Beruflich Dokumente
Kultur Dokumente
de Engenharia S.A.
(Convenience Translation into English from the
Original Previously Issued in Portuguese)
Presentation of Interim Financial Information
for the Quarter Ended June 30, 2014 and
Report on Review of Interim Financial
Information
Deloitte Touche Tohmatsu Auditores Independentes
(Convenience Translation into English from the Original Previously Issued in Portuguese)
REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION
Other matters
Statements of value added
We have also reviewed the interim statement of value added (DVA), for the six month period
ended June 30, 2014, prepared under the responsibility of the Company's management, the
presentation of which is required by the standards issued by the CVM applicable to the preparation
of Interim Financial Information (ITR), and considered as supplemental information for
International Financial Reporting Standards - IFRS, which do not require the presentation of DVA.
This statement was subject to the same review procedures described above, and, based on our
review, nothing has come to our attention that causes us to believe that it was not prepared, in all
material respects, consistently with the interim financial information taken as a whole.
The accompanying interim financial information has been translated into English for the
convenience of readers outside Brazil.
Rio de Janeiro, August 6, 2014
(Convenience Translation into English from the Original Previously Issued in Portuguese)
6/30/2014
12/31/2013
93,735
199,118
37,807
32,628
330
16,547
7,988
388,153
25,798
177,359
36,288
38,673
529
7,516
26,785
6,516
319,464
1,255
41,589
10,393
10,264
49,641
113,142
1,414
42,764
10,053
47,290
101,521
87,392
1,265,514
75,020
1,427,926
87,392
1,224,476
68,392
1,380,260
1,929,221
1,801,245
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade receivables
Inventories
Recoverable taxes
Advances to suppliers
Derivative financial instruments
Other receivables - sale of investee
Other assets
NON-CURRENT ASSETS
Trade receivables
Recoverable taxes
Deferred taxes
Judicial deposits
Other receivables - sale of investee
Investments
Property, plant and equipment
Intangible assets
TOTAL ASSETS
3
4
5
6
26
7
4
6
16.c
17.a
7
8
9
10
(continues)
(Convenience Translation into English from the Original Previously Issued in Portuguese)
6/30/2014
12/31/2013
11
12
13
18
15.a
20
26
12
26
13
16.c
17
TOTAL LIABILITIES
EQUITY
Issued capital
Capital reserves
Earnings reserves
Valuation adjustments to equity
Retained earnings
Total equity
TOTAL LIABILITIES AND EQUITY
19
19
19
19
29,112
45,412
107,052
24,279
2,734
993
8,582
1,713
21,810
5,208
5,116
252,011
37,904
12,764
112,532
19,186
960
7,084
18,697
40,990
4,866
254,983
16,459
572,113
9,267
11,565
60
609,464
58,749
267
448,238
9,444
2,478
10,573
529,749
861,475
784,732
563,054
14,879
447,862
(235)
42,186
1,067,746
553,232
10,231
447,862
5,188
1,016,513
1,929,221
1,801,245
The accompanying notes are an integral part of this interim financial information.
(Convenience Translation into English from the Original Previously Issued in Portuguese)
6/30/2014
Quarter
YTD
6/30/2013
Quarter
YTD
22
23
212,967
(89,938)
420,788
(168,985)
211,774
(87,275)
400,202
(155,691)
23
123,029
(66,270)
251,803
(128,157)
124,499
(56,844)
244,511
(109,773)
24
24
56,759
7,458
(25,858)
123,646
11,475
(46,423)
67,655
5,024
(16,810)
134,738
7,157
(28,145)
16
38,359
(10,319)
5,354
(4,965)
88,698
(31,508)
10,077
(21,431)
55,869
(9,742)
(1,558)
(11,300)
113,750
(30,143)
(1,406)
(31,549)
33,394
67,267
44,569
82,201
3,504
5,133
67,267
0.53
0.52
48,073
0.38
0.38
87,334
0.69
0.68
0.53
0.52
0.35
0.35
0.65
0.64
Note
CONTINUING OPERATIONS
Net revenue from sales and services
Cost of sales and services
GROSS PROFIT
General and administrative expenses
PROFIT BEFORE FINANCE INCOME (COSTS)
Finance income
Finance costs
PROFIT BEFORE TAXES
Current income tax and social contribution
Deferred income tax and social contribution
Income tax and social contribution
PROFIT FROM CONTINUING OPERATIONS
PROFIT FROM DISCONTINUED OPERATIONS
PROFIT FOR THE PERIOD
Basic earnings per share - R$
Diluted earnings per share - R$
21 (a)
21 (b)
33,394
0.26
0.26
21 (a)
21 (b)
0.26
0.26
The accompanying notes are an integral part of this interim financial information.
(Convenience Translation into English from the Original Previously Issued in Portuguese)
6/30/2014
Quarter
YTD
6/30/2013
Quarter
YTD
33,394
67,267
48,073
87,334
(8)
(5,423)
3,693
3,184
33,386
61,844
51,766
90,518
26
The accompanying notes are an integral part of this interim financial information.
(Convenience Translation into English from the Original Previously Issued in Portuguese)
19
15.b
Capital
reserve
Legal Expansion
Special
Valuation
Earnings adjustments
retention to equity
Retained
earnings
Total
537,625
233
20,768
61,243
808
238,949
(300)
859,326
11,183
-
4,497
11,183
4,497
(759)
759
3,184
-
87,334
(23,448)
3,184
87,334
(23,448)
548,808
4,730
20,768
61,243
49
238,949
2,884
64,645
942,076
19.e
The accompanying notes are an integral part of this interim financial information.
(Convenience Translation into English from the Original Previously Issued in Portuguese)
19
15.b
19.e
20
Capital
reserve
Legal
Expansion
Valuation
adjustments
to equity
Earnings
retention
Retained
earnings
Total
553,232
10,231
29,398
61,243
357,221
5,188
1,016,513
9,822
-
4,648
9,822
4,648
(5,423)
-
67,267
(25,081)
(5,423)
67,267
(25,081)
563,054
14,879
29,398
61,243
357,221
(235)
42,186
1,067,746
The accompanying notes are an integral part of this interim financial information.
