Financial Statements Banco de Desenvolvimento de Minas

Transcrição

Financial Statements
Banco de Desenvolvimento de
Minas Gerais S.A. - BDMG
December 31, 2013 and 2012
with independent auditor’s report
MANAGEMENT REPORT - 2013
1. The Bank
The State Law No. 2067 of January 5, 1962 created Banco de Desenvolvimento de Minas Gerais
S.A. BDMG, (Bank) a financial institution organized to foster the sustainable development of
Minas Gerais State and integrates the state development system coordinated by the State
Secretary for Economic Development.
In order to increase its operational efficiency, BMDG implemented, in 2013, a new business
model regulated by the BDMG Strategic Plan 2012-2015.
The BDMG Strategic Plan 2012-2015, based on the Balanced Score Card methodology, guides
the Bank’s operations to continually contribute with the strengthening of the economy in Minas
Gerais.
The strategic objectives, indicators and goals established in this process converge the efforts of
internal units to increase disbursement’s volume by expanding through the increase in the number
of clients with effectiveness and deadlines compatible with the market practices, aiming to the
financial sustainability. Accordingly, the Bank is in current process of expansion and is
internalizing its actions in order to meet its role of a development bank.
2. Performance highlights
Renewal of rating: The investment grade awarded by Standard & Poors and Moody’s in 2012 was
maintained in the review performed in 2013. Standard & Poors awarded BDMG a credit rating of BBBlong-term debt in foreign currency and local currency on global rankings and br.AAA on national
ranking. Moody's also maintained the long-term credit rating of BDMG, currently at Baa3 in local
currency on a global ranking and Aa1.br on national ranking.
Funding: BDMG issued two Private Financial Bills in the total amount of R$ 102.5 million, both linked
to DI rate variation and with three-year maturity, equivalent to R$ 82.5 and R$ 20 million.
In August/2013, the Bank entered into a financing agreement to obtain a credit line of US$ 100 million
with the Andean Promotion Corporation (Corporación Andina de Fomento "CAF”), which will used in
the remodeling, expansion and modernization of the production capacity of companies established in
the state, mainly small and medium-sized enterprises. In December/2013, the Bank entered into a 50
million loan agreement with French Agency for Development (Agence Française de Développement
“AFD”). The funds will be used to finance municipal infrastructure projects focused on climate issues
and to universalize basic water and sewage services.
New business model: In May 2013, the new business model was implemented to offer its clients
a more effective and personalized approach, to increase productivity and efficiency of the Bank’s
loan processes. The main leverage actions performed to achieve such results include specializing
in commercial activities, consolidating operational functions to obtain scale gains, strengthening
professional skills in financial solutions, making customer service more effective and expanding
distribution channels, especially for small and medium-sized enterprises. Between May and
December 2013, 77% of processes were performed within deadlines agreed upon with the market
and 59% of the approved limits were carried out through parameterized methodology with an
average term of 3.5 business days.
2. Performance highlights (Continued)
Improving credit access across Minas Gerais regions: seeking to bring closer BDMG,
companies and clients in 853 municipalities of Minas Gerais (MG), the banking agent program
has been intensified in in partnership with credit unions and class entities (FIEMG, EMCF,
ICCAPE, FECOMERCIO, FCDL, Crediminas, Cecremge, SICOOB Crediminas and SICOOB
UNICRED). As a result of this initiative, the number of banking agents increased from 72 (in
2012) to 123 (in 2013), representing a 239% increase in the number of clients brought in by these
banking agents (from 782 in 2012 to 2,649 in 2013), also representing a 196% increase in
disbursement of clients served by the banking agent (from R$47.9 million in 2012 to R$142 million
in 2013). This initiative simplifies and accelerates the loan granting process and extends the
Bank's presence in the countryside of Minas Gerais, thus making business process easier to our
clients.
Small and medium-sized enterprises: the increase in the number of Bank’s clients focused on
the small and medium-sized enterprises. From January to December 2013, BDMG served 5,392
clients in this segment, accounting for a 29% growth in the number of client services and 24%
increase in the volume of funds disbursed for this target public in comparison with 2012, with a
disbursement of R$ 514 million. In regional terms, small and medium-sized enterprises
contributed to spread the funds provided by the Bank throughout the State, with emphasis to the
growth of 79% in Central regions and 66% in Triângulo Mineiro (region in the state of Minas
Gerais).
Infrastructure – Concessions and Public Private Partnership (PPP) provision of services to
the public sector in the development of concession models, PPP and project finance. Accordingly,
services were provided to BH-TEC, Local Government of Belo Horizonte, State Government and
Minas Gerais State Sanitation Company and its subsidiary (COPASA/COPANOR).
BDMGTEC: in April 2013, BDMG - by means of its subsidiary BDMGTEC Participação S.A. and
jointly with Fapemig, BNDES and other partners - approved the investment of Biomm S.A. located
in Nova Lima. The project consists in implementing a biopharmaceutical plant to produce insulin
with a total investment of R$330 million and generating 208 direct and 624 indirect jobs. BDMG
and Fapemig participate by financing the amount of R$ 56 million. BDMGTEC also participates in
the share capital with R$ 29 million. The project is expected to be concluded in July 2015.
BDMGTEC also participates in the capital of SIX Semicondutores S.A. The unit of the Company
that is being implemented in Ribeirão das Neves (Metropolitan region of Belo Horizonte) will be
the southern hemisphere’s most modern semi-conductor factory. The project will require R$1
billion in investments and should generate about 300 direct jobs. Operations are expected to start
in 2015. Through a partnership among SIX Soluções Inteligentes, BNDES, BDMG, IBM
(NYSE:IBM), Matec Investimentos and Tecnologia Infinita WS-Intecs, Brazil will enter a high-tech
sector, with strong domestic and international demand, supplying the virtually non-existent offer of
local chips.
Receivables Investment Fund - Minas Gerais Production Chains (FIDC-CPMG): aiming to
support the industrial development, the Bank increased the cash availability for investment with
short-term funds for companies operating in the car industry chain. In 2013, the Receivables
Investment Fund - Minas Gerais Production Chains (FIDC-CPMG) reached R$98 million in equity:
The transfer of funds of the end of December totaled 56.7% with an approximately R$56 million
invested in receivables of companies subject to FIDC support.
2. Performance highlights (Continued)
Supporting Innovation: in 2013, BDMG supported innovation initiatives in 25 companies with the
disbursement of R$10.6 million through Pro-innovation and Proptec credit lines, which resulted in
a partnership between BDMG and Fundação de Amparo à Pesquisa do Estado de Minas Gerais
– FAPEMIG. In addition, a partnership was entered into with FINEP to support the segment,
enabling BDMG to transfer Inovacred funds. In terms of risk capital, the Bank also maintains its
support as a shareholder in private equity funds: Fundo HorizonTI, Fundo Brasil Sustentabilidade,
Fundo Brasil TI and Criatec.
Risk management: in line with the strategic planning, risk management improved the
management tools of credit, market and liquidity risks. The model and procedure of risk
management assessment were reviewed for the small and medium-sized enterprises in order to
maintain the compliance and adequacy with scenario of portfolio expansion, also respecting
quality matters. Liquidity risk management has been improved with the adoption of new indicators,
limits and monitoring instruments. In addition, the Internal Controls units have been reinforced in
order to mitigate operational risks and contribute to the improvement of processes. The
implementation of a fraud prevention model is to be highlighted.
Bank’s brand repositioning: in the second half of 2013, the positioning of the institution and of
the Bank’s business segment - designed in connection with a communication strategy based on
the characteristics of partnership, innovation, commitment and development – was widely
disseminated both internally and externally through campaigns and promotional materials.
Seeking transparency and visibility, the actions of the bank have been disseminated in events and
in local and national press.
Culture: in order to celebrate 25 years of support, appreciation and encouragement of the culture
of Minas Gerais state, BDMG Cultural began the year of 2013 with the renewal of its brand, in line
with BDMG’s new visual identity and created a new, more interactive and modern website. Among
the activities developed throughout the year, we highlight the organization of 207 artistic and
cultural events, involving 35 municipalities, 1,520 artists and an audience close to 30,000,
reflecting a 26% increase in the number of performances supported by BDMG Cultural and the
participation of over 45% cities. It is also noteworthy that the renovation of centenary standband of
Praça da Liberdade, in the city of Belo Horizonte, and the support to the filmography industry of
the city of Minas Gerais.
Citizenship: the Citizenship Institute of BDMG Employees - INDEC, supported by BDMG subsidy
and donations from AFBDMG associated members, promoted the donation of approximately
8,400 kg of enriched flour to be used to fight child malnutrition of about 700 children enrolled in
the Pão Forte project. It also supported the entering of teenagers in the federal Vocational High
School.
3. Operational performance
Between January and December 2013, BDMG disbursements reached R$ 2,090 million, 46%
higher than in the same period of 2012. As to the origin of the funds, the BDMG risk transactions
accounted for 92% of disbursements, while third-party risk transactions accounted for 8%. The
distribution profile of the funds used in BDMG risk transactions reflects a 45% participation of own
funds and 47% of National Development Bank (BNDES) onlending.
Disbursements
(In millions of reais)
2,090
1,432
Jan to Dec 2012
+ 46%
Jan to Dec 2013
Source: BDMG
The sector distribution of disbursements made by BDMG, between January and December 2013,
allocated 50% of funds to the industry, with highlights to the food and beverage sector (12%),
non-metallic mineral products (9%), metallurgy (7%) and transport equipment and auto parts
(6%). Simultaneously, the service sector involved 36% of funds with strong participation of the
commercial segment.
From January to December 2013, the number of clients served reached 5,678, 26% higher than in
the same period of 2012. The increase in the number of clients was driven by the Bank’s
communication action plans, relationship with the market and wit banking agents, in addition to
the continuous improvement of the online credit tool.
4. Economic and financial performance
At 12/31/2013, BDMG total assets amounted to R$ 4,901 million, reflecting a 34% increase in
comparison with R$ 3,651 million at 12/31/2012. In the period, the Bank’s equity went from R$
1,313 million at 12/31/2012 to R$ 1,714 million 12/31/2013, reflecting 30% increase, with
highlights to capital payments of R$ 255 million and R$ 4 million by the shareholders State of
Minas Gerais and CODEMIG, respectively.
4. Economic and financial performance (Continued)
The own portfolio of loans and corresponding transactions showed a balance of R$4,148 million
at year end, of which R$1,999 million was originated in agreements entered into with own
resources and R$2,149 million was granted with funds transferred by other financial institutions.
The 44% growth, in relation to the balance of R$2,873 million disclosed at 12/31/2012, was a
result of the 39% increase in transactions contracted with own funds that amounted to R$ 1,436
million at 12/31/2012, while the onlending transactions amounted to R$ 1,437 million on the same
date, reflecting a growth of 50% in the period.
Loan potfolios
(In millions of reais)
2.873
Jan to Dec 2012
4.148
Jan to Dec 2013
Source: BDMG
It should be highlighted that loans classified under risk levels AA, A and B at 12/31/2013,
accounted for 75% of the loan portfolio, a situation that reflects the management guidelines in the
search for quality in the credit granted.
BDMG, as a financial agent of managed funds, presented, at December 31, 2013, financing
balance of R$ 2,189 million, of which R$ 2,157 million refer to operations contracted with state
funds and R$ 32 million refer to operations contracted with state funds extinguished by State Law
13848/2001 and with private funds and/or funds linked to state and federal government agencies.
The capital adequacy ratio (Basel index) computed in accordance with the new Basel III
regulation totaled 25% at 12/31/2013.
5. Acknowledgements
BDMG management appreciates the support of those who contributed to the 2013 results,
specially the Minas Gerais State Government and Legislative Assembly.
BANCO DE DESENVOLVIMENTO DE MINAS GERAIS S.A. – BDMG
Audit committee report summary – 2nd half of 2013
Introduction
The Audit Committee, a statutory body of Banco de Desenvolvimento de Minas Gerais S.A. – BDMG,
was established at the Special General Meeting held on February 28, 2011, in accordance with CMN
Resolution No. 3198 of May 27, 2004. The Committee supports the Board of Directors regarding the
exercise of its auditing and inspection duties and, among other attributions provided for in its Bylaws,
evaluate and express an opinion on: (i) quality of the financial statements; (ii) effectiveness of the
internal control system, and (iii) effectiveness of the internal and independent audits.
Activities performed under the scope of its duties
The Committee held 22 (twenty-two) meetings in the second half of 2013 and another 08 (eight) at the
beginning of the first half of 2014, including the participations in Board of Directors’ meeting. The last
meeting of the Committee held on 02.25.2014 concluded the review of the Financial Statements as at
December 31, 2013, Management Report and Independent Auditor’s Report on the Financial
Statements.
The Committee kept permanent contact with the Bank’s control area managers in order to monitor the
work developed and collect evidence to support its assessments. The Committee discussed topics
related to the preparation of the financial statements and internal controls with the managers in charge
of the Controlling, Internal Audit, Risk Management, Internal Control and Ombudsman areas, in their
respective areas of expertise.
Four meetings were held with the External Auditors, Ernst & Young Auditores Independentes S.S., in
order to know the methodology, planning and results of the work for the preparation of the Financial
Statements as at June 30, 2013 and December 12, 2013.
The Committee met with the Bank’s Executive Board and with directors individually to address matters
related to strategic planning; business; accounting; internal controls; internal audit; compliance; people
management; capital management; and credit, liquidity, operational and market risk management. The
Committee made recommendations to improve processes and checked on the compliance with those
recommendations or any clarifications and inquiries. Then it monitored the implementation of
improvements recommended by the internal and independent audits, which were pointed out in the
course of the work.
A meeting was held with the accounting manager of Fundação BDMG de Seguridade Social –
DESBAN, when the Committee was provided with the information regarding the Bank’s equity
situation and inspections performed by PREVIC.
The Committee held regular meetings with the Bank’s Board of Directors, when it expressed its
opinion on aspects related to its regimental competencies and provided the panel with information
regarding its activities.
