriana Godinho, Investor Relations Manager [email protected] www.rossiresidencial.com.br/ir

Rossi’s Customer Service Center

São Paulo and Greater São Paulo: (55 11) 3038-5566 Other locations: 0800 733 6000

Rossi on Twitter: www.twitter.com/Rossi_brasil Rossi’s site: www.rossiresidencial.com.br Rossi’s mobile site: www.rossiresidencial.com.br/mobile

Credits Overall Coordination Rossi Residencial S.A. Institutional Marketing and Investor Relations Departments

Coordination of Content, Editing and Translation BRIC Integrated Corporate Communications

Translation MZ Translations

Graphic Design MZ Design

Photos Rossi’s image bank

Your life project, our satisfaction. 95 Your home isn’t just the place where you reside. It’s the world in which you live.