(Convenience Translation into English from the Original Previously Issued in Portuguese)
6/30/2014
6/30/2013
88,698
120,852
81,630
1,379
4,648
1,713
(21,457)
65,313
944
4,497
10,817
(21,630)
36,128
11,405
115,446
27,108
7,649
94,698
Lawsuits settled
Interest paid
Income tax and social contribution paid
Profit sharing paid
(32,933)
(1,519)
14,267
365
(1,273)
(347)
5,093
3,978
166
(12,203)
(387)
(29,888)
(20,550)
(18,607)
(30,215)
(3,914)
13,591
157
(334)
(35)
8,975
(7,887)
(5,986)
(25,648)
(235)
(20,698)
(26,590)
(20,102)
122,509
122,277
(165,461)
11,304
159,606
(256,185)
-
29,057
33,640
(125,100)
(62,939)
(continues)
(Convenience Translation into English from the Original Previously Issued in Portuguese)
6/30/2014
6/30/2013
9,822
(43,469)
(295,825)
400,000
70,528
11,183
(36,170)
(32,300)
1,038
(56,249)
67,937
(3,089)
25,798
44,200
93,735
47,289
The accompanying notes are an integral part of this interim financial information.
10
(Convenience Translation into English from the Original Previously Issued in Portuguese)
562,388
(97,532)
1,185
(11,405)
454,636
635,521
(69,334)
970
(7,649)
559,508
(14,574) (21,440)
(86,199) (95,948)
(12,449) (15,032)
(113,222) (132,420)
341,414
(81,630)
427,088
(65,313)
259,784
361,775
11,475
7,688
271,259
369,463
65,365
50,450
11,061
3,854
80,464
75,824
3,883
757
58,163
46,413
11,750
67,267
25,081
42,186
271,259
125,145
96,032
22,253
6,860
113,608
104,633
3,616
5,359
43,376
31,094
12,282
87,334
23,448
63,886
369,463
The accompanying notes are an integral part of this interim financial information.
11
(Convenience Translation into English from the Original Previously Issued in Portuguese)
GENERAL INFORMATION
Mills Estruturas e Servios de Engenharia S.A. ("Mills" or "Company") is a publicly-traded
corporation with registered offices at Avenida das Amricas, n 500 Bloco 14 Loja108 Sala
207 e 208 - Barra da Tijuca, in the City of Rio de Janeiro, Brazil. The Company basically
operates in the construction, engaging in the following primary activities:
(a) Rental and sale, including import and export, of steel and aluminum tubular structures,
and steel and aluminum props and access equipment for construction works, as well as
reusable concrete formworks, along with the supply of related engineering projects,
supervisory and optional assembly services.
(b) Rental, assembly, and disassembling of access tubular scaffolding in industrial areas.
(c) Sale, rental and distribution of scissor lifts and telescopic handlers, as well as parts and
components, and technical assistance and maintenance services for such equipment.
(d) Holding of interests in other companies, as partner or shareholder.
The Companys operations are segmented according to the new organization and
management model approved by Management, containing the following business units:
Heavy Construction, Real Estate and Rental. Each business unit is described in Note 25.
The accounting information contained in this interim financial information was approved by
the Companys Board of Directors and authorized for issue on July 21, 2014.
2.
12
3.
2,655
91,080
93,735
2,049
23,749
25,798
The balances recorded as cash and cash equivalents refer to deposits and highly liquid shortterm investments, readily convertible into a known amount of cash and subject to an
insignificant risk of change in value. As at June 30, 2014, short-term investments refer to
bank deposit certificates (CDBs) issued by Banco Santander and Banco Ita, bearing interest
at the rate of 101.5% of the interbank deposit certificate (CDI) (101.5% as at December 31,
2013).
13
4.
TRADE RECEIVABLES
6/30/2014 12/31/2013
Heavy Construction business unit
Real Estate business unit
Industrial Services business unit (***)
Rental business unit
Events business unit (**)
76,726
82,277
4,014
95,948
2,290
261,255
68,785
82,177
4,408
73,468
3,796
232,634
(60,882)
(53,861)
Current
Non-current
200,373
199,118
1,255
178,773
177,359
1,414
(*)
The allowance for doubtful debts is calculated based on the amount considered
sufficient to cover potential losses on realization of receivables, considering an
individual analysis of the Companys major customers.
(**)
Amount receivable from the sale of property, plant and equipment of the events
division, which was discontinued in 2008.
(***) Remaining amount receivable from the operations of the Industrial Services business
unit, which was discontinued on November 30, 2013.
Mills holds receivables corresponding to assets of the Events business unit, whose activities
were discontinued. Part of these assets was sold in the course of 2008 and 2009 under
agreements for sale of chattels with reserve of title entered into on May 20, 2008 and
February 18, 2009. The total amount will be received over a period not exceeding eight
years, and the installments are adjusted using the percentage fluctuation of the Extended
Consumer Price Index (IPCA). As at June 30, 2014, the asset is adjusted at present value
and management, based on the collaterals provided for in the agreement, believes that the
amount will be fully realized by the due date of the last installment.
To determine whether or not trade receivables are recoverable, the Company takes into
consideration any change in the customers creditworthiness from the date the credit was
originally granted to the end of the reporting period. The credit risk concentration is limited
because the customer base is comprehensive and there is no relationship between customers.
The Company does not have any customer concentration in its revenue or trade receivables
as no single customer or corporate group represents 10% or more of its trade receivables in
any of its segments.
The aging list of the Companys trade receivables is as follows:
Current
Current (bills with original due dates extended)
1 to 60 days past due (*)
61 to 120 days past due (*)
More than 120 days past due (*)
Total
6/30/2014
12/31/2013
118,064
6,649
46,735
19,035
70,772
261,255
112,126
8,539
37,220
13,943
60,806
232,634
(*) The analysis above was conducted considering the extended due dates of the bills.
14
The changes in the Companys allowance for doubtful debts are as follows:
6/30/2014
12/31/2013
53,861
11,405
(4,384)
60,882
36,703
17,283
(125)
53,861
As at June 30, 2014, trade receivables totaling R$60,882 (As at December 31 - R$53,861)
were accrued. The increase in the amount of this allowance refers basically to the accrual of
the balance receivable from specific customers that during the first half of 2014 were having
difficulties to discharge their obligations.
5.
INVENTORIES
Raw materials
Goods for resale
Replacement parts and supplies
Advances for inventories
Other
Total
6/30/2014
12/31/2013
6,276
19,921
10,281
745
584
37,807
6,617
15,015
8,972
5,140
544
36,288
Raw material inventories, and advances for inventories are linked to toll manufacturing
processes, to meet Company and customer requirements. The spare parts inventory refers
basically to access equipment. All inventories are carried at average cost.
6.
RECOVERABLE TAXES
6/30/2014
Taxes on revenue (PIS and COFINS) (*)
Income tax (IRPJ) and social contribution (CSLL) (**)
State VAT (ICMS) (***)
Other
Current
Non-current
71,531
271
1,982
433
74,217
32,628
41,589
12/31/2013
71,856
8,537
909
135
81,437
38,673
42,764
(*)
(**)
Refers to IRPJ and CSLL tax loss carryforwards determined at December 31, 2013,
which will be adjusted for inflation monthly based on the SELIC rate and offset
against taxes of the same nature during 2014.
