SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of March, 2015
(Commission File No. 001-33356),
Gafisa S.A.
(Translation of Registrant's name into English)
Av. Nações Unidas No. 8501, 19th floor
São Paulo, SP, 05425-070
Federative Republic of Brazil
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.
Form 20-F ___X___ Form 40-F ______
Indicate by check mark if the registrant is submitting
the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)
Yes ______ No ___X___
Indicate by check mark if the registrant is submitting
the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes ______ No ___X___
Indicate by check mark whether by furnishing the information contained in this Form,
the Registrant is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes ______ No ___X___
If “Yes” is marked, indicate below the file number assigned
to the registrant in connection with Rule 12g3-2(b): N/A
GAFISA S.A.
Corporate Taxpayer’s ID (CNPJ/MF)
No. 01.545.826/0001-07
Corporate Registry (NIRE)
No. 35.300.147.952
Publicly-held Company.
MANAGEMENT PROPOSAL
ANNUAL GENERAL MEETING
APRIL 16, 2015
1
INDEX
proposal for the annual general meeting |
3 |
appendix I – MANAGEMENT COMMENTS |
6 |
appendix II – FISCAL COUNCIL CANDIDATES’ PROFILE |
43 |
appendix III – MANAGEMENT COMPENSATION |
47 |
2
GAFISA S.A.
Corporate Taxpayer’s ID (CNPJ/MF) No.
01.545.826/0001-07
Corporate Registry (NIRE) No.
35.300.147.952
Publicly-held Company
Dear Shareholders,
Below we present for your appreciation the
management proposal for the matters on the agenda of the Company’s Annual
General Meeting to be held on April 16, 2015:
1. Review the
management accounts and examine, discuss and vote on the financial statements
relative to the fiscal year ended December 31, 2014.
We propose that the management accounts and
financial statements for the 2014 fiscal year, as disclosed on February 27, 2015
on the websites of the Brazilian Securities and Exchange Commission
("CVM") and the BM&FBOVESPA S.A. - São Paulo Stock,
Commodities and Futures Exchange ("BM&FBovespa”) via the Periodic
Information System (IPE) and on February 28, 2015 in the newspapers
O
Estado de São Paulo and the Official Gazette of the State of São
Paulo
(“Financial Statements”) be approved without
reservations.
We also propose that there is no distribution
of dividends as the Company has made a calculated loss in the fiscal year ended
31/12/14.
As per Article 9, paragraph III of CVM
Instruction 481 of December 17, 2009 (“CVM Instruction 481/09"), the management’s
comments on the Company’s financial situation are detailed in Appendix
I of
this proposal.
In compliance with the provisions of Article
9, V and paragraph 1, III of CVM Instruction 481/09, the opinion of the Fiscal
Council and the Audit Committee are available at the Company’s headquarters, on
its Investor Relations website (www.gafisa.com.br/ri/) and on the websites of the BM&FBOVESPA
S.A. – São Paulo Stock, Commodities and Futures Exchange (www.bmfbovespa.com.br) and the Brazilian Securities and Exchange
Commission (www.cvm.gov.br).
2. Fixing the
management’s overall compensation for the 2015 fiscal
year.
We recommend that the management’s overall
compensation for the fiscal year 2015 should be fixed at the limit of
R$13,227,950.80, for the current fiscal year, from January to December
2015.
As per Article 12 of CVM Instruction 481/09,
the information necessary for analysis of the management compensation proposal
can be found in detail in Appendix III of this proposal.
3
Please note that the limit proposed above
includes fixed and short-term variable compensation for the management, as well
as any benefits provided or supported by the Company. To further avoid
confusion, this amount does not include social charges or expenses associated with
the recognition of the fair value of stock options that may be granted by the
Company and are only recognized in the Company&'92;s accounting and are
incurred in the Stock Option Plan previously approved by the Company's
shareholders at General Meeting.
The Company maintains a short-term variable
compensation program that is connected to achievement of specific goals that are
established, agreed upon and approved by the Board of Directors each year. For
the 2014 fiscal year, a series of goals was established, including one
mandatory, related to the Company’s return on capital employed
(ROCE).
We also inform that at the Annual General
Meeting held on 2014 a total limit of management compensation was approved in
the amount of R$13,424,727.60, and the effective payment is estimated to amount
to a total of R$9,155,525.48 (still being calculated).
3. Installation and
establishment of the number of members that should compose the Company's Fiscal
Council.
Considering that the term of office has ended,
we propose the installation of the Company's Fiscal Council. Once installed, in
compliance with the provisions of Article 43 of the Company's Bylaws, we propose
that the Company's Fiscal Council be composed of 3 (three) sitting members with
an equal number of alternates.
4. Considering that
the term of office has ended, election of the members of the Company&'92;s
Fiscal Council
We propose the election of the following
members and their respective alternates for a term of office that will end on
the date of the 2014 Annual General Meeting, to wit, as sitting
members: (i) Olavo Fortes Campos Rodrigues Junior, Brazilian, business
administrator, married, bearer of ID card (RG) no. 9.369.027 issued by SSP/SP
and enrolled in the Individual Taxpayer's Registry (CPF/MF) under no.
769.488.977-20, resident and domiciled in São Paulo, São Paulo State at Rua Dr.
José Maria Whitaker 310, apto. 4, Edif. Figueira, CEP 05622-001, (ii) Peter Edward
Cortes Marsden Wilson, Brazilian, economist, married, bearer of ID card (RG)
no. 08.424.379-9 issued by IFP/RJ and enrolled in the Individual Taxpayer’s
Registry (CPF/MF) under no. 168.126.648-20, resident and domiciled in São Paulo,
São Paulo State at Rua Princesa Isabel 347, apartment 92, Campo Belo, CEP
046001-001, and (iii) Luis Fernando Brum de Melo, Brazilian,
economist, single, bearer of ID card (RG) no. 6.064.143.776 issued by SSP/SP and
enrolled in the Individual Taxpayer's Registry (CPF/MF) under no.
964.918.410-49, resident and domiciled in São Paulo, São Paulo State with
offices at Av. Paulista 2.300, 11º andar, Cerqueira César, CEP 01310-300; and as
alternates: (i) Marcello Mascotto Iannalfo, Brazilian,
economist, married, bearer of ID card (RG) no. 16.994.226-0 issued by SSP/SP and
enrolled in the Individual Taxpayer’s Registry (CPF/MF) under no.
101.947.028-39, resident and domiciled in the city of Campinas, São Paulo State
at Rua Bacabá, 48, Alphaville, Campinas - CEP
13098-339, (ii) Marcelo Martins Louro, Brazilian, business
administrator, married, bearer of ID card (RG) no. 19.994.703 issued by SSP/SP
and enrolled in the Individual Taxpayer's Registry (CPF/MF) under no.
118.319.918-02, resident and domiciled in São Paulo, São Paulo State at Rua Iaiá
127, CEP 04542-060, and (iii) Laiza Fabiola Martins de Santa Rosa, Brazilian,
economist, single, bearer of ID card (RG) no. 32.677.183-9 issued by SSP/SP and
enrolled in the Individual Taxpayer's Registry (CPF/MF) under no.
294.953.408-29, resident and domiciled in São Paulo, São Paulo State with
offices at Avenida Paulista 2.300, 11º andar.
4
As per Article 10 of CVM Instruction 481/09,
the information relative to the candidates to the position of member of the
Fiscal Council supported by the Company is detailed in Appendix
II of
this proposal.
5. Establishment of
the total compensation of the Members of the Fiscal Council for the 2015 fiscal
year.
We propose that the total compensation for
fiscal council members for the 2015 fiscal year be established at up to
R$204,600.00.
As per Article 12 of CVM Instruction 481/09,
the information necessary for analysis of the management compensation proposal
can be found in detail in Appendix III of this proposal.
São Paulo, March 13,
2015.
The
Management
Gafisa
S.A.
5
APPENDIX I
As per Appendix 24,
item 10 of CVM Instruction no. 480 of December 17, 2009
10. MANAGEMENT COMMENTS
10.1.
a) general
financial condition and
assets |
The management believes that Company is one of
the leading players in the real estate development market, operating nationally
with a focus on high-quality residential undertakings targeting all income
brackets.
The Company’s revenue is largely derived from
the development and sale of real estate projects. The Company recognizes the
revenue from these real estate projects during the construction period, based on
a financial calculation related to the value of the project on completion, and
not when the sales contracts are signed. On a smaller scale, the Company also
generates revenue from the provision of real estate services, such as
construction, technical and real estate management, to third parties. The
Company structures some of its projects through its subsidiaries or jointly
controlled affiliates, set up as specific purpose enterprises
(SPE).
The Company’s current working capital is
sufficient for its present requirements and its cash position, including loans
to third parties, and to meet the financing of all its activities and cover its
capital requirement, for at least the next 12 months.
The Management understands that the Company
has sufficient financial resources and shareholders’ equity to implement its
business plan and comply with its short-to-medium-term
obligations.
Gafisa ended 2014 with a positive outlook on
the operational and financial results during the period. Launches ended the year
at R$241.5 million in 4Q14 and reached R$1.6 billion in 2014. Net sales totaled
R$303.9 million in the fourth quarter and R$1.2 billion in 2014. In 2014,
reduced operational complexity, coupled with Gafisa segment’s strategic
consolidation and the improvement of the volume of Tenda segment launches,
enabled a gradual increase of the Company's margins. The adjusted gross margin
reached 33.2% in 2014, compared with 31.2% in 2013.
Cash generation in 2014 should also be
mentioned. The Company recorded cash generation of R$298.6 million in 2014 in
both the Gafisa and Tenda segment operations, reaching free cash flow of R$81.0
million in the year.
With the completion of the sale of an interest
held at Alphaville Urbanismo S.A. in December 2013, the Company worked
throughout 2014 with a balanced capital structure, and ending the year with a
net debt/net equity ratio of 47%.
The proceeds from the completion of the
Alphaville transaction were used to repay approximately R$1.6 billion in debt
throughout 2014. In addition to the reduction in debt, funds were allocated to
the remuneration of the Company's shareholders through the payment of
approximately R$130 million as interest on capital in February and R$32 million
in supplementary dividends paid in December 2014.
In addition, since the beginning of 2013, and
within the policy of maximizing shareholder value, the Company paid
approximately R$208.7 million to acquire about 73.2 million shares through
several repurchase programs open throughout the period. 57.5 million of these
shares have already been canceled, representing about 15.2% of the total number
of shares issued by the Company. In early February 2015, a new repurchase
program limited to 27 million shares was reopened. It is worth mentioning that
the Company reaffirms its commitment to capital discipline, conditioning the
execution of such program to a relation Net Debt/Equity not higher than
60%.
On December 31, 2014, the Company’s cash
position was R$1,157,254,000. On the same date, net debt totaled R$1,440,300,000
and the net debt to equity ratio was 47.1%.
6
On December 31, 2013, the Company’s cash position was R$2,024,163,000. On the same date, net debt totaled R$1,159,046,000 and the net debt to equity ratio was 36.1%.
On December 31, 2012, the Company’s cash position was R$1,567,755,000. On the same date, net debt totaled R$2,396,389,000 and the net debt to equity ratio was 89.2%.
In 2014, the Company's adjusted EBITDA margin reached 11.6%, 17.4% in 2013 and 13.5% in 2012. It is worth noting that in spite of better management and control of the operating cycle, 2014 was marked by a reduction in net income due to the lower level of sales and the deteriorating economic conditions, which also reflects the reduced results of Alphaville due to the sale of 70% of its equity. Also, this sale of Alphaville equity caused the positive impact in the result of 2013.
On a consolidated basis, net revenues for 2014, recognized by the "PoC" method, decreased 13.3% year-over-year, totaling R$2.15 billion, impacted especially by the resumption of the volume of Tenda launches in 2013. During the year, the Gafisa segment accounted for 73% of net revenues and the Tenda segment for the remaining 27%. The gross margin reached 25.2% in 2014, compared with 24.9% in 2013 and 18.8% in 2012, due to the lower impact of legacy projects and the higher volume of revenue from new projects, especially in the case of Tenda’s increase in the volume of launches in the New Model, allowing a more representative contribution to the consolidated results, as verified in 2014.
The liquidity ratio in 2014 was 2.07, compared to 2.12 in 2013 and 2.43 in 2012.
As announced in early 2014, the Company has been conducting studies to assess the spin-off process of its business units – Gafisa and Tenda – so that they can follow up their operations independently. During 2014 a number of actions were implemented to achieve this goal, including: the division of several departments such as Service Center, Human Resources, Legal, among others; the change of Tenda’s issuer registration category with the Brazilian Securities and Exchange Commission (CVM) to Category A; acting with banks and insurance companies to open an independent credit limit for Tenda; and mapping contracts and evaluating the potential impact of the spin-off.
As stated in the announcement of the initial studies, we expect that the potential spin-off, if approved, will be implemented in 2015. The Company will keep its shareholders and the market informed about the progress and developments of this potential spin-off.
Over the last year, Gafisa and Tenda managed to strengthen and improve their operational and financial cycles to allow greater stability and preparation, given the challenges of 2015. The Gafisa segment continues with its consistent and balanced operation, improving the level of capital employed, while the Tenda segment is ready to increase its operating level, based on the good results of its first projects in the New Model. The Company continues to work towards profitability goals and shareholder value generation, guided by capital discipline, seeking continuous result improvements over the quarters of the year to come.
b) capital structure and possibility of share or quota redemption |
i. Capital Structure
The table below shows the total amount used by the Company to fund its operations (total capitalization) and the segregation of such amounts between capital from third parties and equity (both in real terms and as a percentage) for each fiscal year, as follows:
|
Fiscal Year ended December 31, |
|
2014 |
2013 |
2012 |
|
(in thousands of reais) |
Total capital from third parties |
4,147,451 |
4,968,547 |
6,026,740 |
Total equity |
3,058,401 |
3,214,483 |
2,685,829 |
Total capitalization |
7,205,852 |
8,183,030 |
8,712,569 |
|
|
|
|
Capital from third parties and total capitalization ratio |
57.6% |
60.7% |
69.2% |
Equity and total capitalization ratio |
42.4% |
39.3% |
30.8% |
|
|
7
On December 31, 2014, the Company’s cash
position was R$1,157,254,000. On the same date, net debt totaled R$1,440,300,000
and the net debt to equity ratio was 46.7%.
On December 31, 2013, the Company’s cash
position was R$2,024,163,000. On the same date, net debt totaled
R$1,159,046,000 and the net debt to equity ratio was 36.1%.
On December 31, 2012, the Company’s cash
position was R$1,567,754,000. On the same date, net debt totaled R$2,396,389,000
and the net debt to equity ratio was 89.2%.
ii.
Event of
redemption
The directors inform that there is no
provision in the Company's Bylaws covering the redemption of the Company's
shares.
iii.
Redemption value
calculation
Not applicable.
c) capacity for
payment in relation to the financial commitments assumed
|
On December 31, 2014, the Company’s net debt
was R$1,440,330,000 and the cash position and cash equivalents amounted to
R$1,157,254,000, compared to a total debt of R$2,597,554,000, with a net debt to
shareholder equity ratio of 46.7%.
Additionally, the Company had a total of
R$2,889,351,000 of outstanding real estate receivables and R$250,692,000 of
unsold finished units, compared to R$570,506,000 of obligations related to construction and R$628,752,000 of
costs to be incurred. When considering the sum of the Total Receivables and
Inventory of Unsold finished units, this exceeds 2.62 times the sum of Net Debt,
Obligations related to construction and Costs to be
Incurred.
Furthermore, of the Company’s R$2,597,554,000
of total debt, R$1,128,514,000 corresponds to Brazil’s Housing Finance System
contracts, which use funds to finance the construction of real estate projects,
and counts on fiduciary assignment or pledge of the real estate receivables of
each project, which mostly mature upon the project’s delivery. Therefore, when
finalizing the projects, the resources from the settlement of the outstanding
balance by clients are obligatorily used to amortize the balance of the
Company’s contracts.
Considering the Company's indebtedness
profile, its most liquid assets against its obligations, reflected or not
reflected in the Balance Sheet, the Directors believe there is sufficient
liquidity to meet the current contractual obligations on this
date.
If needed, the Company has capacity to take
out additional loans to fund investments and operations.
d) sources of
financing for working capital and investments in non-current assets
used |
As and when allowed, the Company takes out
debt for all projects it develops with Brazil’s Housing Finance System
(SFH/SFI), which offers lower interest rates than traditional working capital
facilities, with actual guarantee and amortization connected with the settlement
by clients through the transfer of clients’ receivables to banks. Using this
credit facility, the Company intends to cover the cash exposure for each
project, which is not covered by monthly payments received.
8
The Company used credit assignment and securitization instruments when it perceived a market demand for real estate receivables, and privileged definitive assignment structures with no right to withdraw. The transactions are subject to resolutive conditions, the main of which being the complete formalization of the guarantee to the assignee by the assignor, and the current amount of these transactions is recorded in the Company’s liabilities up to the resolution of the guarantee.
Additionally, the Company used the proceeds from the issue of bank bills of credit (CCB), debentures and Promissory Notes in the capital market to complete its funding strategy.
Still, the Company disposed of non-strategic assets to generate cash, especially items in the land bank in regions the Company understands are no longer strategic after its repositioning.
e) sources of financing for working capital needs and investments in non-current assets intended to be used to cover liquidity shortfalls |
The Company currently has a liquidity level and cash generation prospects that allows for it to not use additional funding for its operations. But this does not eliminate the possibility to structure or take out new working capital facilities according to the instruments available and market conditions at the time of contracting, as indicated in items 10.1.c and 10.1.d.
f) levels of indebtedness and debt characteristics |
i) significant loan and financing agreements
The Company's directors show in the table below the Company’s total amount of debt of any consolidated nature, which is equal to the sum of total Current Liabilities and total Non-current Liabilities on December 31, 2014, 2013 and 2012:
|
Fiscal Year ended December 31, |
|
2014 |
2013 |
2012 |
|
(in thousand of reais) |
Total current liabilities |
2,270,869 |
2,683,023 |
2,641,284 |
Total non-current liabilities |
1,876,581 |
2,285,524 |
3,385,456 |
Total amount of debt of any nature |
4,147,451 |
4,968,547 |
6,026,740 |
Below, the Company’s directors show some key features of consolidated financings and loans of the Company, grouped by type, in December 31, 2014, 2013 and 2012:
|
|
|
Fiscal Year ended December 31, |
|
Average cost |
Maturity |
2014 |
2013 |
2012 |
|
(in thousand of reais) |
Project Financing (SFH/SFI) |
125% CDI 8,3% to 11,0% + TR |
July 2014 to January 2018 |
1,128,514 |
1,088,258 |
704,758 |
FGTS Debentures |
9,2% to 10,2% + TR |
October 2016 to Dezembro 2017 |
891,650 |
961,416 |
1,163,204 |
Debentures |
1,3% to 1,9% + CDI 7,96% + IPCA |
June 2014 to October 2016 |
297,449 |
459,802 |
572,699 |
Working capital |
0,6% to 2,2% + CDI 117% a 123% CDI |
June 2014 to July 2017 |
268,911 |
550,052 |
1,199,776 |
Obligations with Investors |
- |
February 2014 to Junr 2017 |
11,030 |
123,680 |
323,706 |
Total debt |
|
|
2,597,554 |
3,183,208 |
3,964,143 |
9
Project Financing (SFH and SFI)
Project financing is represented by loans from national commercial banks to raise the necessary funds to develop the real estate projects of the Company and its subsidiaries and affiliates. These contracts have an actual guarantee represented by the land’s mortgage and by the fiduciary assignment or pledge of receivables, and the funds are released upon proof of physical and financial development of the construction works; amortization begins after the construction works purpose of the contract are completed. During the amortization of the contract, the proceeds from the settlement of the outstanding balance by clients are used to amortize the debt.
FGTS Debentures
These refer to the Company’s 7th Issue and subsidiary Construtora Tenda S.A.’s 1st Issue. These issues use FGTS resources, and the proceeds are used to fund the construction works of the projects given as guarantee. For further information on these issues, please refer to item 18.5 of the Reference Form.
Debentures
As at December 31, 2014, these refer to the 1st and 2nd Series of the 8th Issue and the 9th Issue, and the proceeds are allocated, respectively, to the Company’s working capital and to the development of selected real estate projects. For further information on these issues, please refer to item 18.5 of the Reference Form.
Working Capital
It consists of Bank Bills of Credit (CCB) and other banking instruments that represent debt, and the proceeds are allocated to the Company’s working capital. These instruments may have actual guarantees or sureties, and feature covenants that may result in the early maturity of the obligations if not complied with. As at December 31, 2014, the Company was complying with all its contractual obligations.
Obligations with Investor
These are structured transactions that involved the restructuring of Company subsidiaries to capture the distribution of results from the development of selected real estate projects the investor holds an interest in. These investments feature clauses of return on capital after a certain period and priority in the distribution of results, reason why they are recorded under “Obligations with Investors” in the Company’s financial statements. For further information, please refer to item 6.5 of this Reference Form.
ii) other long-term arrangements with financial institutions
There are no other long-term arrangements with financial institutions but those detailed in this item.
iii) degree of Company debt subordination
For the fiscal years ended December 31, 2014, 2013 and 2012 the Company's debts can be segregated according to the nature of their guarantees, as follows:
|
Fiscal Year ended December 31, |
|
2014 |
2013 |
2012 |
|
(in thousand of reais) |
Total debt with Actual Guarantee |
1,391,412 |
1,487,344 |
1,570,864 |
Total debt with Floating Guarantee |
891,650 |
961,416 |
1,163,204 |
Total Unsecured debt |
314,492 |
734,449 |
1,230,075 |
Total debt |
2,597,554 |
3,183,208 |
3,964,143 |
10
There is no degree of contractual
subordination among the unsecured debts. The Company’s debts with actual and
floating guarantee have the preferences and prerogatives provided for by the
law. Therefore, in the event of collective insolvency proceedings: (i) the debts
with actual guarantee have payment priority over the Company's other debts, up
to the value of the asset recorded, and (ii) the debts with floating guarantee
have priority over unsecured debts.
iv)
restrictions imposed to the
issuer, especially with regard to indebtedness limits, taking of new loans,
distribution of dividends, disposal of assets, issuance of new securities, and
sale of controlling interest
The Company is party to agreements that set
minimum and maximum limits on specific topics, in addition to restricting the
Company regarding the taking of some actions. Noncompliance with the agreed
ratios or restrictions may result in the early maturity of the agreements.
The financial instruments’ major restrictions
in the fiscal years ended December 31, 2014, 2013 and 2012 are as
follows:
· request of any judicial or extra-judicial
recovery plan to any creditor or class of creditors, regardless of a judicial
approval having been requested or obtained for said plan; or file a court
request for judicial recovery;
· change in the direct or indirect control of
the Issuer, under article 116 of Law 6,404 of December 15, 1976, as amended
(“Brazilian Corporate Law”), that result in a downgrade in the Company’s risk
rating to a lower level than that at the time of the issue or, in some cases, to
a rating lower than A- or equivalent in national scale by the leading rating
agencies;
· payment by the Company of dividends, interest
on equity, or any other profit sharing provided for in the Company’s bylaws,
whenever it is in arrears regarding the issues in effect at the time the event
is declared, except for the payment of the minimum compulsory dividend provided
for in article 202 of the Brazilian Corporate Law;
· declaration of early maturity of any
financial obligation and debts of the Company and/or its Relevant Subsidiaries,
in the domestic or international market;
· amendment to or change in the Company’s
business purpose so that the Company no longer operates as a real estate
developer and construction Company;
· change in the corporate nature of the Company
to limited liability, under articles 220 through 222 of the Brazilian Corporate
Law;
· spin-off, or merger of the Company into
another Company, unless such transaction is approved by the holders of debt
securities or holders are granted the right to withdraw;
· reduction in the Company’s capital stock that
results in a capital stock lower than ninety-five percent (95%) of the existing
capital stock, except (i) in the case the capital reduction is carried out to
absorb losses under article 173 of the Brazilian Corporate Law, or (ii) it is
previously approved by the holders of debt securities;
· disposal, expropriation, seizure, or any
other form of disposal of fixed assets by the Company in equivalent amount, as
determined in indentures or contracts, and that may affect the Company’s
financial capacity.
The restrictions described above may not
fully apply to all agreements in effect on this date, and different limits may
be determined to each agreement.
The Company has also committed to keeping the
following financial indicators within the limits set. The formulas and maximum
and minimum limits are presented below:
11
For the Company’s issues of debentures, the financial indicators are as follows:
|
2013 |
2012 |
2011 |
7th issuance |
|
(restated) |
(restated) |
Total accounts receivable plus inventories must be less than zero or higher than 2.0 times net debt minus project debt(3). |
-6.21 times |
46.13 times |
8.53 times |
Total debt, minus project debt(3), minus cash(1), should not exceed 75% of Shareholders' equity plus minority shareholders. |
-31.6% |
7.6% |
45.6% |
Total receivables plus revenues to be recognized plus inventory of finish units must be higher than 1.5 times the net debt +obligations related to construction + costs to be incurred. |
2.79 times |
1.85 times |
1.56 times |
|
|
|
|
8th issuance – Gafisa |
|
|
|
Total accounts receivable plus inventory of finish units must be less than zero or higher than 2.0 times net debt minus project debt. |
-4.31 times |
36.51 times |
6.55 times |
Total debt, minus project debt, minus cash(1), should not exceed 75% of Shareholders' equity plus minority shareholders. |
-31.6% |
7.6% |
45.6% |
|
|
|
|
1st issuance – Tenda |
|
|
|
Total accounts receivable plus inventories must be equal or higher than 2.0 times net debt minus debt with actual guarantee (3) or less than zero, being TR(4) plus TE(5) always higher than zero. |
-2.49 times |
-3.19 times |
-6.41 times |
Net debt minus debt with actual guarantee(3) should not exceed 50% of Shareholders' equity. |
-56.97% |
-41.97% |
-37.97% |
Total receivables plus revenues to be recognized plus inventory of finish units must be higher than 1.5 times the net debt plus obligations related to construction plus costs to be incurred. |
56.85 times |
6.18 times |
2.39 times |
(1) Cash refers to cash and cash equivalents and marketable securities.
(2) Total receivables, whenever mentioned, refers to the amount reflected in the Balance Sheet plus the portion not shown on the Balance Sheet.
(3) Project debt and debt with actual guarantee refers to the Housing Finance System (SFH) debt, defined as the sum of all loans contracts disbursed whose funds are from Housing Finance System (SFH), and also the debt related to the seventh issuance.
(4) Total accounts receivable.
(5) Total inventory.
Issues of Bank Bills of Credit (CCB), Promissory Notes, and other debt instruments have the following indicators:
Bank Bills of Credit (CCB), Promissory Notes and others |
2013 |
2012 |
2011 |
Total accounts receivable plus inventory of finish units must be less than zero or higher than 2.0 times net debt minus project debt. |
-4.31 times |
36.51 times |
6.55 times |
Total debt, minus project debt, minus cash(1), should not exceed 75% of Shareholders' equity plus minority shareholders. |
-31.6% |
7.6% |
45.6% |
(1) Cash refers to cash and cash equivalents and marketable securities. |
12
g) use limits of
contracted financing |
In the fiscal years ended December 31, 2012,
2013, and 2014, the proceeds of construction financing contracted from national
institutions considered by the Company as prime institutions in the National
Financial System are exclusively allocated to the construction works of the
relative projects. The funds are released to the Company according
to the physical/financial development of the construction
works.