Internal control and risk management systems
In the second quarter of 2013, we highlight the conclusion of the Antifraud Intelligence Program within
the loan granting process, developed by using a sophisticated statistic model, which will enable the
implementation of anti-fraud actions without having to increase the number of documents required for
Bank’s clients. The Audit Committee considers Bank management actions positive in the sense of
ensuring the effectiveness of the systems of internal control and Bank’s risk management.
Internal Audit
The Committee held several meetings with the Internal Audit manager in order to follow up the works
performed by that Unit. The Committee considers positive the comprehensiveness and quality of
audits and the independence level of the area. The audit work carried out by the internal audit did not
evidence any failures in the compliance with the current law and internal rules, the relevance of which
could impair the Bank's soundness and ability to continue as a going concern.
Independent audit
The Committee maintained with the external auditors, Ernst & Young Auditores Independentes S.S a
regular communication channel for a wide-ranging discussion on the planning, scope, relevant
accounting aspects, and results of the work carried out, so as to enable its members to support the
opinion on the completeness of the Bank’s financial statements. The Committee met with the
independent auditors to know the main occurrences found in the course of the preparation of the
financial statements as of June 30, 2013 and December 31, 2013 and its assessment of the Bank’s
internal controls. The Committee considers the audit work satisfactory, and no events that could affect
the objectivity and independence of the external auditors have been found.
Financial statements
The Committee monitored the preparation process of the financial statements as of June 30, 2013 and
December 31, 2013 (individual and consolidated), and audited the trial balances, balance sheets,
explanatory notes, management report, independent auditor’s report and other documents intended
for publication. It became aware of the accounting practices adopted by the Bank, uncommon events
and their impacts on the Bank’s equity and results at meetings held with those responsible for
preparing these documents and with the external auditors. The Committee found that the accounting
practices used in the preparation of the financial statements are in line with the main accounting
principles, Brazilian Corporation Law, and with regulations of the National Monetary Council and the
Central Bank of Brazil, fully reflecting the equity situation of the Bank.
Conclusion
The Audit Committee did not receive, until the closure of this report, any claim of non-compliance with
regulations, lack of control, action or omission by the Bank management that indicated the existence
of frauds, failures or errors that could impair its continuity as a going concern or completeness of the
financial statements.
Based on the considerations above, the Audit Committee, after due consideration of its natural
restrictions and responsibilities arising from the scope of its actions, recommends that the Board of
Directors approve the Financial Statements of Banco de Desenvolvimento de Minas Gerais S.A. –
BDMG as at December 31, 2013.
Belo Horizonte, February 26, 2014.
MAURO
LOBO
JUNIOR
Coordinator
MARTINS
CARLOS ANTONIO DUARTE
Member
JAIR MODESTO DA COSTA
Member
Banco de Desenvolvimento de Minas Gerais S.A. - BDMG
Financial Statements
Contents
Audited financial statements
Independent auditor’s report on audited financial statements........................................................ .1
Balance sheets ............................................................................................................................... .3
Income statements ......................................................................................................................... .5
Statements of changes in equity .................................................................................................... .6
Cash flow statements ..................................................................................................................... .7
Notes to financial statements ......................................................................................................... .8
Edifício Phelps Offices Towers
Rua Antônio de Albuquerque, 156
11º Andar - Savassi
30112-010 - Belo Horizonte, MG, Brasil
Tel: (5531) 3232-2100
Fax: (5531) 3232-2106
ey.com.br
A free translation from Portuguese into English of Independent Auditor’s Report on individual and consolidated
financial statements prepared in Brazilian currency in accordance with accounting practices adopted in Brazil
Independent auditor’s report on audited financial statements
The Shareholders, Board of Directors and Officers of
Belo Horizonte - MG
We have audited the individual and consolidated financial statements of Banco de Desenvolvimento
de Minas Gerais S.A. – BDMG (“Bank”), identified as Company and Consolidated, respectively, which
comprise the balance sheet as at December 31, 2013 and the related income statements, statements
of changes in equity and cash flow statements for the year then ended, and a summary of significant
accounting practices and other explanatory information.
Management's responsibility for the individual and consolidated financial statements
The Bank management is responsible for the preparation and fair presentation of the individual and
consolidated financial statements in accordance with accounting practices adopted in Brazil applicable
to institutions authorized to operate by the Central Bank of Brazil (BACEN) and for such internal
control as management determines is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these individual and consolidated financial statements
based on our audit. We conducted our audit in accordance with Brazilian and international standards
on auditing. Those standards require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether these financial statements are free from
material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal controls relevant to the Bank's
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Bank's internal control. An audit also includes evaluating the appropriateness of
accounting practices used and the reasonableness of accounting estimates made by the
management, as well as evaluating the overall presentation of the individual and consolidated financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
1
Uma empresa-membro da Ernst & Young Global Limited
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
individual financial position of Banco de Desenvolvimento de Minas Gerais S.A.- BDMG, as well as
the consolidated financial position of Banco de Desenvolvimento de Minas Gerais S.A.- BDMG and
subsidiary as at December 31, 2013, and its individual and consolidated financial performance and its
cash flows for the year then ended, in accordance with accounting practices adopted in Brazil
applicable to institutions authorized to operate by the Central Bank of Brazil.
Emphasis of a matter
Restatement of corresponding amounts
As mentioned in explanatory notes 3 (k) and 28, due to the changes in accounting practices adopted
by the Bank in the recognition of employee benefits, as amended by Brazilian FASB (CPC) 33 (R1), in
force as of January 1, 2013, the corresponding amounts for the year ended December 31, 2012,
presented for comparison purposes, have been adjusted and are being restated as provided for in
CMN Resolution No. 4007/11, which approved Brazilian FASB (CPC) 23 - Accounting Policies,
Changes in Accounting Estimates and Correction of Errors. Our opinion does not contain a
modification as to this matter.
Belo Horizonte, February 26, 2014.
ERNST & YOUNG
Auditores Independentes S.S.
CRC 2SP015199/O-6
Rogério Xavier Magalhães
Accountant CRC-1MG080613/O-1
2
Uma empresa-membro da Ernst & Young Global Limited
A free translation from Portuguese into English of individual and consolidated financial statements prepared in
Brazilian currency in accordance with accounting practices adopted in Brazil
Balance sheets
(In thousands of reais)
Individual
Notes
Assets
Current assets
Cash and Banks
Short-term interbank investments
Open market investments
Marketable securities and derivative financial instruments
Own portfolio
Derivative financial instruments
Loans
Loans
Public sector
Private sector
(Allowance for loan losses)
Lease Transactions
Leases and subleases receivable
Private sector
(Unearned income from leases)
(Allowance for losses on lease receivables)
Other receivables
Receivables for guarantees and sureties honored
Income receivable
Sundry
(Allowance for losses on other receivables)
Other amounts and assets
Noncurrent assets
Long-term receivables
Investments in Interbank deposits
(Allowance for losses)
Marketable securities and
derivative financial instruments
Own portfolio
Subject to repurchase agreement
Linked to the Central Bank of Brazil
Derivative financial instruments
Loans
Loans
Public sector
Private sector
(Allowance for loan losses)
Other receivables
Income receivable
Specific receivables
Sundry
(Allowance for losses on other receivables)
temporary investments
(Valuation allowance)
Permanent assets
Investments
Other investments
(Allowance for losses)
Real estate in use
Real estate in use
Other fixed assets in use
(Accumulated depreciation)
Lease property and equipment
Leased assets
(Accumulated depreciation)
Intangible assets
Intangible assets
(Accumulated amortization)
Deferred
Organization and expansion expenses
(Accumulated amortization)
3
4
5
6-7
7
8
8
9
10
5
6-7
7
8
9
10
11
2013
Consolidated
2013
1,100,322
71,483
28,215
28,215
42,041
41,665
376
912,857
959,261
92,198
867,063
(46,404)
45,561
6,112
39,495
(46)
165
165
3,800,731
3,705,234
11,727
(11,727)
2012
(restated)
956,632
1,158
342,333
342,333
583,420
618,010
77,016
540,994
(34,590)
(109)
114
114
(111)
(112)
29,612
2,134
27,670
(192)
218
218
2,694,233
2,666,980
11,727
(11,727)
373,337
279,913
47,062
33,456
12,906
3,064,409
3,188,294
457,408
2,730,886
(123,885)
266,763
3,382
1,184
274,499
(12,302)
725
2,227
(1,502)
204,422
204,422
2,148,059
2,254,661
458,235
1,796,426
(106,602)
291,727
3,201
1,116
299,417
(12,007)
22,772
22,772
1,518
(1,518)
373,337
279,913
47,062
33,456
12,906
3,064,409
3,188,294
457,408
2,730,886
(123,885)
266,763
3,382
1,184
274,499
(12,302)
725
95,497
68,572
69,409
(837)
21,870
40,996
12,112
(31,238)
5,055
5,055
1,610
(1,610)
4,901,053
27,253
487
1,324
(837)
22,869
41,831
10,382
(29,344)
644
1,704
(1,060)
3,223
3,975
(752)
30
1,610
(1,580)
3,650,865
63,362
36,437
37,274
(837)
21,870
40,996
12,112
(31,238)
5,055
5,055
1,610
(1,610)
4,901,053
1,132,457
71,483
28,215
28,215
74,174
73,798
376
912,857
959,261
92,198
867,063
(46,404)
45,563
6,112
39,497
(46)
165
165
3,768,596
3,705,234
11,727
(11,727)
2,227
(1,502)
Individual
Notes
Liabilities and equity
Current liabilities
Deposits
Interbank deposits
Funds obtained in the open market
Own portfolio
Borrowings
Foreign borrowings
Local onlending – Official institutions
National Treasury
BNDES
FINAME
Other institutions
Other liabilities
Social and statutory
Collection and transfer of taxes and the like
Tax and social security
Financial and development funds
Sundry
Long-term payables
Deposits
Interbank deposits
Exchange acceptance and issuance of securities
Funds from financial bills
Borrowings
Foreign borrowings
National Treasury
BNDES
FINAME
Other institutions
Other liabilities
Tax and social security
Sundry
Deferred income
Deferred income
Equity
Capital:
Capital of parties domiciled in Brazil
Capital increase
Unrealized capital
Income reserves
Equity valuation adjustment
Total liabilities and equity
See accompanying notes
4
12
12
13
14
15
12
12
13
14
15
16
2013
507,529
45,033
45,033
1,022
1,022
388,266
1,760
280,806
101,822
3,878
73,208
19,678
590
10,536
1,026
41,378
2,669,191
50,902
50,902
469,490
469,490
187,119
187,119
1,644,657
12,532
838,088
765,302
28,735
317,023
151,488
9,114
156,421
10,728
10,728
1,713,605
2012
(restated)
407,346
59,493
59,493
276,301
1,816
189,359
81,372
3,754
71,552
1,172
34,856
965
34,559
1,922,297
351,267
351,267
1,056,244
13,540
597,671
413,129
31,904
514,786
229,764
6,973
278,049
7,967
7,967
1,313,255
1,659,782
49,262
(16,859)
81,143
(59,723)
4,901,053
1,456,157
(22,772)
29,227
(149,357)
3,650,865
Consolidated
2013
507,529
45,033
45,033
1,022
1,022
388,266
1,760
280,806
101,822
3,878
73,208
19,678
590
10,536
1,026
41,378
2,669,191
50,902
50,902
469,490
469,490
187,119
187,119
1,644,657
12,532
838,088
765,302
28,735
317,023
151,488
9,114
156,421
10,728
10,728
1,713,605
1,659,782
49,262
(16,859)
81,143
(59,723)
4,901,053
Income statements
Years ended December 31, 2013 and 2012
(In thousands of reais, except for earnings per share, stated in reais)
Individual
Notes
Second half
2013
Year
2013
2012
(restated)
Consolidated
Second half
Year
2013
2013
230,159
190,881
22,306
13,282
3,690
415,457
350,598
248
47,633
13,282
3,696
353,964
308,378
463
45,116
7
231,515
190,881
23,662
13,282
3,690
417,595
350,598
248
49,771
13,282
3,696
(120,966)
(22,896)
(62,256)
(35,814)
(197,884)
(44,158)
(104,582)
(246)
(48,898)
(149,376)
(13,464)
(79,418)
(376)
(56,118)
(120,966)
(22,896)
(62,256)
(35,814)
(197,884)
(44,158)
(104,582)
(246)
(48,898)
Gross financial income
109,193
217,573
204,588
110,549
219,711
Other operating revenue (expenses)
- Revenue from services rendered
- Personnel expenses
- Other administrative expenses
- Tax expenses
- Other operating income
- Other operating expenses
29,802
25,305
(42,804)
(30,512)
(9,002)
111,074
(24,259)
(29,590)
47,956
(82,884)
(48,575)
(17,269)
119,993
(48,811)
(96,079)
55,790
(74,189)
(39,259)
(17,240)
17,009
(38,190)
28,446
25,305
(42,804)
(30,512)
(9,002)
109,721
(24,262)
(31,728)
47,956
(82,884)
(48,601)
(17,269)
117,885
(48,815)
138,995
187,983
108,509
138,995
187,983
(4,604)
(5,392)
(2,752)
(4,604)
(5,392)
134,391
182,591
105,757
134,391
182,591
(20,035)
4,537
2,162
(26,734)
(42,612)
(12,912)
(8,445)
(21,255)
(25,940)
(28,296)
(17,863)
20,219
(20,035)
4,537
2,162
(26,734)
(42,612)
(12,912)
(8,445)
(21,255)
(8,378)
(8,378)
(11,789)
(11,789)
(4,641)
(4,641)
(8,378)
(8,378)
(11,789)
(11,789)
Income from financial intermediation
- Loans
- Lease transactions
- Marketable security transactions
- Income from derivative financial instruments
- Foreign exchange transactions
Financial expenses
- Open market funding
- Borrowings and onlending
- Lease transactions
- Allowance for loan losses
8
20
Operating (expenses)
Non-operating (expense)
21
Income before income taxes on profit sharing
Income and social contribution tax expenses
Provision for income tax
Provision for social contribution tax
Deferred tax asset
Statutory profit sharing
Employee profit sharing
19
Net income
105,978
128,190
75,176
105,978
128,190
Interest on equity
(75,703)
(75,703)
(39,216)
(75,703)
(75,703)
0.0017609
0.0021300
0.0014520
0.0017609
0.0021300
Earnings per share
5
Statements of changes in equity
Balances at December 31, 2011
Capital increase approval
Capital increase
Net income for the year
Allocations:
Reserves
Dividends (R$ 0.00054 per share)
Interest on equity (R$ 0.00076 per share)
Capital increase approval
Capital increase
Allocations:
Reserves
Interest on equity(R$ 0.00129 per share)
Balances at June 30, 2013
Capital increase
Net income for the six-month period
Allocations:
Reserves
Interest on equity (R$ 0.00129 per share)
6
Income
reserve
legal
Income
reserve
Other
Adjustment
to availablefor-sale
securities
Other equity
valuation
adjustment
Capital
.