(***) Refers to State VAT (ICMS) levied on the Company's operations due to purchase of
merchandise for resale.
15
7.
12/31/2013
2014
2015
2016
2017
Total
16,547
16,547
16,547
16,547
66,188
26,785
15,763
15,763
15,764
74,075
Current
Non-current
16,547
49,641
66,188
26,785
47,290
74,075
On November 30, 2013 the Company completed the sale of its Industrial Services business
unit to Fundo de Investimento em Participao (FIP) Leblon Equities Partners V, managed
by Leblon Equities Gesto de Recursos Ltda.
The agreement prescribes that the acquisition price be paid in six (6) installments, all
adjusted using the CDI, from May 31, 2013 to the payment date, as follows:
1. The first installment of R$25,000 (R$25,207, including the CDI-based adjustment
through the payment date) was paid on the agreement execution date;
2. The second installment of R$17,000 (R$18,293, considering the CDI-based adjustment
through March 31, 2014) was paid in April 2014, in the amount of R$11,304. The amount
of the second installment was adjusted by the partial performance of the business, which
meant that the business profit plus the depreciation of the assets acquired, less
investments, plus the increase in trade payables (or less the decrease in trade payables, as
applicable), and less the increase in trade receivables (or plus the decrease in trade
receivables, as applicable), from May 31, 2013 to the closing date, i.e., November 30,
2013. These amounts were determined using the same expense apportionment, allowance
for doubtful debts recognition, and equipment derecognition accounting criteria currently
used by the Company. For profit for the year calculation purposes, the income tax and
social contribution rate used was identical to the average tax rate charged on Company
operations in the twelve months immediately prior to the closing date, and the following
were disregarded: (i) allocated costs related to the Companys stock options and profit
sharing, and (ii) finance income and costs. The accumulated partial performance of the
business amount, between June 1 and November 30, 2013, the date when the Company
completed the transaction, was R$6,789.
3. Four installments of R$15,000 each (R$16,547, considering upgrading each installments
by 100% of the CDI until June 30, 2014), with annual maturity, counted from the
agreement execution date.
16
8.
INVESTMENTS
On February 8, 2011, the Company acquired 25% of the capital of Rohr S.A. Estruturas
Tubulares (Rohr) for R$ 90,000. Rohr is a privately-held company specialized in access
engineering and supplying construction solutions, which operates mainly in the heavy
construction and industrial maintenance sectors.
In 2011, the Company received R$2,608 (net of taxes) in interest on capital and dividends
related to prior years. This amount was recognized reducing the amount of the investment,
as it referred to dividends derived from profits or reserves already existing at the time the
shares were purchased.
In the fourth quarter of 2011, there was an increase in the stake in Rohr S.A. Estrutura
Tubulares (Rohr) from 25% to 27.47%, resulting from a buyback by Rohr of 9% of its
shares, which are currently in its treasury and will be cancelled or proportionally distributed
to its shareholders.
The Company assessed its influence over the management of Rohr and concluded that, even
though it holds 27.47% of the investees capital, such investment should be carried at
acquisition cost, due to the following facts: Mills does not have power to influence Rohrs
financial, operational and strategic policies, it does not control, either individually or jointly,
such policies, and it is not represented in the investees management.
Furthermore, there is no shareholders agreement that might give Mills the right to have
influence over the investees management or that might give it the right to increase its stake
in the future. Based on these factors, the Company concluded that it does not have
significant influence over the investee and will keep the investment carried at acquisition
cost.
In December 2013 the Company recognized finance income of R$1,648 (R$3,214 in
December 2012 referring to 2011 and 2012) related to interest on capital of Rohr for 2013.
17
9.
Leasing
1,409,698
82,156
38,506
1,530,360
19,040
24,274
13,886
3,640
5,470
8,945
580
75,835
1,606,195
140,549
(20,380)
(15,271)
31,079
(3,648)
-
914
(31,079)
141,463
(24,028)
(15,271)
-
3,663
-
1,143
(4)
-
180
(258)
-
750
-
776
-
175
-
6,687
(262)
-
148,150
(24,290)
(15,271)
-
1,545,675
78,508
8,341
1,632,524
22,703
24,274
15,025
3,562
6,220
9,721
755
82,260
1,714,784
Accumulated depreciation
Balances at December 31, 2013
(320,309)
(42,440)
(362,749)
(4,169)
(1,526)
(6,594)
(2,232)
(1,051)
(3,398)
(18,970)
(381,719)
Depreciation
Write-offs/disposals
Reclassification
Balances at June 30, 2014
(71,914)
9,506
(382,717)
(3,944)
2,139
(44,245)
(75,858)
11,645
(426,962)
(1,237)
(5,406)
(335)
(1,861)
(1,134)
1
(7,727)
(225)
195
(2,262)
(249)
(1,300)
(354)
(3,752)
(3,534)
196
(22,308)
(79,392)
11,841
(449,270)
10
10
20
20
20
10
10
1,089,389
1,162,958
39,716
34,263
38,506
8,341
1,167,611
1,205,562
14,871
17,297
22,748
22,413
7,292
7,298
1,408
1,300
4,419
4,920
5,547
5,969
580
755
56,865
59,952
1,224,476
1,265,514
Rental
equipment
in progress
Total
rental
Leasehold Buildings
Computers
equipment improvements and land and peripherals Vehicles
Facilities
Furniture
and
Construction Total assets
fixtures
in progress
in use
Total
PP&E
18
Rental equipment can be summarized as follows: access scaffolding (Mills and Elite tubular
scaffolding), forms (Noe and Aluma forms), props (MillsTour and Aluma), aerial platforms
(JLG and Genie) and telescopic manipulators.
We highlight below the main purchases in the first six-month period of 2014, by group of
assets:
Props
Lifts
Reusable concrete formworks
Suspended scaffolding and access structures
Other
Total purchases
15,108
101,870
8,723
14,583
7,866
148,150
The depreciation for the period, allocated to direct project and rental costs and general and
administrative expenses, amounts to R$74,626 and R$4,766 as at June 30, 2014 (R$60,698 and
R$3,515 as at June 30, 2013), respectively.
Certain items of the Companys property, plant and equipment are pledged as collateral of
borrowing and financing transactions (Note 12).
Property, plant and equipment are measured at historical cost, less accumulated depreciation.
Historical cost includes costs directly attributable to the acquisition of items and may also
include transfers from equity of any gains/losses on cash flow hedges qualifying as referring to
the purchase of property, plant and equipment in foreign currency.