As at December 31, 2014, the Company had
contracted a total of R$4,145 million; of that amount, R$3,479.5 million or
83.9% had already been released. Of the total amount, the remaining outstanding
balance is R$2,586,500.
h) significant
alterations in each item of the financial
statements |
CONSOLIDATED FINANCIAL STATEMENT FOR THE
FISCAL YEAR
|
2014 |
2013 |
2012 |
|
|
|
|
|
|
|
|
Gross operating
revenue |
|
|
|
Real
estate development and sale and exchange |
2,256,189 |
2,618,737 |
2,784,983 |
Provision for
cancellations |
69,479 |
81,122 |
255,495 |
Taxes
on Property Sales and Services |
(174,670) |
(218,648) |
(235,392) |
|
|
|
|
Net operating
revenue |
2,150,998 |
2,481,211 |
2,805,086 |
|
|
|
|
Operating costs
|
|
|
|
Real
estate development and sale |
(1,609,246) |
1,863,766 |
(2,276,804) |
|
|
|
|
Gross operating
profit |
541,752 |
617,445 |
528,282 |
|
|
|
|
Operating
revenue (expense) |
|
|
|
Selling
expenses |
(148,041) |
215,649 |
(231,746) |
General and
administrative expenses |
(211,906) |
234,023 |
(252,208) |
Equity pick-up on investments |
19,263 |
7,370 |
55,603 |
Income from investments assessed at fair
value |
- |
375,853 |
- |
Depreciation and
amortization |
(79,251) |
(63,014) |
(80,238) |
Other income /
(expenses), net |
(141,349) |
(86,111) |
(101,015) |
Impairment Losses on Non-Financial
Assets |
|
- |
- |
|
|
|
|
Profit/(loss) before financial income and expenses
and income taxes and trade unions contribution |
(19,532) |
401,871 |
(81,322) |
|
|
|
|
|
|
|
|
Financial
expenses |
(165,712) |
(243,586) |
(236,082) |
Financial
revenue |
156,794 |
81,083 |
55,819 |
|
|
|
|
Profit (loss) before income tax and trade unions
contribution |
(28,450) |
(239,368) |
(261,585) |
|
|
|
|
|
Expense with income tax and social contribution
(current) |
(33,330) |
(23,690) |
(17,403) |
Income tax and social contribution
(deferred) |
(18,055) |
20,878 |
(2,819) |
|
|
|
|
Total
Income tax and social contribution |
(15,275) |
(2,812) |
(20,222) |
|
|
|
|
Net
profit for Continued Operations |
(43,725) |
(236,557) |
(281,807) |
|
|
|
|
(-)
Net profit for Discontinued Operations |
- |
631,122 |
204,128 |
Net
profit for the year |
(43,725) |
(867,679) |
(77,679) |
(-) Profit / (loss)
attributable: |
|
|
|
To minority
shareholders |
(1,176) |
235 |
49,364 |
To parent Company |
(42,549) |
867,443 |
(127,043) |
|
|
|
|
13
Operating Results
related to the Fiscal Years ended December 31, 2014 compared with
2013
Gross Revenue from
Sales and/or Services
Gross revenue from the development and sale of
real estate properties and swap agreements totaled R$2.26 billion in fiscal year
2014, down R$363 million or 14% year-over-year (R$2.62 billion in 2013), due to
the reduced number of launches in the last 2 years.
Deductions from Gross
Revenue – Taxes on Property Sales and Services
Gross revenue deductions referring to taxes on
sales of real estate properties and services were down 20% from R$219 in the
year ended December 31, 2013 to R$175 million in 2014, in line with the decrease
in the Company’s revenue.
Net Revenue from Sales
and/or Services
Consolidated net revenue for 2014, as
recognized by the “PoC” method, decreased 13.3% in the comparison adding R$2.15
billion, impacted by the lack of Gafisa segment launches in the last 2 years.
During the year, the Gafisa brand accounted for 73% of net revenues and Tenda
for the remaining 27%.
Cost of Development
and Sale of Property
Cost of development and sale of property and
physical swap agreements totaled R$1.6 billion in 2014, down 14% over the R$1.9
billion recorded in 2013, impacted by the lower volume of projects under
development and greater efficiency in the construction process, due to the
reduction of legacy projects and the advent of new technologies and work
management.
Gross
Profit
Gross revenue reported in 2014 was R$541.8
million, compared to R$617.4 million in 2013. The variation is mainly due to the
lower volume of projects launched in the last two years, especially in the
Gafisa segment, which will eventually impact the level of revenue and
consequently the consolidated gross profit. Gross margin was at 25.2% compared
to 24.9% in the previous year.
Selling
expenses
Selling expenses totaled R$148.0 million in
2014, a decrease of 31% year-over-year (R$215.6 in 2013). Selling expenses
represented 6.9% of the Company’s net operating revenues for 2014, up from 8.7%
in 2013. This variation is due to the consolidation of the physical store
operation in the Tenda segment and being more assertive in marketing expenses
and sales commissions in the Gafisa segment.
General and
Administrative Expenses, and Stock Option Plan Expenses
General and administrative expenses totaled
R$211.9 million in 2014, as compared to R$234.0 million in 2013, down 9.4% or
R$22.1 million year-over-year, due to the Company's increased operating efficiency,
allowing a level of costs and expenses in line with its business
cycle.
(1) salaries and payroll charges were down by
R$13.1 million or 14.1% year-over-year;
(2) provision and equity in net income
decreased R$24.6 million, or 41.3% year-over-year, totaling R$35.0 million in
2014.
Depreciation and
Amortization
Depreciation and amortization totaled R$79.3
million in 2014, down R$ 17.2 million or 25.8% compared to the R$63.0 million
recorded in 2013, due to the full incorporation of a subsidiary in the last
quarter of 2014, which generated a non-recurring impact of R$14.5 million
related to the amortization of goodwill.
Other Operating
Expenses
In 2014, our results reflected a negative
impact of R$141.3 million, compared to R$86.1 million in 2013, mainly due to
increase in expenses with litigation, a consequence of the large volume of
deliveries related to legacy projects over the past two years, and the impact of
the partial provisioning of the stock option program of the former subsidiary
Alphaville.
14
Financial
revenue
The financial revenue was up R$75.7 million to
R$156.8 million at the close of the year as a result of higher average interest
rate in the period.
Financial
expenses
Net financial expenses totaled R$165.7 million
in 2014, compared to R$243.6 million in 2013, down 32% due to the reduction in
gross debt in the period.
Provision for Income
Tax and Social Contribution and Deferred Income Tax
Income tax, social security and deferred taxes
totaled R$15.3 million in 2014.
The variation is mainly due to the recognition
of income tax and social contribution credit of approximately R$15 million as a
result of a preparatory study on the Company's business plan, which shows the
total recovery capacity of the tax loss inventory and temporary
differences.
Minority Interests
The increased interest held by non-controlling
shareholders (minority shareholders of subsidiaries the Company invests in),
from R$0.2 million to R$1.2 million in 2014 was due to the results variation of
the Company’s affiliates.
Net Profit
(Loss)
Gafisa Group closed 2014 with net loss of
R$42.5 million, as opposed to net profit of R$867.4 million in 2013, reflecting
the result of the sale
of the former subsidiary, Alphaville, in late 2013, which impacted the this
year’s result.
Operating Results
related to the Fiscal Years ended December 31, 2014 compared with 2013 – by
Operating Segment
|
Company (i) |
Tenda |
Total 2014 |
Net operating
revenue |
1,580,860 |
570,138 |
2,150,998 |
Operating
Cost |
(1,164,998) |
(444,248) |
(1,609,246) |
Gross operating
profit |
415,862 |
125,890 |
541,752 |
|
Company (i) |
Tenda |
Total 2013 (ii) |
Net operating
revenue |
1,663,751 |
817,460 |
2,481,211 |
Operating
Cost |
(1,111,550) |
(752,216) |
(1,863,766) |
Gross operating
profit |
552,201 |
65,244 |
617,445 |
(i)
Includes all
subsidiaries except Construtora Tenda S.A.
(ii)
At the end of 2013, the
Company completed the sale of 70% of its subsidiary Alphaville Urbanismo S.A.
From 2014, Alphaville is no longer a subsidiary of Gafisa, becoming consolidated
through equity in Gafisa. Therefore, the total sum presents only Gafisa and
Tenda.
Company - Gafisa
Segment
Gross Revenue from
Sales and/or Services
Net revenue from sales and/or services was
down 5.0%, from R$1.7 billion in 2013 to R$1.6 billion in 2014, reflecting the
lower number of launches. In 2014, the Gafisa segment accounted for 73% of the
Company’s consolidated net revenue.
Cost of Development
and Sale of Property
Cost of development and sale of property and
physical swap agreements totaled R$1.2 billion in 2014, an increase of 4.8% over
the R$1.1 billion recorded in 2013, reflecting the variation in construction
costs below inflation.
15
Gross
Result
Gross profit was R$415.9 million for 2014, a
decrease of 24.7% over the R$552.2 million recorded in 2013. In 2014, the gross
margin generated by project sales was down to 26.3%, versus 33.2% in 2013. This
reduction is the result of the lower volume of projects in the last two years
and also due to some non-recurring effects in the last quarter of 2014, such as
impairment adjustments of land and reevaluation of the calculation methodology
for guaranteed provisions.
Construtora Tenda
S.A.
Net Sales and/or
Service Revenue
Net sales and/or service revenue totaled
R$570.1 million in 2014, down 30.3% from R$817.46 in the previous year, impacted
by the lower volume of project delivery related to the legacy projects that were
especially concentrated in 2013. In 2014, the Construtora Tenda S.A. accounted
for 38% of the consolidated net revenue.
Cost of Development
and Sale of Property
Cost of development and sale of property and
physical swap agreements totaled R$444.2 million in 2014, down 40.9% over the
R$752.2 million recorded in 2013, an effect of the substantial reduction of the
Company's exposure to old projects, decreasing the cost still to be incurred
related to them.
Gross
Result
Gross income was R$125.9 million for 2014 and
R$65.2 million in 2013. The margin increased from 8.0% in 2013 to 22.1% in 2014.
Construtora Tenda S.A.’s profitability for 2014 was positively affected by the
lower impact from old projects on its result and also the incipient contribution
of the launches in the new model, which have higher margins than in old
projects.
Operating Results
related to the Fiscal Years ended December 31, 2013 compared with
2012
Gross Revenue from
Sales and/or Services
Gross revenue from the development and sale of
real estate properties and swap agreements totaled R$2.88 billion in fiscal year
2013, down R$422 million or 13% year-over-year (R$3.30 billion in 2012), due to
the reduced number of launches in the year and the still incipient percentage of
revenue from launches in the new Tenda model in 2013.
Deductions from Gross
Revenue – Taxes on Property Sales and Services
Gross revenue deductions referring to taxes on
sales of real estate properties and services were down 7.1% from R$235 in the
year ended December 31, 2012 to R$219 million in 2013, in line with the decrease
in the Company’s revenue.
Net Revenue from Sales
and/or Services
Consolidated net revenue for 2013, as
recognized by the “PoC” method, decreased 11.5% in the comparison adding R$2.48
billion, impacted by the lack of Tenda launches in 2012, and by the new Tenda
model launches revenue percentage in 2013, still in early stage. During the
year, the Gafisa brand accounted for 67% of net revenues and Tenda for the
remaining 33%.
Cost of Development
and Sale of Property
Cost of development and sale of property and
physical swap agreements totaled R$1.86 billion in 2013, down 18% over the
R$2.28 billion recorded in 2012, mainly impacted by the lower launch volume and
consistent reduction in the Company’s exposure to old projects, thus reducing
the cost to be incurred referring to these projects.
16
Gross
Profit
Gross revenue reported in 2013 was R$ 617.4
million, compared to R$528.3 million in 2012. The variation refers to, mostly,
the minor participation in projects in non-prioritized location, Gafisa’s
concentration in São Paulo and Rio de Janeiro strategy and also the resumption
of launches within Tenda’s new business model. Gross margin was at 24.9%
compared to 18.8% in the previous year.
Selling
expenses
Selling expenses totaled R$215.65 million in
2013, a decrease of 7% year-over-year (R$231.75 in 2012). Selling expenses
represented 8.7% of the Company’s net operating revenues for 2013, up from 8.3%
in 2012. This variation is due to the lower number of launches year-over-year,
and the effort the Company has made to adapt its cost and expense structure to
the current stage of its operations.
General and
Administrative Expenses, and Stock Option Plan Expenses
General and administrative expenses totaled
R$234 million in 2013, as compared to R$252.2 million in 2012, down 7.2% or
R$18.19 million year-over-year. The completion of the turnaround process in
2013, with a reduction in the number of projects in non-strategic markets and
Tenda’s old projects legacy allowed for the Company to achieve a nominal
reduction in its costs in 2013 and reach greater stability in its cost and
expense structure.
(1) salaries and payroll charges were down by
R$11.6 million or 10.9% year-over-year;
(2) expenses relatedto services provided were
down by R$11.81 million or 40.6% year-over-year.
Depreciation and
Amortization
Depreciation and amortization totaled R$63
million in 2013, down R$ 17.2 million or 21.5% compared to the R$80.2 million
recorded in 2012, due to lower amortization referring to the Company’s sales
stands.
Other Operating
Expenses
In 2013, our results reflected a negative
impact of R$86.11 million, compared to R$101.015 million in 2012, due to the
reversal of provisions for contingencies at the end of the 4th quarter of
2013.
Financial
revenue
The financial revenue was up R$25.26 million
to R$81.08 million at the close of the year as a result of higher average
interest rate in the period.
Financial
expenses
Net financial expenses totaled R$243.59
million in 2013, compared to R$236.08 million in 2012, up 3,2% as a result of
higher average interest rate in the period and effect of mark-to-market
adjustments in derivative transactions.
Provision for Income
Tax and Social Contribution and Deferred Income Tax
Income tax, social security and deferred taxes
totaled R$2.8 million in 2013.
The remaining interest in Alphaville was fair
valued and resulted in deferred income tax loss in the amount of R$127.8
million. Also, considering the result for year 2013 and the new perspective
regarding future profitability and taxable profit for the Company in the
upcoming years, a deferred income tax credit of R$180.6 million was recorded for
the year, offset by the deferred income tax loss.
Minority Interests
The reduced interest held by non-controlling
shareholders (minority shareholders of subsidiaries the Company invests in),
from R$49.36 million to R$0.24 million in 2013, was due to the classification of
Alphaville as asset held for sale and the later completion of the sale
transaction by the end of 2013.
Net Profit
(Loss)
Gafisa Group closed 2013 with net income of
R$867.4 billion, as opposed to net loss of R$127.04 million in 2012, reflecting
Gafisa’s and Tenda’s better operating performance in 2013 and the effect of the
impact of the recent completion of Alphaville’s sale.
17
Operating Results
related to the Fiscal Years ended December 31, 2013 compared with 2012 – by
Operating Segment
|
Company (i) |
Tenda |
Alphaville |
Total 2013(ii) |
Net operating
revenue |
1,663,750 |
817,460 |
959,243 |
2,481,210 |
Operating
Cost |
(1,111,549) |
(752,216) |
(524,200) |
(1,863,766) |
Gross operating
profit |
552,201 |
65,244 |
435,043 |
617,445 |
|
Company (i) |
Tenda |
Alphaville |
Total 2012 |
Net operating
revenue |
2,018,100 |
1,125,670 |
809,512 |
3,953,282 |
Operating
Cost |
(1,572,948) |
(977,472) |
(390,605) |
(2,941,025) |
Gross operating
profit |
445,152 |
148,198 |
418,907 |
1,012,257 |
(i)
Includes all
subsidiaries except Construtora Tenda S.A. and Alphaville Urbanismo
S.A.
(ii)
Gafisa and
Tenda
Company - Gafisa
Segment
Gross Revenue from
Sales and/or Services
Net revenue from sales and/or services was
down 4.2%, from R$1.74 billion in 2012 to R$1.66 billion in 2013, reflecting the
lower number of launches. In 2013, the Gafisa segment accounted for 67% of the
Company’s consolidated net revenue.
Cost of Development
and Sale of Property
Cost of development and sale of property and
physical swap agreements totaled R$1.11 billion in 2013, down 29.3% over the
R$1.57 billion recorded in 2012, mainly due to the lower impact of old projects
located outside of the Company’s strategic markets, which have been
completed.
Gross
Result
Gross profit was R$552 million for 2013, an
increase of 24% over the R$445 million recorded in 2012. In 2013, the gross
margin generated by project sales was up to 33%, versus 22% in 2012. Even though
revenues were lower, development and selling costs went down substantially due
to the completion of Gafisa’s old projects, resulting in improved performance
and profitability in the year.
Construtora Tenda
S.A.
Net Sales and/or
Service Revenue
Net sales and/or service revenue totaled
R$817.46 million, down 23.5% from R$1.07 in the previous year, due to the
absence of launches in 2012, and the still incipient stage of revenue from
launches in 2013. In 2013, the Construtora Tenda S.A. accounted for 33% of the
consolidated net revenue.
Cost of Development
and Sale of Property
Cost of development and sale of property and
physical swap agreements totaled R$752.2 million in 2013, down 23% over the
R$977.5 million recorded in 2012, mainly impacted by the lower number of
launches in 2012-2013 and by reduced costs relative to Tenda’s old
projects.
Gross
Result
Gross income was R$65.2 million for 2013 and
R$148.2 million in 2012. The margin fell from 13.2% in 2012 to 8% in 2013.
Tenda’s profitability for 2013 was positively affected by the lower impact from
old projects on its result and also the incipient contribution of the launches
made, which have higher margins than in old projects.
18
Alphaville Urbanismo
S.A.
Net Sales and/or
Service Revenue
Net revenue from sales and/or services was up
22.2%, from R$785.18 million in 2012 to R$959.24 million in 2013, reflecting the
higher number of launches in 2012 and 2013.
Cost of Development
and Sale of Property
Cost of development and sale of property and
physical swap agreements totaled R$524.2 million in 2013, up 39% over the
R$377.1 million recorded in 2012, due to the higher number of launches in 2012
and 2013.
Gross
Result
Gross profit in 2013 totaled R$435.0 million,
representing a 6.6% increase compared to the R$408.1 million profit reported in
2012. In 2013, gross margin generated by the Company’s property sales decreased
to 45.3%, compared to 52.1% in 2012, effect of higher volume of phased launches presenting
lower sales speed.
CONSOLIDATED BALANCE SHEET
|
2014 |
2013 |
2012 |
|
|
|
|
Assets |
|
|
|
Current |
|
|
|
Cash
and cash equivalents |
109,895 |
215,194 |
587,956 |
Securities |
1,047,359 |
1,808,969 |
979,799 |
Accounts receivable from development and services
provided |
1,440,498 |
1,909,877 |
2,493,170 |
Properties for
sale |
1,695,817 |
1,442,019 |
1,892,390 |
Receivable amounts from related party transactions
|
142,732 |
82,547 |
164,884 |
Non
current assets held for sale |
110,563 |
114,847 |
139,359 |
Derivatives |
- |
183 |
9,224 |
Prepaid expenses
and others |
15,442 |
35,188 |
61,685 |
Other
receivables |
128,905 |
71,083 |
77,573 |
Total current
assets |
4,691,211 |
5,679,907 |
6,406,040 |
|
|
|
|
Non-current
|
|
|
|
Accounts receivable from development and services
provided |
384,821 |
313,791 |
820,774 |
Property for
sale |
816,525 |
652,395 |
274,034 |
Receivable amounts from related party
transactions |
107,067 |
136,508 |
115,089 |
Derivatives |
- |
- |
10,443 |
Other
accounts receivable and other items |
112,241 |
137,628 |
163,145 |
Deferred income tax and social
contribution |
- |
- |
- |
|
1,420,654 |
1,240,322 |
1,383,485 |
|
|
|
|
|
958,393 |
1,120,076 |
646,812 |
Investments
|
46,691 |
36,385 |
46,145 |
Property, plant
and equipment |
76,903 |
106,340 |
230,087 |
Intangible
assets |
1,093,967 |
1,262,801 |
923,044 |
|
109,895 |
215,194 |
587,956 |
|
|
|
|
Total
non-current assets |
2,514,641 |
2,503,123 |
2,306,529 |
|
|
|
|
Total
assets |
7,205,852 |
8,183,030 |
8,712,569 |
19
Liabilities |
2014 |
2013 |
2012 |
Current |
|
|
|
Loans and
financing |
550,058 |
590,386 |
613,973 |
Loans
and financing – reclassified due to default |
- |
- |
- |
Debentures
|
504,387 |
563,832 |
346,360 |
Debentures – reclassified due to
default |
- |
- |
- |
Obligations for property purchases and advances to
clients |
490,605 |
408,374 |
503,889 |
Material and
service providers |
95,131 |
79,342 |
154,763 |
Income tax and social
contribution |
- |
90,309 |
13,561 |
Taxes and
contributions |
114,424 |
126,316 |
209,017 |
Wages, social charges and
interest |
65,039 |
96,187 |
104,586 |
Minimum
mandatory dividends |
- |
150,067 |
6,279 |
Provision for
judicial rulings |
103,034 |
72,119 |
58,570 |
Payables to
credit assignment |
24,135 |
82,787 |
134,339 |
Obligations with
investors |
6,317 |
112,886 |
161,373 |
Payables to related party transactions
|
156,503 |
133,678 |
138,228 |
Derivatives
|
3,340 |
- |
- |
Other
obligations |
157,895 |
176,740 |
196,346 |
Total current
liabilities |
2,270,869 |
2,683,023 |
2,641,284 |
|
|
|
|
Non-current
|
|
|
|
Loans and
financing |
847,367 |
1,047,924 |
1,290,561 |
Debentures
|
684,712 |
857,386 |
1,389,543 |
Obligations for property purchases and advances to
clients |
101,137 |
79,975 |
70,194 |
Deferred income tax and social
contribution |
34,740 |
56,652 |
85,821 |
Provision for
judicial rulings |
136,540 |
125,809 |
149,790 |
Payables to
credit assignment |
31,994 |
37,110 |
155,960 |
Obligations with
investors |
4,713 |
10,794 |
162,333 |
Derivatives |
4,833 |
- |
- |
Other
obligations |
30,544 |
69,874 |
81,254 |
Total
non-current liabilities |
1,876,580 |
2,285,524 |
3,385,456 |
|
|
|
|
Shareholders’
equity |
|
|
|
Capital
stock |
2,740,662 |
2,740,662 |
2,735,794 |
Treasury shares
|
-79,060 |
-73,070 |
-1,731 |
Capital reserve and stock option
grant |
59,234 |
54,383 |
36,964 |
Profit
reserve |
334,509 |
468,749 |
-235,582 |
|
3,055,345 |
3,190,724 |
2,535,445 |
|
|
|
|
Attributable to
minority shareholders |
3,058 |
23,759 |
150,384 |
Total
shareholders’ equity |
3,058,403 |
3,214,483 |
2,685,829 |
|
|
|
|
|
|
|
|
Total
liabilities and shareholders’ equity |
7,205,852 |
8,183,030 |
8,712,569 |
Balance Sheet relative
to the Fiscal Year Ended December 31, 2014 compared to
2013
Current
assets
Cash and Equivalents –
Cash and Banks, Marketable Securities
The Company’s cash and cash equivalents on
December 31, 2014 totaled R$1.2 billion, compared to R$2.0 billion on December
31, 2013, a decrease of R$866.9 million, or 42.8%. This decrease is due to the
partial use of resources from the sale of its stake in Alphaville in late 2013,
reduction of the Company's consolidated debt, value distribution to shareholders
through dividends, interest on own capital and stock repurchase programs during
2014.
Accounts receivable
from development and services provided – Current and
Non-Current
The following tables show the client accounts
receivable from development and the sale of Company property, as well as the
receivables to be appropriated, and the maturity of the Company’s
portfolio:
(in R$
million) |
On December 31, |
Real estate
development and sale clients |
2014 |
2013 |
2012 |
|
|
|
|
Current |
1,440 |
1,910 |
2,189 |
Non-current |
385 |
314 |
443 |
|
1,825 |
2,224 |
2,632 |
20
(in R$
million) |
On December 31, |
Receivables for
appropriation |
2014 |
2013 |
2012 |
|
|
|
|
|
1,064 |
1,863 |
2,696 |
|
|
|
|
Total
receivables |
2,889 |
4,087 |
5,328 |
(in R$
million) |
|
|
On December
31, |
Receivables
maturity as of December 31, 2014 |
|
Total |
2015 |
2016 |
2017 |
As of
2018 |
Total |
|
2,889 |
2,280 |
297 |
178 |
134 |
|
|
|
|
|
|
|
On December 31, 2014, the balance of clients
by real estate development totaled R$1.8 billion, compared to R$2.2 billion on
December 31, 2013. This decrease is mainly the result of the reduction in the
volume of launches over the last 2 years, and consequently the volume of sales
in the period.
All the balances of accounts receivable
presented herein are adjusted to present value, as required by Technical
Pronouncement CPC 12 “Adjustment to present value.”
Property for Sale –
Current and Non-Current
The balance of property for sale was comprised
as follows in the periods indicated:
|
|
|
|
12/31/2014 |
12/31/2013 |
12/31/2012 |
|
|
|
|
Land
bank |
1,311,847 |
1,077,762 |
899,177 |
(-) Provision for
land bank realization |
(12,309) |
(11,276) |
(7,663) |
(-) Adjustment to
present value |
(5,503) |
(883) |
(1,976) |
Property under
construction |
905,190 |
630,407 |
751,738 |
Cost of property
in recognition of provision for cancelled contracts (Note 5
(i)) |
52,309 |
107,172 |
180,399 |
Completed
units |
260,808 |
291,232 |
344,749 |
|
|
|
|
|
2,512,342 |
2,094,414 |
2,166,424 |
|
|
|
|
Current |
1,695,817 |
1,442,019 |
2,049,084 |
Non-current |
816,525 |
652,395 |
798,206 |
On December 31, 2014, the balance of
properties for sale, both current and non-current, totaled R$2.5 billion,
compared to R$2.1 billion on December 31, 2013. At the close of 2014, 10.4% of
total inventory was represented by finished units, while units under
construction and units up to 30% complete represented 36.0% of total units. The
Company remains focusing on inventory reduction, chiefly at Gafisa, which
accounts for 73% of final inventory.
Other accounts
receivable – Current and Non-Current
The balance of other accounts receivable held
by the Company on December 31, 2014 stood at R$241.1 million, 15.5% higher than
in the same period in 2013 as a result of higher volume of recoverable taxes and
escrow deposits.
21
Intangible
assets
On December 31, 2014, the balance of
intangible assets reached R$76.9 million, compared to R$106.3 million on
December 31, 2013, mainly impacted by the deduction of goodwill related to the
acquisition of the final installment of Cipesa Empreendimentos
Imobiliários.
Deferred income tax
and social contribution
On December 31, 2014, the balance of income
tax and social contribution was R$34.7 million, down 38.7% over the R$56.7
million on December 31, 2013. Liabilities are presented net of
assets.