Capital
increase
Unpaid
capital
Retained
earnings
1,087,715
368,442
-
(368,442)
368,442
-
(22,772)
-
25,088
-
37,108
-
822
6,730
-
(27,739)
(129,170)
-
1,456,157
203,625
-
(203,625)
252,887
-
(22,772)
22,772
(16,859)
-
3,568
28,656
-
(36,537)
571
(571)
-
7,552
(19,651)
-
(156,909)
109,285
-
(4,138)
(28,000)
(39,216)
-
1,659,782
1,659,782
-
49,262
49,262
-
(16,859)
(16,859)
-
6,409
35,065
29,767
-
46,078
46,078
-
(12,099)
(5,478)
(6,621)
-
(47,624)
(89,721)
42,097
-
(52,487)
(75,703)
21,101
105,978
(75,703)
1,713,605
1,615,451
32,403
35,476
105,978
1,659,782
49,262
(16,859)
5,298
35,065
46,078
46,078
(12,099)
(47,624)
(51,376)
(75,703)
-
(75,703)
1,713,605
71,354
128,190
Total
1,122,994
(22,772)
368,442
(122,440)
71,354
(37,107)
(28,000)
(39,216)
1,313,255
22,201
236,028
89,634
128,190
Cash flow statements
Individual
Second half
2013
Cash flow from operating activities
Net income before taxes and profit sharing
Net income adjustments:
Depreciation and amortization
Set up (reversal) of net provisions
Allowance for loan losses net of reversals
Setup of allowance for losses
Profit (loss) on the disposal of assets not for
own use
Allocation of deferred income
Recovery of loans written off to losses
Revenue from monetary restatement of longterm loans
Equity pickup
Adjusted net income
Decrease in Interbank investments
Decrease/(Increase) in marketable securities
Increase in loans and lease transactions
Increase in other receivables and other assets
Increase in interbank deposit
Decrease (Increase) in obligations from
repurchase agreements
Funds raised through financial bills
Increase in borrowings and on-lending
Increase in deferred income
Decrease (increase) in other liabilities
Income and social contribution taxes paid
Profit sharing payment
Changes in assets and liabilities
Net cash used in operating activities
Cash flow from investing activities
Acquisition of permanent assets
Investment in the subsidiary BDMGTEC
Year
2013
134,391
182,591
2012
(restated)
105,757
1,728
(87,487)
35,814
(769)
3,566
(76,972)
48,898
(472)
34
(2,196)
(4,203)
Consolidated
Second half
Year
2013
2013
134,391
182,591
3,232
21,922
56,118
(752)
1,728
(87,487)
35,814
(769)
3,566
(76,972)
48,898
(472)
436
(4,417)
(4,889)
(283)
(3,516)
(10,529)
34
(2,196)
(4,203)
436
(4,417)
(4,889)
(8,339)
(2,540)
66,433
(13,069)
(2,540)
133,132
(14,961)
156,988
(9,526)
67,786
(13,501)
135,240
55,932
-
291,236
55,932
-
4,802
(814,026)
(13,023)
(10,675)
(246,462)
(1,276,323)
(17,042)
(8,591)
(45,012)
(756,382)
(3,517)
(40,692)
3,449
(814,026)
(13,023)
(10,675)
(271,252)
(1,276,323)
(17,042)
(8,591)
45,033
20,423
661,288
3,429
9,992
(10,453)
(4,414)
(51,692)
45,033
118,224
888,520
7,178
11,567
(46,958)
(6,939)
(531,793)
(5,012)
351,267
145,842
5,429
(37,780)
(36,990)
(8,295)
(139,906)
45,033
20,423
661,288
3,429
9,992
(10,453)
(4,414)
(53,045)
45,033
118,224
888,520
7,178
11,567
(47,049)
(6,939)
(556,674)
14,741
(398,661)
17,082
14,741
(421,434)
(3,324)
(20,000)
(4,886)
(42,773)
(4,722)
(22,772)
(23,324)
-
(24,886)
-
Net resources used in investing activities
Cash flow from financing activities
Capital increase
Dividend paid
Interest on equity
Net cash used in financing activities
(23,324)
(47,659)
(27,494)
(23,324)
(24,886)
32,403
(55,703)
(23,300)
258,230
(55,703)
202,527
308,562
(28,000)
(39,216)
241,346
32,403
(55,703)
(23,300)
258,230
(55,703)
202,527
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
(31,883)
131,581
99,698
(243,793)
343,491
99,698
230,934
112,557
343,491
(31,883)
131,581
99,698
(243,793)
343,491
99,698
7
Notes to financial statements
1. Operations
Banco de Desenvolvimento de Minas Gerais S.A. - BDMG, a privately-held corporation, is a
government-owned company controlled by the State of Minas Gerais and governed by the
Brazilian Corporation Law, by a relevant regulation of the National Financial System, and by an
applicable legislation as established by the Government of Minas Gerais.
BDMG's activities, base of its corporate purpose, are associated with the social and economic
development of the State of Minas Gerais. Within this focus, it carries out development bankrelated activities in accordance with the rules established by the National Monetary Board (CMN)
and acts as a financial agent for funds constituted by the State to finance programs and projects
that foster development in the State of Minas Gerais. BDMG is also a financial agent and/or
manager of other funds which do not belong to the State, as they finance projects in Minas
Gerais, promoting its development. The Bank provides advisory services and technical assistance
to the State Direct and Indirect Management and creates opportunities for the establishment and
expansion of companies that are significant for the development of the State of Minas Gerais by
investing in these companies through its wholly owned subsidiary BDMGTEC PARTICIPAÇÃO
S.A., established in 2012 in compliance with the Constitution of the State of Minas Gerais.
2. Basis for preparation and presentation of financial statements
(a) Basis of preparation
The Bank’s Board of Directors approved the issue of the 2013 financial statements on
February 26, 2014.
Preparation of financial statements requires that management, to the best of its judgment,
estimate and adopt assumptions that affect the unrealized assets, liabilities, revenues, costs
and expenses. The settlement of transactions involving these estimates may result in
amounts significantly different from those recorded in the financial statements due to
uncertainties inherent in the estimate process.
The financial statements were prepared based on accounting practices adopted in Brazil, in
light of the accounting guidelines contained in the Corporation Law No. 6404/76, as amended
by Law No. 11638/07 and Law No. 11941/09, associated with standards and instructions of
the Brazil Monetary Council (CMN) and Central Bank of Brazil (BACEN).
8
Notes to financial statements (Continued)
2. Basis for preparation and presentation of financial statements
(b) Basis of consolidation
The financial statements for 2013 were prepared on a consolidated basis, based on the
Brazilian Accounting Standard (NBC TG 36) - Consolidated financial statements, and include
the financial statements of the Bank and that of its wholly owned subsidiary, the nonfinancial
company BDMGTEC PARTICIPAÇÃO S.A..
The tables in the explanatory notes related to the individual information of BDMG are
presented under the Bank and are presented under the Consolidated when include data of
BMDG and BDMGTEC.
The following procedures were complied with in the consolidation:
- the individual financial statements of the Bank and BDMGTEC for 2013 were prepared at
December 31, 2013;
- the same policies and practices were adopted, when applicable for both entities
- the sole transaction recorded between the entities refers to investments of the Bank in the
capital of its wholly owned subsidiary;
- the equity between the two entities calculated the following adjustment, in December 2013,
which was recorded by the Bank under the revenue account:
Equity of BDMGTEC at 12/31/2013
Investments of BDMG in BDMGTEC
Equity pickup adjustment
R$
68,085
65,545
2,540
In 2012, when BDMGTEC was established, its financial statements and those of the Bank
were not consolidated, since the duration of the subsidiary was subject to how long it has
been a noncontrolling shareholder in a sole company or companies of the same economic
group of which it participates. This condition, provided for in the Articles of Incorporation of
BDMGTEC, was a determining factor for BDMG to record its wholly owned subsidiary as a
temporary investment under Equity Interest of the subgroup Long-term receivables.
Subsequently, aiming to adopt new alternatives to promote economic and social development
of the State, the articles of incorporation of BDMGTEC was amended in order to allow for in
its participation in companies significant to the State. This amendment became effective in
December 2013, when BDMGTEC started to participate in the capital of a second company.
This fact caused the accounting record of the Equity Interest account to change to an
investment account of the subgroup Permanent assets and, consequently, the consolidation
of the financial statements for 2013 also changed.
9
3. Summary of significant accounting practices
(a) Determination of profit and loss (P&L)
Revenues and expenses are calculated on the accrual basis for the year, and are adjusted
according to the attributable amount of income and social contribution taxes on taxable profit
and, where applicable, by deferred income and social contribution taxes, which will be
recovered or demanded in following years, except for profit on renegotiated loans posted to
P&L on a cash basis, as determined by Resolution CMN/BACEN 2682/1999.
(b) Cash and cash equivalents
These comprise cash and cash equivalents in local and foreign currency and short-term
interbank investments maturing on their effective investment date within no more than 90
days, which are used by BDMG for short-term commitment management.
(c) Short-term interbank investments
These are stated at cost of acquisition, plus yields earned on a pro-rata basis up to the
balance sheet date, less valuation allowances, where applicable.
(d) Marketable securities
As per BACEN Circular Letter No. 3068/2001 and supplementary regulations, marketable
securities, according to management’s intentions to trade them, will be classified in light of the
following criteria:
(i) Held-for-trading securities – these include marketable securities acquired to be frequently
and actively traded, accounted for at market value, with profit and losses on these
securities, either realized or not, recorded directly in P&L for the year.
(ii) Available-for-sale securities – these include marketable securities used as part of a
strategy to manage cash flow. These securities are accounted for at market value, their
intrinsic yields are (security curve) recognized in P&L for the year, and profit and loss from
changes in market value, still not realized, are recorded in Equity Valuation Adjustment
under the Equity account, net of related tax effects. Profit and loss, when realized, are
recorded in P&L for the year upon specific identification on the trade date, matched
against equity, net of related tax effects.
10
3. Summary of significant accounting practices (Continued)
(d) Marketable securities (Continued)
(iii) Held-to-maturity securities – these include marketable securities that management
intends and has the financial ability to hold to maturity, which are recorded at cost of
acquisition, plus intrinsic yields that are recognized in P&L for the year. The financial
capacity is defined by cash flow projections, disregarding the possibility of advanced
redemption of said securities.
Decreases in the market value of available-for-sale and held-to-maturity marketable securities
below their corresponding costs, related to reasons not considered to be temporary, are
reflected in P&L as realized losses.
(e) Derivative financial instruments
The BDMG started to operate with derivative financial instruments as of October 2013,
through the use of swaps to mitigate the exposure arising from the risk of fluctuation of US
dollar exchange and interest rate levied on external financing taken out in the second half of
2013.
As presented in Note 7, derivatives are recorded at fair value, in addition these derivatives will
be recorded as assets when positive and as liabilities when negative, with the fair value
variations recorded in the income statement.
The risk management and monitoring of these transactions are in compliance with the Bank’s
policies and strategies for the adoption of the hedging transactions.
(f) Loans and other current assets and long-term receivables
These are stated at realizable values, including, where applicable, yields earned on a pro rata
basis, deducted of the corresponding unearned income. Allowance for loan losses is set up
based on the criteria defined by Resolution CMN/BACEN No. 2682/1999, and takes into
consideration loan risk classification and maturity.
Revenues from loan and lease transactions overdue for more than 59 days, regardless of
their risk level, are only recognized when they are effectively received.
11
(f) Loans and other current assets and long-term receivables (Continued)
Renegotiation transactions are maintained, at least, at the same risk level in which they had
been classified prior to the renegotiation. Also, the renegotiated transaction is reclassified to a
lower risk category upon the occurrence of material facts that justify the change of risk level.
Loans that had already been written off against the respective allowance and recorded in
memorandum accounts, if renegotiated, are classified under level “H” and any gains arising
therefrom are only recognized as revenue when they are effectively received.
(g) Permanent assets
Permanent assets (property and equipment, intangible assets and deferred charges) are
presented at acquisition cost, net of the respective accumulated depreciation and
amortization and adjusted by impairment, if the test annually held indicates that their book
value exceeds their recoverable value.
Depreciation of property and equipment in use, amortization of deferred charges, and
amortization of intangible assets are calculated under the straight-line method at the rates
mentioned in items (b), (d), and (e) of Note 11, respectively.
The permanent asset of investments is recognized at cost and, as from December 2013, the
subsequent measurement is performed by the equity method if due. According to this
method, the book value of the investment is increased or decreased to recognize the portion
of the controlling company under the subsidiary’s profit or loss.
(h) Current liabilities and long-term payables
These are stated according to known or calculable values, and, whenever applicable, the
charges incurred on a pro rata basis.
12
(i)
Operations in foreign currencies
Asset and liability balances of operations in foreign currencies are translated into the domestic
currency (R$), which is also the functional currency of the Bank at the sales exchange rate at the
balance sheet date.
(j)
Income and social contribution taxes
Provision for income tax is set up at the base rate of 15% of taxable profit, plus surtax of 10%,
and provision for social contribution tax on net income is calculated at 15% of taxable profit.
The Bank does not have tax effects arising from the Transition Tax Regime (RTT) provided
for by Law No. 11941/2009, which resulted from Provisional Executive Order (MP) No.
449/2008.