Review of estimated useful life
Based on a valuation conducted by technical experts, the Company issued an internal report on
the estimated useful life, dated December 31, 2013, which was approved at an executive board
meeting. In order to prepare the report, the technical experts considered the Company's
operational planning for the coming fiscal years, past experience, such as the level of
maintenance and use of the items, external elements for benchmarking, such as available
technologies, manufacturers' recommendations and technical manuals, and the service lives of
the assets.
There was no change in the remaining estimated useful lives of property, plant and equipment
items for 2013 and there were no events during the period ended June 30, 2014 that would
affect the valuation undertaken in 2013.
The Company concluded that there were no events or changes in circumstances that would
indicate that such assets may be impaired.
19
Intangible
assets in
progress
Goodwill on
investments
Total
intangible
assets
20,943
895
12,626
44,294
78,758
Purchases
Transfer
Balances at June 30, 2014
2,067
18,774
41,784
895
6,799
(18,774)
651
44,294
8,866
87,624
Accumulated amortization
Balances at December 31, 2013
Amortization
Balances at June 30, 2014
Annual amortization rates - %
(5,839)
(2,151)
(7,990)
10
(295)
(87)
(382)
20
(4,232)
(4,232)
-
(10,366)
(2,238)
(12,604)
-
15,104
33,794
600
513
12,626
651
40,062
40,062
68,392
75,020
27,765
1,347
29,112
32,229
5,675
37,904
As at June 30, 2014, the trade payables balance refers basically to installment purchase of
equipment.
20
12/31/2013
42,349
3,063
45,412
4,936
7,828
12,764
16,459
16,459
58,423
326
58,749
37,766
4,583
42,349
4,936
4,936
Non-current liabilities
6/30/2014 12/31/2013
Financing from financial institutions:
Indexed to US dollar plus interest of 2.13% per year
Indexed to TJLP plus interest of 0.20% to 0.90% per year
16,459
16,459
39,932
18,491
58,423
The financial institutions with which the Company has borrowing and financing transactions as
at June 30, 2014 are as follows:
Santander
Banco do Brasil
Ita BBA
HSBC
21
On December 6, 2013 the Company entered into a loan agreement with the Nassau Branch of
Banco Ita BBA S.A. totaling US$16,9 million (equivalent to R$40,0 million). Principal and
interest will be settled in a bullet payment on January 30, 2015. In order to minimize the
foreign exchange risk on this borrowing, on the same date a swap was contracted with Banco
Ita BBA S.A. in the amount of R$40.0 million so that the obligations (principal and interest)
are fully converted into local currency and carried out on the same maturity dates (see Note
26).
On April 11, 2014 the Company issued a single series of 20 commercial promissory notes with
unit face value of R$10,000, for a total amount of R$200,000 maturing on August 8, 2014. The
unit face value of the promissory notes bears interest corresponding to 106% of the
accumulated fluctuation of the average daily interbank deposit (DI) rates. On June 18, 2014 the
Company fully paid these promissory notes with the net proceeds from its third issue of
debentures (see note 13).
The table below shows a breakdown of the contractual guarantees outstanding on the indicated
dates:
6/30/2014 12/31/2013
Guarantees provided:
Collateral sale (*)
Total collaterals
56,048
56,048
65,858
65,858
Promissory notes
12,415
20,128
(*) Refer to equipment acquired under the Federal Equipment Financing Program (FINAME)
and leases.
The promissory notes are enforceable guarantees and serve as additional guarantees in relation
to the borrowings and financing.
The maturities of the non-current portions as at June 30, 2014 are as follows:
2015
2016
2017
2018 to 2021
987
3,541
3,138
8,793
16,459
22
6/30/2014
12/31/2013
2014
2015
Present value of minimum lease payments
3,063
3,063
7,828
326
8,154
Current portion
Non-current portion
3,063
-
7,828
326
There are no significant differences between the present value of minimum lease payments and
the market value of such financial liabilities. Interest charges are at floating rates and are
recognized on a prorated basis.
The Company has finance lease agreements with purchase option at the end of the contractual
term. The purchase option is based on the guaranteed residual value that can be paid at the
beginning of, end of or during the contractual term. There is also an option to renew the lease
agreement for the period and under the terms agreed by the parties.
The Companys current finance leases do not contain any restrictive covenants.
13. DEBENTURES
Description
Series
1st issue
Issue cost
Single
2nd issue
2nd issue
Issue cost
3rd issue
Issue cost
Amount
issued
Beginning
Maturity
Financial charges
270,000
Apr/2011
Apr/2016
112.5% of CDI
1st series
2nd series
160,940
109,060
Aug/2012
Aug/2012
Aug/2017
Aug/2020
Single
200,000
May/2014
May/2019
108.75% of CDI
Total debentures
Current
Non-current
6/30/2014
183,915
(864)
183,051
167,337
128,990
(1,255)
295,072
201,778
(736)
201,042
679,165
107,052
572,113
12/31/2013
275,530
(1,100)
274,430
166,938
120,803
(1,401)
286,340
560,770
112,532
448,238
23
1,495
188
379
1,406
3,468
3,052
407
731
1,924
6,114
6/30/2013
Quarter
YTD
1,135
428
316
766
2,645
2,977
888
636
1,191
5,692
25
b.
Plans
Final
exercise date
Grant date
Shares in thousands
Shares
Shares
Outstanding
granted
exercised
shares
1/01/2008
7/10/2014
782
(782)
5/31/2010
4/16/2011
6/30/2012
4/30/2013
4/30/2014
5/31/2016
4/16/2017
5/31/2018
4/30/2019
4/30/2020
1,475
1,184
1,258
768
234
(1,364)
(592)
(392)
(72)
-
111
592
866
696
234
Program
2010
2010
2011
2012
2012
2013
2013
2014
Grant
First
Second
Single
Basic
Discretionary
Basic
Discretionary
Basic
Weighted
Weighted average
average fair
fair value of the
value by
share at the grant
option - R$
date - R$
3.86
11.95
5.49
14.10
6.57
19.15
21.75
27.60
12.57
27.60
24.78
31.72
11.92
31.72
22.58
28.12
Exercise
price - R$
11.50
11.50
19.28
5.86
19.22
6.81
26.16
7.98
Volatility
31.00%
31.00%
35.79%
37.41%
37.41%
35.34%
35.34%
33.45%
Dividend yield
1.52%
1.28%
1.08%
0.81%
0.81%
0.82%
0.82%
0.75%
Annual
risk-free
interest rate
6.60%
6.37%
6.53%
3.92%
3.92%
3.37%
3.37%
12.47%
Maximum
exercise
period
6 years
6 years
6 years
6 years
6 years
6 years
6 years
6 years
26
The table below shows the accumulated balances of the plans in the balance sheet accounts and
the effects on profit for the year.