Liabilities
Loans, Financing and
Debentures - Current and Non-Current
The Company’s total level of indebtedness on
December 31, 2014, was R$2.6 billion, a decrease of 18.4% over the balance of
R$3.2 billion on December 31, 2013, reflecting the use of resources from the
sale of the Company’s stake in Alphaville, seeking a more appropriate capital
structure, and reduced consolidated gross debt.
The table below shows the development of net
indebtedness and obligations with investors in the Company:
Total Debt
(in R$ ‘000) |
|
Balance
in |
Transaction Type |
Rate |
2014 |
2013 |
2012 |
Bank Credit Note -
CCB |
117,9% do
CDI
2,20% +
CDI
13,20% Pré |
268,911 |
550,052 |
1,118,553 |
Promissory
Notes |
125% + CDI |
- |
- |
80,159 |
Project Finance
(SFH) |
TR + 8,3% to 11,00%
|
1,128,514 |
1,088,258 |
704,758 |
Debt assumption
from incorporation of subsidiary debt and others |
TR + 12% |
- |
- |
1,064 |
|
|
1,397,425 |
1,638,310 |
1,904,534 |
Current |
|
550,058 |
590,386 |
613,973 |
Non-current |
|
847,367 |
1,047,924 |
1,290,561 |
Debentures
|
|
|
|
Consolidated |
|
Program/Issuances |
Principal - R$ |
Annual Compensation |
Due Date |
2014 |
2013 |
2012 |
|
|
|
|
|
|
(restated) |
3rd program/1st
issuance -5th issuance |
250,000 |
120% of
CDI |
May
2018 |
- |
- |
129,569 |
6th
issuance |
100,000 |
CDI +
1.30% |
June
2014 |
- |
151,513 |
137,763 |
7th
issuance |
600,000 |
TR +
10.17% |
December
2017 |
502,033 |
551,855 |
601,200 |
8th issuance/1st
issuance |
288,427 |
CDI +
1.95% |
October
2015 |
147,640 |
294,073 |
291,956 |
8th issuance/2nd
issuance |
11,573 |
IPCA +
7.96% |
October
2016 |
15,185 |
14,216 |
13,411 |
9th
issuance |
130,000 |
TR +
9.21% |
July
2018 |
134,624 |
- |
- |
1st issuance
(Tenda) |
600,000 |
TR +
9.21% |
October2015 |
389,617 |
409,561 |
562,004 |
|
|
|
|
1,189,099 |
1,421,218 |
1,735,903 |
|
|
|
|
|
|
|
Current |
|
|
|
504,387 |
563,832 |
346,360 |
Non-current |
- |
|
684,712 |
1,389,543 |
857,386 |
Obligations for
property purchases and advances to clients – Current and
Non-Current
The Company’s obligations for the purchase of
property and client advances totaled R$591.7 million on December 31, 2014, an
increase of 21.2% over the same period in 2013. This variation is mainly due to
the increase of obligations by physical swap.
The following table shows the development of
obligations for the purchase of properties and client advances, as well as its
distribution between the short and long terms.
22
Balance of obligations
for the acquisition of property and client advances
|
|
|
|
12/31/2014 |
12/31/2013 |
12/31/2012 |
Current |
490,605 |
408,374 |
503,889 |
Non-current |
101,137 |
79,975 |
70,194 |
Total |
591,742 |
488,349 |
574,083 |
Material and service
providers
On December 31, 2014, the balance of payables
due to material and service providers was R$95.1 million, up 19.9% over the
R$79.3 million on December 31, 2013. The increase in this obligation is due to
the higher real estate construction volume of Tenda segment.
Taxes and
contributions - Current
The balance of taxes and social contributions
(current) on December 31, 2014 was R$114.4 million, which corresponds to a
decrease of 9.4% compared with the balance on December 31, 2013 of R$126.3
million. This decrease reflects the reduction in the Company’s
operations.
Income tax and social
contribution – current and non-current
The balance of deferred income tax and social
security totaled R$34.7 million as at December 31, 2014, down 38.7% compared to
R$56.7 million in 2013. Liabilities are net of assets.
Provision for
Contingencies - Current and Non-Current
The Company and its subsidiaries are parties
in legal actions and administrative processes in various courts and with several
government bodies, as a result of normal business operations, involving tax,
labor, and civil matters, among other issues. The Company, based on information
from its legal advisers, analysis of the pending lawsuits and, when concerning
labor cases, based on its prior experience in terms of the amounts claimed, made
a provision considered sufficient to cover the estimated losses as a result of
the claims being made.
The table below shows the improvement of the
Company’s provisions for contingencies:
Consolidated |
Civil |
Tax |
Labor |
Total Consolidated |
Balance on December 31,
2012 |
138,615 |
14,670 |
55,624 |
208,360 |
Supplementary
provision |
48,844 |
(152) |
29,709 |
78,402 |
Payments and
reversal of unutilized provision |
(47,289) |
(590) |
(29,852) |
(77,371) |
Balance on December 31,
2013 |
140,722 |
1,582 |
55,624 |
197,928 |
Supplementary
provision |
65,699 |
600 |
46,765 |
113,064 |
Payments and
reversal of unutilized provision |
(42,340) |
(359) |
(28,719) |
(71,418) |
Balance on
December 31, 2014 |
157,842 |
414 |
81,318 |
239,574 |
|
|
|
|
|
Current |
91,665 |
218 |
11,151 |
103,034 |
Non-Current |
66,177 |
196 |
70,167 |
136,540 |
The provision for contingencies related to
civil processes on December 31, 2014, in the amount of R$157.8 million, also
include the cases in which Company was named as the successor in existing
lawsuits in which the original debtor is a former shareholder of Cimob Companhia
Imobiliária, among other group companies. The plaintiff alleges that Company
should be held responsible for Cimob’s debts.
The Company is appealing all these decisions,
believing that the Company’s inclusion in the lawsuits is legally unreasonable,
thus aiming to release its amounts and ensuring recognition that it cannot be
held responsible for the debt of a company with which it has no ties. The
Company has won similar actions previously, definitively determining that it is
not responsible for the debts of Cimob Companhia Imobiliária The final ruling on
the Company’s appeal, however, cannot be foreseen at this
time.
Other accounts payable
– Current and Non-current
On December 31, 2014, the balance of other
accounts payable was R$188.4 million, down 23.6% over the R$246.6 million on
December 31, 2013. This decrease is due to the lower amount for provisions
and fines for construction work delays and long-term suppliers.
23
Shareholders’ equity
As at December 31, 2014, the Company’s
shareholders’ equity balance was R$3.1 billion, compared to R$3.2 billion a year
before, a slight variation due to the negative result during the period and the
acquisition of treasury shares.
Other
accounts
Other accounts on the Company’s balance sheet
not discussed in this analysis varied in the normal course of business or are of
little importance in terms of the consolidated balance sheet.
Balance Sheet relative
to the Fiscal Year Ended December 31, 2013 compared to
2012
Current
assets
Cash and Equivalents –
Cash and Banks, Marketable Securities
The Company’s cash and cash equivalents on
December 31, 2013 totaled R$2.02 billion, compared to R$1.57 billion on December
31, 2012, an increase of R$456.4 million, or 29.1%. This increase was mainly due
to cash flow in the period and the inflow of funds due to the sale of stake in
Alphaville.
Accounts receivable from development and
services provided – Current and Non-Current
The following tables show the client accounts
receivable from development and the sale of Company property, as well as the
receivables to be appropriated, and the maturity of the Company’s
portfolio:
(in R$
million) |
On December 31, |
Real estate
development and sale clients |
2013 |
2012 |
2011 |
|
|
|
|
Current |
1,910 |
2,189 |
3,962 |
Non-current |
314 |
443 |
864 |
|
2,224 |
2,632 |
4,826 |
(in R$
million) |
On December 31, |
|
Receivables for
appropriation |
2013 |
2012 |
2011 |
|
|
|
|
|
1,863 |
2,696 |
4,686 |
|
|
|
|
Total
receivables |
4,087 |
5,328 |
9,512 |
(in R$
million) |
|
|
On December
31, |
Receivables
maturity as of December 31, 2013 |
|
Total |
2014 |
2015 |
2016 |
As of
2017 |
Total |
|
4,087 |
1,910 |
1,278 |
421 |
478 |
|
|
|
|
|
|
|
On December 31, 2013, the balance of clients
by real estate development totaled R$2.2 billion, compared to R$2.6 billion on
December 31, 2012. This decrease is mainly the result of cash anticipation via
receivables securitization operations and the reduced volume of launches in the
period.
All the balances of accounts receivable
presented herein are adjusted to present value, as required by Technical
Pronouncement CPC 12 “Adjustment to present value.”
Property for Sale –
Current and Non-Current
The balance of property for sale was comprised
as follows in the periods indicated:
24
|
|
|
|
12/31/2013 |
12/31/2012 |
12/31/2011 |
|
|
|
|
Land
bank |
1,077,762 |
899,177 |
1,209,400 |
(-) Provision for
land bank realization |
(11,276) |
(7,663) |
(50,049) |
(-) Adjustment to present
value |
883 |
(1,976) |
(8,183) |
Property under
construction |
630,407 |
751,738 |
1,181,950 |
Cost of property
in recognition of provision for cancelled contracts (Note 5
(i)) |
107,172 |
180,399 |
394,830 |
Completed
units |
291,232 |
344,749 |
119,342 |
|
|
|
|
|
2,094,414 |
2,166,424 |
2,847,290 |
|
|
|
|
Current |
2,130,195 |
2,049,084 |
1,707,892 |
Non-current |
330,488 |
798,206 |
498,180 |
On December 31, 2013, the balance of
properties for sale, both current and non-current, totaled R$2.1 billion,
compared to R$2.2 billion on December 31, 2012. At the close of 2013, 13.9% of
total inventory was represented by finished units, while units under
construction and units up to 30% complete represented 30% of total units. The
Company remains focusing on inventory reduction, chiefly at Gafisa, which
accounts for 35.6% of final inventory.
Other accounts
receivable – Current and Non-Current
The balance of other accounts receivable held
by the Company on December 31, 2013 stood at R$208.7 million, 13.3% lower than
in the same period in 2012 as a result of lower volume of recoverable taxes and
escrow deposits.
Intangible
assets
On December 31, 2013, the balance of
intangible assets reached R$106.3 million, compared to R$230.1 million on
December 31, 2012, impacted by the deduction of part of the goodwill from the
sale of stake in Alphaville.
Deferred income tax
and social contribution
On December 31, 2013, the balance of income
tax and social contribution was R$56.7 million, down 33.9% over the R$85.8
million on December 31, 2012. Liabilities are presented net of
assets.
Liabilities
Loans, Financing and
Debentures - Current and Non-Current
The Company’s total level of indebtedness on
December 31, 2013, was R$3.18 billion, a decrease of 19.7% over the balance of
R$3.96 billion on December 31, 2012, especially with the reduction in the stock
of debt relative to the debentures and working capital, reflecting the Company's
commitment to seek a more appropriate capital structure to its current level of
operations
The table below shows the development of net
indebtedness and obligations with investors in the Company:
Total Debt
(in R$ ‘000) |
|
Balance
in |
Transaction Type |
Rate |
2013 |
2012 |
2011 |
Bank Credit Note -
CCB |
0.59% - 2.20%
+ CDI/117% - 123%
CDI |
550,052 |
1,118,553 |
937,019 |
Promissory
Notes |
125% + CDI |
- |
80,159 |
231,068 |
Project Finance
(SFH) |
TR + 8.3% to 11.00%
|
1,088,258 |
704,758 |
684,642 |
Debt assumption
from incorporation of subsidiary debt and others |
TR 12% |
- |
1,064 |
3,881 |
|
|
|
1,904,534 |
1,856,610 |
Current |
|
590,386 |
812,483 |
1,135,543 |
Non-current |
|
1,047,924 |
1,290,561 |
721,067 |
25
|
|
|
|
Consolidated |
Program/Issuances |
Principal - R$ |
Annual
Compensation |
Due
Date |
2013 |
2012 |
|
|
|
|
|
(restated) |
3rd program/1st
issuance -5th issuance |
250,000 |
120% do
CDI |
May
18 |
- |
129,569 |
6th
issuance |
100,000 |
CDI +
1,30% |
June
2014 |
151,513 |
137,763 |
7th
issuance |
600,000 |
TR +
10,17% |
December
2017 |
551,855 |
601,200 |
8th issuance/1st
issuance |
288,427 |
CDI +
1,95% |
October
2015 |
294,073 |
291,956 |
8th issuance/2nd
issuance |
11,573 |
IPCA +
7,96% |
October
2016 |
14,216 |
13,411 |
1st issuance
(Tenda) |
600,000 |
TR +
9,21% |
October2015 |
409,561 |
562,004 |
|
|
|
|
1,421,218 |
1,735,903 |
|
|
|
|
|
|
Current |
|
|
|
563,832 |
346,360 |
Non-current |
|
|
857,386 |
1,389,543 |
|
|
|
|
|
|
Obligations for
property purchases and advances to clients – Current and
Non-Current
The Company’s obligations for the purchase of
property and client advances totaled R$488.3 million on December 31, 2013, a
decrease of 14.9% over the same period in 2012. Of this total, 83.6% or R$408.4
million mature in the short term. The R$80 million maturing in the long-term is
fully related to land bank acquisition.
The following table shows the development of
obligations for the purchase of properties and client advances, as well as its
distribution between the short and long terms.
Balance of obligations
for the acquisition of property and client advances
|
|
|
|
12/31/2013 |
12/31/2012 |
12/31/2011 |
Current |
408,374 |
503,889 |
610,555 |
Non-current |
79,975 |
70,194 |
177,135 |
Total |
488,349 |
574,083 |
787,690 |
Material and service
providers
On December 31, 2013, the balance of payables
due to material and service providers was R$79.3 million, down 48.7% over the
R$154.8 million on December 31, 2012. The decrease in this obligation is due to
the drop in real estate construction volume.
Taxes and
contributions - Current
The balance of taxes and social contributions
(current) on December 31, 2013 was R$126.3 million, which corresponds to a
decrease of 39.6% compared with the balance on December 31, 2012 of R$209.0
million. This decrease reflects the reduction in the Company’s
operations.
Income tax and social
contribution – current and non-current
The balance of deferred income tax and social
security totaled R$56.7 million as at December 31, 2013, down 33.9% compared to
R$85.8 million in 2012. Liabilities are net of assets.
Provision for
Contingencies - Current and Non-Current
The Company and its subsidiaries are parties
in legal actions and administrative processes in various courts and with several
government bodies, as a result of normal business operations, involving tax,
labor, and civil matters, among other issues. The Company, based on information
from its legal advisers, analysis of the pending lawsuits and, when concerning
labor cases, based on its prior experience in terms of the amounts claimed, made
a provision considered sufficient to cover the estimated losses as a result of
the claims being made.
The table below shows the improvement of the
Company’s provisions for contingencies:
26
Consolidated |
Civil |
Tax |
Labor |
Total Consolidated |
Balance on December 31,
2011 |
114,177 |
15,852 |
39,760 |
169,789 |
Supplementary
provision |
51,696 |
837 |
42,399 |
94,932 |
Payments and
reversal of unutilized provision |
(27,258) |
(2,019) |
(27,084) |
(56,361) |
Balance on December 31,
2012 |
138,615 |
14,670 |
55,075 |
208,360 |
Supplementary
provision |
48,844 |
(152) |
29,709 |
78,402 |
Payments and
reversal of unutilized provision |
(47,289) |
(590) |
(29,852) |
(77,371) |
AUSA - Payments
and reversal of unutilized provision |
551 |
12,346 |
692 |
(11,103) |
Balance on
December 31, 2013 |
140,722 |
1,582 |
55,624 |
197,928 |
|
|
|
|
|
Current |
47,988 |
255 |
23,876 |
72,119 |
Non-Current |
92,734 |
1,327 |
31,748 |
125,809 |
The provision for contingencies related to
civil processes on December 31, 2013, in the amount of R$140.7 million, also
include the cases in which Company was named as the successor in existing
lawsuits in which the original debtor is a former shareholder of Cimob Companhia
Imobiliária, among other group companies. The plaintiff alleges that Company
should be held responsible for Cimob’s debts.
The Company is appealing all these decisions,
believing that the Company’s inclusion in the lawsuits is legally unreasonable,
thus aiming to release its amounts and ensuring recognition that it cannot be
held responsible for the debt of a company with which it has no ties. The
Company has won similar actions previously, definitively determining that it is
not responsible for the debts of Cimob Companhia Imobiliária The final ruling on
the Company’s appeal, however, cannot be foreseen at this
time.
Other accounts payable
– Current and Non-current
On December 31, 2013, the balance of other
accounts payable was R$246.6 million, down 11.1% over the R$277.6 million on
December 31, 2012. This decrease is due to the lower number of contract
terminations payable and the lower amount for provisions and fines for
construction works delays in 2013.
Shareholders’ equity
As at December 31, 2013, the Company’s
shareholders’ equity balance was R$3.21 billion, up from R$2.68 billion a year
before, mainly due to the result from the sale of a 70% interest at
Alphaville.
Other
accounts
Other accounts on the Company’s balance sheet
not discussed in this analysis varied in the normal course of business or are of
little importance in terms of the consolidated balance sheet.
Cash Flow relative to
the Fiscal Year Ended December 31, 2014 compared to 2013
Operating
activities
In 2014, net cash verified in operations
totaled R$41.9 million, compared to R$297.7 million in 2013.
Investment
activities
The net cash verified in investment
activities, including the acquisition of assets, equipment and new investments,
was R$751.9 million in 2014.
Financing
activities
The cash burn registered by financing
activities in 2014 totaled R$899.1 million, compared to a generation of R$568.1
million in 2013.
27
Below is the change in cash during the
year:
Cash Generation |
|
|
|
|
4Q13* |
1Q14 |
2Q14 |
3Q14 |
4Q14 |
Cash
|
2,024,162 |
1,563,226 |
1,279,568 |
1,463,425 |
1,157,254 |
Change in Cash (1) |
- |
(460,937) |
(283,658) |
183,857 |
(306,200) |
Total Debt + Investor
Obligation |
3,183,208 |
2,967,050 |
2,687,851 |
2,848,249 |
2,597,554 |
Change in Total Debt + Investor Obligations
(2) |
- |
(216,158) |
(279,199) |
160,399 |
(250,695) |
Other investments
|
64,241 |
329,524 |
332,711 |
332,711 |
426,509 |
Change in Investments
(3) |
- |
265,284 |
3,187 |
- |
93,798 |
Cash Generation in the
Period (1) - (2) + (3) |
- |
20,505 |
(1,273) |
23,488 |
38,293 |
Final Cash Generation |
- |
20,505 |
19,233 |
42,721 |
81,014 |
Cash Flow relative to
the Fiscal Year Ended December 31, 2013 compared to 2012
Operating
activities
In 2013, net cash verified in operations
totaled R$297.7 million, compared to R$384.9 million in 2012.
Investment
activities
The net cash verified in investment
activities, including the acquisition of assets, equipment and new investments,
was R$53.5 million in 2013.
Financing
activities
The cash burn registered by financing
activities in 2013 totaled R$568.1 million, compared to a generation of R$162.1
million in 2012.
Below is the change in cash during the
year:
Cash Generation |
|
|
|
|
4Q12 |
1Q13 |
2Q13 |
3Q13 |
4Q13 |
Cash
|
1.248.231
|
1.146.176
|
1.101.160
|
781.606
|
2.024.163 |
Change in Cash (1) |
|
(102.055) |
(45.016) |
(319.555) |
1.242.558 |
Total Debt + Investor
Obligation |
3.618.845 |
3.602.105 |
3.620.378 |
3.639.707 |
3.183.208 |
Change in Total Debt + Investor Obligations
(2) |
|
(16.740) |
18.273 |
19.329 |
(456.499) |
Investments (Share Buyback + AUSA
Transaction) |
- |
- |
35.634 |
406.632 |
(1.114.281) |
Change in Investments
(3) |
- |
- |
35.634 |
370.998 |
(1.520.912) |
Cash Generation in the
Period (1) - (2) + (3) |
- |
(85.315) |
(27.655) |
32.114 |
178.144 |
Final Cash Generation |
- |
(85.315) |
(112.970) |
(80.855) |
97.289 |
|
|
|
|
|
|
10.2.
a) the company’s
operating results |
Description of any significant revenue
items
The Company’s revenues come mainly from the
development and sale of real estate properties. To a lesser extent, it also
earns revenue from providing real estate services, such as construction,
technical and real estate management to third parties.
|
|
2014 |
|
2013 |
|
2012 |
Development, sale
of real estate properties and services of construction to third
parties |
|
2,265,189 |
|
2,618,737 |
|
3,992,209 |
Provisions for
terminations |
|
69,479 |
|
81,122 |
|
252,993 |
Deductions of net
income |
|
(174,670) |
|
(218,648) |
|
(291,920) |
Total of liquid
revenue |
|
2,150,998 |
|
2,481,211 |
|
3,953,282 |
Factors that materially affected the operating
results
Net operating revenues were down 4.61% for the
fiscal year ended December 31, 2012 year-over-year, partly due to the
recognition of revenue from pre-sales in previous years, and the re-presentation
of balances, with the reclassification of Alphaville’s Net Revenue to Revenue
from Operations Held for Sale. Revenue recognized in 2011 was negatively
impacted by the revision of all construction works cost budgets and of the whole
customer portfolio of Tenda.
Net operating revenues were down 11.5% for the
fiscal year ended December 31, 2013 year-over-year, due to the lower number of
launches compared to 2012 and 2011, and to the volume of deliveries, which
generates a lower recognition of revenue from pre-sales in prior
periods.
28
For the fiscal year ended December 31, 2014,
net operating revenue decreased by 13.3% compared to 2012 due to the lower
volume of launches in the last two years in the Gafisa segment. During the year,
the Gafisa brand accounted for 73% of net revenue and Tenda for the remaining
27%.
b) changes in
revenue attributable to variations in prices, exchange rates, inflation,
changes in volumes or the introduction of new products and services
|
The Company recognizes revenue from real
estate developments according to their construction, based on a financial
calculation of project completion and not at the moment that the sale contract
is signed. The main impacts on revenue variations between the 2014, 2013
and 2012 fiscal years are changes in sales volumes and the Company’s
introduction of new products and services, as well as a detailed review of the
Company’s operations and strategy in 2011.
The reduction by 13.3% of net revenues in 2014
compared to 2013 is due to Gafisa segment’s lower volume of launches in the last
two years and the consequent lower revenue recognition for the progress of
projects for sale from previous periods.
The decrease of 11.5% in revenues in 2013
year-over-year is due to the lower number of launches compared to 2012 and 2011,
and to the volume of deliveries, which generates a lower recognition of revenue
from pre-sales in prior periods..
The decrease of 4.61% in net operating
revenues in 2012 year-over-year, is partly due to the recognition of revenue
from pre-sales in previous years, and the re-presentation of balances, with the
reclassification of Alphaville’s Net Revenue to Revenue from Operations Held for
Sale.
R$
‘000 |
|
2014 |
2013 |
2012 |
|
2014
vs 2013 |
2013
vs 2012 |
Contracted
Sales |
|
1,207,013 |
1,451,603 |
2,633,104 |
|
-16.8% |
-44.9% |
Launches |
|
1,636,311 |
1,424,117 |
2,951,161 |
|
14.9% |
-51.7% |
Net revenue |
|
2,150,998 |
2,481,211 |
2,805,086 |
|
-13.3% |
-11.5% |
c) impact of
inflation, variation in the prices of the company’s main inputs and
products, exchange rates and interest rates on the company’s operating and
financial results |
As mentioned in item 5.1 of the Reference
Form, the main indexers used in Company’s business plan are the INCC, IGP-M, CDI
and TR:
INCC (National Building Cost Index): most of
the Company’s costs and its entire revenue portfolio from unfinished projects
are adjusted according to this index. Hypothetically, an increase of 1% in the
INCC would represent an increase of R$2.362 million in the Company's operating
income based on the current level of assets linked to this index.
IGP-M (General Market Price Index): the
Company’s entire revenue portfolio from completed projects is adjusted according
to this index. Hypothetically, an increase of 1% in the IGP-M would not
represent a significant variation in the Company's operating income based on the
current level of assets linked to this index.
CDI (Interbank Deposit Certificate): all of
the Company’s financial investments and roughly 50% of total indebtedness are
pegged to the CDI. Hypothetically, an increase of 1% in the CDI would represent
a decrease of R$701,000 in the Company's financial results based on the current
level of indebtedness linked to this index.
TR (Reference Rate): approximately 60% of the
Company’s total debt is indexed to the TR. Hypothetically, an increase of 1% in
the TR would represent a decrease of R$83,000 in the Company's financial results
based on the current level of indebtedness linked to this
index.
Exchange rates: the Company does not have any
debts or amounts receivable denominated in foreign currency, and none of the
Company’s significant costs are denominated in foreign
currency.
29
10.3. Significant events and impacts on the company’s
financial statements and results:
a) introduction or disposal of
operations |
The Company operates in practically all income
segments of the Brazilian residential real estate market and has an
appropriate business platform to execute its future
plans.
On February 7, 2014, the Company announced that the
Board is studying a potential separation of the Gafisa and Tenda business
units into two public and independent companies. The separation would be
the next step in a comprehensive plan initiated by management to enhance
and reinforce the ability of each business to generate
value. |
b) establishment, acquisition or disposal of
shareholdings |
Over the past three years, the main relevant events
related to the constitution, acquisition or disposal of equity interest
refers to the former subsidiary Alphaville Urbanismo
S.A..
In June 2013, the Company entered into the "Stock
Purchase and Sale Agreement" with Private Equity AE Investimentos e
Participações S.A., a company controlled by Pátria Investimentos Ltda. and
Blackstone Real Estate Advisors L.P., for the sale of the majority
interest held by the Company in Alphaville Urbanismo S.A, a residential
community development company, focusing on the identification, development
and sale of high quality residential communities in Brazilian metropolitan
areas, with a target audience belonging to high and medium class
families.
In July 2013, the third and final step for the
acquisition of all the shares of EVP Participações S.A. (formerly
Alphaville Urbanismo S.A.) – the main asset of which consisted of shares
representing 20% of the stock capital of Alphaville Urbanism SA – by
Construtora Tenda S.A., a subsidiary of the Company, was completed. As a
result, the partners of EVP Participações S.A., Renato de Albuquerque and
Nuno Lúis de Carvalho Lopes Alves, received an amount corresponding to
R$366,661,985.11, paid by the Company in local currency. Following the
completion of this transaction, the Company holds, directly and
indirectly, 100% of the stock capital of Alphaville Urbanismo
S.A..