The Brazilian IRS Revenue Procedure (IN RFB) No. 1397 was published on September 17,
2013, and the Provisional Executive Order (MP) No. 627 was published on November 12,
2013: (i) repealing the Transition Tax Regime (RTT) as of 2015, introducing a new tax
regime, (ii) amending the Law Decree No. 1598/77 related to the calculation of legal entity’s
income tax and the legislation on the Social Contribution Tax on Net Profit (CSLL). The new
tax regime provided for in MP 627 becomes effective as of 2014, if the entity exercises such
option. We may highlight some provisions within MP 627 that approach profit sharing and
distribution of dividends, tax base on interest on equity and calculation criteria of equity
through the term of RTT.
The analysis of the adoption of Provisional Executive Order (MP) 627 and Revenue
Procedure (IN) 1397 did not identify significant impact on its operations and financial
statements for the year ended December 31, 2013, pursuant to interpretation of the current
wording. The possible conversion of MP 627 into Law may cause our conclusions to change.
(k) Employee benefits
The Bank sponsors the following benefits to active and assisted employees:
·
13
Private pension plan – supplements the retirement benefit provided by the General Social
Security Regime (RGPS). BDMG sponsors defined benefit private pension plans, closed to
new members since November 10, 2011, under the variable contribution type.
(k) Employee benefits (Continued)
·
Health and dental assistance – this plan offers medical and dental coverage to its
participants. BDMG ensures this benefit to participants that subscribe to the plan, the
quality of the assets up to 10/10/2009 through partial payment of the monthly contribution.
Employees that are part of the health plan as from 10/11/2009 are ensured BDMG
sponsorship while active participants or as assisted members, these employees may
remain in the plan and liable for the total contribution owed.
·
Life insurance – BDMG pays part of the group life insurance policy premium.
·
Voluntary retirement program – On December 14, 2011, BDMG created the Voluntary
Resignation Program, which benefits employees who meet the program requirements,
conditional upon their retirement by December 31, 2014.
·
Other benefits – the Bank still grants its active employees benefits arising from profit
sharing, in addition to a six-month period maternity leave.
The benefits granted by the Bank, except those related to "Other benefits", are accounted for
in accordance with the Brazilian Accounting Standards “NBC TG 33 - Employee Benefits,
which is based on the accounting procedure issued by Brazilian FASB (CPC) 33 (R1) (IAS 19
issued by International Accounting Standards Board “IASB”).
The Brazil’s National Association of State Boards of Accountancy (CFC) Resolution No.
1425/2013 adapted NBC TG 33 to include the amendments of the revised CPC 33 (R1) and
determined it would be adopted as from January 1, 2013.
The revised standard requires the: (i) immediate recognition of actuarial gains and losses of
post-employment benefits being recorded against equity; and, (ii) calculation of net interest
based on the adoption of discount rate on the balance of net liabilities of active members.
The information on the accounting of employee benefits, pursuant to NBC TG 33, is detailed
in Note 28.
14
The changes arising from the adoption of CPC 33 (R1) as from January 2013 had to be
disclosed in the financial statements of 2012 in order to meet the requirements of NBC TG 23
(NBC T 19.11) – Accounting Policies, Changes in Accounting Estimates and Errors, based on
which the adjustments made to the financial statements for the year must be considered in
the previous year in order to allow the comparability of information.
The financial statements of BDMG at 12/31/2012 are presented in the following table with the
adjustments made due to the adoption of NBC TG 33:
· Balance sheets
Balances
originally
disclosed
Assets
Current assets
Cash
Marketable securities
Loans
Lease transactions
Other receivables (b)
Noncurrent assets
Long-term receivables
Marketable securities
Loans
Lease transactions
Other receivables (b)
Permanent assets
Investment
Property and equipment (P&E) in use
Lease property and equipment
Intangible assets
Deferred charges
Total assets
15
953,739
1,158
342,333
583,420
(109)
26,719
218
2,657,843
2,630,590
204,422
2,148,059
255,337
22,772
27,253
487
22,869
644
3,223
30
3,611,582
12/31/2012
Effects of
NBC TG 33
adoption
2,893
2,893
36,390
36,390
36,390
39,283
Adjusted
balances
956,632
1,158
342,333
583,420
(109)
29,612
218
2,694,233
2,666,980
204,422
2,148,059
291,727
22,772
27,253
487
22,869
644
3,223
30
3,650,865
Balances
originally
disclosed
775,020
1,224
292,379
21,641
437,239
(114)
22,521
130
2,064,922
2,039,054
100,179
135,619
1,575,344
(33)
227,945
25,868
607
23,086
1,019
923
233
2,839,942
01/01/2012
Effects of
NBC TG 33
adoption
2,991
2,991
19,464
19,464
19,464
22,455
Adjusted
balances
778,011
1,224
292,379
21,641
437,239
(114)
25,512
130
2,084,386
2,058,518
100,179
135,619
1,575,344
(33)
247,409
25,868
607
23,086
1,019
923
233
2,862,397
· Balance sheets (Continued)
Balances
originally
disclosed
Liabilities
Current liabilities
Deposits
Funds obtained in the open market
Other liabilities (a)
Noncurrent liabilities
Funds from exchange acceptance and
issue of securities
Other liabilities (a)
Deferred income
Equity
Capital
Capital of parties domiciled in Brazil
(Unrealized capital)
Income reserves
Equity adjustments (c)
Total liabilities and equity
(a)
(b)
(c)
16
12/31/2012
Effects of
NBC TG 33
adoption
Adjusted
balances
Balances
originally
disclosed
01/01/2012
Effects of
NBC TG 33
adoption
Adjusted
balances
401,241
59,493
276,301
65,447
1,732,210
6,105
6,105
190,087
407,346
59,493
276,301
71,552
1,922,297
431,089
100,184
238,700
5,012
87,193
1,252,067
7,125
7,125
43,069
438,214
100,184
238,700
5,012
94,318
1,295,136
351,267
1,056,244
324,699
7,967
1,470,164
190,087
(156,909)
351,267
1,056,244
514,786
7,967
1,313,255
948,004
304,063
6,053
1,150,733
43,069
(27,739)
948,004
347,132
6,053
1,122,994
1,456,157
(22,772)
29,227
7,552
(156,909)
1,456,157
(22,772)
29,227
(149,357)
1,087,715
62,196
822
(27,739)
1,087,715
3,611,582
39,283
3,650,865
2,839,942
22,455
2,862,397
The adjustments recorded in Assets under "Other receivables" refer to tax credit mainly generated in the recognition of actuarial losses (Note 9).
The adjustments recorded in Liabilities under "Other obligations" refer to the recognition of actuarial losses of defined benefit plans and of cost of services
communicated by the health plan arising from the adoption of revised the NBC TG 33 (explanatory notes Nos. 15 and 28).
The adjustments recoded under Equity refer to the effect of recognition of actuarial losses and cost of services communicated by the health plan net of tax
credit.
62,196
(26,917)
· Statements of operations for the year
Income from financial intermediation
Trading expenses
Gross profit on financial intermediation
Other operating expenses
Operating income (expenses)
Non-operating income (expense)
Income before income taxes on profit sharing
Corporate Income Tax (IRPJ) and CSLL provision
Statutory profit sharing
Balances
originally
disclosed
353,964
(149,376)
204,588
(99,901)
104,687
(2,752)
101,935
(25,940)
(4,641)
71,354
2012
Effects of the
adoption of
NBC TG 33
3,822
3,822
3,822
3,822
Adjusted
balances
353,964
(149,376)
204,588
(96,079)
108,509
(2,752)
105,757
(25,940)
(4,641)
75,176
· Cash flow statements
Net income before taxes and profit sharing
Establishment of allowances and contingent liabilities, net
Setting up of allowance for loan losses
Reversal of valuation allowance
Loss from disposal of assets not in use
Allocation of deferred income
Recovery of loans written off to losses
Revenue from monetary restatement of long-term loans
Adjusted net income
Changes in assets and liabilities
17
Balances
originally
disclosed
101,935
3,232
25,744
56,118
(752)
(283)
(3,516)
(10,529)
(14,961)
156,988
2012
Effects of the
adoption of
NBC TG 33
3,822
(3,822)
-
Adjusted
balances
105,757
3,232
21,922
56,118
(752)
(283)
(3,516)
(10,529)
(14,961)
156,988
(139,906)
-
(139,906)
Net cash provided by operating activities
17,082
-
17,082
Net resources used in investing activities
(27,494)
-
(27,494)
Net cash used in financing activities
241,346
-
241,346
Net increase in cash and cash equivalents
230,934
-
230,934
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
112,557
343,491
-
112,557
343,491
· Statements of changes in equity
Capital
Balances at December 31, 2012 - published
Effects of
NBC TG 33 adoption
Balances at December 31, 2012 -adjusted
Balances at January 1, 2012 - published
Effects of
NBC TG 33 adoption
Balances at January 1, 2012 -adjusted
18
Income
reserve – legal
Unpaid capital
reserve
Capital
increase
Income
reserve retained
earnings
Adjustment to Other equity
valuation
available-forsale securities adjustment
Retained
earnings
Total
1,456,157
-
(22,772)
28,656
571
7,552
-
-
1,470,164
1,456,157
-
(22,772)
28,656
571
7,552
(156,909)
(156,909)
-
(156,909)
1,313,255
1,087,715
-
-
25,088
37,108
822
-
-
1,150,733
1,087,715
-
-
25,088
37,108
822
(27,739)
(27,739)
-
(27,739)
1,122,994
(l)
Contingent assets and liabilities and legal obligations
Recognition, measurement, and disclosure of contingent assets and liabilities and legal
obligations observe Accounting Pronouncement CPC 25, issued by the Brazilian FASB
(CPC), and follow the criteria below:
(i)
Contingent assets – these are only recognized in financial statements upon existence of
evidence guaranteeing their realization, on which no further appeals can be filed.
(ii) Contingent liabilities – are recognized in the financial statements when, based on the
opinion of legal advisors and management, the risk of an unsuccessful outcome of a
legal or administrative suit is considered probable, implying a probable cash outflow for
their settlement, and when the amounts involved can be measured reliably. Contingent
liabilities classified by the legal advisors as possible losses will solely be disclosed in the
notes to financial statements, whereas liabilities classified as remote losses will not be
disclosed and do not require accrual or disclosure.
(iii) Legal obligations – these refer to litigation aimed to challenge the legality and/or
constitutionality of certain taxes and contributions. The amount under dispute is
measured, recorded and adjusted on a monthly basis.
(m) Employee profit sharing
Profit sharing is defined in a collective agreement and also by complying with the Goal Plan,
and is accrued based on the percentage on P&L and adjusted at the end of the year after the
calculation of income for the year and assessment of achievement of goals.
(n) Related parties
The disclosure in notes to the financial statements regarding related parties is in compliance
with the CMN/BACEN Resolution No. 3750/2009, which established that financial institutions
should comply with the Accounting Pronouncement CPC 05 – Disclosure of Related Parties
for Financial Institutions. This Pronouncement provides for the mandatory disclosure of
transactions between the Bank and its related parties that may affect its equity, financial
situation and P&L. Legal entities and individuals that fall under the internal BDMG resolution
No. 209/2009 are considered Bank’s related parties. The related parties with which the Bank
performed transactions are mentioned in note No. 22.
(o) Earnings per share
Calculated based on the number of outstanding shares at the balance sheet date.
19
4. Cash and cash equivalents
Bank and
Consolidated
2013
71,483
28,215
99,698
Cash
Total
Bank
2012
1,158
342,333
343,491
At December 31, 2013, the total of R$71,483 in cash includes R$70,260 in foreign deposit as a
result of the arising from the approval of R$ 30,000 in December related to the third tranche of
external financing contracted by BDMG with Corporación Andina de Fomento (CAF).
5. Short-term interbank investments
Bank and
Consolidated
2013
Investments in repurchase agreements
Self-funding position
Financial treasury bills
Investments in Interbank deposits
Allowances
Total - Current
28,215
11,727
(11,727)
28,215
Bank
2012
342,333
11,727
(11,727)
342,333
The allowance for losses arises from the investment in interbank deposit issued by an institution
currently under bankruptcy.
Maturity dates of interbank deposits are as follows:
Overdue
National Treasury Bill (LFT)
Interbank deposit certificate (CDI)
Allowance
2013
2012
20
11,727
(11,727)
-
Up to 30 days
28,215
28,215
342,333
Total
28,215
11,727
(11,727)
28,215
342,333
6. Marketable securities
a)
Portfolio breakdown
At December 31, 2013, the portfolio of marketable securities comprises the following securities:
Bank
Number
Unrestricted securities
- Financial treasury bills
- National Treasury Notes
- Debentures
- Bank deposit certificates (CDB)
Fund shares:
- Emerging companies (FIEE)
- Equity interest (FIP)
- Credit rights (FDIC)
- Investment warranty (FGI)
Subtotal: Unrestricted securities
Restricted securities
- Repurchase agreements
National Treasury Notes
- Central Bank (Capital increase)
National Treasury Notes
Subtotal: Restricted securities
Total
Current
Noncurrent
21
2013
Curve
value
2012
Market
value
Number
Curve value
Market value
Consolidated
2013
Market
Curve value
value
89,058
52,000
-
207,566
83,364
25,654
-
207,418
72,122
25,654
-
69,958
19,744
-
110,615
69,149
-
110,578
82,832
-
207,566
83,364
25,654
32,133
207,418
72,122
25,654
32,133
71
4,193,180
1,700
233,806
1,022
5,085
9,998
279
332,968
1,022
5,085
9,998
279
321,578
71,25
3,344,014
1,000
103,059
1,038
2,839
7,021
114
190,776
1,038
2,839
7,021
114
204,422
1,022
5,085
9,998
279
365,101
1,022
5,085
9,998
279
353,711
20,460
50,097
47,062
-
-
-
50,097
47,062
14,200
40,890
90,987
423,955
-
33,456
80,518
402,096
41,665
360,431
-
190,776
-
204,422
204,422
40,890
90,987
456,088
-
33,456
80,518
434,229
73,798
360,431
6. Marketable securities (Continued)
b)
Marketable securities classification
Considering the Bank’s financial capacity and intention, the marketable securities portfolio is
classified into the categories established by BACEN Circular No. 3068/2001, as under:
Bank
Category
Available for sale (i)
Held to maturity (ii)
Total
12/31/2013
Curve
Market
value
value
398,301
376,442
25,654
25,654
423,955
402,096
12/31/2012
Curve
Market
value
value
190,776
204,422
190,776
204,402
Consolidated
12/31/2013
Curve
Market
value
value
430,434
408,575
25,654
25,654
456,088
434,229
(i) Securities classified as available for sale.