6/30/2014
12/31/2013
2002 Plan
Capital reserve
Number of shares exercised (thousands)
1,446
3,920
1,446
3,920
1,148
1,055
1,148
1,055
4,007
391
4,007
391
2010 Plan
Capital reserve
Number of exercisable options (thousands)
Number of shares exercised (thousands)
5,727
111
1,364
5,303
413
1,062
5,906
592
592
5,142
711
473
7,879
866
392
6,308
1,015
243
4,068
696
72
2,503
768
-
324
234
30,505
25,857
(4,648)
(9,998)
(*) As at June 30, 2013, the effect on profit was an expense of R$4,497.
On March 31, 2014, the Company approved at the Board of Directors meeting: (i) the creation
of the program 1/2014 of Grant of Stock Options; (ii) the definition of the criteria for
determining the exercise price of the options and the terms of payment; (iii) the definition of
the terms and conditions of exercise of the options; and (iv) the authorization for the Board to
make the grants of the stock options to the beneficiaries eligible according to the Program
2014.
27
Profit for the period before income tax and social contribution
Statutory income tax and social contribution rate
Income tax and social contribution at statutory rate
Non-deductible provisions (*) and permanent differences
Interest on capital - declared
Other
Total current and deferred income tax and social contribution
Effective tax rate
Current income tax
Deferred income tax
6/30/2014
Quarter
YTD
6/30/2013
Quarter
YTD
38,359
34%
(13,042)
(443)
8,528
(8)
(4,965)
13%
(10,319)
5,354
55,869
34%
(18,995)
(1,195)
7,366
1,524
(11,300)
20%
(9,742)
(1,558)
88,698
34%
(30,157)
(1,037)
8,528
1,235
(21,431)
24%
(31,508)
10,077
113,750
34%
(38,675)
(2,036)
7,503
1,659
(31,549)
28%
(30,143)
(1,406)
(*) Non-deductible provisions consist mainly of non-deductible accounts receivable write-offs, gifts, debt
waivers, and fines for tax infractions.
December
31, 2013
77
(1,434)
815
7,839
2,244
3,637
2,815
(2,673)
(753)
(325)
(12,949)
(921)
(850)
(2,478)
Add-backs Deductions
1,580
553
1,493
798
336
1,532
5,198
121
(376)
(67)
(196)
(876)
(117)
9,979
(25)
391
(147)
2,673
2.892
June
30, 2014
1,580
52
553
(1,043)
668
9,332
3,042
3,973
1,532
8,013
121
(1,129)
(392)
(12,949)
(1,117)
(876)
(967)
10,393
28
The rationale and expectations for realization of the deferred income tax and social contribution
are shown below:
Nature
Realization rationale
Profit sharing
Discount to present value
Other provisions
Accelerated depreciation
Itapo goodwill
Jahu goodwill/GP Sul goodwill
Adjustment for inflation of judicial deposits
Debentures
Derivatives - Cash flow hedge
The table below shows the expected realization of deferred income tax and social contribution
as at June 30, 2014:
Deferred IR and Deferred IR and
CSLL assets CSLL liabilities
2014
2015
2016
2017
2018
Beginning 2019
Total
10,290
4,981
3,449
3,449
3,449
3,248
28,866
(262)
(1,400)
(418)
(339)
(1,044)
(15,010)
(18,473)
17. PROVISION FOR TAX, CIVIL AND LABOR CLAIMS AND JUDICIAL DEPOSITS
The Company is a party to tax, civil and labor lawsuits that have arisen in the normal course of
business, and is discussing these matters in both the administrative and legal spheres, which,
when applicable, are backed by judicial deposits.
Based on the opinion of its outside legal counsel, management understands that the proper legal
steps and measures already taken in each situation are sufficient to cover potential losses and
preserve the Companys net assets, being reassessed periodically.
The Company does not have any contingent assets recorded.
a) Breakdown of the provision for tax, civil and labor claims:
6/30/2014 12/31/2013
Tax (i)
Civil (ii)
Labor (iii)
Success fees (iv)
Total
3,928
500
4,039
3,098
11,565
3,818
467
3,588
2,700
10,573
10,573
1,637
(258)
(387)
11,565
9,919
3,107
(1,740)
(713)
10,573
(i)
Refers basically to a writ of mandamus filed by the Company when challenging the
increase in the PIS and COFINS rates (established by the non-cumulative regime of
these contributions, with the enactment of Laws 10,637/2002 and 10,833/2003). The
Company maintains a judicial deposit for this provision, related to the differences in
rates.
(ii)
The Company is a party to lawsuits filed against it relating to civil liability and
compensation claims.
(iii) The Company is a defendant in several labor lawsuits. Most of the lawsuits involve
claims for compensation due to occupational diseases, overtime, hazardous duty
premium and salary equalization.
(iv) The success fees are generally set in up to 10% of the amount pledged in each claim,
payable to outside legal counsel depending on the success of the demand of each
case. Payment is contingent upon favorable outcome in the lawsuits.
30
6,985
3,279
10,264
6,805
278
2,970
10,053
(i)
As at June 30, 2014, the breakdown of judicial deposits related to tax lawsuits totaled
R$ 6,895. The reconciliation of this amount refers basically to the challenge of the
increase in the PIS and COFINS rates, totaling the amount of R$ 3,680, as informed
in note 17, item a, subitem i, and, also, judicial deposits made on behalf of
certain municipalities due to the understanding of our legal counsel as regards the
levy of the ISS (service tax) on revenues from rental of properties. The balance
recorded in this line items is R$ 2,577. Starting 2003, with the enactment of the
Supplementary Law 116 and based on the opinion of its legal counsel, the Company
has not made judicial deposits of this nature.
(ii)
The judicial deposits are linked to various labor lawsuits in which the Company is
the defendant. Most of the lawsuits involve claims for compensation due to
occupational diseases, overtime, hazardous duty premium and salary equalization.
The Company is a party to tax, civil and labor lawsuits involving risks of loss
classified by management as possible based on the assessment of its legal counsel,
for which no provision was recognized as estimated below:
6/30/2014 12/31/2013
Tax
Civil
Labor
Total
28,753
5,048
14,191
47,992
26,442
4,812
10,944
42,198
3,273
4,223
211
499
376
8,582
2,480
3,417
321
586
280
7,084
31
19. EQUITY
a) Subscribed capital
The Companys fully subscribed and paid-in capital stock as at June 30, 2014 is R$563,054
(December 31, 2013 - R$553,232) represented by 128,026 registered common shares
without par value (December 31, 2013 - 127,386). Each common share corresponds to the
right to one vote in decisions made by the shareholders.