On December 9, 2013, the Company and Construtora
Tenda S.A. announced the completion of the sale of Alphaville Urbanismo
S.A., through the sale of a 50% interest by the Company and a 20% interest
by Construtora Tenda S.A. to Private Equity AE Investimentos e
Participações S.A.. With the completion of this transaction, Alphaville
Urbanismo S.A.’s capital is now composed as follows: (i) 70% held directly
by Private Equity AE Investimentos e Participações S.A.; and (ii) 30% held
by the Company – 10% of capital held directly, and the remaining 20%
indirectly through Shertis Empreendimentos e Participações S.A.. In
October 2014, Shertis Empreendimentos e Participações S.A. was merged into
the Company, which became a direct holder of 30% of the stock capital of
Alphaville Urbanismo S.A.. |
c) exceptional events or
operations |
There were no exceptional events or
operations. |
10.4.
a) significant
changes in accounting
practices |
Pronouncements (new or revised) and interpretations
adopted starting on January 1, 2014 and new and revised standards and
interpretations already issued but not yet adopted
Pronouncements (new or revised) and interpretations
adopted starting January 1, 2014
30
The Company adopted
all pronouncements (new or revised) and interpretations issued by the CPC,
applicable to its operations, that were in force on December 31,
2014.
The pronouncements
(new or revised) and interpretations listed below, which were issued by CPC and
deliberated by CVM, have mandatory application for the fiscal years beginning on
or after January 1, 2014. They are:
·
OCPC 07 –
Disclosure in the Release of Accounting and Financial Reports for General
Purposes – CVM Resolution 727 of November 11, 2014;
The purpose of the
resolution is to address the basic requirements of the preparation and
disclosure of accounting and financial reporting releases for general purposes.
It provides for the disclosure of information in annual and interim accounting
and financial statements, in particular those contained in the explanatory
notes.
The standard verifies
if the information is relevant for external users. They are relevant if they
influence the decision making process of investors and creditors. Consequently,
the irrelevant information should not to be disclosed.
·
ICPC 09
(R2) – Individual, separate and consolidated financial statements and
application of the Equity Method – CVM Resolution 729 of November
27, 2014.
The purpose of the
review of ICPC 09 is mainly due to the issuance of the technical pronouncements
CPC 18 (R2), CPC 19 (R2) and CPC 36 (R3), in accordance with the alterations
made by the International Accounting Standards Board (IASB) in the international
accounting standards IAS 28, IFRS 10 and IFRS 11. Other items were also reviewed
in order to adjust their text to the current needs and keep them in line with
international standards.
·
ICPC 19 –
Taxes – CVM Resolution 730 of November 27, 2014;
The Interpretation is
correlated with IFRIC Interpretation 21 – Levies, issued by the International
Accounting Standards Board (IASB). The document provides for the accounting
obligation to pay a tribute, if it is in the scope of IAS 25 and also addresses
the accounting requirement to pay tributes at the right time and
value.
·
Alteration of CPC 01/IAS 36 – "Reduction in Impairment of
Assets" on the disclosure of impairment of non-financial assets. This alteration
eliminates certain disclosures of the impairment of Cash Generating Units (CGU)
that had been included in IAS 36 with the issuance of IFRS 13.
·
Alteration of CPC 39/IAS 32 – "Financial Instruments:
Presentation" on compensation of financial assets and liabilities. This
amendment clarifies that the countervailing duty should not be contingent on a
future event. It must also be legally applicable to all counterparties in the
normal course of business, as well as in case of default, insolvency or
bankruptcy. The alteration also considers settlement arrangements.
·
Review of
the Technical Pronouncement nº 07 – "Equity Method in Separate Financial
Statements", alters the text of CPC 35 – "Separate Financial Statements" to
incorporate amends made by the IASB in the IAS 27 – Separate Financial
Statements, which will enable the adoption of the equity method in subsidiaries
in separate financial statements, aligning Brazilian accounting practices with
international accounting standards. For IFRS purposes, the changes to IAS 27
have been early adopted.
There are no other
standards and interpretations issued and not yet adopted that, according to the
Management, have a significant impact on net income or equity disclosed by the
Company.
Standards and new and revised interpretations issued and
not yet adopted on December 31, 2014
·
IFRS 9 –
"Financial Instruments", addresses the classification, measurement and
recognition of financial assets and liabilities.
31
The normative review
on financial instruments consists of three phases:
Phase 1:
Classification and measurement of financial assets and
liabilities
Regarding the
classification and measurement in accordance with IFRS 9, all recognized
financial assets that are currently included in the scope of IAS 39, are
subsequently measured at amortized cost or at fair value.
Phase 2: Impairment
Reduction Methodology
The impairment
reduction model of IFRS 9 reflects the expected credit losses, instead of
incurred credit losses pursuant to IAS 39. According to the impairment reduction
approach in IFRS 9, it is no longer necessary that a credit event has occurred
before the recognition of credit losses. Instead, an entity always accounts for
expected credit losses and the changes in these expected credit losses. The
value of expected credit losses should be updated at each financial statement
date to reflect changes in credit risk since the initial recognition.
Phase 3: Hedge
Accounting
The hedge accounting
requirements introduced by IFRS 9 maintain the three types of hedge accounting
mechanism in IAS 39. Furthermore, the new standard brought greater flexibility
regarding the types of transactions eligible for hedge accounting, specifically
the expansion of the types of instruments that qualify as hedging instruments
and the types of risk components of non-financial items eligible for hedge
accounting. In addition, the effectiveness test was renovated and replaced by
the principle of "economic relationship". The retrospective evaluation of the
effectiveness of the hedge is no longer needed. Additional disclosure
requirements related to risk management activities of an entity were
introduced.
The resolution is
effective for annual periods beginning on or after January 1, 2018. Its early
adoption, although encouraged by the IASB, is not permitted in Brazil by the
Brazilian Accounting Standards Committee (CPC – Comitê de Pronunciamento
Contábeis).
·
IFRS 15 –
Revenue from customer contracts
On May 28, 2014, the
International Accounting Standards Board (IASB) and the Financial Accounting
Standards Board (FASB) issued new requirements for revenue recognition in both
the IFRS and the U.S. GAAP, respectively. The IFRS 15 – Customer Contract
Revenue requires an entity to recognize the amount of revenue reflecting the
consideration which is expected in exchange for control of those goods or
services. The new standard will replace most of the detailed guidance on revenue
recognition that currently exists in the IFRS and the U.S. GAAP, when adopted.
The application is required for annual periods beginning on or after January 1,
2017. Its earlier adoption is permitted for IFRS purposes and not allowed
locally before harmonization and approval by the CPC and CVM.
The Company is
evaluating the effects of IFRS 15 and IFRS 9 on its financial statements and has
not yet completed its analysis to date, and can not estimate the impact of the
adoption of these standards.
No other IFRS
standards or IFRIC interpretations that have been effective could have a
significant impact on the Company.
Pronouncements (new or revised) and interpretations
adopted from 2013 or applicable from January 1, 2014 and
2015
Pronouncements (new or revised) and interpretations
adopted from January 1, 2013
32
The Company adopted all pronouncements (new or revised)
and interpretations issued by the CPC, applicable to its operations that were
effective on December 31, 2013.
The Pronouncements
(new or revised) and interpretations listed below, issued by the CPC and
resolved on by the CVM, have mandatory application for the fiscal years
beginning on or after January 1, 2013. They are:
·
CPC 18
(R2) – Investment in Subsidiaries, Affiliates and Joint Ventures – CVM
Resolution 696 of December 13, 2012;
·
CPC 19
(R2) – Joint Ventures – CVM Resolution 694 of November 23, 2012;
·
CPC 33
(R1) – Benefits and employees – CVM Resolution 695 of December 13,
2012;
·
CPC 36
(R3) – Consolidated Statements – CVM Resolution 698 of December 20,
2012;
·
CPC 44 –
Combined Financial Statements – CVM Resolution 708 of May 2, 2013;
·
CPC 45 –
Disclosure of shareholdings in other entities – CVM Resolution 697 of
December 13, 2012;
·
CPC 46 –
Fair value measurements – CVM Resolution 699 of December 20, 2012;
and
·
OCPC 06 –
Presentation of Pro Forma Financial Information – CVM Resolution 709 of May 2,
2013.
Of the pronouncements
listed above, the only ones that impacted the Company were the CPC 19 (R2), and,
consequently, the CPC 18 (R2) and the CPC 36 (R3). Those standards require that
the subsidiaries are fully consolidated from the date of control acquisition,
and continue to be consolidated until the date that control is ceased, excluding
joint ventures with other entities, which should be valued using the equity
method in the separate and consolidated financial statements.
There are no other
standards and interpretations issued and not yet adopted that, according to
management, have a significant impact on net income or equity disclosed by the
Company.
Pronouncements (new or
revised) and interpretations applicable for fiscal years beginning on or after
January 1, 2014 and 2015
·
IFRIC 21
– "Taxes", issued in May 2013. IFRIC 21 clarifies when an entity should
recognize an obligation to pay fees in accordance with the law. The requirement
should only be recognized when the occurrence of the event that generates the
obligation. This interpretation is applicable from January 1, 2014.
·
IFRS 9 –
"Financial Instruments", addresses the classification, measurement and
recognition of financial assets and liabilities. IFRS 9 was issued in November
2009 and October 2010 and replaces parts of the IAS 39 relating to
classification and measurement of financial instruments.
The IFRS 9 requires
the classification of financial assets into two categories: measured at fair
value and measured at amortized cost. The determination is made at initial
recognition. The classification depends on the entity's business model and the
contractual cash flow characteristics of the financial instruments. For
financial liabilities, the standard maintains most of the requirements
established by the IAS 39. The main change is that in cases where the fair value
option is adopted for financial liabilities, the change in fair value due to the
risk of the entity's own credit is recorded in other comprehensive income and
not in other income statement, except when it results in accounting mismatch.
The Company is assessing the impact of IFRS 9.
These standards were
issued but are not yet effective for 2013. Its early adoption, although
encouraged by the IASB, is not permitted in Brazil by the Brazilian Accounting
Standards Committee (CPC – Comitê de Pronunciamento Contábeis).
b) Material
effects of the changes in accounting
practices |
For the fiscal year ended December 31, 2014, the adoption
of the pronouncements did not significantly impact the Company's financial
statements.
The Company is evaluating the effects of the IFRS 15 and
the IFRS 9 on its financial statements and has not yet completed its analysis to
date and can not estimate the impact of the adoption of this
standard.
33
For the fiscal year ended December 31, 2013, as mentioned
on item 10.4.a, of the above listed pronouncements, the only ones that impacted
the Company were the CPC 19 (R2) and, consequently, the CPC 18 (R2) and the CPC
36 (R3). Those standards require that the subsidiaries are fully consolidated
from the date of control acquisition, and continue to be consolidated until the
date that control is ceased, excluding joint ventures with other entities, which
should be valued using the equity method in the separate and consolidated
financial statements.
The financial statements of subsidiaries and joint
ventures are prepared for the same fiscal year that the parent company’s
financial statements, using accounting policies in line with those adopted by
the Company. For the consolidation, the following criteria were
adopted:
(i)
elimination of investments in subsidiaries and equity in
their results;
(ii) elimination of the profits from transactions between
consolidated companies, as well as the corresponding balances of assets and
liabilities; and
(iii) the value of the minority interest is calculated and
shown separately.
The following joint ventures, which until December 31,
2012 were accounted for in the consolidated statements by the proportional
consolidation method, started to be accounted for using the equity method as of
January 1, 2013 and the periods corresponding presented in these financial
statements.
|
% - Interest |
Portfolio |
2013 |
2012 |
Gafisa SPE 48
S.A. (**) |
80% |
80% |
Sítio Jatiuca
Emp Im.SPE Ltda. |
50% |
50% |
GAFISA SPE-116
Emp. Imob. Ltda. |
50% |
50% |
Gafisa SPE 47
Emp. Imob. Ltda. (**) |
80% |
80% |
Gafisa SPE 85
Emp. Imob. Ltda. (**) |
80% |
80% |
Gafisa SPE 71
Emp. Imob. Ltda. (**) |
80% |
80% |
Manhattan Square Emp. Imob. Coml. 1 SPE
Ltda. |
50% |
50% |
Manhattan Square Emp. Imob. Residencial. 1 SPE
Ltda. |
50% |
50% |
Jardim da
Barra |
50% |
50% |
Gafisa SPE 65
Emp. Imob. Ltda. (**) |
80% |
80% |
Costa Maggiore
Emp. Imob. Ltda |
50% |
50% |
Gafisa SPE 73
Emp. Imob. Ltda. (**) |
80% |
80% |
Gafisa SPE 46
Emp. Imob. Ltda. |
60% |
60% |
Dubai
Residencial Emp. Imob. Ltda. |
50% |
50% |
Gafisa SPE 113
Emp. Imob. Ltda. |
60% |
60% |
Grand
Park-Parque das Arvores Em. Im. Ltda |
50% |
50% |
O Bosque Empr.
Imob. Ltda. |
60% |
60% |
Grand Park -
Parque das Aguas Emp Im Ltda. |
50% |
50% |
Other
(*) |
Various |
Various |
|
|
|
(*) Includes companies with a balance of investments of
less than R$ 5,000.
(**) In the adoption of the CPC 18 (R2)
– Investments in Associates, Subsidiaries and Joint Ventures, after
analysis of corporate and historical decisions acts, the Company
identified that does not have control of these companies, after applying
the equity method. |
For comparison purposes, the corresponding balances of
December 31, 2012 and the opening balance of January 1, 2012 have been adjusted
considering the change of accounting practice. As required by the CPC 23 –
Accounting Policies, Estimates Changes and Error Correction, the retrospective
effects of the adoption of the CPCs 18 (R2), 19 (R2) and 36 (R3) are stated as
follows:
|
|
Parent Company |
Consolidated |
|
|
Balances
originally reported on 12/31/2012 |
Impact of the adoption of the CPCs 18 (R2), 19 (R2)
and 36 (R3) (a) |
Balances after the adoption of the CPCs 18 (R2), 19
(R2) and 36 (R3) |
Balances
originally reported on 12/31/2012 |
Impact of the adoption of the CPCs 18 (R2), 19 (R2)
and 36 (R3) |
Balances after the adoption of the CPCs 18 (R2), 19
(R2) and 36 (R3) |
Balance
sheet |
|
|
|
|
|
|
Current
assets |
2,193,251 |
- |
2,193,251 |
7,218,690 |
(812,650) |
6,406,040 |
Non-current
assets |
638,005 |
- |
638,005 |
1,575,371 |
(191,886) |
1,383,485 |
Investments |
3,547,195 |
(9,059) |
3,538,136 |
- |
646,812 |
646,812 |
Property, plant
and equipment and intangible assets |
56,755 |
- |
56,755 |
276,933 |
(701) |
276,232 |
Total
assets |
6,435,206 |
(9,059) |
6,426,147 |
9,070,994 |
(358,425) |
8,712,569 |
|
|
|
|
|
|
|
|
Current
liabilities |
1,710,192 |
- |
1,710,192 |
2,879,590 |
(238,306) |
2,641,284 |
Non-current
liabilities |
2,180,510 |
- |
2,180,510 |
3,499,037 |
(113,581) |
3,385,456 |
Total
liabilities |
3,890,702 |
- |
3,890,702 |
6,378,627 |
(351,887) |
6,026,740 |
Shareholders’
equity |
2,544,504 |
(9,059) |
2,535,445 |
2,692,367 |
(6,538) |
2,685,829 |
Total liabilities
and shareholders’ equity |
6,435,206 |
(9,059) |
6,426,147 |
9,070,994 |
(358,425) |
8,712,569 |
34
|
Parent Company |
Consolidated |
|
Balances
originally reported on 12/31/2012 |
Impact of the adoption of the CPCs 18 (R2), 19 (R2)
and 36 (R3) (a |
Impact of the adoption of the CPC 31
|
Balances after the adoption of the CPCs 18 (R2), 19
(R2) and 36 (R3) |
Balances
originally reported on 12/31/2012 |
Impact of the adoption of the CPCs 18 (R2), 19 (R2)
and 36 (R3) |
Impact of the adoption of the CPC 31
|
Balances after the adoption of the CPCs 18 (R2), 19
(R2) and 36 (R3) |
Income
Statement |
|
|
|
|
|
|
|
Net operating
revenue |
1,202,980 |
- |
- |
1,202,980 |
3,953,282 |
(363,014) |
(785,182) |
2,805,086 |
Operating
costs |
(906,310) |
- |
- |
(906,310) |
(2,941,025) |
287,150 |
377,071 |
(2,276,804) |
Operating
revenue (expense) |
(327,582) |
- |
- |
(327,582) |
(840,452) |
13,535 |
161,710 |
(665,207) |
Equity
pick-up |
75,711 |
(2,539) |
(97,421) |
(24,249) |
- |
63,335 |
(7,732) |
55,603 |
Financial
results |
(172,116) |
- |
- |
(172,116) |
(206,940) |
(8,911) |
35,588 |
(180,263) |
Income tax and social
contribution |
2,813 |
- |
- |
2,813 |
(41,228) |
6,589 |
14,417 |
(20,222) |
Minority
shareholders |
- |
- |
- |
- |
(48,141) |
(1,223) |
- |
(49,364) |
Discontinued
operating result |
- |
- |
97,421 |
97,421 |
- |
- |
204,128 |
204,128 |
Net
profit for the year |
(124,504) |
(2,539) |
- |
(127,043) |
(124,504) |
(2,539) |
- |
(127,043) |
|
|
|
|
|
|
|
|
|
Cash
flow |
|
|
|
|
|
|
|
|
Operating
activities |
556,274 |
(5,640) |
- |
550,634 |
650,945 |
(33,208) |
(232,867) |
384,870 |
Financing
activities |
(266,411) |
5,640 |
- |
(260,771) |
161,488 |
10,336 |
(9,744) |
162,080 |
Investment
activities |
(226,253) |
- |
- |
(226,253) |
(322,894) |
(104,014) |
242,611 |
(184,297) |
|
|
|
|
|
|
|
|
|
Value added
statement |
|
|
|
|
|
|
|
|
Net
value added generated by the entity |
369,680 |
92,258 |
- |
461,938 |
1,020,761 |
(557,005) |
364,329 |
828,085 |
Value
added received in transfer |
94,005 |
(99,961) |
- |
(5,956) |
80,629 |
5,752 |
25,041 |
111,422 |
Total
value added to distribute |
463,685 |
(7,703) |
- |
455,982 |
1101,390 |
(551,253) |
389,370 |
939,507 |
(a) Amount regarding the
financial costs capitalized in joint ventures, which are now accounted for using
the equity method.
There are no other standards and interpretations issued
and not yet adopted that, according to management, have a significant impact on
net income or equity disclosed by the Company.
c) reservations
and emphasis in the auditor’s
report |
The independent auditors’ report on the
financial statements for the fiscal year ended December 31, 2014, 2013 and 2012
contains no restrictions.
The independent auditors’ report on the
financial statements for the fiscal year ended December 31, 2014 emphasized the
fact that the separate and consolidated financial statements have been prepared
in accordance with the IFRS applicable to real estate development entities,
which also considers the Guidance OCPC04 issued by the Brazilian Accounting
Standards Committee. This guidance addresses the recognition of revenue from
this sector and covers issues related to the meaning and application of the
concept of continuous transfer of risks, benefits and sale control of real
estate units, as it is further detailed in Note 2.2.2 of the financial
statements. The independent auditors’ report is not modified due to this
matter.
The report of the independent auditors on the
financial statements for the fiscal year ended on December 31, 2013 emphasized
the fact that the separate (parent company) and consolidated financial
statements were prepared in accordance with the accounting practices adopted in
Brazil, as stated in Note 2.1 to the financial statements. The consolidated
financial statements prepared in accordance with the IFRS standards applicable
to real estate development entities also consider Guidance OCPC 04 published by
the Accounting Standards Committee which addresses recognition of revenue for
this sector. Certain issues regarding the meaning and application of the concept
of continuous transfer of risk, benefits and control in the sale of residential
units will be analyzed by the International Financial Reporting Interpretation
Committee (IFRIC). Furthermore, due to the project to publish a revised standard
for revenue recognition, IFRIC is discussing this matter, arguing that the
concept of revenue recognition is addressed in the standard currently under
discussion. Thus, it is expected that the matter be finalized only after
publication of the revised standard for revenue recognition.
35
The report of the independent auditors on the
financial statements for the fiscal year ended December 31, 2012 emphasized the
fact that the separate (parent company) and consolidated financial statements
were prepared in accordance with the accounting practices adopted in Brazil, as
stated in Note 2.1 to the financial statements. The consolidated financial
statements prepared in accordance with the IFRS standards applicable to real
estate development entities also consider Guidance OCPC 04 published by the
Accounting Standards Board which addresses recognition of revenue for this
sector. Certain issues regarding the meaning and application of the concept of
continuous transfer of risk, benefits and control in the sale of residential
units will be analyzed by the International Financial Reporting Interpretation
Committee (IFRIC). Furthermore, due to the project to publish a revised standard
for revenue recognition, IFRIC is discussing this matter, arguing that the
concept of revenue recognition is addressed in the standard currently under
discussion. Thus, it is expected that the matter be finalized only after
publication of the revised standard for revenue
recognition.
10.5. Critical Accounting Policies of the
Company:
The separate financial statements, identified
as "parent company", were prepared in accordance with accounting practices
adopted in Brazil issued by the Accounting Standards Committee (CPC) and are
disclosed together with the consolidated financial statements.
The fact that the accounting practices adopted
in Brazil applicable to the parent company’s financial statements from 2014 do
not differ from the IFRS applicable to separate financial statements, as the
IFRS started to allow the application of the equity method in subsidiaries in
the separate financial statements, means that they are also in accordance with
the International Financial Reporting Standards (IFRS), issued by the
International Accounting Standards Board (IASB).
The consolidated financial statements are
prepared and presented in accordance with accounting practices adopted in
Brazil, including the pronouncements issued by the Accounting Standards
Committee (CPC), endorsed by the Brazilian Securities Commission (CVM) and
according to the International Financial Reporting Standards (IFRS), issued by
the International Accounting Standards Board (IASB).
Specifically, the consolidated financial
statements are in compliance with the International Financial Reporting
Standards (IFRS) applicable to real estate entities in Brazil, including
Orientation OCPC 04 – Application of Technical Interpretation ICPC 02 to
Brazilian real estate entities regarding to the processing of recognition of
revenue from this sector and involves matters relating to the application of the
concept of continuous transfer of risks, benefits and control in the sale of
real estate units.
The financial statements were prepared in the
normal course of business. The Management conducts a review of the Company's
ability to continue its activities during the preparation of financial
statements. The Company is compliant in relation to the debt clauses on the
issue date of these financial statements.
All amounts reported in these financial
statements are expressed in thousands of reais, unless otherwise
indicated.
Consolidated financial
statements
The Company’s consolidated financial
statements include the financial statements of Gafisa, its direct and indirect
subsidiaries. The Company controls an entity when it is exposed or has rights to
variable returns resulting from its involvement with the organization and has
the ability to interfere with these returns because of the power it exercises
over the entity. The existence and the effects of potential voting rights, that
are currently exercisable or convertible, are taken into consideration when
assessing whether the Company controls another entity. Subsidiaries are fully
consolidated from the date that control is transferred and are no longer
consolidated from the date that control ceases.
The accounting practices were equally applied
in all subsidiaries included in the consolidated financial statements and their
fiscal year is the same as the Company.
Functional and presentation
currency
The separate (parent company) and consolidated
financial statements are presented in Reais (presentation currency), which is
also the functional currency of the Company and its subsidiaries.
Presentation of information by
segment
36
The information by operating segment is in
line with the internal reporting provided to the main operating decision makers,
represented by the Executive Board and Board of Directors, who are responsible
for allocation of resources, performance evaluation of the operating segments
and strategic decisions.
Judgments, estimates and accounting
premises
Estimates and accounting judgments are
continually evaluated and are based on historical experience and other factors,
including future events expectations that are considered reasonable under the
circumstances.
(i)
Judgments
The preparation of the Company’s separate and
consolidated financial requires that the Management make certain judgments and
estimates, as well as adopt premises that affect the values presented for
revenue, expenses, assets and liabilities, and the amount of contingent
liabilities, on the base date of the financial statements.
(ii)
Estimates and premises
Assets and liabilities subject to estimates
and premises include the provision for impairment of assets, transactions with
stock-based payments, litigation provision, fair value of financial instruments,
measurement of budgets for projects, deferred asset taxes, among
others.
The main premises related to the sources of
uncertainty regarding future estimates and other important doubts about
estimates on the date of the balance sheet and that could result in different
values to those booked, are discussed below:
a)
Impairment of assets
Management reviews, on annual basis or
whenever a specific event occurs, the accounting value of the assets to evaluate
events or changes in the economic, operating or technological conditions that
might indicate deterioration or loss of recoverable value. Upon identification
of impairment and if the net book value exceeds its recoverable value, a
provision is created, adjusting the net book value to the recoverable value.
Those losses are entered into the fiscal year’s result upon their
identification. The impairment test of intangible assets with undefined useful
life and premium for expectation of future profitability is carried out once a
year and/or when the circumstances indicate loss by devaluation of the
accounting value.
The cash flows are derived from the budget for
the next five years and do not include reorganization activities that the
Company has still not committed to, or significant future investment that would
improve the asset base of the cash generating unit subject to the test. The
recoverable value is sensitive to the discount value used in the discounted cash
flow method, as well as the future expected cash receivables and the growth rate
used for extrapolation purposes.
The net sales value is determined, whenever
possible, based on a firm sales agreement in a transaction under commutative
bases between knowing and interested parties, adjusted by expenses attributable
to the sale of the asset or, when there is no firm sales agreement, based on the
market price from an active market, or on the prices of the most recent
transaction with similar assets.
b)
Transactions with stock-based
payments
The Company measures the cost of transactions
to be settled with shares with employees based on the fair value of the equity
instruments on the date they are granted. The estimated fair value of payments
made with shares requires the use of a valuation model more suited to the
granting of such equity instruments and that depends on the terms and conditions
they are offered under. This also requires the definition of more adequate data
for the valuation model, including the useful life of the option, volatility,
dividend yield and corresponding premises. The premises and models used to
estimate the fair value of stock-based payments are disclosed in Note 19.3 of
the Company's Financial Statements.
c)
Provision for lawsuits
The Company recognizes a provision for
ongoing/pending tax, labor and civil cases. The estimate of the probability of
loss includes the evaluation of all the evidence available, the legal hierarchy,
available jurisprudence, the most recent and pertinent decisions in the courts
and their relevance to the ruling in question, as well an opinion from external
counsel. The provisions are revised and adjusted to take any changes in
circumstances into account, such as the statute of limitations, completion of
tax audits or additional exposure identified based on new matters or court
rulings. The settlement of the transactions involving these estimates may result
in values different than those estimated as a result of the imprecision inherent
in the process of determining their value. The Company revises its estimates and
premises at least annually.
37
There are uncertainties concerning
interpretation of complex tax regulations and about the value and time of future
tax results. The Company and its subsidiaries are subject, in the normal course
of business, to investigations, audits, lawsuits and administrative proceedings
in civil, tax and labor matters.
d)
Fair value of financial
instruments
When the fair value of financial assets and
liabilities presented on the balance sheet cannot be obtained from the relevant
market, it is determined using technical evaluation methods, including the
discounted cash flow method.
The data for these methods is based on those
practiced in the market, as and when possible. However, when this is not
feasible, discretion is required to establish the fair value. This judgment
includes considerations about the data used such as, for example, interest rate,
liquidity risk, credit risk and volatility. Changes in the premises concerning
these factors may affect the fair value of the financial instruments
presented.
e)
Budgeted Project
Costs
The total budgeted costs, mainly comprised of
the costs incurred and expected to be complete when the construction work is
concluded, are regularly revised during the course of the project and any
adjustments identified based on that review are reflected in the Company’s
results. The effect of these reviews on the estimates affects the
result.
f)
Realization of the deferred income
tax
The initial and following analyses of the
realization of deferred income tax occur when is it probable that the taxable
profit of the next years will be available for offsetting the deferred tax asset
based on results forecasts prepared and based on internal assumptions and future
economic scenarios that enable their total or partial use.