Except for debentures, all securities in the Bank’s portfolio are classified as available for
sale.
At December 31, 2013, unrealized losses arising from adjustment at market value with
these securities totaled R$ 21,859 (12/31/2012 – gain of R$ 13,646).
The marked to market of BDMG government bonds, classified as available for sale,
considers the quotes disclosed by the Brazilian Financial and Capital Markets Association
(ANBIMA) for the aftermarket of these securities.
BDMGTEC securities, classified as available for sale, present the same value due to the
remuneration method that ensures daily liquidity with remuneration being paid per
instrument.
22
b)
Marketable securities classification (Continued)
(ii) Reclassification of securities held to maturity.
In September 2013, the Bank acquired 25 debentures not convertible into shares maturing
on 01/23/2018. Those debentures classified as securities held to maturity were contracted
through a direct negotiation with the issuing entity. These debentures essentially
correspond to a form of financial support and investment.
Due to the characteristics of the operations, debentures are being evaluated pursuant to
CMN/BACEN Resolution No. 2.682/99. Thus, the curve value presented in previous tables
reflects the acquisition value, increased of pro-rata remuneration of the security and
decreased of the allowance arising from the credit risk assessment of the issuer.
At December 31, 2013 the curve value of debentures was calculated as under:
Acquisition value at 09/30/2013
Financial charges recorded at 12/31/2013
Curve value at 12/31/2013
Allowance arising from credit risk evaluation of the issuer
Curve value at 12/31/2013, adjusted by the allowance of credit risk
c)
Marketable securities are distributed according to the following maturity dates:
Federal government bonds
Debentures
Investment fund shares
CDB
Total at 12/31/2013
Total at 12/31/2012
23
R$
25,062
851
25,913
(259)
25,654
Bank
Over 360
days
360,057
25,654
16,385
402,096
204,422
Total
360,057
25,654
16,385
402,096
204,422
Consolidated
Over 360
days
Total
360,057
360,057
25,654
25,654
16,385
16,385
32,133
32,133
434,229
434,229
-
d)
Following are the changes in amounts accounted for in the equity account "Equity valuation
adjustments" for the period, which includes adjustments of available-for-sale securities:
Bank and Consolidated
Balance at December 31, 2012
Adjustment in the six-month period ended June 30, 2013
Adjustment in the six-month period ended December 31, 2013
Unrealized
income (loss)
13,646
(23,542)
(11,963)
(21,859)
Tax effects
(6,094)
10,512
5,342
9,760
Mark-to-market
adjustment
7,552
(13,031)
(6,620)
(12,099)
7. Derivative financial instruments
Because the Bank took out the external loan in the second half-year of 2013, it sought hedging
against risk exposures from exchange risk variation (US dollar) and from international interest
rates (libor+spread) levied on funds already available at the Bank through the use of derivative
instruments. Thus, swap derivatives have been contracted to hedge each one of the tranches of
external funds available to Brazil (Note 13). They have been jointly structured to enable the
transfer of final risk associated with external fund raising to reais (functional currency) indexed to
a CDI percentage.
In the accounting of these transactions, the Bank used the hedge accounting structure in the
market risk category to neutralize the effects on its P&L arising from the fluctuation generated by
the difference in accounting valuation of products involved therein: fund raising valued by the
curve and mark-to-market (MTM) derivatives.
In accordance with BACEN Circular 3082/2001, the Bank has documentary evidence related to
the hedged risk, which comprises the management of these risks in accordance with risk control
policies, the establishment of strategies, definition of limits and alternatives to continuously
monitor the effectiveness of the hedge instrument transactions.
24
7. Derivative financial instruments (Continued)
The table shows data of hedged foreign funding:
Funding
1
2
Total
Date
Beginning
9/27/2013
11/25/2013
Maturity
9/27/2023
10/23/2023
Foreign currency
US$ thousand
15,000
30,000
45,000
R$ at 12/31/2013
Index
Cost
Market
Libor+3.65%
35,503
39,305
Libor+3.65%
70,815
78,482
106,318
117,787
Mark-to-market
adjustment
3,802
7,667
11,469
The hedge instrument adopted in each funding transaction consisted in the combination of two
swap agreements negotiated under the same funding terms (similar beginning dates, maturity and
notional value) and linked to each settlement (interest or amortization + interest) of funding,
recorded in Center of Securities Financial Custody and Settlement (CETIP), as under:
First swap:
Assets
Liabilities
Second swap:
Assets
Liabilities
USD + Libor + spread
USD + spread
USD + spread
BRL + % CDI
The hedge transaction was structured to allow for the corresponding hedge instrument to be
adjusted at each payment of interest and/or amortization of external loan throughout the period of
each hedged funding.
The status of derivative financial instruments in December 2013 is shown below:
Bank
Swap agreements
Long position
Foreign currency
Notional value
(Memorandum
account)
204,357
Amount receivable
(Equity account)
13,282
Mark-to-market
adjustments
(P&L)
9,555
Curve value
3,727
The Bank monthly tests the effectiveness of its hedge accounting transactions through the
comparison of: (i) market value balance of hedge instrument (balance indexed to foreign currency
plus interest at libor plus fixed rate) with (ii) market value balance of hedge underlying object
(market value balance of the hedge underlying object). The balance to be considered will be the
one as from the beginning or the last payment of interest/amortization (whichever takes place
first).
25
7. Derivative financial instruments (Continued)
The mark to market of the hedged portion issued abroad that remained in the country totaled
R$117,788 at 12/31/2013. The mark to market of the swap’s long position totaled R$ 117,703 at
12/31/2013. Due to match of future flows of the underlying hedge object and of the swap’s long
position, the effectiveness of the transaction remained close to 100%.
8. Loans, leases, and loan-like receivables
BDMG receivables portfolio comprises loans related to financing of development projects and/or
conditions related thereto, finance lease transactions, and loan-like receivables composed of time
sales of assets not in use.
Breakdown of BDMG receivables portfolio is as follows:
2013
Receivables portfolio
Loans
Loan-like receivables – time sales
of assets not in use
Total
Total
amount
4,147,555
Allowance
(170,289)
Net value
3,977,266
Bank
2012
Net
value
2,731,479
4,147,555
(170,289)
3,977,266
196
2,731,675
The lease transactions, all lease back, were settled in the first half of 2013. At December 31,
2012, the balance of lease transactions adjusted to present value totaled R$ 111 and was
constituted allowance for the full amount.
At December 31, 2013, out of R$ 4,147,555 (2012 - R$ 2,873,218) regarding loan transactions,
R$ 1,999,164 (2012 - R$ 1,436,375) were granted from own funds, and R$ 2,148,391 (2012 - R$
1,436,843), originally, from on-lending funds received from other financial institutions.
26
8. Loans, leases, and loan-like receivables (Continued)
(a) Classification by product and by activity sector
Loans
Industry
Trade
Other services
Financing – private sector
Industry
Trade
Other services
Rural and agro-industrial
Financial
Individuals
Financing – public sector
Local direct and indirect management
Lease transactions (i)
Other loan-like receivables
Subtotal
Allowance for loan losses
Loans
Lease transactions
Other receivables
Total
Current
Noncurrent
(i) The balance stated is adjusted to present value.
27
Bank and
Consolidated
2013
1,094,567
541,347
241,239
311,981
2,503,382
1,556,772
101,441
455,350
361,933
19,205
8,681
549,606
549,606
4,147,555
(170,289)
(170,289)
3,977,266
912,857
3,064,409
Bank
2012
540,420
282,527
176,496
81,397
1,797,000
1,038,520
309,264
337,767
76,525
25,150
9,774
535,251
535,251
111
436
2,873,218
(141,543)
(141,192)
(111)
(240)
2,731,675
570,570
2,161,105
(b) Classification by term and risk levels
Risk
level
AA
A
B
C
D
E
F
G
H
Total
1,514,763
710,901
874,641
833,292
86,664
60,957
13,684
7,208
45,445
4,147,555
Overdue
488
1,964
1,021
2,588
991
892
6,827
14,771
From 15
to 90
94,604
34,063
67,359
48,171
6,204
4,311
1,446
1,213
4,224
261,595
2013
Falling due by day of maturity
from 361 From 1,081 From 1,801
From 91 to
360
to 1,080
to 1,800
to 5,400
145,776
475,439
244,453
554,491
174,486
234,918
118,677
148,756
115,999
357,751
161,021
172,023
199,080
330,225
123,184
130,668
17,824
39,427
11,214
10,974
12,935
24,769
10,534
5,820
5,044
5,852
351
1,417
3,146
540
10,334
12,472
4,690
6,898
682,895
1,483,999
674,664
1,029,630
Bank
2012
Over
5,400
1
1
Total
1,336,633
442,078
481,266
376,525
143,341
41,864
3,136
2,788
45,587
2,873,218
(c) Classification by risk level and allowance
Risk
AA
A
B
C
D
E
F
G
H
%
0.0
0.5
1.0
3.0
10.0
30.0
50.0
70.0
100.0
Portfolio
1,514,763
710,901
874,641
833,292
86,664
60,957
13,684
7,208
45,445
4,147,555
2013
Allowance for credit
risks at minimum
required percentage
3,555
8,746
24,999
8,666
18,287
6,842
5,046
45,445
121,586
Bank
2012
Allowance for
loan losses
48,703
3,555
8,746
24,999
8,666
18,287
6,842
5,046
45,445
170,289
Portfolio by
1,336,633
442,078
481,266
376,525
143,341
41,864
3,136
2,788
45,587
2,873,218
Allowance for
loan losses
47,224
2,210
4,813
11,296
14,334
12,559
1,568
1,952
45,587
141,543
Up to November 2005, loan transactions regarding PESA (Rural Credit, under Resolution
CMN/BACEN No. 2471/1998) were classified into level H. Beginning November 2005, BDMG
management rated such transactions as AA. This risk reclassification considered
particularities of these transactions in relation to the credit risk mitigated through security
interest represented by public bonds. The Bank sets up a supplementary allowance for loan
losses, which is computed based on the difference between the restated principal balance of
reclassified loan transactions and present values of securities guaranteeing them. At
December 31, 2013, supplementary allowance amounted to R$ 48,703 (2012 – R$ 47,224).
28
(d) Changes in allowance for loan losses for the year:
Opening balance
Establishment of allowance, net of reversals
Write-off of loans as losses
Closing balance
Bank and
Consolidated
2013
141,543
48,898
(20,152)
170,289
Bank
2012
116,652
56,118
(31,227)
141,543
Bank
2012
218,322
88,196
10,797
8,668
5,335
48
2,172
333,538
(12,199)
321,339
29,612
291,727
Consolidated
2013
192,583
92,240
11,119
16,807
9,494
24
2,407
324,674
(12,348)
312,326
45,563
266,763
9. Other receivables
Tax credits (a)
Escrow deposits (b)
Bonds and credits receivable (c)
Sundry receivables – Local (d)
Income receivable (e)
Recoverable taxes
Other
Subtotal
Allowance for loan losses (f)
Total
Current
Noncurrent
2013
192,583
92,240
11,119
16,807
9,494
22
2,407
324,672
(12,348)
312,324
45,561
266,763
a) Income and social contribution tax credits on net profit have been determined and recorded as stated in
Note 19 (a).
b) The deposits in guarantee shows records of deposits related to legal inquiries, particularly of tax and
legal nature, stated in Note 15 (a), in which the relationship between judicial deposits and their
corresponding legal inquiries is mentioned.
c) Bonds and credits receivable correspond to remuneration payable by National Treasury Department
(STN) due to renegotiations grounded on laws, regarding rural credit transactions taken out with funds
arising from STN.
d) The balance of Sundry receivables refers to goods whose fiduciary property has already been
consolidated by BDMG under Law No. 9514, article 27.
29
9. Other receivables (Continued)
e) Income receivable substantially comprises remuneration receivable, net of corresponding allowance,
on loan transactions with development funds managed by BDMG. Remuneration matures upon
maturity of installments taken out and its allowance is set up on amounts recorded, based on a
percentage related to the risk level in which the transaction from which the remuneration resulted is
classified. This classification is based on a policy adopted by the Bank to extend the same criteria
established in Resolution CMN/BACEN No. 2682/1999 for loans in BDMG own portfolio to
transactions financed through the funds it manages.
f)
The allowance for loan losses totaled R$ 12,348 (2012 – R$ 12,199) is set up mainly to cover notloan-like transactions, of which R$ 12,302 (2012 - R$ 11,914) refer to amounts to be refunded by
STN. STN has not formally expressed itself on the amounts and settlement date of such liabilities. The
allowance, set up based on the uncertainty as to realization term of such receivables, comprises R$
11,077 (2012 - R$10,797) regarding remuneration and R$ 1,225 (2012 - R$ 1,117) regarding the
amount payable for rural financing interest rate equalization.
10. Other assets
Bank
2013
Equity interest (i)
Other
Total
Current
Noncurrent
890
890
165
725
2012
22,772
218
22,990
218
22,772
(i) The amount of R$ 22,772 recorded equity interest in 2012 concerned the Bank’s capital payment in the subsidiary BDMGTEC
Participações S.A. In December 2013, such equity interest started to be recorded as investment in under the subgroup Permanent
assets as reported in Note 2 (b).
30
11. Permanent assets
(a) Investment
Bank
2012
2013
BDMGTEC Participações S.A.
Equity interest
Other
Total
68,085
487
68,572
Consolidated
2013
487
487
35,950
487
36,437
(b) Property and equipment in use
Properties
Facilities, furniture and
equipment
Data processing system
Other
Construction in progress
Total
Depreciation
rate % p.a.