Under the Companys Mills bylaws, the Board of Directors may increase the capital up to a
ceiling of 200,000,000 shares.
a.1) Share issue
The Company's shares have been issued as approved by the Companys Board of
Directors due to the exercise of stock options by beneficiaries. The shares issued in
the period were fully subscribed and paid up by their respective beneficiaries and are
as follows:
Approval by
the Board
of Directors
1/10/2014
1/10/2014
1/10/2014
1/10/2014
2/05/2014
2/5/2014
2/5/2014
2/5/2014
2/05/2014
2/14/2014
2/14/2014
2/14/2014
5/15/2014
5/15/2014
5/15/2014
5/15/2014
5/15/2014
Number
of shares
issued
6
5,772
711
3,000
50,174
13,825
3,554
11,250
7,710
1,820
3,890
2,800
250,004
95,391
24,800
101,550
63,827
640,084
Issue price
- R$
13,02
21,51
5,76
20,39
13,13
21,70
5,81
20,56
6,78
13,16
21,74
20,60
13,44
22,20
5,93
21,03
6,95
Capital
increase
(in thousands)
124
4
61
658
300
21
231
52
24
85
58
3,360
2,118
147
2,135
444
9,822
32
The table below shows the shareholding structure at the reporting dates:
6/30/2014
12/31/2013
Number
Number
of shares
of shares
(in thousands) Percentage (in thousands) Percentage
Shareholders
Andres Cristian Nacht
Snow Petrel S.L.
HSBC Bank Brasil S.A. (*)
Capital Group International, Inc (**)
Capital Research Global Investors (**)
Other signatories of the Company
Shareholders Agreement (***)
Other
15,595
17,728
6,323
7,056
6,507
12.18%
13.84%
5.07%
5.50%
5.10%
15,596
17,728
6,323
6,445
-
12.34%
13.90%
5.07%
5.01%
-
11,826
62,991
128,026
9.23%
49.08%
100.00%
11,825
69,469
127,386
9.28%
54.50%
100.00%
(*)
(**)
On June 5, 2014, according to information officially received by the Company and disclosed
to the CVM.
(***) This amount does not consider the shares of Andres Cristian Nacht and Francisca Nacht,
who are also Company officers, and considers the number of shares reported in the last
month, in accordance with CVM Instruction 358/02. These shareholders hold individual
interests of less than 5% of the capital.
b) Earnings reserves
(b.1) Legal reserve
The legal reserve is set up annually by allocating 5% of profit for the year until it
reaches a ceiling of 20% of the share capital. The purpose of the legal reserve is to
ensure the integrity of share capital and it can only be used to offset losses and
increase capital.
(b.2) Expansion reserve
The purpose of the expansion reserve is to provide funding to finance additional
investments in fixed and working capital and expand corporate activities. Under the
Companys bylaws, the ceiling of the expansion reserve is 80% of total subscribed
capital.
(b.3) Special reserve
The Companys special reserve referred to the tax benefit generated by the corporate
restructuring undertaken in 2009.
c) Capital reserve
The capital reserve incorporates the transaction costs incurred in capital funding,
amounting to R$15,068, net of taxes, related to the distribution of shares under the IPO, the
premium reserve of the stock options amounting to R$30,505 related to the employees
stock option plans, and the cost of the cancelled shares amounting to R$558, totaling
R$14,879 as capital reserve as at June 30, 2014 (December 31, 2013 - R$10,231).
33
d) Earnings retention
This earnings retention reserve refers to the remaining balance of retained earnings used to
fund the business growth project set out in the Companys investment plan, according to
the capital budget proposed by management, submitted to and approved at a Shareholders
Meeting, pursuant to Article 196 of the Brazilian Corporate Law.
e) Valuation adjustment to equity - cash flow hedge
The cash flow hedge reserve incorporates the effective portion of the cash flow hedges
through June 30, 2014, amounting to a negative R$235, net of taxes (R$5,188 as at
December 31, 2013).
f)
Basic
Basic earnings per share are calculated by dividing the profit attributable to owners of the
Company by the weighted average number of common shares issued during the period.
6/30/2014
Quarter
YTD
Profit attributable to owners of the Company
Weighted average number of common
shares issued (thousands)
Basic earnings per share from continuing
and discontinued operations
Basic earnings per share from continuing
operations
6/30/2013
Quarter
YTD
33,394
67,267
48,073
87,334
127,848
127,615
126,933
126,654
0.26
0.53
0.38
0.69
0.26
0.53
0.35
0.65
34
b) Diluted
Diluted earnings per share are calculated by adjusting the weighted average number of
common shares outstanding to assume conversion of all dilutive potential common shares.
The Company has one category of dilutive potential common shares: stock options. A
calculation is made for the stock options to determine the number of shares that would be
acquired at fair value (determined as the annual average market price of the Companys
share), based on the monetary amount of the subscription rights linked to the outstanding
stock options. The number of shares calculated as described above is compared with the
number of shares issued, assuming exercise of the stock options.
6/30/2014
Quarter
YTD
Profit used to determine diluted earnings per
share
Weighted average number of common
shares issued (thousands)
Adjustments for:
Stock options (thousands)
Weighted average number of common shares
for diluted earnings per share (thousands)
6/30/2013
Quarter
YTD
33,394
67,267
48,073
87,334
127,848
127,615
126,933
126,654
697
715
1,309
1,304
128,545
128,330
128,242
127,958
0.26
0.52
0.38
0.68
0.26
0.52
0.35
0.64
Rentals
Sales
Technical assistance
Indemnities and recoveries
Total gross revenue
Taxes on sales and services
Cancelations and discounts
Total net revenue
6/30/2014
Quarter
YTD
6/30/2013
Quarter
YTD
232,964
26,216
5,569
22,663
287,412
(23,885)
(50,560)
212,967
204,594
24,119
10,821
21,305
260,839
(20,995)
(28,070)
211,774
467,348
33,386
9,660
51,994
562,388
(44,068)
(97,532)
420,788
397,085
37,363
16,129
36,972
487,549
(39,775)
(47,572)
400,202
35
23. COST OF SALES AND SERVICES AND GENERAL AND ADMINISTRATIVE EXPENSES (BY NATURE)
The costs refer mainly to personnel expenses for assembly and dismantling of Company-owned leased assets, when such assembly is carried out
by Mills itself, the equipment sublet from third parties when the Companys inventory is insufficient to meet demand, freight for transportation of
equipment between branches and occasionally to customers, and expenses on supplies consumed in the projects, from personal protective
equipment (PPE) to wood, paint and thermal insulation.