A summary of the financial information related to
Company’s main accounting practices is shown below.
Revenue and expense recognition
(i)
Determination of profit or loss from the
development and sale of property
(a) For payments made for completed units, the result is
appropriated when the sale is made, independent of the contractual term for
these receivables.
(b) For sales of incomplete units, the following procedures
are observed:
·
The cost incurred (including the cost of land
and other expenses directly related with inventory formation) corresponding to
the units sold is fully appropriated in the result. For units not yet sold, the
cost incurred is appropriated to inventory.
·
Sales revenues are stated in the result, using
the percentage of completion method for each project, and this percentage is
calculated based on the cost incurred in relation to the total budgeted cost of
the respective project;
·
The amounts of sales revenue recognized which
are higher than the values effectively received from clients are booked under
“Accounts Receivable from services provided” in current or long-term assets; The
amounts received related to the sale of units which are higher than the
recognized revenue values are booked under the item: “Obligations for property
purchases and client advances”;
·
The interest and monetary restatement over the
balance of accounts receivable after the keys are delivered, as well as the
adjustment to present value of the balance of accounts receivable are
appropriated to the result of contracted sales and property sales as and when
incurred, observing the accrual basis of accounting for the fiscal years “pro
rata temporis”;
·
The financial charges on accounts payable
arising from the acquisition of land and directly related to construction
financing are capitalized and registered to inventory of properties for sale and
appropriated to the cost incurred with units under construction until
completion, observing the same appropriation criteria of the real estate
development cost in proportion to units sold under construction;
38
·
The tax levied and deferred on the difference
existing between the real estate revenue and the accumulated revenue subject to
taxation are calculated and included in the accounting upon recognition of this
revenue difference.
·
Other revenue and expenses, including
advertising and publicity, are booked in the result when incurred.
(ii)
Construction services provided
Revenue derived from real estate services provided are
recognized as the services are rendered and are linked to the activity of
construction management for third parties and technical
consulting.
(iii)
Swap operations
A land swap is intended for the receipt of third party
land for settlement by delivery of real estate units or the transfer of
installments from sales of real estate units. The land acquired by the Company
and its subsidiaries is registered based on its fair value, as a component of
the inventory, in a contra account to advances from clients. The revenues and
costs derived from swap operations are appropriated into the result throughout
the construction period, as previously mentioned in item (b).
Accounts receivable from services
provided
The present and realized values are disclosed.
The classification between current and non-current is made based on the expected
maturity of the contract’s installments.
The outstanding installments are adjusted
based on the National Building Cost Index (INCC) for the construction phase of
the project and by the General Market Price Index (IGP-M) plus interest of 12%
per year after the date of delivery of completed units.
The adjustment to present value is calculated
from the time of signing the contract and the expected date of delivery of keys
to the prospective buyer, using a discount rate represented by the average rate
on loans obtained by the Company, net of the inflationary effect.
The reversal of adjustment to present value,
considering that an important part of the Company's operating environment is to
finance its customers until the delivery of the keys, was held, being offset by
real estate development revenues, consistently in line with accrued interest on
the accounts receivable portion related to the "post-keys".
Properties for sale
The Company also acquires land for future
developments, with payment conditions in local currency or through swap
operations, in which, in exchange for the land, it agrees to: (a) transfer of
installments from sales of real estate units of the projects; or (b) deliver
real estate units under development. The land acquired through swap operations
is stated at fair value of the units to be delivered and the revenue and costs
are recognized following the criteria described above.
The properties are stated at construction cost
and reduced by provisions when such value exceeds their net realizable value. In
the case of properties under construction, the portion in inventory corresponds
to the cost incurred of units not yet sold. The cost incurred comprises
construction spending (materials, own labor force or outsourced and others), the
costs of legalization of land and development, the cost of land and financial
charges applied in the project incurred during the construction
phase.
The classification of land between current
assets and non-current assets is performed by the Management based on the
expected term for the launch of real estate projects. The Management
periodically reviews the estimates of launches of real estate projects.
The accounting practices have been applied
consistently in all subsidiaries and joint ventures included in the consolidated
financial statements and the fiscal year of these companies coincides with that
of the Company.
39
10.6. Internal controls adopted to ensure the reliability of the
financial statements:
a) efficiency of such controls, indicating possible
flaws and the steps taken to rectify them |
The Company’s Management, and especially the Chief
Executive Officer and the Chief Financial and Investor Relations Officer,
is responsible for implementing and maintaining a suitable internal
control structure for the preparation of the financial
statements.
The internal controls over the preparation of the
Financial Statements are evaluated to ensure a reasonable level of
confidence as to the reliability of the accounting information and the
preparation of the financial statements in accordance with Brazilian
accounting practices for outside disclosure. The Company’s internal
controls over the preparation of the financial statements include policies
and procedures that: (i) reflect precisely and appropriately the Company’s
transactions and asset disposal; (ii) provide a reasonable degree of
confidence that the transactions are recorded in such a way as to enable
the preparation of the financial statements in accordance with Brazilian
accounting practices and that the Company’s receipts and payments are in
strict compliance with the authorizations granted by the Company’s
management; and (iii) provide a reasonable degree of confidence regarding
the timely prevention or detection of any unauthorized acquisition, use or
disposal of Company assets that could have a material effect on the
financial statements.
Due to their inherent limitations, the internal
controls over the preparation of the financial statements could fail to
identify or prevent errors.
The Company’s Management performed an assessment of
the internal controls on the preparation of the Financial Statements as at
December 31, 2014, based on the criteria established in the Internal
Control – Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission - COSO, and, according to said
methodology, concluded that, as of December 31, 2014, the Company’s
Internal Control structure for the preparation of the Financial Statements
in BRGAAP was considered to be effective.
Finally, it should be pointed out that the Company
meets all the corporate governance requirements of the BM&FBOVESPA’s
Novo Mercado and Section 404 of the Sarbanes-Oxley
Act. |
b) shortcomings and recommendations regarding
internal controls mentioned in the independent auditor’s
report |
The Company’s
independent auditors identified needs to improve certain internal controls
while auditing the financial statements for 2014. The Company is currently
analyzing together with the independent auditors is discussing with the
Auditors the shortcomings identified in the tests so as to correct
classify their relevance. By the management's judgment, none of the
improvement needs could cause misstatement in the financial statements,
but it should be noted that the independent auditors’ Final Report had not
yet been completed at the time of the Management Proposal disclosure of
the Company's Annual General Meeting.
In compliance
with the Circular Letter CVM/SNC/SEP nº 1, we reported that there were no
problems or recommendations on internal controls in relation to
construction budgets and revenue recognition, perceived by auditors during
the construction listed in the Reference
Form. |
10.7. Factors relating to any public offering of
marketable securities:
a) how the proceeds from the offering were
used |
The resources from the debenture issues until 2010
were allocated to reinforcing working capital, that is, to finance the
construction of residential units in real estate developments. In the
fiscal years 2012 and 2013, the Company has not issued
debentures.
The resources from the Promissory Notes issue in
2012 were allocated to reinforcing the Company’s working
capital.
The proceeds of the 2nd Debentures Issue
of subsidiary Construtora Tenda S.A. were allocated to the acquisition of
the remaining interest of former subsidiary Alphaville Urbanismo S.A.
before it was sold to Private Equity AE Investimentos e Participações
S.A.
The net resources of the 9th Debentures
Issue held in 2014, will be used in the development of selected real
estate projects. |
b) whether there were any significant diversions
between the proposed allocation disclosed in the respective offering
prospectus and the effective allocation of the proceeds
|
There was no significant diversion between the
proposed allocation disclosed in the respective prospectus and the
effective allocation of the proceeds. |
c) in the event of any significant diversions, the
reasons for such |
Not applicable, as there were no significant
diversions between the proposed allocation disclosed in the respective
prospectus and the effective allocation of the
proceeds. |
40
10.8. Significant items not shown in the Company’s
financial statements:
a) assets and liabilities held by the company,
directly or indirectly, that do not appear on the balance
sheet |
The Company does not have any material assets or
liabilities that are not reflected in this form and in the Company’s
financial statements and the notes thereto. |
b) other items not shown in the financial
statements |
The Company does not have any other items that are
not shown in its financial
statements. |
10.9. Regarding each item not shown in the financial
statements, as indicated in item 10.8:
a) how such items altered or could alter the
revenue, expenses, operating results, net financial expenses or other
items in the company’s financial statements |
As explained in item 10.8, above, there are no
items that are not shown in the financial
statements. |
b) nature and purpose of the
operation |
As explained in item 10.8, above, there are no
items that are not shown in the financial
statements. |
c) nature and amount of obligations assumed and
rights generated for the company as a result of the
operation |
As explained in item 10.8, above, there are no
items that are not shown in the financial
statements. |
41
10.10. Key elements of the company’s business
plan:
a) investments (including a quantitative and
qualitative description of investments in course and that are foreseen,
sources of investment financing and significant divestments that are in
course or that are foreseen) |
i.
quantitative and qualitative description of
investments that are in course or are foreseen
Net cash for 2014, generated in investing
activities, including the acquisition of goods, equipment and new
investments amounted to R$751.95 million, mainly due to net redemption of
securities of R$761.61 million and the R$49.85 million dividend
received.
Net cash for 2013, generated in investing
activities, including the acquisition of goods, equipment and new
investments amounted to R$53.46 million, mainly due to dividend received
in the amount of R$342.17 million, investment addition of R$102.64
million, and investments in goods and equipment in the amount of R$80.99
million.
The Company’s net cash in 2012, which was used for
investment, including the acquisition of land bank and equipment and
undertaking new ventures, was negative R$184.30 million, mainly due to
investments in property and equipment in the amount of R$108.72 million.
The Company's disbursements in 2014 were mainly
related to investments in goods, sales stands, software, and improvements,
totaling R$88.53 million versus R$80.99 million in 2013, and a net
investment in securities of R$761.61 million in 2014, compared to a net
investment of R$992.94 million in 2013.
The Company’s disbursements in 2013 mainly referred
to investments in goods, sales stands, software, and improvements, and
totaled R$80.99 million versus R$108.73 million in 2012, and a net
investment in securities of R$992.94 million in 2013, compared to a net
investment of R$27.3 million in 2012.
ii.
sources of investment
financing
The Company relies on resources from the sale of
treasury stock, the abovementioned corporate fundraising, debentures
issues and lines of credit from the SFH (National Housing Finance
Scheme).
iii.
significant divestments that are in course or are
foreseen
No significant divestments are in course or
foreseen. |
b) previously disclosed acquisitions of plant,
equipment, patents or other assets that can materially affect the
company’s production capacity |
There have been no acquisitions of plant,
equipment, patents or other assets that can materially affect the
Company’s production capacity. |
c) new products and
services |
There are no new products or
services. |
10.11. Other factors materially impacting the company’s
operating performance that have not been identified or discussed in other items
in this section.
All significant information relevant to this subject has
been disclosed in the items above.
42
APPENDIX II
(As per Appendix 24 items 12.6 and 12.9 of CVM Rule 480,
of December 17, 2009)
12.6. Candidates to
the Fiscal Council appointed by Management:
Management proposes the election of the following members
of the Fiscal Council, whose main information is as follows:
a) Name |
b) Age |
c) Occupation |
d) Individual Taxpayers' ID (CPF) or passport
number |
e) Position |
f) Appointment date |
g) Investiture date |
h) Term of office |
i) Other positions/offices |
j) Appointed by Controlling
Shareholder |
FISCAL COUNCIL |
Olavo Fortes Campos Rodrigues
Junior |
53 |
Business Administrator |
CPF/MF no. 769.488.977-20 |
Sitting member |
Proposal to be submitted to the shareholders at the
Annual General Meeting to be held on 4/16/15 |
Not applicable |
If elected, term ends on 2016
AGM |
Has no other positions/functions at the
Company |
Candidate appointed by
Management. |
Peter Edward Cortes Marsden
Wilson |
43 |
Economist |
CPF/MF no. 168.126.648-20 |
Sitting member |
Proposal to be submitted to the shareholders at the
Annual General Meeting to be held on 4/16/15 |
Not applicable |
If elected, term ends on 2016
AGM |
Has no other positions/functions at the
Company |
Candidate appointed by
Management. |
Luis Fernando Brum de Melo |
35 |
Employee of the Brazilian Federal Savings
Bank |
CPF/MF no. 964.918.410-49 |
Sitting member |
Proposal to be submitted to the shareholders at the
Annual General Meeting to be held on 4/16/15 |
Not applicable |
If elected, term ends on 2016
AGM |
Has no other positions/functions at the
Company |
Candidate appointed by
Management. |
Marcello Mascotto Iannalfo |
46 |
Economist |
CPF/MF no. 101.947.028-39 |
Alternate Member |
Proposal to be submitted to the shareholders at the
Annual General Meeting to be held on 4/16/15 |
Not applicable |
If elected, term ends on 2016
AGM |
Has no other positions/functions at the
Company |
Candidate appointed by
Management. |
Marcelo Martins Louro |
43 |
Business administrator |
CPF/MF no. 118.319.918-02 |
Alternate Member |
Proposal to be submitted to the shareholders at the
Annual General Meeting to be held on 4/16/15 |
Not applicable |
If elected, term ends on 2016
AGM |
Has no other positions/functions at the
Company |
Candidate appointed by
Management. |
Laiza Fabiola Martins de Santa
Rosa |
34 |
Economist |
CPF/MF no. 294.953.408-29 |
Alternate Member |
Proposal to be submitted to the shareholders at the
Annual General Meeting to be held on 4/16/15 |
Not applicable |
If elected, term ends on 2016
AGM |
Has no other positions/functions at the
Company |
Candidate appointed by
Management. |
12.7. Members of statutory, audit,
risk, financial and compensation committees:
Not applicable
43
12.8. Regarding each candidate to the
Fiscal Council:
a) Resumes:
Sitting members
Olavo Fortes Campos Rodrigues Junior. He began his career at Arthur Andersen, in the auditing
and consulting areas. He has experience in management of companies in the
service, manufacturing, and retail industries, and worked at Carrefour,
Pepsi-Cola Engarrafadora, Alcoa Brazil and Argentina, and Grupo Siciliano as
CEO. In the last 5 years, he served as (i) Superintendent Officer at Grupo
Papaiz, manufacturer of padlocks, locks, and window and door frame components;
(ii) member of the Fiscal Council of Duke Enegy International, Geração
Paranapanema S.A., company whose core activity is hydropower generation and
energy trading; (iii) member of the Board of Directors of Renova Energia S.A., a
publicly-held company whose core activity is the production of renewable energy.
especially wind power; (iv) alternate member of the Fiscal Council of
São Carlos Empreendimentos e Participações S.A., company that specializes in
equity management of commercial properties; and (v) member of the Fiscal Council
of Alphaville Urbanismo S.A., whose core activity is the development of urban
lots (the Company holds a 30% interest at Alphaville Urbanismo S.A.); He
currently holds the following positions: (a) member of the Company's Fiscal
Council; (b) member of the Fiscal Council of Construtora Tenda S.A., a
publicly-held company whose core activity is the construction and development of
real estate projects, and a wholly-owned subsidiary of the Company; (c) Managing
Partner at OREA Consultoria Empresarial, which main activity is business
management and corporate governance consulting; (v) Chairman of Fundação São
Isidoro, a not-for profit foundation; and (vi)
Partner - Director of OREA Business Consulting, a company
whose main activity is in business management consulting and corporate
governance; and (d) President of the St. Isidore Foundation, non-profit
foundation
Peter Edward Cortes Marsden Wilson. In the last five years he served as Partner responsible
for the corporate finance department and restructuring of middle sized companies
of Managrow Cosultoria Estratégica em Finanças Ltda.. Additionaly, he
serves/served in the following management positions: (i) current member of
the Board of Directors of Construtora Tenda S.A., a publicly-held company whose
core activity is the construction and development of real estate projects, and a
wholly-owned subsidiary of the Company (ii) current member of the Board of
Directors of Banco Mercantil do Brasil S.A., banking institution; (iii) current
member of Fiscal Council of B2W S.A., retail company; (iv) current member of the
Fiscal Council of Bradespar S.A., investment holding of non financial
institutions; (v) member of the Fiscal Council of Vivo S.A., telecom company;
(vi) member of the Fiscal Council of Banco Pine S.A., banking institution; (vii)
member of the Board of Directores of Confab Industrial S.A., mettalurgical
company; (viii) member of the Board of Directors of Minupar Participações S.A.,
investment holding of companies whose core activity is the processing of pig and
chicken meat; and (ix) member of the Fiscal Council of Trisul S.A., company
whose core activity is the construction and development of real estate projecta,
acting in the same market as the Company.
Luis Fernando Brum de Melo. In the last 5 years he served as (i) Institutional
Relations Manager and Executive Manager in the Asset Management Vice-Presidency
(VITER) of Caixa Econômica Federal, company whose core activity is asset
management; (ii) member of the Board of Directors of Ijuí Energia S.A., a
Company of the Alupar Investimento group, responsible for the implementation of
the São José Hydroelectric Power Plant on the Ijuí River, in the northwestern
region of Rio Grande do Sul; (iii) member of the Board of Directors of Foz do
Rio Claro Energia S.A.; and (iv) member of the Company's Fiscal Council. None of
the foregoing corporations is part of the Company’s economic group.
Alternate Members
Marcello Mascotto Iannalfo. In the last 5 years he served as (i) Chief
Administrative and Financial Officer for Latin America of Grupo El Tejar, an
agribusiness company; (ii) Chief Financial Officer of Trip Linhas Aéreas, an
aviation company; (iii) Chief Administrative and Financial Officer of
Termomecânica São Paulo S.A., a company whose core activity is the
transformation of non-ferrous metals; (iv) Chief Administrative and Financial
Officer and member of the Board of Directors of Power Transmission Industries
S.A., a manufacturer of speed reducers and connections; (v) Chief Financial
Officer and Chairman of the Board of Areva Transmissão e Distribuição de Energia
Ltda., in Chile, Argentina, Colombia and Venezuela, a company whose core
activity is the trading of power transmission and distribution equipment; (vi)
shareholder in Clic Metais e Produtos Ltda., a producer of metal fittings; (vii)
alternate member of the Company's Fiscal Council; (viii) current alternate
member of the Fiscal Council of Construtora Tenda S.A., a publicly-held company whose
core activity is the construction and development of real estate projects, and a
wholly-owned subsidiary of the Company; and (ix) alternate member of the Fiscal
Council of Alphaville Urbanismo S.A. for the period the board was operative. The
Company holds a 30% interest at Alphaville Urbanismo S.A., a company whose core
activity is the development of urban lots.
44
Marcelo Martins Louro. He began his career at Arthur Andersen in the auditing
and consulting areas, and is alternate member of the Fiscal Council of the
Company and of Construtora Tenda S.A.. In the last 5 years, he served as (i)
Chief Financial Officer and alternate member of the Fiscal Council of Alphaville
Urbanismo S.A., a company whose core activity is the development of urban lots
and where the Company holds a 30% interest; (ii) Chief Planning and Control
Officer of Construtora Tenda S.A., a publicly-held company whose core activity
is the construction and development of real estate projects, and a wholly-owned
subsidiary of the Company; and (iii) Chief Financial Officer of Scalina S.A., a
textile company; and (iv) Chief Investor Relations Officer of T4F Entretenimento
S.A., an entertainment Company. The Company holds a 30% interest at Alphaville
Urbanismo S.A., a company whose core activity is the development of urban lots
and is parent company of Construtora Tenda S.A..
Laiza Fabiola Martins de Santa Rosa. She is currently Executive Director of the National
Management of Funds for the Real Estate Sector of Caixa Econômica Federal,
an asset management Company, which she joined in 2006, having worked in the areas of
housing and commercial loans, including Asset Management Vice-Presidency of Caixa Econômica
Federal, with fund management and operations
structuring, Investment Funds in Participations, Investment Funds in Credit
Rights and Real Estate Investment Funds. None of the foregoing corporations is part of the
Company’s economic group.
b) Any administrative or judicial (including criminal)
sentences entered against the executive officers or members of the Company's
Fiscal Council:
Mr. Olavo Fortes Campos Rodrigues Junior represented for all intents and purposes that in the
last 5 years he has not been under the effects of any criminal sentence, nor has
had any judgment entered or penalty imposed against him in any administrative
proceeding pending at the CVM, nor has been convicted in any final and
unappealable court sentence or administrative judgment that resulted in
suspension of his ability to, or inability to, engage in any professional or
business activities
Mr. Peter Edward Cortes Marsden Wilson represented for all intents and purposes that in the
last 5 years he has not been under the effects of any criminal sentence, nor has
had any judgment entered or penalty imposed against him in any administrative
proceeding pending at the CVM, nor has been convicted in any final and
unappealable court sentence or administrative judgment that resulted in
suspension of his ability to, or inability to, engage in any professional or
business activities
Mr. Luis Fernando Brum de Melo represented for all intents and purposes that in the
last 5 years he has not been under the effects of any criminal sentence, nor has
had any judgment entered or penalty imposed against him in any administrative
proceeding pending at the CVM, nor has been convicted in any final and
unappealable court sentence or administrative judgment that resulted in
suspension of his ability to, or inability to, engage in any professional or
business activities
Mr. Marcello Mascotto Iannalfo represented for all intents and purposes that in the
last 5 years he has not been under the effects of any criminal sentence, nor has
had any judgment entered or penalty imposed against him in any administrative
proceeding pending at the CVM, nor has been convicted in any final and
unappealable court sentence or administrative judgment that resulted in
suspension of his ability to, or inability to, engage in any professional or
business activities
Mr. Marcelo Martins Louro represented for all intents and purposes that in the
last 5 years he has not been under the effects of any criminal sentence, nor has
had any judgment entered or penalty imposed against him in any administrative
proceeding pending at the CVM, nor has been convicted in any final and
unappealable court sentence or administrative judgment that resulted in
suspension of his ability to, or inability to, engage in any professional or
business activities
Ms. Laiza Fabiola Martins de Santa Rosa represented for all intents and purposes that in the
last 5 years he has not been under the effects of any criminal sentence, nor has
had any judgment entered or penalty imposed against him in any administrative
proceeding pending at the CVM, nor has been convicted in any final and
unappealable court sentence or administrative judgment that resulted in
suspension of his ability to, or inability to, engage in any professional or
business activities
45
12.9. Any marital
relationship, de facto marriage or kinship down to the second degree
between:
a) Executive officers of the
Company: |
There are no marital relationship,
de facto marriage or kinship down to the second degree among the
candidates to the Fiscal Council of the Company themselves or between any
of them and the other members of Management.
In addition, the Company’s Code of
Ethics does not allow for the hiring of employees’ and/or upper
management’s first degree family members (father, mother, siblings,
children), spouse, cousins, uncles/aunts and nephews/nieces.
Stable relationships among
employees and/or upper management is not allowed either. |
b) (i) directors of the issuer and (ii) directors
of direct or indirect subsidiaries of the issuer: |
There are no marital relationship,
de facto marriage or kinship down to the second degree among the
candidates to the Fiscal Council of the Company and directors of direct or
indirect subsidiaries of the Company. In addition, the Company’s Code of
Ethics does not allow for subsidiaries to hire first degree family members
(father, mother, siblings, children), spouse, cousins, uncles/aunts and
nephews/nieces of employees and/or upper management of the Company.
Stable relationships among
employees and/or upper management of the Company and its subsidiaries is
not allowed either. |
c) (i) Directors of the issuer or of its direct or
indirect subsidiaries and (ii) direct or indirect controlling shareholders
of the issuer |
There are no marital relationship,
de facto marriage or kinship down to the second degree among the
candidates to the Fiscal Council of the Company and direct or indirect
controlling shareholders of the Company. |
d) (i) Directors of the issuer and (ii) directors
of direct or indirect parent companies of the issuer |
There are no marital relationship,
de facto marriage or kinship down to the second degree among the
candidates to the Fiscal Council of the Company and directors of direct or
indirect parent companies of the
Company. |
12.10. Information regarding the
existence of any hierarchy, service agreements or control relationships in the
last 3 fiscal years between directors of the Company and:
a) Any direct or indirect subsidiary of the
Company: |
Not applicable. |
b) Direct or indirect controlling shareholder of
the Company: |
Not applicable. |
c) If relevant, any supplier, client, debtor or
creditor of the Company, of a subsidiary or parent or subsidiary company
of any of such persons: |
The Company’s Code of Ethics
prohibits any such relationship.
In addition, the Company’s Audit
Committee’s statute sets the guidelines for the Company to hire employees
or former employees of the independent
auditor. |
46
APPENDIX III
(As per Appendix 24, item 13 of CVM Instruction no. 480
of December 17, 2009)
13. MANAGEMENT
COMPENSATION
13.1. Compensation practice and policy of the Board of
Directors, the statutory and non Statutory Executive Officers, the Fiscal
Council, the Statutory Committees and the Audit, Risk, Finance and Compensation
Committees, covering the following aspects:
a. objectives of the compensation policy or
practice:
The compensation policy of the Company for its managers,
including members of the Board of Directors, statutory and non-statutory
Directors, members of the Fiscal Council, in line with the best corporate
governance practices, aims to attract and retain the best professionals in the
market. Compensation is established based on market research and directly aligns
the interests of the executives in question and those of the Company's
shareholders.
In the case of the Directors, the existence of a variable
short-term and long-term incentives (the later in the form of grant of stock
option plans) practice permits the sharing of the Company's risks and results
with its main executives, being characteristic of a transparent policy and aimed
at achieving long-lasting results and the perpetuity of the Company.
b. breakdown of compensation,
indicating:
(i)
description of compensation elements and the objectives of each one
a) Board of Directors
The members of the Board of Directors are entitled to a
fixed compensation, which is established in accordance with market criteria and
aims to attract professionals who contribute effectively to the results of the
company; and to the stock options program, based on the Company
shares.
b) Executive Board
The members of the statutory and non-Statutory Executive
Officers are entitled to fixed and variable short-term compensation, and
long-term incentive tranche, in the form of a stock option plan, based on the
Company shares. The amounts paid in fixed compensation are close to the median
market standards. The variable portion has significant representation in the
total compensation, which means that the Directors share risks and results with
the Company, so providing a greater alignment of interests between executives
and shareholders.
The objective of the short-term variable compensation is
to reward the results achieved for the year if the targets stipulated for the
period were reached. By the same token, long-term incentives, based on stock
options, aims at providing reward for results achieved over a longer period
(generally more than 2 years. This policy aims to align the interests of the
executives with those of the shareholders.
In addition to fixed and variable
compensation, the Company offers its directors health plan benefits and life
insurance, which are established in accordance with market standard.
47
It is important to emphasize that the Company has a
Compensation Committee that analyses the strategy for fixed and variable
compensation to be adopted, the models for granting of stock option models and
the recommendations of corresponding beneficiaries of the plan, for subsequent
approval by the Board of Directors.
c) Fiscal Council
The members of the Fiscal Council, in addition to
mandatory reimbursement for necessary travel and lodging expenses as a result of
their function, are entitled only to a fixed compensation based on the legal
minimum.
d) Committees
All the members of the Company's Committees are managers
or employees, and do not receive specific compensation for the fact that they
participate on the Committees.
