a)  Employee benefits

Employee salary, benefits and related expenses are stated as follows:

     
Description 12/31/2009 12/31/2008
Payroll and Related Charges 432,873 341,627
Profit Participation Plan 106,916 108,134
Statutory benefits 67,478 49,856
Additional benefits 43,936 32,156
651,203 531,773


  Additional benefits:
In addition to the usual benefits required by labor legislation, the Company and its subsidiaries provide additional benefits contracted with third parties, such as: health and dental insurance and group life insurance, whose actuarial risks are not assumed by the Company. Expenses for these additional benefits for the year ended December 31, 2009 totaled R$43,936 (R$32,156 on December 31, 2008).

The Company and its subsidiaries have complementary remuneration plans considering fulfillment of targets:

(i)  Profit Participation Plan (PPR): the Company must remunerate its staff on the basis of profit sharing in the amount of up to three additional monthly salaries, in the event that the performance targets established according to annual planning approved by the Company’s Board of Directors are met.
(ii)  Additional Profit Participation Plan (PPR – Short-term): the Company also rewards a select number of members of management, directors and managers duly approved by the Board in the form of differentiated salaries. This supplement is geared to additional targets and in exceptional cases may be exempted from these conditions, as decided by the Board.
(iii)  Long-term Profit Participation Plan (PPR Long-term): the Company also rewards a select number of members of management, directors and managers duly approved by the Board in the form of differentiated salaries. The purpose of this supplement is to retain the services of these collaborators.
(iv)   Profit Participation Additional Plan (PPR): the Company will make an additional payment of up to 0.6 of the monthly salary of employees. The principal purpose of this supplementary payment is to have the Board’s targets fulfilled 100% to 120%.

On December 31, 2009 the Company recorded provisions as salaries and social charges in the amount of R$132,495 (R$112,994 on December 31, 2008) related to these plans).
b)  Remuneration of Management
Remuneration paid to the Company’s management for services in their respective fields of competence is shown below:

     
12/31/2009 12/31/2008
Short-term benefits 12,169 19,503
Long-term benefits 3,911 5,791
    16,080 25,294


c)  Related companies
The main asset and liability balances and profit and loss, on December 31, 2009 and 2008, resulting from the transactions among related parties are shown below:

Click here to see the tables.

  The right to use the trademark Net has been assigned free of charge by Net Brasil S.A., a related party, as part of the sales commission agreement between the parties.

Pay-per-view (PPV) events are acquired through consortium between the related company Globosat Programadora Ltda. and the Company, to jointly exploit the assets, rights and resources allocated for transmission and marketing of these events.

The values and terms of the programming contracts with the companies related to the Globo group such as SporTV, GNT, Multishow, Globo News, Futura, Canal Brasil, Sexy Hot, Universal Channel, For Man, Playboy, Vênus and Private are conducted at normal market prices, terms and payment conditions.

The programming guide of the Company is published and distributed by Editora Globo S.A., a subsidiary of Globo Comunicação e Participações S.A., on the basis of usual market practice prices and terms for this type of operation.

The Company and Empresa Brasileira de Telecomunicações S.A. (Embratel) offer telephony services for subscribers of the Company. This service offers an Embratel voice product to existing and prospective subscribers of the Company, which calls for the sharing of results by means of the Company’s bi-directional network. In connection with this business, the Company also offers to its markets integrated video, broadband and voice (triple play) services.

The main aim of the partnership between the Company and Embratel is the exploitation of voice services based on Embratel licenses for conventional telephone services (Serviço Telefônico Fixo Comutado – STFC), multimedia service (Serviço de Comunicação de Multimídia – SCM) and/or through any other structure best suited to exploitation by the parties involved, through the use of the Company’s network to access final customers, with the simultaneous use of Embratel’s communications network.

The Company’s transactions involving the companies associated with Embratel Participações S.A. are recorded based on prices and conditions defined as follows:
a)  Net Fone revenue – In December 2009, Embratel acquired the right of use of the transmission capacity of three gb/s generated by the Net coaxial network, for a period of five years, for R$873,539, renewable for the same period through future negotiations between the parties. Any excess usage is charged on a monthly basis;
b)  The Company is responsible for invoicing Net Fone customers and passing on the pertinent amounts to Embratel;
c)  Special projects – Remunerated on the basis of percentage of costs incurred by each project;
d)  Network access revenue – Remunerated on the basis of Net Fone installation costs;
e)  Optic fiber lease revenue – Remunerated in accordance with specific contract including usual market condition; and
f)  Revenues from PME (services for small and medium businesses) – These services are remunerated under specific contractual conditions, 50% of net amount of accounts invoiced by Embratel, net of taxes and interconnection fees.

The Company provides an Internet access service known as NetVirtua broadband service using Embratel’s IP backbone infrastructure. In December 2009, the Company acquired a right of use of 45 gb/s transmission capacity generated for a period of five years, for R$849,632, and renewable for the same period through future negotiations between the parties. This was recorded as rights for prepaid use, to be amortized over the five year life of the contract. The amounts exceeding the monthly capacity acquired are expensed as incurred.

Communication expenses such as voice channel, land line telephony and Click 21 are recorded on the basis of usual market practice prices and terms for this type of service.