4
10
20
10
-
2013
Accumulated
Cost
depreciation
Net value
40,996
(23,296)
17,700
5,654
4,256
598
1,604
53,108
(4,477)
(2,960)
(505)
(31,238)
1,177
1,296
93
1,604
21,870
Bank
2012
Net value
19,566
1,570
1,320
106
307
22,869
(c) Lease property and equipment
Cost
Leased assets
-
2013
Accumulated
Excess
depreciation
depreciation
-
Bank
2012
Net
value
-
Net value
644
The Bank’s lease transactions were fully settled in the first half of 2013.
(d) Deferred charges
Amortization
rate % p.a.
Expenses on acquisition and
logistics development
20
Cost
1,610
2013
Accumulated
amortization
Net value
(1,610)
Bank
2012
Net value
-
30
Pursuant to Resolution CMN/BACEN No. 3617/2008, deferred charges will be held to their
effective realization.
31
11. Permanent assets (Continued)
(e) Intangible assets
Intangible assets
Amortization
rate % p.a.
20
2013
Accumulated
Cost
amortization
Net value
6,631
(1,576)
5,055
Bank
2012
Net value
3,223
Pursuant to Resolution CMN/BACEN No. 3642/2008 and Circular Letter BACEN No.
3357/2008, as from December 2008 BDMG started to record the items intended for
maintenance of the Bank as intangible assets.
12. Funding - domestic
The funds raised in Brazil breakdown as under:
Interbank deposits (i)
Obligations linked to repurchase agreements (ii)
Issue of financial bills (iii)
Total
Current
Noncurrent
(i)
Bank and
Consolidated
2013
R$
50,902
45,033
469,490
565,425
45,033
520,392
Bank
2012
R$
59,493
351,267
410,760
59,493
351,267
Interbank deposits
The renewed the interbank deposit R$50,000, overdue in the last quarter of 2013, with maturity in the
second half of 2015.
(ii)
Obligations linked to repurchase agreements
In December 2013, the Bank performed repurchase agreements backed by government bonds of its
own portfolio.
32
12. Funding – domestic (Continued)
(iii) Financial bills
Following are the balances at December 31, 2013 of funding through the issue of financial
bills:
2013
Amount
Number
R$
Maturity
12/17/2015
500
100,367
12/17/2017
1,250
265,431
5/9/2016
275
83,651
12/23/2016
100
20,041
2,125
469,490
469,490
Issue type
Public
Private
Total
Current
Noncurrent
Number
500
1,250
1,750
Bank
2012
Amount
R$
100,272
250,995
351,267
351,267
Maturity
12/17/2015
12/17/2017
The issue of financial bills is in compliance with CMN Resolution No. 4.143/2012, which
authorized the issue of these bonds by development banks.
13. Foreign borrowings
In September 2013, BDMG contracted a financing of US$ 100 million dollars with Corporación
Andina de Fomento - CAF, subject to Libor interest rate plus 3.65% p.a. and maturity of ten years,
to be released in tranches of different amounts.
Following are the tranches released at December 31, 2013:
Tranche
Date
9/27/2013
10/21/2013
12/19/2013
Total
Current
Noncurrent
USD
thousand
15,000
30,000
30,000
75,000
Amount in R$
Status
Amortized
Market
of the funds
cost
value
35,503
39,305
Available in Brazil
70,815
78,482
Available in Brazil
Deposited abroad (current amount of foreign
70,354
70,354
currency)
176,672
188,141
1,022
187,119
The market value calculated for funds already available in Brazil is a result of the hedge
accounting criteria for the accounting of derivative instruments used to hedge the Bank from
currency fluctuations and contractual charges related to these funds.
33
14. Local onlending – Official institutions
These liabilities correspond to balances of resources obtained from official programs and funds
passed on to finance ventures in the state of Minas Gerais. Principal and charges are payable
through 2028, bearing financial charges defined in the operating policies of each agency or fund
passing on those resources.
The balances of these obligations are summarized below:
BNDES (i)
FINAME (ii)
BNB (iii)
National Treasury
Total
Current
Noncurrent
Bank and
Consolidated
2013
1,118,894
867,124
32,613
14,292
2,032,923
388,266
1,644,657
Bank
2012
787,031
494,501
35,657
15,356
1,332,545
276,301
1,056,244
The BNDES/FINAME system is the main source of on-lending from BDMG to its clients.
(i) Brazilian Development Bank (BNDES) funds are mainly to finance long-term investment projects. At
December 31, 2013, funds passed on by BDMG arise from the following lines of credit:
Credit lines
BNDES Automático TJLP
BNDES FINEM TJLP
BNDES Automático PROGEREN
BNDES Exim Pré-embarque
BNDES FINEM TJ-462
BNDES Automático TJ-462
BNDES Automático PROCAP-AGRO
BNDES Automático Rural
Other
Total
Bank and
Consolidated
2013
195,810
136,460
125,940
111,025
82,159
71,274
55,665
23,492
317,069
1,118,894
Bank
2012
188,152
97,649
51,637
54,703
65,813
67,003
36,911
225,163
787,031
The above-mentioned BNDES lines amount to R$ 801,825 at December 31, 2013 (2012 –
R$561,868), which is equivalent to 71.7% (2012 – 71.4%) of the balance with BNDES. Financial
charges of these lines are determined by the Long-Term Interest Rate (TJLP), plus floating
percentage ranging from 0.9% to 4.9% p.a., according to financing objective. Financial brokerage
rate of 0.5% p.a. is included in this percentage, where applicable.a. BNDES AUTOMÁTICO
PROCAP-AGRO with a fixed financial charge from 3.75% p.a. and 6.5% p.a. is an exception to
specified lines
34
14. Local onlending – Official institutions (Continued)
(ii) Following are the funds raised by BDMG with the Government Agency for Machinery and
Equipment Financing (FINAME), which will mainly be used to finance machinery and
equipment related to development projects.
Credit lines
FINAME PSI
FINAME PROVIAS
FINAME – TJ462
FINAME – TJLP
FINAME MODERMAQ
Other
Total
Bank and
Consolidated
2013
805,659
26,618
14,342
8,304
1,641
10,560
867,124
Bank
2012
408,078
41,329
16,601
10,145
9,338
9,010
494,501
At December 31, 2013, FINAME lines described above totaled R$ 856,564 (2012 –
R$485,491), corresponding to 98.8% (2012 – 98.2%) of BDMG payables to FINAME.
Financial charges of the lines included in this subtotal, except for FINAME PSI, are
determined by TJLP, plus floating percentage ranging from 0.5% to 2.8% p.a., according to
financing objective. Financial brokerage rate of 0.5% p.a. is included in this percentage,
where applicable. FINAME PSI line has a fixed financial charge ranging from 0.5% p.a. to
8.3% p.a.
(iii) In 2005, Northeast Bank of Brazil (BNB) passed on funds from two different sources to
BDMG: from the Inter-American Development Bank (IADB) and the Constitutional Fund for
Financing in the Northeast, to be exclusively applied to BNB performance. Funds passed on
to BDMG arising from IADB aimed to finance the Market Expansion Program for Small and
Medium-Sized Companies in the Northeast of Brazil (PEM), whereas funds arising from FNE
were passed on to BDMG to finance production ventures of micro, small, medium, and large
farm, manufacturing and agro-industrial producers (individuals and legal entities), commercial
and service business, their cooperatives and associations. At December 31, 2013, FNE
balance, amounting to R$ 28,657 (2012 - R$31,223), accounts for 87.9% (2012 – 87.5%) of
total payable by BDMG to BNB; financial charges of this financing total 10% p.a.
35
15. Other liabilities
Tax and social security (a)
Sundry (b)
Social and statutory (c)
Financial and development funds (d)
Collection and transfers of taxes
Total
Current
Noncurrent
Bank and
Consolidated
2013
162,024
197,799
19,678
10,140
590
390,231
73,208
317,023
Bank
2012
264,620
312,608
7,938
1,172
586,338
71,552
514,786
Bank and
Consolidated
2013
142,893
3,043
11,389
4,699
162,024
10,536
151,488
Bank
2012
217,810
29,331
14,042
3,437
264,620
34,856
229,764
(a) Tax and social security
Provision for tax liabilities (i) and (ii)
Provision for taxes and contributions
Provision for deferred taxes and contributions
Taxes and contributions payable
Total
Current
Noncurrent
(i)
Provision for tax liabilities refers to tax-related liabilities including lawsuits and
administrative proceedings pending judgment from Brazilian IRS. These liabilities are
monthly restated at SELIC rate. According to BDMG’s P&L projections the expectation
considered for their realization is distributed throughout a ten-year period.
Following are the changes of provision for tax obligations in the period:
Bank
Balance at
12/31/2012
Change in Contribution Tax on Gross Revenue
for Social Security Financing (COFINS) tax
base – Law No. 9718/1998
Change in PIS/PASEP tax base – Law No.
9718/1998
Tax immunity as to FINSOCIAL for the period
between December 1986 and March 1990
Other provision and legal obligations
Total
36
Provision
recorded
Reversals/
Restatements
Write-offs
Balance at
12/31/2013
170,224
12,548
8,652
(100,314)
91,110
41,408
2,037
1,918
-
45,363
4,383
1,795
217,810
39
14,624
113
90
10,773
(100,314)
4,496
1,924
142,893
15. Other obligations (Continued)
(a) Tax and social security (Continued)
(ii) In order to cover the above-mentioned tax proceedings, the Bank has judicial deposits of
R$89,413 (2012 – R$81,526), recorded in the balance of R$92,240 (2012 – R$88,196) of
the "Other receivables – Escrow deposits" account - Note 9 (b). In the following table are
the judicial deposits of ongoing tax proceedings:
Change in COFINS tax base – Law No. 9718/1998
Change in PIS/PASEP tax base – Law No. 9718/1998
Tax immunity as to FINSOCIAL for the period between
December 1986 and March 1990
Other contingencies and legal obligations
Total
2013
Provision
Deposits
91,110
38,321
45,363
45,154
4,496
1,924
142,893
4,496
1,442
89,413
Bank
2012
Provision
170,224
41,408
Deposits
34,525
41,235
4,383
1,795
217,810
4,383
1,383
81,526
In the COFINS and PIS/PASEP claims, BDMG seeks to suspend its obligation to pay
those contribution taxes, under the terms enacted by Law No. 9718/1998, which, in
addition to creating COFINS for financial institutions, increased PIS/PASEP tax base
when it is established that revenue comprised both gross operating and non-operating
income. Binding by decisions awarded in the claim course, the Bank has made judicial
deposits to cover COFINS contributions on revenues from sales.
The Bank has been maintaining the provision set up in compliance with the BACEN
Circular No. 3429/2010, which determines the recognition in liabilities of financial
institutions, until the effective extinguishment of the corresponding tax credits, the tax
liabilities. The constitutionality of the laws enforcing the above-mentioned is under judicial
discussion.
In December 2013, based on study performed by tax advisors, BDMG partially reversed
R$100,314 of the provision set up as a result of COFINS proceedings.
The partial reversal of this provision is based on constant analysis of the opinion of the
advisors concerning the situation of proceeding, which is not subject to the inquiries of
constitutionality of Law No. 9718/98, and its likelihood of loss is rated as remote.
37
(a) Tax and social security (Continued)
BDMG did not set up a provision, pursuant to Note 3 (l), due to the evaluation of legal
advisors for the following tax contingencies:
· Tax notice, drawn up by the National Institute for Social Security (INSS) in 2006, related to
social security. The portion of the tax notice rated as a possible loss at December 31, 2013
totals R$135 (2012 – R$ 131).
· Interlocutory Decisions issued by the Brazilian IRS (RFB) on 12/11/2008, which did not
approve the offset of income taxes performed in 2004 and 2005. The fine of in the amount
of R$569 (2012 – R$569) on the debts not yet offset is rated as a possible loss.
· Tax notice, drawn up by the Brazilian IRS in July 2010, is related to payment of income
and social contribution taxes. The updated amount of the tax notice is rated as a possible
loss and amounts to R$ 7,562 (2012– R$ 7,179).
(b) Sundry
Bank and
Consolidated
2013
Provision for other obligations (i)
Provision for payables (ii)
Actuarial liabilities (III)
Allocation to capital increase (iv)
Sundry creditors – domestic (v)
Other
Total
Current
Noncurrent
38
47,867
22,929
118,415
287
8,301
197,799
41,378
156,421
Bank
2012
(restated)
54,927
14,825
231,119
3,054
8,147
536
312,608
34,559
278,049
(b) Sundry (Continued)
(i)
Following are the changes of the provision for other obligations in 2013:
Bank
Balance at
12/31/2012
Charges on reserve
requirement with BACEN
Co-liability assumed in loans
granted to STN
Civil claims
Labor claims
Attorney’s fees
Provisions
recorded Restatements Write-offs
Balance at
12/31/2013
26,493
-
2,178
-
28,671
8,624
6,636
3,806
9,368
54,927
650
285
587
36
1,558
239
4
336
2,757
(4,928)
(4,598)
(1,849)
(11,375)
4,346
2,562
2,548
9,740
47,867
The Bank has R$ 809 (2012 - R$ 1,856) recorded in the account of Other receivables –
Escrow deposits - related to deposits made to file appeals regarding labor claims and
R$2,018 (2012 – R$ 4,813) to cover the risk of civil proceedings.
The labor and civil contingencies whose losses for the Bank were classified as possible,
and for which there are no provisions totaled R$96 (2012 – R$188) and R$339 (2012 –
R$ 77), respectively, at December 31, 2013.
(ii) The provision for future payment is a result of the following commitment:
Bank and
Consolidated
2013
Vacation, 13 monthly pay and charges thereto
Employees’ profit sharing
Compliance with State law No.11050/93 and BDMG’s
Articles of Incorporation
Other
Total
39
8,827
7,288
Bank
2012
(restated)
8,303
2,634
6,392
422
22,929
3,568
320
14,825
(b) Sundry (Continued)
(iii) The balance of the provision of actuarial liabilities refer to the following benefits
sponsored by the Bank:
Bank and
Consolidated
2013
Actuarial liabilities related to the Private Pension Plan
(Note 28)
Actuarial liabilities regarding the Health Promotion Program (PROSAÚDE), health and dental care plans (Note 28)
Actuarial liabilities regarding life insurance
(Note 28)
. Voluntary resignation program in the Bank in force from 12/14/11 to
12/31/14
(Note 28)
Total
Bank
2012
(restated)
40,900
159,989
65,520
53,982
10,141
13,789
1,854
118,415
3,359
231,119
(iv) Balance of “Allocation to capital increase” consists of R$ 287 (2012 – R$ 3,054)
regarding the percentage on returns of financing taken out from Fundo Estadual
FUNDESE for capital increase applicable to the CREDPOP program, under the terms of
State Law No. 13667/2000.