(ii) proportion of each
element in the total compensation
In the case of the Fiscal Council and the Board of
Directors, fixed compensation corresponds to 100% of the total compensation, as
previously mentioned.
In the case of the Statutory Executive Officers, fixed
compensation corresponds to approximately 30% of the total compensation, while
for the non-Statutory Executive Officers, fixed compensation corresponds to an
average of 40%. Regarding the tranche referring to variable incentives, the
stock option plans (long-term) represent approximately 50%, while the part
referring to the bonuses (short-term) represents approximately the other 50% –
in this case, for both the statutory and the non-Statutory Executive
Officers.
The variable incentives percentages may be modified due
to changes in the results presented by the Company in the period, given the
component of shared risks and results inherent in the variable compensation
tranche.
(iii) methodology for the
calculation and readjustment of each of the compensation elements
The amount of compensation paid by the Company to its
managers and employees are periodically compared with those in the market, based
on research carried out by external specialist consultants, so that they can
measure their competitiveness and evaluate the possible need to carry out any
adjustments to some of the components. The researches involve all positions in
the Company’s structure and include companies that can or cannot be from the
same segment and that have all or some of the following characteristics: similar
presence as the Company, publicly-held company, national capital, high level of
corporate governance and good practices of compensation and human
resources.
(iv) reasons which
justify the compensation breakdown
The Company adopts a compensation breakdown model, which
concentrates a significant tranche of the total compensation into variable
components (both short and long-term), which is part of its policy of sharing
risks and results with its main executives.
c. main performance indicators that are taken into
consideration in the determination of each compensation
element:
For the determination of all the compensation items, the
performance of the employee and his individual targets are taken into
consideration, in accordance to what was achieved in comparison to the
proposition and agreed for the year. Variable compensation is
directly linked to the indicators contained in the Company's Scorecard, which is approved by the Board of Directors
and which contains defined targets for the period, such as for example cash
flow, EBITDA and sales volume, among others.
48
d. how compensation is structured to reflect the
improvement in performance indicators:
Any changes to the compensation items is directly linked
to the performance of the individual and that of the Company and the reaching of
targets in the period in question, while salary increases, the variation in
salary multiples received in the form of bonuses and the quantity of options
granted under the option plan are all directly linked to the performance
demonstrated in the evaluated period.
e. how compensation policy or practice is aligned with
the short, medium and long-term interests of the Company:
The practice adopted by the Company with regard to the
various components of the total compensation is directly aligned to the short,
medium and long-term interests of the Company. Fixed compensation reflects
compensation in line with market practices and, as the cycle in the segment is
medium and long term, the Company believes that a significant portion of
compensation and variable incentives should be remitted to these periods, fully
in line with the Company performance monitoring and, therefore, reaffirming the
sharing of risk and results between executives and the Company.
f. Existence of compensation supported by subsidiaries,
controlled companies, or direct or indirect controlling
shareholders:
There is no compensation supported by subsidiaries,
controlled companies, or direct or indirect controlling shareholders of the
company.
g. Existence of any compensation or benefit linked to the
occurrence of any particular corporate event, such as the sale of control of the
Company:
There is no compensation or benefit linked to the
occurrence of any particular corporate event, such as the sale of control of the
Company.
13.2. Concerning the compensation recognized in the
results of the last 3 financial years and expected for the current financial
year, for the Board of Directors, the Statutory Executive Officers and the
Fiscal Council:
49
Year 2012 |
Board of Directors |
Fiscal Council |
Statutory Executive Officers |
Total |
Number of members (1) |
9.00 |
3.00 |
5.83 |
17.83 |
Fixed annual compensation |
1,791,001 |
137,940 |
3,923,539 |
5,852,480 |
- Pro Labore (2) |
1,772,352 |
137,940 |
3,709,999 |
3,847,939 |
- Direct or indirect benefits (5) |
18,649 |
NA |
213,540 |
232,189 |
- Compensation for participation on committees |
NA |
NA |
NA |
NA |
- Others |
NA |
NA |
NA |
NA |
Annual variable compensation |
NA |
NA |
10,351,753 |
10,351,753 |
- Bonus |
NA |
NA |
10,351,753 |
10,351,753 |
- Profit-sharing |
NA |
NA |
NA |
NA |
- Compensation for participation on committees |
NA |
NA |
NA |
NA |
- Commission |
NA |
NA |
NA |
NA |
- Others |
NA |
NA |
NA |
NA |
Postemployment benefits |
NA |
NA |
NA |
NA |
Benefits as a result of leaving the company |
NA |
NA |
NA |
NA |
Compensation based on shares (3) |
410,051 |
NA |
6,330,745 |
6,740,796 |
Total (R$) (4) |
2,201,052 |
137,940 |
20,606,037 |
22,945,029 |
Notes:
1. The number of members of each body corresponds to the annual average of the number of members of each body measured on a monthly basis.
2. The value stated as pro-labore does not include payroll charges.
3. The amounts presented as compensation based on shares reflect the account at cost to be realized in 2012, related to all programs granted to the Board of Directors and Statutory Executive Officers, in accordance to pricing models of Monte Carlo (traditional stock option plans) and Binomial (restricted stock option plans). The Board’s Program, granted in 2011, expired in 2012 (see item 13.4 of this Reference Form), however an amortized expense was recorded in this year.
4. The information described in the Financial Statements presented are related to pro-labore and benefits (when applicable) of Board of Directors, Fiscal Council and Statutory Executive Officers.
5. Benefits paid to a Member, who is a former officer of the Company, therefore keeping the Officer policy.
Year 2013 |
Board of Directors |
Fiscal Council |
Statutory Executive Officers |
Total |
Number of members (1) |
9.00 |
3.00 |
6.00 |
18.00 |
Fixed annual compensation |
1,898,927 |
165,600 |
4,225,811 |
6,290,338 |
- Pro-Labore (2) |
1,852,416 |
165,600 |
3,900,000 |
5,918,016 |
- Direct or indirect benefits (3) |
46,511 |
NA |
325,811 |
372,322 |
- Compensation for participation on committees |
NA |
NA |
NA |
NA |
- Others |
NA |
NA |
NA |
NA |
Annual variable compensation |
NA |
NA |
10,406,562 |
10,406,562 |
- Bonus (6) |
NA |
NA |
10,406,562 |
10,406,562 |
- Profit-sharing |
NA |
NA |
NA |
NA |
- Compensation for participation on committees |
NA |
NA |
NA |
NA |
- Commission |
NA |
NA |
NA |
NA |
- Others |
NA |
NA |
NA |
NA |
Postemployment benefits |
NA |
NA |
NA |
NA |
Benefits as a result of leaving the company |
NA |
NA |
NA |
NA |
Compensation based on shares (4) |
NA |
NA |
7,164,377 |
7,164,377 |
Total (R$) (5) |
1,898,927 |
165,600 |
21,796,750 |
23,861,277 |
Notes:
1. The Board of Directors and Fiscal Council are not eligible for short-term variable compensation.
2. The number of members of each body corresponds to the annual average of the number of members of each body measured on a monthly basis.
3. As from 2011, there is no maximum limit for reaching targets regarding bonus payment.
4. The Variable Remuneration amounts presented are still awaiting approval.
5.The information described in the Financial Statements presented are related to pro-labore and benefits (when applicable) of Board of Directors, Fiscal Council and Statutory Executive Officers.
6. The Variable Remuneration amounts presented are still awaiting approval.
50
Year 2014 |
Board of Directors |
Fiscal Council |
Statutory Executive
Officers |
Total |
Number of members
(1) |
7.67 |
3.00 |
5.17 |
15.83 |
Fixed annual compensation |
2,083,230 |
226,826 |
4,729,761 |
7,039,817 |
- Pro-Labore (2) |
1,720,151 |
189,021 |
3,629,677 |
5,538,850 |
- Direct or indirect benefits
(3) |
19,049 |
NA |
374,148 |
393,197 |
- Compensation for participation on
committees |
NA |
NA |
NA |
NA |
- Others |
344,030 |
37,804 |
725,935 |
1,107,770 |
Description of other fixed
compensation |
INSS contribution
(employer's
obligation) |
INSS contribution
(employer's
obligation) |
INSS contribution
(employer's
obligation) |
|
Annual variable
compensation |
NA |
NA |
3,412,500 |
3,412,500 |
- Bonus(4) |
NA |
NA |
3,412,500 |
3,412,500 |
- Profit-sharing |
NA |
NA |
NA |
NA |
- Compensation for participation on
committees |
NA |
NA |
NA |
NA |
- Commission |
NA |
NA |
NA |
NA |
- Others |
NA |
NA |
NA |
NA |
Postemployment benefits |
NA |
NA |
NA |
NA |
Benefits as a result of leaving the
company |
NA |
NA |
NA |
NA |
Compensation based on
shares(5) |
NA |
NA |
9,743,910 |
9,743,910 |
Total (R$)(6) |
2,083,230 |
226,826 |
17,886,170 |
20,196,227 |
Notes:
1.
The number of members of each body corresponds
to the annual average of the number of members of each body measured on a
monthly basis.
2. The value stated as pro-labore does not include payroll charges.
3.
Benefits paid to a Member, during a few
months, who is a former officer of the Company, therefore keeping the Officer
policy.
4.
The amounts shown as bonuses are still being
calculated.
5.
The amounts shown for stock-based compensation
reflect the accounting cost to be measured in 2014 related to all programs
granted to the Statutory Executive Officers, in accordance with the pricing
models of Monte Carlo (Traditional Stock Options Program) and Binomial
(Restricted Stock Options Programs).
6.
The information described in the Financial
Statements presented are related to pro-labore and benefits (when applicable) of Board of Directors,
Fiscal Council and Statutory Executive Officers.
Year 2015 – Forecast |
Board of Directors |
Fiscal Council |
Statutory Executive
Officers |
Total |
Number of members
(1) |
7.00 |
3.00 |
6.00 |
16.00 |
Fixed annual compensation |
2,234,827 |
245,520 |
5,642,345 |
8,122,692 |
- Pro-Labore (2) |
1,862,356 |
204,600 |
4,290,000 |
6,356,956 |
- Direct or indirect benefits
(3) |
NA |
NA |
494,345 |
494,345 |
- Compensation for participation on
committees |
NA |
NA |
NA |
NA |
- Others |
372,471 |
40,920 |
858,000 |
1,271,391 |
Description of other fixed
compensation |
INSS contribution
(employer's
obligation) |
INSS contribution
(employer's
obligation) |
INSS contribution
(employer's
obligation) |
|
Annual variable
compensation |
NA |
NA |
6,581,250 |
6,581,250 |
- Bonus |
NA |
NA |
6,581,250 |
6,581,250 |
- Profit-sharing |
NA |
NA |
NA |
NA |
- Compensation for participation on
committees |
NA |
NA |
NA |
NA |
- Commission |
NA |
NA |
NA |
NA |
- Others |
NA |
NA |
NA |
NA |
Postemployment benefits |
NA |
NA |
NA |
NA |
Benefits as a result of leaving the
company |
NA |
NA |
NA |
NA |
Compensation based on
shares |
NA |
NA |
NA |
NA |
Total (R$) |
2,234,827 |
245,520 |
12,223,595 |
14,703,942 |
Notes:
1.
The number of members of each body corresponds
to the annual average of the number of members of each body measured on a
monthly basis.
2.
The value stated as pro-labore does not include payroll charges.
3.
The information described in the Financial
Statements presented are related to pro-labore and benefits (when applicable) of Board of Directors,
Fiscal Council and Statutory Executive Officers.
51
13.3. Concerning the variable compensation in the last 3
financial years and that expected for the current financial year for the Board
of Directors, the Statutory Executive Officers and the Fiscal
Year 2012 |
Board of Directors (1) |
Fiscal Council (1) |
Statutory Executive
Officers |
Total |
Number of members
(2) |
9.00 |
3.00 |
5.83 |
17.83 |
Bonus |
|
|
|
|
Minimum amount set under the
compensation plan |
NA |
NA |
0 |
0 |
Maximum amounts set under the
compensation plan (3) |
NA |
NA |
NA |
NA |
Value expected under the compensation
plan
- targets having been reached
|
NA |
NA |
9,900,000 |
9,900,000 |
Effective recognized value |
NA |
NA |
10,351,753 |
10,351,753 |
Participation on results |
|
|
|
|
Minimum amount set under the
compensation plan |
NA |
NA |
NA |
NA |
Maximum amounts set under the
compensation plan |
NA |
NA |
NA |
NA |
Value expected under the compensation
plan
- targets having been
reached |
NA |
NA |
NA |
NA |
Effective recognized value |
NA |
NA |
NA |
NA |
Note:
1. The Board of Directors and Fiscal
Council are not eligible for short-term variable compensation.
2. The number
of members of each body corresponds to the annual average of the number of
members of each body measured on a monthly basis.
3. As from 2011, there is
no maximum limit for reaching targets regarding bonus
payment.
Year 2013 |
Board of Directors (1) |
Fiscal Council (1) |
Statutory Executive
Officers |
Total |
Number of members
(2) |
9.00 |
3.00 |
6.00 |
18.00 |
Bonus |
|
|
|
|
Minimum amount set under the
compensation plan (3) |
n.a |
n.a |
0 |
0 |
Maximum amounts set under the
compensation plan (4) |
n.a. |
n.a. |
n.a |
n.a |
Value expected under the compensation
plan - targets having been reached (5) |
n.a. |
n.a. |
11,484,375 |
11,484,375 |
Effective recognized value |
n.a. |
n.a. |
9,906,563 |
9,906,563 |
Participation on results |
|
|
|
|
Minimum amount set under the
compensation plan |
n.a. |
n.a. |
n.a. |
n.a. |
Maximum amounts set under the
compensation plan |
n.a. |
n.a. |
n.a. |
n.a. |
Value expected under the compensation
plan - targets having been reached |
n.a. |
n.a. |
n.a. |
n.a. |
Note:
1. The Board of Directors and Fiscal
Council are not eligible for short-term variable compensation.
2. The number
of members of each body corresponds to the annual average of the number of
members of each body measured on a monthly basis.
3. As from 2011, there is
no maximum limit for reaching targets regarding bonus payment.
4. The Variable Remuneration amounts presented
are still awaiting approval.
Year 2014 |
Board of Directors (1) |
Fiscal Council(1) |
Statutory Executive
Officers |
Total |
Number of members
(2) |
7.67 |
3.00 |
5.17 |
15.83 |
Bonus |
|
|
|
|
Minimum amount set under the
compensation plan |
n.a |
n.a |
0 |
0 |
Maximum amounts set under the
compensation plan |
n.a. |
n.a. |
5,687,500 |
5,687,500 |
Value expected under the compensation
plan - targets having been reached (3) |
n.a. |
n.a. |
3,412,500 |
3,412,500 |
Participation on results |
|
|
|
|
Minimum amount set under the
compensation plan |
n.a. |
n.a. |
n.a. |
n.a. |
Maximum amounts set under the
compensation plan |
n.a. |
n.a. |
n.a. |
n.a. |
Value expected under the compensation
plan - targets having been reached |
n.a. |
n.a. |
n.a. |
n.a. |
Note:
1. The Board of Directors and Fiscal Council
are not eligible for short-term variable compensation.
2. The number of members of each body
corresponds to the annual average of the number of members of each body measured
on a monthly basis.
3. The amount presented is still being
calculated.
52
Year 2015 – Forecast |
Board of Directors (1) |
Fiscal Council(1) |
Statutory Executive
Officers |
Total |
Number of members
(2) |
7.00 |
3.00 |
6.00 |
16.00 |
Bonus |
|
|
|
|
Minimum amount set under the
compensation plan |
n.a |
n.a |
0 |
0 |
Maximum amounts set under the
compensation plan |
n.a. |
n.a. |
6,581,250 |
6,581,250 |
Value expected under the compensation
plan - targets having been reached |
n.a. |
n.a. |
5,265,000 |
5,265,000 |
Participation on results |
|
|
|
|
Minimum amount set under the
compensation plan |
n.a. |
n.a. |
n.a. |
n.a. |
Maximum amounts set under the
compensation plan |
n.a. |
n.a. |
n.a. |
n.a. |
Value expected under the compensation
plan - targets having been reached |
n.a. |
n.a. |
n.a. |
n.a. |
Note:
1. The Board of Directors and Fiscal Council
are not eligible for short-term variable compensation
2. The number of members of each body
corresponds to the annual average of the number of members of each body measured
on a monthly basis.
13.4. Concerning the compensation plan based on shares
for the Board of Directors and the Statutory Executive Officers, in force at the
end of the financial year and envisaged for the current financial
year:
a. general terms and conditions:
Within the scope of the Company Stock Option Plan,
employees and managers (“beneficiaries”) are eligible to receive call options on
ordinary shares issued by the Company. In principle, all managers and employees
are eligible to participate, seeing that currently 69 people, among the managers
and employees, hold stock options in the Company, taking all the Option Programs
together.
The first Stock Option Plan was approved at the Annual
General Meeting held on April 30, 2002, ratifying the terms and conditions
approved by the Board of Directors as a meeting held on April 3, 2000 (“Option
Plan 2002”). There are no further plans for options to be granted under the
Option Plan 2002, whose conditions are not applicable to the granting of options
currently carried out by the Company.
At a General Shareholders Meeting on February 3, 2006 a
second share option plan was approved (“Option Plan 2006”), and at a General
Shareholders Meeting on June 18, 2008, a third option plan was approved for
shares issued by the Company (“Option Plan 2008”). Option Plan 2006 and
Option Plan 2008 establish similar terms and conditions to each other, the most
important difference being the possibility instituted by Option Plan 2008 of the
granting of options in the form of Restricted Stock Options, as explained
further on in this report. Option Plan 2008 is applicable to options
currently granted by the Company, the general conditions of which are described
below.
The Plan (thus considering Option Plan 2006 and Option
Plan 2008, without distinction, except where otherwise indicated) is managed by
the Board of Directors, which has wide-reaching powers in terms of its
organization and option granting, observing the limits imposed by the Plan. The
Board of Directors is responsible for the granting of options, establishing the
specific terms and conditions applicable to each granting of A Options as part
of option programs (“Programs”), in which may be defined: (i) the beneficiaries;
(ii) the total number of shares in the Company that are the object of the
options granted, and their division into lots; (iii) the exercise price; (iv)
the lock up period during which the option may not be exercised, the periods for
the exercising A Options and the limits dates for the total or partial
exercising of the option and on which the option rights expire; (v) restrictions
on the availability of shares received by the exercising of the option; and (vi)
targets related to the performance of the employees, managers or the Company.
The Board of Directors may also opt to delegate its functions to a specific
Committee. Currently, the Compensation Committee is responsible for analyzing
and recommending all the actions related to compensation and long term
incentives, for approval of the Board of Directors.
53
The Beneficiaries covered by the options granted must
sign a Contract for the Granting of Options with the Company (“Option
Contracts”), by which the Beneficiaries have the option of buying lots of shares
issued by the company, in accordance with the terms and conditions of the
corresponding Plan and Program. The option contracts may include specific
conditions applicable to a particular Beneficiary.
The general rule is that the option exercise price will
be equivalent to the average trading value of the shares over 30 days of trading
on BM&FBOVESPA S.A. (the stock exchange of Sao Paulo) prior to the option
granting date (”market value”), with the possibility of applying monetary
correction or interest to this figure, as decided by the Board of Directors for
each program. Option Plan 2008 introduced the possibility of the Board of
Directors authorizing differentiated options to particular Beneficiaries (“B
Options”) for the exercise price of R$0.01. The exercising of B Options,
if granted, will be always conditional and proportional to the previous
exercising of the other options in Option Plan 2008 and authorized for each
Beneficiary (“A Options”, whose exercise price will always be calculated in
accordance with Market Value) and during the course of the lock up period, of a
minimum of 2 years counting from the date of the respective option granting
date. Other conditions May be established for each Program (see item “h” below,
description of programs with regard to appreciation targets). With this,
Option Plan 2008 introduced the possibility of the granting of options in a new
format, known as “Restricted Stock Options”, under which B Options, inextricably
linked to A Options, serve as an adjustment factor in the initial granting of A
Options, so that the effective gain of the beneficiaries will depend on the
performance by the Company over the medium and long term.
Under Option Plan 2006, 2 programs were approved,
respectively at meetings of the Board of Directors on March 23, 2006 (“2006
Program”) and February 9, 2007 (“2007 Program”).
Under Option Plan 2008, 9 programs were approved,
respectively at meetings of the Board of Directors on May 9, 2008 (“2008
Program”), and June 26, 2009 (“2009 Program”), December 17, 2009 (“2009 Program
II”), August 4, 2010 (“2010 Program”), March 31, 2011 (“2011 Program”), July 13,
2011, in which 2 Programs were approved (“2011 Program II” and “Council Program
2011”), August 20, 2012 (“2012 Program”), May 10, 2013 (“2013 Program”) and
March 14, 2014 (“2014 Program”).
The 2008 Program, the 2009 Program, the 2010 Program, the
2011 Program II, the 2013 Program and the 2014 Program were divided into 2
grants, with distinct conditions for each, described in the items below, where
indicated. The 2012 Program was divided into 3 grants, also with distinct
conditions for each, described in the items below, where indicated.
All the Programs approved under the 2006 Option Plan, as
well as the first option grant under the 2008 Program, the two option
grants under the 2009 Program, the first option grant under the
2010 Program and the first option grant under the 2011 Program II, second and
third option grants under the 2012 Program and the 2013 Program were carried out
in accordance with a conventional option grant model, which is to say, options
were only granted whose exercise price corresponds to the Market Value of the
Company's shares. This model was also used in the 2011 Board Program, in which
options were granted to the members of the Board of Directors. While the second
granting of the 2008 Program, the 2009 Program II, the second granting of the
2010 Program, the 2011 Program, the second granting of the 2011 Program II, the
first option grant under the 2012 Program, the first option grant under the 2013
Program and the grants under the 2014 Program followed the Restricted Stock
Option model, so that each beneficiary received both A Options and B
Options.
54
The options granted to the members of the Statutory
Executive Officers under the 2006 Program, under the 2009 Program, under the
first granting of the 2010 Program and under the first granting of the 2011
Program II were replaced in their entirety by options granted under the 2012
Program, through the signing of corresponding Contracts with the Company.
In this way, no member of the Statutory Executive
Officers is currently a beneficiary of the 2006 Program, the 2007 Program, the
2008 Program, or the 2009 Program, first granting of the 2010 Program or first
granting of the 2011 Program II. It should also be observed that no member of
the Statutory Executive Officers is a beneficiary of the second granting of the
2010 Program, or the 2011 Program.
The options of the 2011 Board Program expired. According
to the rules of this Program, it would have been necessary the exercise at least
20% of the options of the allotment incorporated in 2012 for the allotments not
incorporated to be cancelled. Thus, currently, the members of the Board of
Directors are not beneficiaries in any Stock Option Plan of the Company.
Furthermore, as a result of the incorporation of the
shares issued by Construtora Tenda S.A. by the Company, as approved at an
Extraordinary General Meeting held on December 30, 2009, certain of options
granted by Construtora Tenda S.A. were assumed by the Company, under the terms
set at the meeting of the Board of Directors held on January 4, 2010. With this,
the Board of Directors approved a further 3 Programs, these being Special Stock
Option Program I, Special Stock Option Program II and Special Stock Option
Program III (“Special Programs”). Each of the Special Programs had specific
conditions which sought to reconcile the conditions of the plan with the need to
maintain an economic balance of the options granted to the beneficiaries of the
corresponding programs of Construtora Tenda S.A., in such a way that their
conditions reflected, in so far as is possible under the terms of the plan, the
corresponding conditions previously applicable to the beneficiaries when they
exercised their roles at Construtora Tenda S.A.. Special Program I and
Special Program III carried out option grants which essentially reflected
conventional option models.
While Special Program II carried out 2 grantings with
partially distinct conditions, both followed the Restricted Stock Option model,
which was also adopted by Construtora Tenda S.A. for certain of their option
grants. The difference between these grants is due to the fact that certain
Beneficiaries before being beneficiaries under the Tenda Plan, were
beneficiaries of the Company itself, having exercised roles in the then
subsidiary Fit Residencial Empreendimentos Ltda., which was incorporated by
Tenda in 2008, resulting in the migration of these beneficiaries to the Tenda
option plan. So that the conditions of the options that had been granted
to these beneficiaries under the Restricted Stock Option model could be
preserved, and additional lot of B Options were granted to them when they
migrated to the Tenda plan, with a lock up period and reflecting the respective
B Options to which each of them would have the right to exercise in the first
company, and because they had previously exercised A Options granted by the
Company. With the incorporation of the shares of Construtora Tenda S.A. by
the Company and the further migration as a result, the conditions applicable to
the beneficiaries of Restricted Stock Options were incorporated in the second
granting of Special Program II, which contained two Option B lots, with separate
and distinct lock up periods.
With regard to the exercise price of the options to be
granted by the Special Programs, the criteria of Market Value was not used for
the traditional options or for A Options: in order to reflect the conditions
previously applicable to beneficiaries of the programs of Construtora Tenda S.A.
who switched to the Company, the exercise price were used that was applicable
under the corresponding program of Construtora Tenda S.A. (which reflected the
market value of the shares in that company), adjusted for the swap ratio for the
shares established for the incorporation of the shares in Construtora Tenda S.A.
by the Company.
55
It should also be observed that none of these three
mentioned Programs are in force today. In the case of Special Programs I and
III, due to the termination of the beneficiaries, the options that were not
exercised in accordance with the rules of the Plan and the decisions of the
Board of Directors were cancelled. In the case of Program II, it was 100%
exercised in accordance with the rules of the Plan and of the Program in
question.
b. principal objectives of the plan:
The Company's option plans and stock option programs have
the aim of: (1) encouraging expansion and success in the development of its
corporate objectives, permitting the beneficiaries to acquire shares,
encouraging their integration into the Company; (2) attracting top level
managers and employees to provide their services, offering them the additional
advantage of becoming shareholders in the Company on potentially differentiated
terms; and (3) aligning the interests of the top level managers and employees
with the interests of the Company's shareholders.
c. the way in which the plan contributes to these
objectives:
In providing the possibility of employees and managers
becoming shareholders of the Company under potentially differentiated
conditions, it is expected that they will have a strong incentive to effectively
commit themselves to the creation of value and exercise their roles in a manner
integrated with the interests of the Company's shareholders, corporate
objectives and expansion plans, thus maximizing result. The offering of stock A
Options also encourages Beneficiaries, as a result of the commitment of their
own funds, to seek appreciation of the shares, without, however, compromising
the sustainable growth, equally relevant in view of the grant model adopted.
Furthermore, this type of model results in the sharing of the risks and gains of
the Company, through the appreciation of the shares acquired under the stock
option plan.