General and administrative expenses refer to the management of each Company contract, encompassing the project teams and sales function
engineers, which correspond basically to salaries, payroll taxes and benefits, and other expenses on travel, representations and communications, as
well as the administrative function overheads.
Nature
Personnel
Third parties
Freight
Construction/maintenance material
and repair
Equipment and other rentals
Travel
Cost of
sales
Depreciation and amortization
Write-off of assets
Allowance for doubtful debts
Stock option plan
Adjustment of provisions
Profit sharing
Other
Total
(15,380)
(1,443)
(4,178)
(27,698)
(6,344)
(222)
(43,078)
(7,787)
(4,400)
(29,665)
(2,788)
(8,011)
(55,779)
(13,815)
(417)
(85,444)
(16,603)
(8,428)
(14,304)
(1,375)
(4,000)
(26,727)
(5,462)
(198)
(41,029)
(6,837)
(4,198)
(26,828)
(2,426)
(6,904)
(52,014)
(9,863)
(266)
(78,842)
(12,289)
(7,170)
(11,353)
(1,248)
(1,158)
(1,430)
(4,245)
(2,957)
(12,783)
(5,493)
(4,115)
(21,156)
(2,617)
(2,295)
(3,867)
(9,133)
(5,911)
(25,023)
(11,750)
(8,206)
(12,263)
(1,380)
(1,255)
(1,426)
(3,475)
(2,847)
(13,689)
(4,855)
(4,102)
(21,110)
(2,853)
(2,696)
(2,945)
(6,809)
(5,688)
(24,055)
(9,662)
(8,384)
(14,707)
(38,412)
(1,745)
(314)
(89,938)
(3,653)
(4,865)
(2,461)
(354)
(1,231)
(10,810)
(66,270)
(14,707)
(42,065)
(1,745)
(4,865)
(2,461)
(354)
(1,231)
(11,124)
(156,208)
(23,562)
(74,625)
(3,396)
(870)
(168,985)
(7,005)
(11,405)
(4,648)
(968)
(1,713)
(13,496)
(128,157)
(23,562)
(81,630)
(3,396)
(11,405)
(4,648)
(968)
(1,713)
(14,366)
(297,142)
(20,868)
(29,350)
(2,266)
(216)
(87,275)
(1,918)
(2,795)
(2,119)
(75)
(6,355)
(3,447)
(56,844)
(20,868)
(31,268)
(2,266)
(2,795)
(2,119)
(75)
(6,355)
(3,663)
(144,119)
(32,955)
(56,284)
(3,125)
(510)
(155,691)
(3,567)
(7,097)
(3,808)
(160)
(10,619)
(6,937)
(109,773)
(32,955)
(59,851)
(3,125)
(7,097)
(3,808)
(160)
(10,619)
(7,447)
(265,464)
36
Finance income
6/30/2014
Quarter
YTD
Interest income
Income from short-term investments
Discounts obtained
Foreign exchange and inflation gains
Other
2,402
2,138
10
2,897
11
7,458
4,867
2,980
68
3,489
71
11,475
Restated
6/30/2013
Quarter
YTD
1,405
3,018
71
501
29
5,024
1,918
4,437
85
575
142
7,157
b) Finance costs
Borrowing costs
Inflation losses
Interest on finance leases
Interest - debentures
Bank fees
Tax on financial transactions (IOF)
Other
6/30/2014
Quarter
YTD
Restated
6/30/2013
Quarter
YTD
(4,150)
(117)
(150)
(14,710)
(442)
(4)
(6,285)
(25,858)
(1,428)
(683)
(400)
(13,046)
(81)
(5)
(1,167)
(16,810)
(6,211)
(823)
(386)
(30,693)
(470)
(10)
(7,830)
(46,423)
(2,719)
(774)
(731)
(21,894)
(140)
(8)
(1,879)
(28,145)
37
38
106,573
(55,319)
(19,388)
31,866
1,701
(9,974)
23,593
(5,701)
17,892
102,603
(53,193)
(14,294)
35,116
1,591
(6,319)
30,388
(8,428)
21,960
118,338
(69,690)
(23,167)
25,481
2,734
(15,875)
12,340
(2,982)
9,358
131,348
(79,025)
(18,533)
33,791
2,770
(10,620)
25,941
(7,194)
18,746
111,230
(96,389)
(5,462)
9,379
687
(2,965)
7,102
(1,969)
5,133
195,877
(82,398)
(39,075)
74,404
3,635
(20,340)
57,699
(13,942)
43,757
166,251
(73,394)
(27,025)
65,832
2,796
(11,206)
57,422
(15,926)
41,496
(8,105)
(8,105)
3,405
(234)
(4,934)
1,194
(3,740)
- 420,788 511,432
- (215,512) (302,000)
- (81,630) (65,314)
- 123,646 144,118
- 11,475
7,844
- (46,423) (31,110)
- 88,698 120,852
- (21,431) (33,518)
- 67,267
87,334
55,538
(29,899)
(10,025)
15,614
55,136
(30,073)
(7,186)
17,877
58,821
(33,637)
(11,692)
13,492
66,491
(41,917)
(9,638)
14,936
59,769
(51,224)
(2,724)
5,821
98,608
(43,557)
(20,347)
34,704
90,147
(40,862)
(14,443)
34,842
(7,051)
(7,051)
- 212,967 271,543
- (114,144) (164,076)
- (42,064) (33,991)
- 56,759
73,476
1,216
(5,509)
11,321
(1,686)
445
(3,012)
15,310
(3,154)
1,874
(8,420)
6,946
(1,217)
2,250
(6,593)
10,593
(1,826)
(1,088)
(136)
4,597
(1,093)
2,715
(11,778)
25,641
(3,454)
2,329
(7,205)
29,966
(6,320)
1,653
(151)
(5,549)
1,392
7,458
(25,858)
38,359
(4,965)
3,936
(16,946)
60,466
(12,393)
9,635
12,156
5,729
8,767
3,504
22,187
23,646
(4,157)
33,394
48,073
39
411,941
393,691
483,125
487,013
819,718
725,491
(138,153) (122,006) (135,657) (117,444) (175,460) (142,269)
273,788
271,685
347,468
369,569
644,258
583,222
138,266
99,088
198,487
179,693
170,728
133,976
412,054
370,773
545,955
549,262
814,986
717,198
156,226
156,226
- 1,714,784
- (449,270)
- 1,265,514
164,012
663,707
164,012 1,929,221
1,606,195
(381,719)
1,224,476
576,769
1,801,245
40
93,735
25,798
200,373
10,264
178,773
10,053
58,808
3,063
679,165
29,112
63,359
8,154
560,770
37,904
701
4,507
267
7,516
Several Company policies and accounting disclosures require the determination of the
fair value both for financial assets and liabilities and for non-financial assets and
liabilities. The fair values have been determined for the purpose of measurement and/or
disclosure based on the methods below. When applicable, additional information on the
assumptions used in calculating the fair values are disclosed in specific notes applicable
to such asset or liability.