(v) Sundry payables – Domestic refers mostly to client credits to be offset, totaling R$ 1,519
(2012 – R$ 4,265) and R$ 3,733 (2012– R$ 2,130) to be on-lent to Minas Gerais
Integrated Development Institute (INDI).
c)
Social and statutory
The amount of R$19,678 (2012 - R 0) recorded as dividends payable refers to part of the
interest on equity calculated on P&L of 2013 and not yet paid to shareholders.
d)
The amount of R$ 10,140 (2012 – R$ 7,938 ) refers substantially to funds managed by BDMG
(private funds and funds related to official agencies), received from clients, but not yet
transferred to funds.
40
16. Equity
(a) Capital
BDMG subscribed capital amounts to R$ 1,709,044 (2012 – R$ 1,456,157), comprising
60,184,375,503 (2012 – 51,773,828,207) common registered shares, with no par value. The
total subscribed capital includes the amount of R$49,262 related to the capital increase under
approval at the Central Bank, of which R$32,403 was paid up at the moment of subscription,
leaving R$16,859 to be paid up (Note 29).
In 2013, the paid-up capital increased by R$236,028 being (i) R$235,457 through contribution
of shareholders and (ii) R$571 through the incorporation of the net book value for 2012.
Following are the Bank’s shareholders at December 31, 2013: The State of Minas Gerais is
the controlling shareholder of the Bank with 89.3% interest; Minas Gerais Economic
Development Company (CODEMIG) became a shareholder in the last quarter of 2012; and,
the Minas Gerais State Highways Department (DER/MG) has been a shareholder since 1990,
when the Bank was converted from an autonomous government agency to a corporation.
(b) Income reserve – legal reserve
This is set up at 5% on net income computed, limited to 20% of capital.
(c) Equity valuation adjustments
Following are the adjustments:
Bank and
Consolidated
2013
MTM adjustment (i)
Other equity valuation adjustment (ii)
Total
41
(12,099)
(47,624)
(59,723)
Bank
2012
(restated)
7,552
(156,909)
(149,357)
(i)
mark-to-market adjustments, net of tax effects, of securities classified as available for sale,
(ii)
other adjustments originated from the adoption of NBC TG 33 - Employee benefits, effective as
from January 2013, which determined the adjustment in equity, net of tax effects, of the obligation
with employee benefits. The significant adjustment amount arises from the recognition of costs
inherent to that obligation and that, previously, could be deferred. In order to meet requirement of
the retrospective adoption for purposes of comparison, the Bank adopted the NBC TG 33 –
Employees benefits in the calculation of the actuarial obligation in May 2012, based on actuarial
study performed on the same date.
16. Equity (Continued)
(d) Special income reserve
The balance of R$ 46,078 (2012 - R$ 571), remainder of the profit for the year, under Law
11638/2007 and Resolution CMN/BACEN No. 3605/2008, was allocated, pursuant to
management proposal, for future capital increase and transferred from the "retained earnings"
to "special income reserve” account.
(e) Dividends and interest on equity
Shareholders are entitled to minimum dividend corresponding to 1% of net income for the
year, adjusted under the Brazilian Corporation Law and articles of incorporation of the Bank.
For shareholders’ capital remuneration, BDMG makes it a practice to distribute dividends or
pay interest on equity capital in line with P&L computed for the year.
17. Capital management
Capital management
As required by CMN Resolution No. 3988/2011, BDMG enacted internal regulations Resolution Nº
213 and Ruling Nº 239 setting out the policy and structure needed for the Bank capital
management. These regulations lay down guidelines to secure that capital, without failing to meet
the regulatory requirements set thereby, is kept adequate levels so that the Bank is able to meet
its strategic planning goals, even in different scenarios.
The scenarios considered take into consideration the possible changes in market conditions, the
Bank’s different operating and administrative activities, the economic environment where it
operates and the risks it is exposed to.
In 2013, pursuant to the aforesaid regulations and to the defined strategic planning, assumptions
for the scenarios proposed and projected results, the Bank designed its capital plan for the period
2014 to 2016. The BDMG’s Capital Management Structure Description Report, prepared in
December 2013, is available at:
http://www.bdmg.mg.gov.br/Transparencia/Paginas/demonstracao-financeira.aspx
42
18. Regulatory capital
In accordance with the regulatory capital measurement rules, the financial institutions must keep
capital compatible with the degree of risk of its assets, in light of weighting factors such as
exposures, risk mitigation and credit conversion.
References to regulatory capital (PRC in Portuguese) and required regulatory capital (RRC in
Portuguese) prior to October 2013 are laid down in connection with requirements adopted by the
Basel II accord, according to the criteria set respectively by CMN/BACEN Resolutions N°
3444/07 and N° 3490/07.
CMN/BACEN Resolution N° 4192/13, together with the new regulatory set, regulated in Brazil
effective October 1, 2013 the recommendations from the Basel Committee on Banking
Supervision regarding the capital structure of financial institutions known as Basel III. The new
framework introduced the methodology for regulatory capital determination and for required
capital maintenance in light of the minimum requirements of PR, PR level I and core capital.
The Bank regulatory capital and capital ratios are calculated as follows:
Bank
Regulatory capital
Basel III
Basel II
Statement of calculation of regulatory capital and capital ratios
2013
1,713,606
1,713,606
1,713,606
500,000
1,213,606
-
2012
(restated)
1,303,427
1,303,427
1,313,255
400,000
913,225
-
-
30
-
9,798
9,798
1,713,606
4,043,549
516,546
385,655
4,945,750
234,262
25%
23%
25%
25%
9,798
1,313,225
2,377,671
377,126
354,740
3,109,537
161,761
29%
28%
29%
29%
Tier I regulatory capital (a)
Core capital - CP
Equity
Capital reserved for operations with the public sector (c)
Regulatory capital for comparison with RWA (d-c)
Prudential adjustments pursuant to CMN Resolution N°4192/13 (1)
Reduction in deferred assets pursuant to CMN Resolution N°
3444/07
Reduction in gains/losses from market value adjustments pursuant
to Resolution N° 3444/07
Regulatory capital – level II (b)
Addition of gains/losses on market value adjustments pursuant to
CMN Resolution N° 3444/07
Regulatory capital PR (d) = (a +b)
Credit risk - RWAcpad
Market risk - RWAmpad
Operational risk - RWAopad
Total risk-weighted assets - RWA (2)
RWA for coverage of interest rate of banking book - Rban
Basel ratio (PR/RWA)
Ample Basel ratio (PR/(RWA + RWA Rban))
Tier I capital ratio (Tier I/RWA)
Core capital ratio (CP/RWA)
(1) Prudential adjustments: effective October 2013, the regulatory capital calculation methodology incorporated criteria in light of CMN/BACEN
Resolution Nº 4192/13.
(2) RWA consists of total risk-weighted assets, the value of which for 2012 was calculated for comparison purposes.
43
19. Income and social contribution taxes
(a) Deferred income and social contribution taxes
Deferred tax credits recorded at December 31, 2013 are as follows:
Bank and
Consolidated
2013
Temporary additions
Market value adjustment (marketable securities)
PIS/ COFINS credits
Total
182,490
9,760
333
192,583
Bank
2012
(restated)
218,303
17
2
218,322
Breakdown of tax credits from temporary additions in relation to provisions from which they
resulted is as follows:
Bank and
Consolidated
2013
Provision
Allowance for loan losses
COFINS – (change in the tax base – Law No. 9718/1998)
Reserve requirement with BACEN (charges)
Civil, labor and tax contingencies
Change in PIS/PASEP tax base – Law No. 9718/1998
Post-employment benefit
Co-liability with STN
Voluntary resignation program
Other
Total
88,195
30,742
11,469
6,629
9,157
30,374
1,406
742
3,776
182,490
Banco
2012
(restated)
78,942
63,115
8,661
10,597
8,339
43,986
2,536
1,344
783
218,303
Changes in tax credits for the year are as follows:
Recognition
Reversal
Market value
adjustment
17
9,743
9,760
Temporary
Credit
additions
PIS/COFINS
218,303
2
62,154
331
(97,967)
182,490
333
Total
218,322
72,228
(97,967)
192,583
BDMG tax credits are recorded in accordance with CMN/BACEN Resolution No. 3355/2007
and consider their expected realization within no longer than 10 years, ensured by the
existence of tax credits in income projections which are prepared based on internal
assumptions and future economic scenarios that may change.
44
19. Income and social contribution taxes (Continued)
(a) Deferred income and social contribution taxes (Continued)
The probable recovery of tax credits stemming from temporary additions amounting to
R$182,490 is as follows:
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Nominal value
Present value
22,020
21,304
65,690
59,781
17,006
14,557
26,235
21,123
15,330
11,609
10,078
7,178
9,859
6,606
7,784
4,906
4,564
2,705
3,924
2,188
182,490
151,957
Present value of tax credits was calculated by discounting the future recovery flow at the
average funding rate of onlending by BDMG of 6.32% p.a. (2012– 6.27% p.a.).
At December 31, 2013, that Bank had outstanding tax credit balance relating to income and
social contribution tax temporary differences of R$ 10,355 (2012 – R$ 30,010) and R$ 6,213
(2012 – R$ 18,006) unrecorded given that the expectation for realization is over ten years.
45
19. Income and social contribution taxes (Continued)
(b) Reconciliation of income and social contribution taxes posted to P&L
2013
Second six-month period
Year
Social
Social
Income tax
contribution
Income tax
contribution
Income tax
Social
contribution
Income before income and social contribution taxes and after employee profit
sharing
Interest on equity
126,013
(75,703)
126,013
(75,703)
170,802
(75,703)
170,802
(75,703)
105,757
(36,947)
105,757
(36,947)
Net additions (exclusions):
Set up of provision for contingencies, net of reversals
Taxes with suspended enforceability
Allowance for loan losses and recovery of credits written off as losses net
Effective credit losses
Set up of provision for post-employment benefit, net of reversals
Other
Calculation base
Tax at effective rate
Income surtax
Tax incentives
Subtotal income and social contribution taxes payable
Provision for deferred income tax
Total provision for income and social contribution taxes payable
Set up of deferred tax credits (net of reversals) on temporary differences
(98,106)
7,970
29,382
(16,172)
3,307
7,295
(16,014)
2,402
1,614
969
4,985
(448)
4,537
(16,709)
(98,106)
7,970
29,382
(16,172)
3,307
7,107
(16,202)
2,430
2,430
(268)
2,162
(10,025)
(96,424)
14,672
40,228
(17,096)
11,609
7,064
55,152
(8,273)
(5,491)
1,237
(12,527)
(385)
(12,912)
(13,285)
(96,424)
14,672
40,228
(17,096)
11,609
6,437
54,525
(8,179)
(8,179)
(266)
(8,445)
(7,970)
9,898
14,018
44,050
(11,876)
(5,891)
639
119,648
(17,947)
(11,940)
1,577
(28,310)
14
(28,296)
12,637
9,898
14,018
44,050
(11,876)
(5,891)
56
119,065
(17,860)
(17,860)
(3)
(17,863)
7,582
(12,172)
(7,863)
(26,197)
(16,415)
(15,659)
(10,281)
Income and social contribution taxes in P&L
46
Bank
2012
(restated)
Year
20. Administrative expenses, tax expenses, other operating and non-operating
income (expenses)
(a) Other administrative expenses
Bank
nd
2
Third party services
Advertising and
communication expenses
Data processing expenses
Maintenance and material
expenses
Travel and transportation
expenses
Rental and infrastructure
expenses
Other
Total
2012
Consolidated
2013
six month
period
Year
(10,839)
(18,530)
2013
six month
period
(10,839)
Year
(18,530)
Year
(14,781)
(10,446)
(1,974)
(1,727)
(14,414)
(3,325)
(3,319)
(11,002)
(3,416)
(2,859)
(10,446)
(1,974)
(1,727)
(14,440)
(3,325)
(3,319)
(1,001)
(1,767)
(1,607)
(1,001)
(1,767)
(1,053)
(1,761)
(1,748)
(1,053)
(1,761)
(413)
(3,059)
(30,512)
(809)
(4,650)
(48,575)
(884)
(2,962)
(39,259)
(413)
(3,059)
(30,512)
(809)
(4,650)
(48,601)
2
nd
(b) Tax expenses
nd
2
PIS and COFINS
ISSQN
Other
Total
2013
six month
period
Year
(7,722)
(14,385)
(1,266)
(2,403)
(14)
(481)
(9,002)
(17,269)
Bank
2012
Year
(14,005)
(2,798)
(437)
(17,240)
(c) Other operating income
Bank
2013
2012
nd
Foreign exchange gains
Reversals of sundry provisions (*)
Other
Total
Consolidated
2013
2 six
month
period
Year
407
1,607
106,923
112,478
nd
2 six
month
period
407
106,923
Year
1,607
112,478
Year
4,416
10,165
3,744
111,074
5,908
119,993
2,428
17,009
2,391
109,721
3,800
117,885
Note: The significant value recorded arises from the reversal of tax provision regarding the
COFINS claim, as commented on in Note 15(a) to these financial statements.