Additionally, the model adopted is expected to be an
efficient mechanism for retaining managers and key employees, basically because
of the shared results of appreciation in the Company's shares.
d. how the plan is inserted into the Company's
compensation policy
The Company Plan currently in force builds in a policy of
concentrating the incentives of top-level managers and employees in variable
components, linked to the performance of the Company. In fact most of the
compensation is concentrated in incentives which aimed to share risks and
results with the Company's main executives. As explained in item 13.1
above, the option plans are directly linked to this alignment of interests.
e. how the plan outlines the interests of the managers
with those of the Company over the short, medium and long term
The options granted on the basis of the plans have
different mechanisms, which permit the alignment of the interests of the
managers over different time horizons.
Division into annual lots and the existence of lock-up
differentiated lock up periods (see item “h” below) means that the Beneficiaries
commit themselves to the constant appreciation of the Company's shares over the
short, medium and long term. The Beneficiary has the incentive, for the short
term, of exercising A Options at prices that are lower in relation to market
value, encouraging him constantly strive to achieve appreciation in the shares.
In certain cases (item “h”), it is required that the
Beneficiary earmarks a minimum amount of the value received by him in annual
bonus to the exercising of options, or yet that acquires a minimum amount of
options every year, under penalty of extinguishment of
future options. The Company believes that this requirement permits the
alignment of interests both in the short as well as long term, because it
involves the commitment of the Beneficiary's own funds to shares in the Company,
which may only be sold after a given period of time.
56
With regard to the Restricted Stock Option model, under which options granted to the beneficiaries
are divided into A Options and B Options, a structure of distinct incentives is
created to align the interests of the managers and employees with those of the
Company. A Options, whose exercise price reflects Market Value, usually comprise
one lot and are exercisable over a relatively short time horizon, generating a
financial commitment by the Beneficiary over the short term. The corresponding
shares are subject to a period of unavailability, modulating the alignment of
interests over the medium-term.
The mechanism for the exercising of B Options, in turn,
is way of adjusting the gain in which the Beneficiary can realize, depending on
the Company's performance over a longer time horizon, thus aligning the
interests of the Beneficiary over a longer period. The exercising of B
Options will be obligatorily: (i) subject to a minimum lock up period of 2 years, with
the possibility of being divided into annual lots; (ii) proportional to the number of A Options exercised,
linking the short with the long term, while the possibility of exercising B
Options will depend on the commitment shown by the Beneficiary in the exercising
of A Options; and (iii) under the terms of the options granted up to now,
subject to an adjustment in accordance with variation in the market value
(“Appreciation ”) on the shares of the Company between the date of the program
and the exercising of B Options, with dividends and interest-on-equity added per
share (appreciation criteria - item “h” below). With this, it is expected that
the Beneficiary will have an interest in generating a return and creating value,
in such a way that the total gain for him will depend directly on the Company’s
performance, and therefore the gain obtained by its shareholders: B Options,
necessarily linked to A Options, represent an adjustment mechanism, whereby the
total number of shares which can be acquired by the Beneficiary will be adjusted
in the future, the better the Company's performance over the long term, the
higher the figure.
f. maximum number of shares covered
The maximum quantity of shares that maybe subject to the
granting of options, taken together for all the Company's plans, is equivalent
to 5% of the paid-up capital, already taking into account the effect of dilution
as a result of the exercising of all the options. On the date of this document,
this amount corresponds to 21,423,474 ordinary shares issued by the
Company.
g. maximum number of options that will be
granted
Each option guarantees the beneficiary of the right to
acquire one ordinary share in the Company. This being the case, the quantity of
options granted is linked to the limits of dilution described in item “f” above.
On the date of this document, this amount corresponded to 9,542,643
options.
h. conditions for the acquisition of shares
As a general rule, the options granted under the
conventional granting model, as well as A Options granted under the
Restricted Stock Option model, must be acquired at an exercise price equivalent
to Market Value, with this price being subject to monetary correction and
interest, as stipulated by the Board of Directors for each Program. For the
Special Programs, due to the absorption of the options granted by Construtora
Tenda S.A. before the incorporation of its shares by the Company, however, the
exercise price was equivalent to the exercise price previously applicable to
Construtora Tenda S.A. (which would reflect the market value of the shares issued by that company), duly adjusted in
accordance with the share swap ratio established in the Protocol and
Justification for the Incorporation of the Shares of Construtora Tenda S.A. by
the Company.
57
B Options, when granted, may always be acquired at an
exercise price of R$0.01, and because they are options that represents an
adjustment factor applied to the total benefit which can eventually be received
by the Beneficiary, the following conditions apply: (i) a minimum lock up period of two years must be observed;
(ii) the exercising of B Options are conditional on the
number of A Options previously exercised; and (iii) the number of B Options exercisable is adjusted in
accordance with the variation in the Market Value of the Company, in addition to
the dividends and interest-on-equity paid, between the date of the program and
the date of the exercising of B Options (“Appreciation”). In the Programs in
force, approved under the Restricted Stock Option model up to the present day, with the exception of the
second 2014 Program grant, B Options were granted with an adjustment factor in
the proportion of until 2 B Options for every A Option, in the case of key
employees of the Company, and in the proportion of until 3 B Options for each A
Option, in the case of the Company Directors. These adjustment proportions will
be reduced to 1.5 and 2.5, respectively if the Appreciation should be less than
10%, being applied in full if the Appreciation is over 20%, and proportionally
if the Appreciation is between 10% and 20%.
In the second granting of the 2010 Program, A Options
were exercisable between August 4, 2010 and September 30, 2010, after which they
were cancelled. B Options were divided into 3 annual lots, each one of
them exercisable, respectively, from August 4, 2012, and on subsequent
anniversaries of this date, for a period of 30 days, after which they are
cancelled. The exercising of B Options was also subject to the conditions
described above.
In the 2011 Program, A Options were available for
exercising between April 01, 2011 and June 01, 2011, after which they were
cancelled. B Options were divided into 3 annual lots, each one of them
exercisable, respectively, from April 01, 2013, and on subsequent anniversaries
of this date, for a period of 30 days, after which they are cancelled. The
exercising of B Options is also subject to the conditions described
above.
In Program II 2011, A Options were available for
exersizing between April 13, 2011 and August 12, 2011, after which they were
cancelled. B Options are divided into 3 annual lots, each one of them
exercisable, respectively, from July 13, 2013, and on subsequent anniversaries
of this date, for a period of 30 days, after which they are cancelled. The
exercising of B Options is also subject to the conditions described
above.
Under the first 2012 Program Grand, A Options were
available for exercising between May 1, 2013 and May 30, 2013 for executive
officers and between May 1, 2014 and May 30, 2014 for all others, after which
they were cancelled. For executive officers, B Options are divided into 3 annual
lots, each of which is exercisable, respectively, as of August 20, 2014 and on
the subsequent anniversaries of this date for a period of 30 days, after which
they will be cancelled. In all other cases, all of the B Options were
exercisable as of August 20, 2014 for a period of 30 days, after which they will
be cancelled. The exercise of B Options is nonetheless subject to the conditions
above.
Under the second 2012 Program grant, the options of each
Beneficiary were divided into 3 annual lots, the first of which is exercisable
as of May 1, 2013 and the remainder of which on the subsequent anniversaries of
this date. Beneficiaries are furthermore required to allocate at least 50% of
the amount received as an annual bonus to the exercise of options, regardless of
the program under which they were granted, or shall lose the right to exercise
all options in subsequent lots.
Under the third 2012 Program grant, the Beneficiary`s
options were divided into 4 equal annual lots, the first of which is exercisable
as of 2014 and the remaining lots, on the subsequent anniversaries of this date.
To receive this grant, the Beneficiary, in addition to
the minimum mention in the paragraphs above, allocated 20% or 30% of the amount
received as annual bonus to the purchase of Company shares on the market. In
this case, the Company granted 2 times of 2.5 times the number of shares
acquired by the Beneficiary as stock options.
58
In the 2013 Plan, A Options were exercisable between May
10, 2013 and May 30, 2014. B Options are split into three annual batches, each
one exercisable starting on May 10, 2015 and on the subsequent anniversaries on
the same date, for a period expiring in 30 days.
Under the first 2014 Program grant, A and B Options to be
received by the beneficiaries varied according to the annual bonus investment
for the purchase of the Company's shares, a preliminary condition for receiving
the grant – a similar rule to the third 2013 Program grant. A and B Options
varied between 1 time and 5 times; and 0.5 times and 2 times, respectively –
according to the volume of shares acquired by the previous
investment. A and B Options will be available for exercise from March
14, 2017, for a period of 3 years (B Options will be available for exercise in
the proportion that A Options are exercised, within this period). At this time,
the Company’s TSR (Total Share Return) in the period will be analyzed, as well
as its position in relation to a group of competitors. Depending on the
Company’s position, only the A Options granted volume may be adjust (up or
down).
Under the second 2014 Program grant, A Options are
exercisable between March 14, 2014 and May 30, 2015. B Options are divided into
three annual lots, each of them exercisable respectively from May 1, 2016 and
subsequent anniversaries of this date, for a period of 30 days.
i. criteria for the fixing purchase or exercise
price
As a general rule, the exercise price of the options must
be equivalent to the average price of the Company's shares over the last 30
trading days on BM&FBOVESPA S.A. Sao Paulo stock exchange (“Market Value”),
and which may have monetary correction applied based on the variation in price
indices to be determined by the Board of Directors, as well as interest added,
in accordance with the determinations of the Board of Directors for each
Program. This price is deducted from dividends and interest-on-equity paid per
share of the Company from the date the A Options are granted to their effective
exercise date.
It is understood that the setting of the exercise price
to market value is necessary to better align the interests of the Beneficiaries
in generating value for the Company's shareholders: gains on the B Options being
obtained to the extent that the Company's shares appreciate in the market.
The possibility of interest being added exists because the exercise price
represents a minimum rate of return, so that the Beneficiaries receive a gain
only in the case of the shares guaranteeing a minimum return, at the criteria of
the Board of Directors.
It is important to observe that the exercise price of the
conventional options is subject to monetary correction, generally by the IGP-M
index, and also the addition of interest, usually 3% to 6% per year. With the
objective of making the exercising of the options more attractive and to retain
executives over the long term, the Board of Directors decided on August 4, 2010,
that he terms of monetary correction and interest added for the Programs would
be applied up to May 6, 2010.
The deduction of interest-on-equity and dividends is a
way of guaranteeing that the Beneficiaries participate in the results obtained
by the Company during the period, seeing that they have already been granted
options, but have not yet become shareholders, because of the design of the
particular program (lock up periods). On the other hand, it ensures that the
results will only be received by the Beneficiary if he remains of the Company
and exercises his options, becoming an effective shareholder.
59
B Options granted under the Restricted Stock Option model may be exercised at the price of R$0.01, but are
mandatorily linked to A Options. The exercise price is justified in so far that
the B Options act an adjustment factor in the number of shares that the
Beneficiary will have the right to acquire over the long term (and consequently
the possible total capital gain that he will receive). And this
necessarily depends on the initial disbursement referring to the A Options,
adjusted in accordance with the performance of the Company, and therefore in
accordance with the gains provided to its shareholders.
j. criteria for the fixing of the option exercise
period
In the 2011 Program, A Options were exercisable between
April 01, 2011 and June 01, 2011. This time limit was established as a way of
tying in the Beneficiary and demonstrating his commitment to the Company. B
Options are divided into 3 annual lots, each one of them exercisable,
respectively, from April 01, 2013, and on subsequent anniversaries of this date,
for a period of 30 days, after which they are cancelled, and only in the
proportion that the Beneficiary has previously exercised his A Options.
Regarding the exercise period of 30 days for the B Options, it is believed that
this period is reasonable seeing that the exercising of the options has already
been planned by the Beneficiary, representing the end of the program in
question.
Under the second granting of the 2011 Program II, A
Options were exercised between July 13, 2011 and August 12, 2011. As mentioned
above, this time limit was established as a way of tying in the Beneficiary and
demonstrating his commitment to the Company. B Options are divided into 3 annual
lots, each one of them exercisable, respectively, from July 13, 2013, and on
subsequent anniversaries of this date, for a period of 30 days, after which they
are cancelled, and only in the proportion that the Beneficiary has previously
exercised his A Options. The lock up periods for the exercising of the B Options
are fixed observing the same criteria and fundamentals described above regarding
the 2011 Program.
Under the first 2012 Program grant, A Options were
exercisable between May 1, 2013 and May 30, 2013 for executive officers and
between May 1, 2013 and May 30, 2014 for all others. As explained above, this
period was established as a means of linking the Beneficiary to demonstrated
commitment to the Company. For executive officers, B Options are divided into 3
annual lots, each of which was exercisable, respectively, as of August 20, 2014
and the subsequent anniversaries of this date, for a period of 30 days, after
which they will be cancelled, and only in the proportion that the Beneficiary
has previously exercised A Options. The vesting periods for B Options are
established according to the same criteria and fundamentals described above
regarding the 2008 Program grant.
Under the second and third 2012 Program grants, the
options of each Beneficiary were divided into 3 annual lots and 4 equal annual
lots, respectively. For the second grant, the first lot is exercisable as of May
1, 2013 and the remaining lots, on the anniversary of this date. For the third
grant, the first lot is exercisable as of 2014 and the remaining lots, on the
anniversary of this date. The division of the options in lots meets the goals of
linking the Beneficiary and aligning his or her short, medium and long term
interest to those of the Company. The options of each annual lot may be
exercised for a period of 10 years as of their vesting date, which will be
reduced to 3 years should the Beneficiary fail to use the portion of the
mandatory allocation of his or her bonus (only for the second grant). This 10
year period provides an opportunity for the Beneficiary to have a longer period
to choose the best time to apply his or her resources to offset the effective
allocation of his or her bonus.
Under the 2013 Program grant, A Options are exercisable
between May 10, 2014 and May 30, 2014. As explained above, this period was
established as a means of linking the Beneficiary to demonstrated commitment to
the Company. B Options are divided into 3 annual lots, each of which is
exercisable, respectively, as of May 10, 2015 and the subsequent
anniversaries of this date, for a period of 30 days, after which they will be
cancelled, and only in the proportion that the Beneficiary has previously
exercised A Options. The vesting periods for B Options are established according
to the same criteria and fundamentals described above regarding the 2011
Program.
60
Under the first 2014 Program grant, A Options may be
exercised from March 14, 2017, for a period of 3 years. As mentioned above, this
period was established to tie in the Beneficiary and as a demonstration of
commitment to the Company. B Options may be exercised in the same period of A
Options and in the proportion that the Beneficiary exercises A
Options.
Under the second grant of the 2014 Program, A Options may
be exercised between March 14, 2014 and May 30, 2015. As mentioned above, this
period was established to tie in the Beneficiary and as a demonstration of
commitment to the Company. Options B are divided into three annual lots, each
one of them being exercisable respectively from May 1, 2016 and subsequent
anniversaries of this date, for a period of 30 days, and only in the proportion
that the Beneficiary has previously exercised the A Options. The lock up period
for the exercise of B Options are fixed subject to the same criteria and
fundamentals described above regarding the 2011 Program.
k. method of settlement
In general, the shares corresponding to the options
exercised by the Beneficiaries are issued, while the corresponding capital
increase, always within the authorized capital limit, is ratified by the Board
of Directors. The Company also uses the shares held in treasury to supply shares
for options exercised.
Under the programs approved up to the date of this
Reference Form, the general rule is that the exercise price be paid in cash, at
the time of the subscription or purchase of the corresponding shares.
l. restrictions on the transfer of
shares
At the meeting of the Board of Directors held on July 13,
2011, all the restrictions to share transfer were eliminated as a consequence of
the grant of stock options under conventional model. Thus, all shares acquired
by the Beneficiaries of the Plan, within the ambit of the 2006 Program, the 2009
Program, the Granting 1 and the 2010 Program will be free and clear for the
transfer at any time. It is important to notice that the remaining grants under
conventional model, such as first granting of the 2011 Program II, the 2011
Board Program, and second and third granting of the 2012 Program, the options
were granted with no restrictions to the shares of the current
exercise.
In case of options granted under the model Restricted
Stock Options, the A Options are subject to lock-up. The second granting of the
2008 Program and the Special Program II had a lock up period of 2 years, counted
from the day of subscription or acquisition of the shares. In the 2009 Program
II, the shares subscribed or acquired as a result of exercising the A Options
could not be alienated by the beneficiary until December 17, 2010 (1 year
counted from the day of the 2009 Program II), notwithstanding the date of
acquisition. In the second granting of the 2010 Program, the 2011 Program and
the second granting of the 2011 Program II, the rule is similar: the lock up
period for the shares of A Option is of 1 year counted from the date of the
respective Program (respectively: August 4, 2011, April 1, 2012 and July 13,
2012), notwithstanding the date of acquisition of the shares.
Under the first 2012 Program Grant, A Options could only
be exercised in the period from May 1 to May 30, 3013 for executive officers and
between May 1 and May 30, 2014 for all others. In all cases, there was no lock
up period after the exercise of A Options, which were granted in
2012.
61
Under the 2013 Program Grant, the rule is similar: A
Options could only be exercised in the period from May 10 to May 30, 2014 and,
in this case, there was no lock up period after the exercise of A Options, which
were granted in 2013.
For the 2014 Program, there is also no lock up period after the
exercise of A Options. In the first grant, they may
only be exercised from March 14, 2017, for a period of 3 years; and in the
second grant, between March 14, 2014 and May 30, 2015.
The shares subscribed or acquired as a result of the
exercising of the B Options are not subject to any lock-up date.
m. criteria and events which, when they occur, would
result in the suspension, alteration or cancellation of the option plan
The Option Plans for 2006 and 2008 may be altered or
cancelled by the Board of Directors. Notwithstanding the powers of the Board of
Directors, no decision may alter: (i) the limit of the number of shares which are the object
of the plan; and (ii) the rights and obligations acquired by the beneficiary,
related to any existing options granted under Option Plans 2006 and 2008.
Additionally, in the case of the dissolving,
transformation, incorporation, merger, demerger or reorganization of the
Company, under which the Company does not remain as an entity, or if it does
remain as an entity, no longer has its shares traded on the stock exchange, the
options may be transferred to the company of succession, or have their lock up
periods brought forward for exercising during a given period.
n. effects of a manager leaving the governing bodies of
the Company on his rights under the share-based compensation plan
Under the terms of Option Plans 2006 and 2008, if a
Beneficiary leaves the Company this will have the following effects on the
options granted to him, depending on his reason for leaving: (i) if there is just cause for his dismissal, all the
options not exercise will are cancelled; (ii) if there is no just cause for dismissal, or if the
employee resigns voluntarily or opts to take retirement, the options already
exercisable may be exercised within a period of 30 days, with the other options
being cancelled; (iii) in the case of the death or permanent disablement of
the Beneficiary, all the options may be exercised by the Beneficiary or his
successors within a period of 180 days. In all these cases, except for death or
permanent disability, the restrictions on the transfer of shares to which they
apply will remain in force.
The Board of Directors has the power to
determine the treatment to be given to B Options granted to the Beneficiary
under Option Plan 2008, in the event of leaving at the behest of the Company,
provided there is no just cause for dismissal. Under the Programs approved under
the Restricted Stock Option model, the Board of Directors has established
rules for exercising the B Options, in proportion to the period in which the
Beneficiary remained in the carrying out of his functions at the Company and
observing the other conditions for the exercising of the B Options contained in
Option Plan 2008 and the respective Programs.
Also, on August 4, 2010, the Board of
Directors decided to establish the possibility of bringing forward the lock up
period date for all the options that had been granted to members of the
Statutory Executive Officers (but not any other beneficiary of the plan), for an
exercise period of 180 days, whenever the corresponding director is dismissed,
without any just cause, for a period of 1 year counting from the relevant
“corporate events”. Such corporate events are as follows: (i) operations involving corporate
reorganization of the Company in which its shareholders’ equity comes to
represent less than 50% of the shareholders’ equity of the resulting company;
(ii) the acquisition, by any person or group, of
a stake equivalent to 30% or more of the Company's paid-up capital; (iii) the obligatory public offering of shares of
the Company, under the terms of Brazilian Corporation Law or the regulations of
Novo Mercado; and (iv) a voluntary public offering for the purchase
of shares in the Company which results in the acquisition of the majority of its
paid-up capital. With this, it is expected that the members of the Statutory
Executive Officers will not be unduly prejudiced by virtue of the occurrence of
a relevant corporate operation, preventing the options from being lost as a
result of the operations, which could imply a change in control of the Company.
Thus, with continuing expectations for the future exercising of the options, the
alignment of the interests of the Beneficiaries is maintained, while retaining
the best talent.
62
In meeting held on July 13, 2011, the Board of Directors
deliberated to extent this possibility to any options granted or to be granted,
to Executive Directors and members of Board of Directors of the Company and its
wholly-owned subsidiary Construtora Tenda S.A.
The possibility of bringing forward the lock-up date for
options, referred to in the paragraph above, is also applicable in the event of
the Company being dissolved.
13.5. Shares or quotas directly or indirectly held, in
Brazil or in other countries, and other securities convertible into shares or
quotas, issued by the Company, its direct or indirect controlling shareholders,
subsidiaries or companies under common control, by members of the Board of
Directors, or the Statutory Executive Officers, or the Fiscal Council, grouped
by body, on the date of the ending of the last financial year:
Shares Issued by the Company
(1)
|
12.31.2014 |
|
Ordinary shares |
|
Total shares |
|
|
|
|
|
|
Board of Directors |
592,609 |
0.145% |
|
592,609 |
0.145% |
Fiscal Council |
0 |
0.000% |
|
0 |
0.000% |
Executive Board |
1,573,145 |
0.385% |
|
1,573,145 |
0.385% |
|
|
|
|
|
|
Total shares |
408,066,162 |
100% |
|
408,066,162 |
100% |
|
|
|
|
|
|
|
12.31.2013 |
|
Ordinary shares |
|
Total shares |
|
|
|
|
|
|
Board of Directors |
474,713 |
0.11% |
|
474,713 |
0.11% |
Fiscal Council |
20 |
0.00% |
|
20 |
0.00% |
Executive Board |
3,194,526 |
0.73% |
|
3,194,526 |
0.73% |
|
|
|
|
|
|
Total shares |
435,559,201 |
100% |
|
435,559,201 |
100% |
|
12.30.2012 |
|
Ordinary shares |
|
Total shares |
|
|
|
|
|
|
Board of Directors |
375,813 |
0.09% |
|
375,813 |
0.09% |
Fiscal Council |
0 |
0.00% |
|
0 |
0.00% |
Executive Board |
1,206,931 |
0.28% |
|
1,206,931 |
0.28% |
|
|
|
|
|
|
Total shares |
433,229,779 |
100% |
|
433,229,779 |
100% |
(1) All the shares are held directly.
63
13.6. Concerning the compensation based on shares
recognized in the results in the last 3 financial years and expected for the
current financial year, for the Board of Directors and Statutory Executive
Officers:
Financial Year 2012 |
Board of Directors
(1) |
Statutory Executive
Officers |
Plans |
|
2011(2) |
2012(2) |
b) Number of Members |
0 |
6 |
6 |
c) c) In relation to each granting of
stock options |
|
|
|
Date of granting |
7/13/2011 |
7/13/2011 |
8/20/2012 |
Quantity of options granted |
800,000 |
1,340,000 (Options A + Options B) |
2,236,000
(Restricted Stock Options Program
Options A + B) and 2,810,000 (Conventional Program) |
Term for options to become
exercisable |
3 years (33%, 33% and 34%) |
Options B - 4 years(0%, 30%, 30% and
40%) |
Restricted Stock Options: Program 9
months for Options A and 4 years (0%, 30%, 30%, 40%) for Options
B
Conventional Program
3 years (50%, 30% and 20%) |
Time limit for the exercising of
options |
10 years |
30 days |
Restricted Stock Options Program: 30
days
Conventional Program:10
years |
Time limit on the restrictions for the
transfer of shares |
n.a. |
Options A: 1 year Options B:
n.a. |
n.a. |
Weighted average price for the
exercising of each group of options |
|
|
|
-open at the beginning of the financial
year |
R$ 7.71 |
Options A: R$ 7.71 Options B: R$ 0.01
|
Restricted Stock Options
Program:
Options A: R$2.73
Options B: R$0.01
Conventional Program: R$2.73 |
-lost during the financial
year |
n.a |
n.a |
n.a. |
-exercised during the financial
year |
n.a. |
R$ 7.71 |
n.a. |
-expired during the financial
year |
R$ 7.71 |
n.a |
n.a. |
d) Fair value of options on the date of
granting |
R$ 7.71 |
Options A: R$7.71 Options B: R$0,01 |
Restricted Stock Options
Program:
Options A: R$2.73
Options B: R$0.01
Conventional Program: R$2.73 |
e) Potential dilution in the event of
all the options granted being exercised (3) |
0.18% |
0.31% |
1.16% |
(1) The Board of Directors 2011 Program
expired during the year of 2012. No option was exercised.
(2) The options granted to the
Statutory Executive Officers under the 2006 Program, the 2009 Program, the
2010 Program and first granting of the 2011 Program II were replaced by
options granted under the 2012 Program.