The Company applies CPC 40/IFRS 7 for financial instruments measured in the balance
sheet at fair value, which requires disclosure of fair value measurements at the level of
the following fair value measurement hierarchy:
Quoted (unadjusted) prices on active markets for identical assets and liabilities (Level
1).
In addition to the quoted prices, included in Level 1, inputs used by the market for
assets or liabilities, whether directly (e.g. prices) or indirectly (e.g., derived from
prices) (Level 2).
41
The Company does not have financial instruments measured at fair value that are
classified as Level 3, i.e., obtained based on valuation techniques that include variables
for the asset or liability, but which are not based on observable market inputs.
The table below shows the Companys assets and liabilities measured at their fair values
as at June 30, 2014.
Level 2 Balances
6/30/2014 12/31/2013
Assets
Derivatives used for hedging
Total assets
Financial liabilities
Derivatives used for hedging
Derivatives used for borrowings
Total liabilities
(a)
7,516
7,516
(701)
(4.507)
(5.208)
(267)
(267)
(b)
42
Debt
BNDES
Working capital
Leasing
1st issue of debentures
2nd issue of debentures:
1st Series
2nd Series
3rd Issue of debentures
(c)
Fair value
Carrying amount
Indicator 6/30/2014 12/31/2013 6/30/2014 12/31/2013
TJLP
CDI
CDI
CDI
21,041
35,809
3,063
195,510
23,427
40,027
8,043
275,483
21,041
37,766
3,063
183,915
23,427
39,932
8,154
275,530
CDI
IPCA
CDI
167,247
126,554
201,778
166,208
119,718
-
167,337
128,990
201,778
166,938
120,803
-
Derivatives
The fair value of exchange forwards is calculated at present value, using market
rates that are accrued on each measurement date.
The fair value of interest rate swaps is based on quotations obtained from brokers.
These quotations are tested as to their reasonableness by discounting the estimated
future cash flows based on the terms and maturity of each contract and using
market interest rates for a similar instrument calculated on the measurement date.
The fair values reflect the credit risk of the instrument and include adjustments to
consider the credit risk of the entity and the counterparty, when appropriate.
Derivative policy
In order to protect its assets from the exposure to commitments assumed
denominated in a foreign currency, the Company has developed its own strategy to
mitigate such market risk. When applied, the strategy is carried out to reduce the
volatility of cash flows to the desirable level, i.e., to maintain the planned
disbursements.
Mills believes that the management of such risks is key to support its growth
strategy without potential financial losses that reduce its operating profits, as the
Company does not aim at obtaining financial gains through the use of derivatives.
Foreign currency risks are managed by the Finance Manager and the CFO, who
evaluate possible exposures to risks and set guidelines to measure, monitor and
manage the risk related to the Companys activities.
Based on this objective, the Company contracts derivative transactions, usually
NDFs (non-deliverable forwards) with prime financial institutions (with credit
ratings of brAAA - national scale, Standard & Poors or similar), in order to
guarantee the agreed trading value at the time the imported goods are ordered.
Likewise, swaps or NDFs are entered into to guarantee the flow of payments
(amortization of principal and interest) for foreign currency-denominated financing.
43
3.06
178
550
(3)
3.06
178
550
15,460
168,419
(3)
(701)
7,516
44
(c)
Swap
The hedge transaction, for the exchange swap agreement, contracted by the
Company is intended to hedge against the exposure of the borrowing of US$16.9
million (see Note 12) to exchange rate fluctuations. The exchange swap for this
transaction consisted in the swap of the exchange rate fluctuation plus interest of
2.31% p.a. for CDI plus 0.29% p.a. As at June 30, 2014, the fair value payable on
this transaction was R$4,507 (R$267 as at December 31, 2013).
(d)
(e)
(f)
45
(g)
Embedded derivatives
All contracts with potential derivative instrument clauses or securities are assessed
by the Companys Finance Manager together with the legal counsel team before
their execution, for guidance regarding any effectiveness testing, the definition of
the accounting policy to be adopted, and the fair value calculation method.
Currently, the Company is not party to any contracts with embedded derivatives.
(h)
Debt
BNDES
Leasing
Working capital
Swap
1st issue of debentures
2nd issue of debentures
1st series
2nd series
3rd issue of debentures
Indicator
Current
Effect on profit
Probable
25%
50%
TJLP
CDI
US$
CDI
CDI
(21,041) (5,648)
(3,063) (1,297)
(37,766)
(536)
(4,507)
(28)
(183,915) (18,952)
(5,690)
(1,323)
(672)
(154)
(24,997)
(5,731)
(1,349)
(805)
(277)
(29,774)
CDI
IPCA
CDI
Total
(167,337)
(128,990)
(201,778)
(748.397)
(17,286) (22,357)
(14,773) (17,193)
(23,033) (30,375)
(81,553) (102,761)
Change
26.00%
(26,358)
(19,342)
(36,174)
(119,810)
46.91%
Scenarios
Probable
6/30/2014
Scenario II
Rates
CDI (%)
TJLP (%)
IPCA(%)
US$
11.50%
5.00%
6.15%
2.50
25%
14.38%
6.25%
7.69%
3.13
Scenario III
50%
17.25%
7.50%
9.23%
3.75
46
The sensitivity analysis presented above takes into account changes in a certain risk,
keeping the other variables, associated with other risks, constant.
The hedged commitments, as described in note 26, are not presented in the sensitivity
analysis above because their effects do not impact the Companys profit.
26.5. Liquidity risk
The table below presents the Companys non-derivative financial liabilities per maturity
bracket, corresponding to the remaining period in the balance sheet until the contractual
date of maturity.
The interest rates estimated for future commitments (CDI and TJLP) reflect market rates
for each period.
Less
than one
year
Between
one and
two years
Between
two and
five years
Over
five
years
50,330
157,228
3,206
4,507
29,112
4,208
156,579
-
11,327
497,575
-
4,350
115,731
-
6,144
139,418
7,612
37,904
49,475
131,129
1,084
267
-
11,652
374,963
-
5,910
167,429
-
47
6/30/2014
12/31/2013
743,891
635,051
Financing
Swap
Leases
Debentures
58,808
4,507
3,063
682,020
63,359
267
8,154
563,271
93,735
654,663
25,798
609,233
Insured amounts
(in thousands of reais)
959,263
279,830
50,600
30,000
2,972
48