(3) Dilution based in the total amount
of shares on 12/31/2012 |
64
Financial Year 2013 |
Board of Directors |
Statutory Executive Officers |
Plans |
|
2011 |
2012 |
2013 |
b) Number of Members |
0 |
6.00 |
6.00 |
6.00 |
c) In relation to each granting of
stock options |
|
|
|
|
Date of granting |
n.a. |
7/13/2011 |
8/20/2012 |
05/10/2013 |
Number of options granted |
n.a. |
1,340,000 (Options A + Options B) |
2,236,000 |
1,884,000 |
(Restricted Stock Options Program
Options A + B) and 2,810,000 (Conventional Program) |
(Restricted Stock Options Program
Options A + B) and 1,177,247 (Conventional Program) |
Term for options to become
exercisable
|
n.a. |
Options B - 4 years (0%, 30%, 30% and
40%) |
Restricted Stock Options Program: 9
months for Options A and 4 years (0%, 30%, 30%, 40%) for Options
B |
Options A: 1 year |
|
Options B - 4 years (0%, 30%, 30% and
40%) |
Conventional Program: 3 years (50%, 30% and
20%) |
Conventional Program: 4 years (25% per
year) |
Time limit for the exercising of
options |
n.a. |
30 days |
Restricted Stock Options Program: 30
days |
Restricted Stock Options Program:
Options A 1 year and 30 days Options B |
|
|
Conventional Program: 10 years |
Conventional Program: 10 years |
Time limit on the restrictions for the
transfer of shares |
n.a. |
Options A: 1 year |
n.a. |
n.a. |
Options B: n.a. |
Weighted average price for the
exercising of each group of options |
|
|
|
|
-open at the beginning of the financial
year (3) |
n.a. |
Options B: R$ 0.01 |
Restricted Stock Options Program: |
Restricted Stock Options Program: |
Options A: R$2.73 |
Options A: R$4.05 |
Options B: R$0.01 |
Options B: R$0.01 |
|
|
Conventional Program: R$2.73 |
Conventional Program: R$4.08 |
-lost during the financial
year |
n.a |
n.a |
n.a |
n.a |
-exercised during the financial
year |
n.a. |
R$ 0.01 |
n.a. |
n.a. |
-expired during the financial
year |
n.a |
n.a |
n.a |
n.a |
d) Fair value of options on the date of
granting |
n.a. |
Options A: R$ 7.71 Options B:
R$0.01 |
Restricted Stock Options Program: |
Restricted Stock Options Program: |
Options A: R$2.73 |
Options A: R$4.05 |
Options B: R$0.01 |
Options B: R$0.01 |
|
|
Conventional Program: R$2.73 |
Conventional Program: R$4.08 |
e) Potential dilution in the event of
all the options granted being exercised (5) |
na. |
0.31% |
1.16% |
0.70% |
(1) Dilution based in the total amount
of shares on 12/31/2013 |
|
65
Financial Year 2014 |
Board of Directors |
Statutory Executive Officer |
Plans |
|
2011 |
2012 |
2013 |
2014 |
b) Number of Members |
0 |
6.00 |
6.00 |
6.00 |
5.00 |
c) In relation to each granting of
stock options |
|
|
|
|
|
Date of granting |
n.a. |
7/13/2011 |
8/20/2012 |
05/10/2013 |
03/14/2014 |
Number of options granted |
n.a. |
1,340,000
(Options A + Options B) |
2,236,000 |
1,884,000 |
3.686.763 |
(Restricted Stock Options Program
Options A + B) and 2,810,000 (Conventional Program) |
(Restricted Stock Options Program
Options A + B) and 1,177,247
(Conventional Program) |
(Restricted Stock Options
Program
Options A + B) |
Term for options to
become exercisable
|
n.a. |
Options B - 4 years
(0%, 30%, 30% and 40%) |
Restricted Stock Options Program: 9
months for Options A and 4 years (0%, 30%, 30%, 40%) for Options
B |
Options A: 1 year |
Options A and B:
3 years |
|
Options B - 4 years (0%, 30%, 30% and
40%) |
|
Conventional Program: 3 years
(50%, 30% and 20%) |
Conventional Program:
4 years (25% per year) |
|
Time limit for the exercising of
options |
n.a. |
30 days |
Restricted Stock Options Program:
30 days |
Restricted Stock Options Program:
Options A 1 year and 30 days Options B |
Options A and B:
3 years |
|
|
|
Conventional Program:
10 years |
Conventional Program:
10 years |
|
Time limit on the restrictions for the
transfer of shares |
n.a. |
Options A: 1 year |
n.a. |
n.a. |
n.a |
Options B: n.a. |
Weighted average price for the
exercising of each group of options |
|
|
|
|
|
-open at the beginning of the financial
year (3) |
n.a. |
Options B: R$ 0.01 |
Restricted Stock Options Program: |
Restricted Stock Options Program: |
|
Options A: R$2.73 |
Options A: R$4.05 |
Options A: R$3.13 |
Options B: R$0.01 |
Options B: R$0.01 |
Options B: R$0.01 |
|
|
|
Conventional Program: R$2.73 |
Conventional Program: R$4.08 |
|
-lost during the financial
year |
n.a |
n.a |
n.a |
n.a |
n.a |
-exercised during the financial
year |
n.a. |
R$ 0.01 |
n.a. |
n.a. |
n.a |
-expired during the financial
year |
n.a |
n.a |
n.a |
n.a |
n.a |
d) Fair value of options on the date of
granting |
n.a. |
Options A: R$ 7.71 Options B:
R$0.01 |
Restricted Stock Options Program: |
Restricted Stock Options Program: |
Options A: R$3.13 |
Options A: R$2.73 |
Options A: R$4.05 |
Options B: R$0.01 |
Options B: R$0.01 |
Options B: R$0.01 |
|
|
|
|
Conventional Program: R$2.73 |
Conventional Program: R$4.08 |
|
e) Potential dilution in the event of
all the options granted being exercised (5) |
na. |
0.33% |
1.22% |
0.74% |
0.90% |
(1)
Dilution based in the total
amount of shares on 12/31/2014
|
|
|
66
Financial Year 2015 – Forecast |
Board of Directors |
Statutory Executive Officer |
Plans |
|
2011 |
2012 |
2013 |
2014 |
b) Number of Members |
0 |
6.00 |
6.00 |
6.00 |
5.00 |
c) In relation to each granting of
stock options |
|
|
|
|
|
Date of granting |
n.a. |
7/13/2011 |
8/20/2012 |
05/10/2013 |
03/14/2014 |
Number of options granted |
n.a. |
1,340,000
(Options A + Options B) |
2,236,000 |
1,884,000 |
3.686.763 |
(Restricted Stock Options Program
Options A + B) and 2,810,000 (Conventional Program) |
(Restricted Stock Options Program
Options A + B) and 1,177,247
(Conventional Program) |
(Restricted Stock Options Program /
Options A + B) |
Term for options to
become exercisable
|
n.a. |
Options B - 4 years
(0%, 30%, 30% and 40%) |
Restricted Stock Options Program: 9
months for Options A and 4 years (0%, 30%, 30%, 40%) for Options
B |
Options A: 1 year |
Options A and B:
3 years |
|
Options B - 4 years (0%, 30%, 30% and
40%) |
|
Conventional Program: 3 years
(50%, 30% and 20%) |
Conventional Program:
4 years (25% per year) |
|
Time limit for the exercising of
options |
n.a. |
30 days |
Restricted Stock Options Program:
30 days |
Restricted Stock Options Program:
Options A 1 year and 30 days Options B |
Options A and B:
3 years |
|
|
|
Conventional Program:
10 years |
Conventional Program:
10 years |
|
Time limit on the restrictions for the
transfer of shares |
n.a. |
Options A: 1 year |
n.a. |
n.a. |
n.a |
Options B: n.a. |
Weighted average price for the
exercising of each group of options |
|
|
|
|
|
-open at the beginning of the financial
year (3) |
n.a. |
Options B: R$ 0.01 |
Restricted Stock Options Program: |
Restricted Stock Options Program: |
|
Options A: R$2.73 |
Options A: R$4.05 |
Options A: R$3.13 |
Options B: R$0.01 |
Options B: R$0.01 |
Options B: R$0.01 |
|
|
|
Conventional Program: R$2.73 |
Conventional Program: R$4.08 |
|
-lost during the financial
year |
n.a |
n.a |
n.a |
n.a |
n.a |
-exercised during the financial
year |
n.a. |
R$ 0.01 |
n.a. |
n.a. |
n.a |
-expired during the financial
year |
n.a |
n.a |
n.a |
n.a |
n.a |
d) Fair value of options on the date of
granting |
n.a. |
Options A: R$ 7.71 Options B:
R$0.01 |
Restricted Stock Options Program: |
Restricted Stock Options Program: |
Options A: R$3.13 |
Options A: R$2.73 |
Options A: R$4.05 |
Options B: R$0.01 |
Options B: R$0.01 |
Options B: R$0.01 |
|
|
|
|
Conventional Program: R$2.73 |
Conventional Program: R$4.08 |
|
e) Potential dilution in the event of
all the options granted being exercised (5) |
na. |
0.33% |
1.22% |
0.74% |
0.90% |
(1) Dilution based in the total amount
of shares on 12/31/2014 |
|
|
67
13.7. Information with regard to options held open by the
Board of Directors and the Statutory Executive Officers at the end of the last
financial year:
Financial Year 2014 |
Board of Directors |
Statutory Executive Board |
Plans |
- |
2011 |
2012 (1) |
2013 |
2014 |
b) Number of Members |
0 |
8 |
8 |
8 |
5 |
c) Options still unexercised |
|
|
|
|
|
i) Number of shares |
n.a. |
150,334 (Restricted Stock Options
Program – Options B) |
575,400 (Restricted Stock Options
Program – Options B) and 260,000 (Conventional Program) |
762,000 (Restricted Stock Options
Program – Options B)
and 363,861 (Conventional
Program) |
3,686,763
(Restricted Stock Options Program –
Options A and B |
ii) Date in which they will become
exercisable |
n.a. |
7/13/2015 (40% of total volume of
options granted) |
5/1/2015 (Conventional Program –
20% of total volume of options granted) |
5/10/2015 (Conventional Program – 25%
of total volume of options granted and 25% per year in the following
anniversaries) |
3/14/2017 |
8/20/2015 (Restricted Program –
Options B – 30% and following anniversarie 40% of the total
granted) |
5/10/2015 (Restricted Program Options B
– 30% and following anniversaries 30% and 40% of the total
granted) |
|
iii) Maximum time limit for the
exercising of options |
n.a. |
30 days |
30 days (Restricted Program – Options
B) and 10 years for the options of the Conventional Program |
Restricted Stock Options Program: 30
days Options B
Conventional Program: 10 years |
3 years |
iv) Time limit on the restriction to
the share transfer |
n.a. |
n.a. |
n.a. |
n.a. |
n.a |
v) Weighted average price for the
exercising |
n.a. |
R$0.01 |
R$2.34
(Conventional Program) |
Restricted Stock Options Program:
Options B R$0.01
|
Options A: R$ 3.13
Options B: R$ 0.01 |
R$0.01
(Options B of Restricted
Program) |
Conventional Program:
R$ 3.66 |
|
vi) Fair value of the options on the
last day of the financial year |
n.a. |
R$0.01 |
R$2.34
(Conventional Program) |
Restricted Stock Options Program:
Options B R$0.01
|
Options A: R$ 3.13
Options B: R$ 0.01 |
R$0.01
(Options B of Restricted
Program) |
Conventional Program:
R$ 3.66 |
|
d) Exercisable options |
|
|
|
|
|
i) number of shares |
n.a |
n.a. |
515,000 |
205,555 (Conventional Program) |
n.a |
ii) maximum time limit for the
exercising of options |
n.a |
n.a. |
10 years |
10 years |
n.a |
iii) time limit on the restriction to
the share transfer |
n.a |
n.a. |
n.a. |
n.a. |
n.a |
iv) weighted average price for the
exercising |
n.a |
n.a. |
R$2.34 |
R$ 3.66 |
n.a |
v) fair value of the options on the
last day of the financial year |
n.a |
n.a. |
R$2.34 |
R$ 3.66 |
n.a |
vi) fair value of the total options on
the last business day of the financial year |
n.a |
n.a. |
R$2.34 |
R$ 3.66 |
n.a |
(1) Options granted to the members of the Statutory Executive
Board within the scopes of Programs 2006, Program 2009, within the scope of the
first grant of Program 2010 and within the scope of the first grant of Program
II 2011 were replaced for options granted under Program
2012
68
13.8. Concerning the options exercised and shares
delivered referring to the share-based compensation for the Board of Directors
and Statutory Executive Officers, in the last 3 financial years, the table below
has been with the following content:
Financial Year 2012 |
Board of Directors (2) |
Statutory Executive Officers |
Program (year) |
|
2011 (3) |
b) Number of members |
0 |
6 |
c) Regarding exercised options: |
- |
- |
i) number of shares |
n.a. |
172,808 |
ii) weighted average exercise
price |
n.a. |
R$7.71 |
iii) total value of the difference
between exercise price and market value of the shares related to the
exercised options |
n.a. |
R$528,792 |
d) Regarding delivered shares, please
inform: (1) |
|
|
i) number of shares |
n.a. |
172,808 |
ii) weighted average acquisition
price |
n.a. |
R$7.71 |
iii) total value of the difference
between the acquisition price and market value of the acquired shares
|
n.a. |
R$528,792 |
(1) Under the model adopted by the
Company all the shares exercised are delivered.
(2) The 2011 Program of the Board of
Directors expired during 2012. No option was exercised.
(3) The options granted to the
Statutory Executive Officers under the 2006 Program, the 2009 Program, the
2010 Program and first granting of the 2011 Program II were replaced by
options granted under the 2012
Program. |
Financial Year 2013 |
Board of Directors
(1) |
Statutory Executive
Officers |
Plans |
|
2011(2) |
2012(2) |
b) Number of Members |
0 |
5 |
6 |
c) c) In relation to each granting of
stock options |
- |
- |
- |
i) number of shares |
n.a. |
216,183 |
1,781,000 |
ii) weighted average exercise
price |
n.a. |
R$0.01 |
R$2.73 |
iii) total value of the difference
between the acquisition price and market value of the acquired
shares |
n.a. |
R$557,752 |
R$1,335.750 |
d) Regarding delivered shares, please
inform: (1) |
n.a. |
|
|
i) number of shares |
n.a. |
216,183 |
1,781,000 |
ii) weighted average acquisition
price |
n.a. |
R$0.01 |
R$2.73 |
iii) total value of the difference
between the acquisition price and market value of the acquired
shares |
n.a. |
R$557,752 |
R$1,335.750 |
(1) Under the model adopted by the Company
all the shares exercised are delivered.
|
Financial Year 2014 |
Board of Directors
(1) |
Statutory Executive
Board |
Plans |
|
2011 |
2012 |
2013 |
b) Number of Members (2) |
0 |
8.00 |
8.00 |
8.00 |
c) c) In relation to each granting of
stock options |
- |
- |
- |
- |
i) number of shares |
n.a. |
396,929 |
2.099,100 |
1,118,500 |
ii) weighted average exercise
price |
n.a. |
R$0.01 |
R$ 1.06 |
R$ 1.66 |
iii) total value of the difference
between the acquisition price and market value of the acquired
shares |
n.a. |
R$ 869,382 |
R$ 2,389,971 |
R$ 599,394 |
d) Regarding delivered shares, please
inform: (1) |
n.a. |
|
|
|
i) number of shares |
n.a. |
396,929 |
2.099,100 |
1,118,500 |
ii) weighted average acquisition
price |
n.a. |
R$0.01 |
R$ 1.06 |
R$ 1.66 |
iii) total value of the difference
between the acquisition price and market value of the acquired
shares |
n.a. |
R$ 869,382 |
R$ 2,389,971 |
R$ 599,394 |
(1) Under the model adopted by the
Company all the shares exercised are delivered. (2) All Statutory
Directors that acquired options during 2014 are being considered in this
chart, including 3 members that left the Company throughout the year of
2014. That is why the number of members reported is 8.
|
69
13.9. Information needed for the comprehension of the
data disclosed in items 13.6 to 13.8 (including the pricing method for the value
of shares and options):
Brief Description of the Formats for the Granting of
Options
A. Traditional options in force (granted under Option
Plan 2008, in the second and third granting of the 2012 Program)
Under this traditional option granting model, the options
granted to each beneficiary are divided into annual option lots, whose right to
exercise is acquired annually.
Every year, the Beneficiary must earmark a minimum
percentage of his annual bonus to the exercising of the option lot in force in
order to be able to acquire the right to exercise options in subsequent lots (in
other words, for the lots to be incorporated). If the bonus is not allocated to
the exercising of options, the future lots (not yet incorporated) of all the
Programs will are cancelled. Based on the partial exercising of options of a
given incorporated lot, the Beneficiary has a period of 10 years to exercise his
options partially or in full. In the case of the Beneficiary not allocating his
bonus in the manner required by the corresponding Program, this time limit is
reduced to 3 years, in the case of the lots already incorporated.
B. Restricted Stock Options (granted under Option Plan
2008, in the 2011 Program, the second set of options granted under the 2011
Program II, the first set of options granted under the 2012 Program, the 2013
Program and the 2014 Program).
The options granted are divided into A Options and B
Options. The lot of A Options is incorporated (that is to say, they become
exercisable) over the short term, and is available for exercising during a brief
period at an exercise price equivalent to the Market Value of the shares (except
in the case of the 2014 Program, when A Options are available for exercise after
3 years of the grant and along with the B Options). The B Options have an
exercise price equivalent to R$0.01 each and are divided into 3 annual lots,
available for exercising within 2, 3 and 4 years counting from the date of
granting, respectively. Exception to this rule is the first 2012 Program
Grant, where B Options, vested in 2 counted from the grant date, in the case of
key employees.
The quantity of B Options available for exercise is
determined by the following factors:
•
Quantity of A options exercised, under the
terms described in item 13.4 above, and
•
Variation in the appreciation targets of
Company's shares in the period counting from the date of granting to the date of
affective exercising of the B Options (except for the 2014 Program, where the
adjustment will be in the A Options, according to TSR).
a. pricing model
The models used by the Company for the pricing of the
options granted to its managers and employees are of the binomial model for the
traditional options and the Monte Carlo model for the format of the Restricted
Stock Options.
Binomial Model
The model is based on the premise that the behavior of
the share price in future periods can be approximated into two possible
trajectories: one ascending and the other descending. In this way it is
built on a “tree” of trajectories for the share price. The ascending factor and
the descending factor are determined based on the volatility of the share and the interval of
time between the steps of the “tree”. The trajectories for the share price are
determined up to the expiry date.
70
In parallel, the “tree” is also constructed representing
the value of the option for each period. The value of the option is determined
backwards, which is to say starting from maturity. At the end of period, it is
the owner of the option's decision whether to exercise it or not.
Monte Carlo Model
The Monte Carlo simulation is a popular alternative
method, which allows the incorporation of various sources of uncertainty. This
method comprises the execution of a number of steps: (1) determining the
processes of uncertainty and the generation of inputs based on a sample of the
distributions of the entry variables, (2) the carrying out of mathematical
operations with inputs so as to generate outputs, (3) repeating the previous steps n times, so as to obtain n outputs, and (4) through the results obtained,
calculating statistical data, such as average and standard deviation.
The calculation algorithm for the Monte Carlo simulation
consists of calculating the value of the option on its due-date for every
trajectory, so as to obtain an average of the values. The value of the option at
the starting time is given by the present value of the average found.
Bearing in mind that for the options granted under the
Restricted Stock Option format, the quantity of B Options depends on the
quantity of A Options exercised, as well as the application of a multiplier
adjustment calculated as a function of the variation of the Appreciation targets
for the Company's shares, the Monte Carlo method was adopted in the pricing of
the options under the format mentioned.
b. data and assumptions used in the pricing model,
including the weighted average share price, the exercise price, expected
volatility, life of the option, expected dividends and interest rates free of
risk
Date of calculation
According to Technical Pronouncement CPC 10, the options
must be valued on their respective granting date (in this case, the date of the
approval of the corresponding Program).
Weighted average share price
The price of the Company's shares considered as the basis
for the calculation of the respective options, is Market Value based on the
calculation of the exercise prices.
Exercise price
•
Traditional options granted:
The exercise price for the options granted under the
traditional format has been corrected in accordance with the variation in the
IGP-M index, with interest of 3% to 6% a year added up to May 6, 2010. So as to
incorporate this contractual condition, the exercise price has been corrected
periodically during the binomial “tree”, so that at the moment of exercising,
the value paid out refers to the corrected amount, up until the corresponding
rules were applied.
The inflation index curve was obtained from the Reference
Rates published by the BM&FBOVESPA S.A. – Sao Paulo stock
exchange, having been interpolated for the respective due dates. The method adopted was linear interpolation.
71
•
Options granted under the Restricted Stock
Option format:
The exercise price for the options granted under the
Restricted Stock Option format is: (i) calculated based on Market Value for A
Options and (ii) R$0.01 for B Options, without monetary correction over
time.
Expected volatility
For the calculation of expected volatility annualized
standard deviation was used taking the natural logarithms of the historic daily
variations in the Company's share price
Option term
•
Traditional options granted:
For options granted following the traditional format, if
the Beneficiaries allocate a percentage of their annual bonus for the
acquisition of shares of a particular lot, the contractual period for the
exercising of the options in this lot is 10 years counting from the date that
the B Options become exercisable, in other words after their lock up period,
which may vary according to the Program in question. If a percentage of
the bonus is not allocated, the lots already incorporated (that is to say, which
are exercisable) will have a period of 3 to be exercised.
•
Options granted under the Restricted Stock
Option format:
For these option grants, the life of the options was
obtained based on the contractual period of the option lock up period (that is
to say, based on the options that become available in the financial year),
bearing in mind that under the Restricted Stock Option, format, the options are
of the European type, that is to say exercisable only from a given date, and for
a relatively short period. For more information referring to the life of options
granted in accordance with the Restricted Stock Option format, see the other
sub-items in Item 13.
Dividends expected (dividend yield)
The dividend yield represents the ratio between the
dividend paid per share in a given period, and the price of the share in the
market. This variable was calculated based on the historic distribution of
dividends and interest-on-equity by the Company.
Interest rate free of risk
The interest rates free of risk had been obtained from
the Brazilian Central Bank and referred to the Selic (Special System for
Settlement and Custody) rate on the respective option granting dates.
c. methods used and the premises assumed for the
incorporation of the expected effects of advance exercising
It can be observed empirically that options are exercised
by their owners before the end of the life of the option, in the case of
traditional options. This behavior is due to various reasons, such as for
example, personal liquidity requirements and the impossibility of hedge
protection.
In this regard, the Company, so as to incorporate this
peculiarity, adopts the assumption that the options will be exercised from the
moment that the lots become exercisable, that is to say have been incorporated,
following the end of the respective lock up period. In this way, the option life
adopted in the calculations varies between 1 and 6 years, in accordance with the
number of lots and the corresponding lock up period is
in which the options are divided, seeing that the Beneficiaries may not exercise options of any type before the end of the lock up period. In addition to this, for option pricing purposes options exercised in advance as a result of the death or permanent disability of the Beneficiary, or corporate events, have not been considered.
72
d. method for the determination of expected volatility
For the calculation of expected volatility, the annualized standard deviation has been used of the natural logarithms of the daily historic variations in the Company's share price.
e. if there is any other characteristic of the option that has been incorporated in the measuring of its fair value
Vesting period
During the vesting period, options may not be exercised by the Beneficiaries. For options granted under the traditional format, this condition was included in the calculations with respect to options of the European type (which can only be exercised from a certain date) while they have not yet been incorporated. After their incorporation, the options become of the American type (that is to say, exercisable at any moment until the cancellation date).
Restrictions on sale ("lock-up")
Contractually speaking, for A Options granted under the Restricted Stock Option model there is a restriction that exists on the sale of shares acquired to the exercising of options. This restriction, also known as lock-up, varies between 1 and 2 years, in accordance with the specific conditions of each Program.
This restriction implies the reduction in the value of the shares for the Beneficiary considering that the shares are illiquid at the time of exercising the options. So as to take these characteristics into account, a discount has been applied due to lack of liquidity in the share price under the “protective put” method. According to this method, the value of a European type put option with a period equal to the lock up period is calculated, assuming volatility and interest rates free of risk identical to those used in each plan. The value arrived at for this put option is therefore divided by the value of the share price on the date of granting, so that there is a percentage discount. This discount is finally applied to the option, reducing its respective value.
This methodology is no longer applicable to the traditional programs, as, under the terms of the Meeting of the Board of Directors held on July 13, 2011, all restrictions for the transfer and sale were released from this date for the shares already acquired and shares that might be acquired, in such Programs.
13.10. Information on the pension plan in force offered to members of the Board of Directors and Statutory Executive Officers:
Not applicable, considering that no pension plans have been offered either to members of the Board of Directors or statutory directors.
13.11. Compensation, in the last 3 financial years, of the Board of Directors, the Statutory Executive Officers and the Fiscal Council
Year 2012 |
Board of Directors |
Fiscal Council |
Statutory Executive Officers |
Number of members |
9.00 |
3.00 |
5.83 |
Value of the highest individual compensation/year (1) |
320,824 |
45,600 |
6,123,879 |
Value of the lowest individual compensation/year (2) |
224,056 |
45,600 |
3,165,013 |
Average value of individual compensation/year (3) |
244,561 |
45,980 |
3,575,601 |
Note:
(1) Considers the highest individual annual compensation effectively received, considering all the members, and that the member with the highest compensation has remained for 12 months with the governing body. |
(2) Considers the lowest individual annual compensation effectively received, only including members who have been with the governing body for 12 months, excluding those remained for a shorter period. |
(3) Total amount of compensation paid divided by the number of members declared for the period. |
73
Year 2013 |
Board of Directors |
Fiscal Council |
Statutory Executive Officers |
Number of members |
9.00 |
3.00 |
6.00 |
Value of the highest individual compensation/year
(1) |
316,079 |
55,200 |
5,957,562 |
Value of the lowest individual compensation/year
(2) |
172,800 |
55,200 |
2,681,366 |
Average value of individual compensation/year
(3) |
210,992 |
55,200 |
3,549,458 |
Note:
(1) Considers the highest individual
annual compensation effectively received, considering all the members, and
that the member with the highest compensation has remained for 12 months
with the governing body. |
(2) Considers the lowest individual
annual compensation effectively received, only including members who have
been with the governing body for 12 months, excluding those remained for a
shorter period. |
(3) Total amount of compensation paid
divided by the number of members declared for the period.
The amounts presented above refer to fixed
compensation (Board of Directors, Fiscal Council and Statutory Executive
Officers), short-term variable Statutory Executive Officers) and long-term
variable, based on stock option plans (Board of Directors and Statutory
Executive Officers).
|
|
Year 2014 |
Board of Directors |
Fiscal Council |
Statutory Executive Officers |
Number of members |
7.67 |
3.00 |
5.17 |
Value of the highest individual compensation/year
(1) |
308,868 |
63,500 |
3,732,593 |
Value of the lowest individual compensation/year
(2) |
185,778 |
63,500 |
2,691,098 |
Average value of individual compensation/year
(3) |
226,852 |
63,007 |
3,321,336 |
Note:
(1) Considers the highest individual
annual compensation effectively received, considering all the members, and
that the member with the highest compensation has remained for 12 months
with the governing body. |
(2) Considers the lowest individual
annual compensation effectively received, only including members who have
been with the governing body for 12 months, excluding those remained for a
shorter period. |
(3) Total amount of compensation paid
divided by the number of members declared for the period.
The amounts presented above refer to fixed
compensation (Board of Directors, Fiscal Council and Statutory Executive
Officers), short-term variable Statutory Executive Officers) and long-term
variable, based on stock option plans (Board of Directors and Statutory
Executive Officers). |
|
13.12. Contractual arrangements, insurance policies or
other instruments which structure mechanisms of compensation or indemnification
for managers in the event of dismissal from their post or retirement (including
the financial consequences for the Company):
None.
13.13. Percentage of total compensation of each body
recognized in the result of the company referring to members of the Board of
Directors, the Executive Board or the Fiscal Council who are related parties to
the controlling shareholders, directly or indirectly, as defined by the
accounting rules covering this subject:
None.
13.14. Values recognized in the Company's results as
compensation of members of the Board of Directors, Executive Board or Fiscal
Council, grouped by body, for any reason which is not a function of which they
occupy, such as for example, commissions and consulting services or services
provided:
None.
74
13.15. Values recognized in the result of the controlling shareholders, direct or indirect, of companies under common control and subsidiaries of the company, in the compensation of members of the Board of Directors, the Executive Board or the Fiscal Council of the Company, grouped by body, specifying the amount of these values attributed to such individuals :
None.
13.16. Other relevant information:
Long term incentives in the form of Granting of Options
The values presented as long-term incentives, based on stock options programs reflect the accounting costs of all programs granted until the date of this Reference Form that are being amortized in the reference years for the tables and, therefore presented in our financial statements. These amounts are calculated in the moment of grant through Binomial model (traditional Stock Option Plans) and Monte Carlo (Restricted Stock Option Plans) and the calculated costs are amortized during its duration (usually 4 years).
The amounts presented do not represent the gains realized by the beneficiaries, since, as mentioned above, it is calculated in the moment of granting and not adjusted by the behavior of market, vesting rules, etc.
75
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 13, 2015
Gafisa S.A. |
|
|
By: |
|
|
Name: Sandro Gamba
Title: Chief Executive Officer |
Gafisa (PK) (USOTC:GFASY)
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