47
20. Administrative expenses, tax expenses, other operating and non-operating
income (expenses) (Continued)
(d) Other operating expenses
Bank
2013
2nd six-month
period
Provisions for contingencies with
rural activities
Provisions for contingencies
INDI agreement expenses
Post-employment benefit –
private pension plan
Post-employment benefit health and life insurance
BDMG Cultural agreement
expenses
Foreign exchange variation
Loan bonus expenses
Other
Total
Consolidated
2012
(restated)
Year
2013
2nd six-month
period
Year
(329)
(5,507)
(2,478)
(650)
(9,880)
(4,835)
(1,250)
(10,922)
(5,262)
(329)
(5,507)
(2,478)
(650)
(9,880)
(4,835)
(4,265)
(9,838)
(2,523)
(4,265)
(9,838)
(2,796)
(5,369)
(3,860)
(2,796)
(5,369)
(1,589)
(415)
(2,728)
(4,152)
(24,259)
(3,007)
(1,622)
(4,707)
(8,903)
(48,811)
(2,718)
(4,407)
(1,581)
(5,667)
(38,190)
(1,589)
(415)
(2,728)
(4,155)
(24,262)
(3,007)
(1,622)
(4,707)
(8,907)
(48,815)
21. Non-operating income (expenses)
Bank
2013
Income from disposal of assets
Donation - João Pinheiro Foundation
Other
Total non-operating (expenses)
48
Year
2nd six-month
period
566
(5,281)
111
(4,604)
2012
Year
754
(6,391)
245
(5,392)
Year
429
(3,567)
386
(2,752)
22. Related parties
BDMG carried out the following transactions with related parties in the period:
Legal entities
(a) State of Minas Gerais direct and indirect subsidiaries:
·
State of Minas Gerais – service provision as financial agent for state funds, with
commission received by the Bank, complete portion from financial charges from loans
granted with funds;
·
State office for Economic Development: BDMG assigned, with encumbrance, an
employee to this agency up to February 2013. In 2013, such assignment generated
expenses of R$ 52, whilst in 2012 it amounted to R$ 208;
·
João Pinheiro Foundation, public institution linked to the State Planning and
Management Office. As established in the articles of incorporation and in compliance
with State Law No. 11050/1993, the Bank donates 5% of its net income for the year to
said Foundation. At December 31, 2013, the provision set up in the period to cover this
commitment totals R$ 6,404 (2012 – R$3,568). BDMG maintains an employee assigned
to the Foundation, which bears the related costs;
·
Minas Gerais State Sanitation Company (COPASA MG), a mixed capital entity, with
controlling interest held by the Minas Gerais state.
COPASA took out long-term financing before publication of the Tax Liability Law, with
resources originating from the SOMMA state fund, already extinguished, and the
remaining balance continues to be generated by BDMG. At December 31, 2013, such
financing totaled R$ 4,076 (2012 – R$ 8,607) and the corresponding Bank remuneration
in 2013 amounts to R$ 214 (2012 – R$ 342).
The Bank signed with Minas Gerais State Sanitation Company (COPASA MG), in the
second six-month period of 2012, a service agreement for economic, financial and legal
technical support in negotiations to contract water supply with companies. For services
rendered the Bank received in 2013 R$ 597 (2012 – R$ 1,170).
Wholly-owned subsidiaries COPASA Serviços de Saneamento Integrado do Norte and
Nordeste de Minas Gerais S/A – COPANOR, with its parent company entered with BDMG in
April 2013 into an agreement for provision of services for development, structuring,
integration and coordination of studies to determine technical, economic and legal feasibility
to implement and operate water supply and sewage systems in locations served by the
company. The Bank, in connection with this service provision, recorded in 2013 revenues for
R$ 3,858 and expenses for R$ 3,571.
49
22. Related parties (Continued)
Legal entities (Continued)
(a) Minas Gerais Integrated Development Institute (INDI), a not-for-profit and non-essentially
business company, linked to the State Economic Development Office, is an affiliate of BDMG,
which is its maintaining shareholder holding 25% of capital, accounts for 25% of the
company’s annual expenses. This commitment is met by assigning employees and
supplementary financial contributions. Bank expenses with INDI, recorded up to December
31, 2013, amounted to R$ 4,835 (2012 – R$ 5,262);
(b) BDMGTEC Participações S.A., wholly-owned subsidiary created by BDMG in 2012, in order
to become a shareholder of companies highly important for the development of the State of
Minas Gerais. BDMGTEC capital paid up by the Bank in 2013 amounted to R$ 42,773 (2012
- R$ 22,772);
(c) DESBAN – BDMG Social Security Foundation, a not-for-profit privately-held supplementary
pension plan entity, is sponsored by BDMG, which, as detailed in Note 26, provided the
Foundation with funds in order to meet social security and healthcare benefits of its
employees. A BDMG employee has been assigned to DESBAN, which bears the costs of
such employee;
(d) The Cultural Institute of Banco de Desenvolvimento de Minas Gerais - BDMG Cultural, a notfor-profit civil association, was organized by BDMG in conjunction with BDMG Employees
Association (AFBDMG) to create a space to encourage culture in Minas Gerais. The Bank
contributes to BDMG Cultural’s maintenance by assigning employees to the Institute free of
charge and contributing funds. Total expenses from contribution of funds in 2013 reached
R$3,007 (2012 – R$ 2,718).
50
22. Related parties (Continued)
Individuals
Individuals, related parties that are part of BDMG management key personnel are the members of
the Board of Directors, Executive Board, and Supervisory Board, to whom the following fees were
paid for the period:
Bank and
Consolidated
2013
Compensation (including social charges and benefits)
Profit sharing
Contributions to pension plans and post-employment benefits
Termination of work contract
Total
4,562
124
312
290
5,288
Bank
2012
(restated)
4,676
111
95
4,882
23. Insurance coverage (unaudited)
The Bank, to cover any claims related to fixed assets, maintains an insurance amounting to
R$58,050 (2012 - R$ 54,194).
24. Financial instruments
(a) Identification and valuation of financial instruments
BDMG mainly operates with the following financial instruments:
a) Financial instruments recorded for amounts close to realizable values
Recorded as such are public federal securities backing the investments and raises in
connection with committed operations and those held in own portfolio; credit operations,
obligations for onlending in Brazil and the derivative financial instruments, as well as the
external loans hedged by these derivatives.
b) Financial instruments recorded for updated issuance values
Recorded by the curve value are the private securities held in own portfolio, investment
fund shares, raises in interfinancial deposits and obligations from financial bills placed in
the market.
51
25. Risk management
Financial risk management policy
The Risk Management Policy, approved by Senior Management, establishes guidelines and
limits intended to identify and mitigate BDMG risks. It is oriented to the convergence of internal
methodologies and models to Basel Accords and compliance with regulators, in line with the best
risk management practices.
Risk Management in BDMG aims at mitigating credit, market, liquidity, and operational risks, so
as to leverage operational efficiency and its results. In order to achieve this objective, the Bank
adopts risk management practices appropriate to the nature and specificities of transactions
carried out thereby.
BDMG adopted the credit, operational and market risk management structure, in compliance with
CMN Resolutions No. 3721, of April 30, 2009, No. 3380, of June 29, 2006, and No. 3464, of June
26, 2007, and Nº 4090, of 05/24/2012, respectively.
The description of these risk management structures, as well as other information on risk
management, is available on BDMG website (http://www.bdmg.mg.gov.br) following this path:
http://www.bdmg.mg.gov.br/BancoDesenvolvimento/Documents/Gestão_do_Risco_de_Credito.pdf
(a) Credit risk
The credit risk management policy establishes limits for credit risk exposure by client,
economic group and receivables portfolio quality; decision-making level and criteria to
analyze and monitor receivables, so as to select transactions, for the purpose of minimizing
default and developments thereof.
(b) Liquidity risk
The liquidity risk management policy establishes roles and responsibilities, exposure limits
and reporting levels to secure the Bank’s readiness to support adverse scenarios, considering
different time frames. It provides for the situations where the contingency plan should be
deployed, addressing the set of strategies and measures to be taken, in order to reclassify
the limits set. The policy also provides for the monitoring of the action plans set and the
reporting of its results to senior management.
BDMG operates its cash with security margin sufficient to meet the minimum liquidity level
determined according to the internal policy. In order to manage liquidity, those responsible
for treasury management daily monitor changes in receipts and disbursements, paying the
Bank’s financial commitments upon their corresponding maturities and in line with the policy
defined for investment of available funds and liquidity risk management.
52
25. Risk management (Continued)
Financial risk management policy (Continued)
(c) Market risk
Market Risk Management (MRM) Policy establishes roles and responsibilities, operational
limits, and reporting levels. Among the tools used in risk management, we point out: VaR
(Value at Risk), GAP analysis, Back Test, and Stress Testing.
The Bank adopts a hedge policy, which sets criteria to use derivative financial instruments in
order to fully or partially offset the risks arising from the exposure to changes in market value
or cash flows of any assets, liabilities, commitment or future transaction expected to mitigate
the effects on its financial statements, cash flows and adequacy to the risk exposure limits.
In September 2013, BDMG took out a loan from Corporación Andina de Fomento - CAF. A
portion of the funds taken out were incorporated as early as 2013 in connection with
derivative operations under the swap type to hedge against foreign exchange variation,
according to Note 7.
(d) Operational risk
Pursuant to National Monetary Council Resolution Nº. 3380/2006, the operational risk
management policy sets roles, responsibilities and own methodology. It aims at identifying
and assessing the operational risks inherent to the Bank’s activities to reduce them to a
reasonable level by senior management by adopting the measures adapted by the units
involved.
The Bank also relies on a Policy for Prevention against External Fraud upon Granting of
Credit which sets out the statistical and probabilistic methodology to identify possible
inconsistent information in credit proposal. Running this policy intends to ensure the highest
security in preventive identification of situations with indications of fraud and sufficient
accuracy to secure an as low as possible impact on BDMG business.
53
26. Development fund management (unaudited)
The Institution maintains a structure for managing development funds. Amounts referring to
assets of these funds at December 31, 2013 are as follows:
Balance
State funds
Private funds
Other funds
Total
Bank
2013
3,589,526
290
28,678
3,618,494
2012
3,500,959
291
20,721
3,521,971
27. Commitments and responsibilities
Collateral signatures, sureties, and loan grants
BDMG offered collateral signatures and sureties to clients and granted loans with co-liabilities, by
providing back bonds and financial charges paid by the beneficiaries. At December 31, 2013,
these commitments amount to R$ 34,185 (2012 - R$ 37,694).
28. Employee benefits
As mentioned in Note 3 (k), BDMG grants the following benefits to its employees: private pension
plan, health and dental assistance, life insurance and voluntary resignation benefits.
BDMG adopts NBC TG 33 - Employee Benefits to record benefits granted to employees. To meet
accounting requirements, the Bank engages an annual actuarial study as part of the year-end
closing procedures to provide a basis for recording of such obligations. Actuarial analyses for
base date of December 31, 2012 are effective, adjusted according to the standard effective as
from November 30, 2013.
54
28. Employee benefits (Continued)
a) Characteristics of the benefit plans
(i)
Private pension
BDMG sponsors defined benefit and variable contribution private pension plans, managed
by DESBAN – Fundação BDMG de Seguridade Social, a privately-held not-for-profit
supplementary pension plan entity. The objective of both plans is to ensure that
participating employees and their beneficiaries are granted portions supplementing the
General Social Security Regime (RGPS). The defined benefit private pension plan, closed
to new members since November 10, 2011, is based on the fully-funded financial regime
for calculation and accrual of reserves; the variable contribution plan, created on January
13, 2011, is a defined contribution plan in the savings phase that becomes a defined
benefit by ensuring a monthly annuity after the pay-out period.
BDMG contribution for these plans is limited to the total regular participant contributions, in
light of particularities of each plan, in conformity with the matching contribution set forth in
Constitutional Amendment No. 20/1998.
At December 31, 2013, the number of BDMG participants in the private pension plans is
as follows:
Bank
Plans
- Defined benefit - BD
Active participants
Assisted participants
- Variable contribution - CV
Active participants
55
2013
2012
275
507
295
488
74
41
a) Characteristics of the benefit plans (Continued)
(ii) Healthcare and dental care benefits
The Health Promotion Program (PRO-SAÚDE), which provides coverage for medical and
dental expenses to active participants and their dependents, as provided for in Note 3 (k),
is managed DESBAN and operates under the capitalization regime. This benefit is also
ensured by the Bank to plan participants, as assets, through October 10, 2009.
(iii) Life insurance
BDMG sponsors group life insurance to active and assisted members who are interested
in this benefit. The Bank contributes with 50% of the premium paid.
(iv) Voluntary resignation program
This program was created by the Bank on December 14, 2011, effective until December
31, 2014, for the purpose of benefitting employees eligible for retirement under the
DESBAN Supplementary Pension Plan and plan participants who, when aged 70, are
eligible for retirement under Social Security.
An employee who joins the Program is entitled to severance pay, profit sharing pursuant to
rules in force in the year of his resignation, compensation as an incentive to resign and
maintenance of post-employment benefits.
b) Bank commitment to benefit plans
In fulfilling its obligations with these benefit plans, BDMG made the following contributions to
active and assisted employees for the year:
Bank
Private pension plan (BD)
Private pension plan (CV)
Health care program PRÓ-SAÚDE
Group life insurance
Voluntary resignation program
Total
56
2013
2nd six-month
period
4,216
134
1,728
414
1,379
7,871
2012
Year
7,661
205
3,393
761
2,335
14,355
Year
7,177
87
3,139
862
1,744
13,009
b) Bank commitment to benefit plans (Continued)
At December 31, net amount of obligations with defined benefit plans, according to NBC TG 33 arise from the following changes:
Bank
12/31/2012
(restated)
12/31/2013
Net liabilities at December 31, 2011
(+) Effects of changes in NBC TG 33 on basis
as of 12/31/2011 (first-time adoption)
Net liabilities at January 1
Net expense recognized in P&L
Contributions – sponsor
Net actuarial gains (losses)
Net liabilities at December 31
Private
pension plan
(159,989)
(15,681)
7,472
127,298
(40,900)
Healthcare
plan
(53,982)
(6,944)
2,496
(7,090)
(65,520)
Life
insurance
(13,790)
(1,431)
676
4,404
(10,141)
Voluntary
resignation
program
(3,359)
(62)
2,335
(768)
(1,854)
Private
pension plan
(437)
(36,764)
(37,201)
(4,556)
7,177
(125,409)
(159,989)
Healthcare
plan
(17,673)
(12,085)
(29,758)
(4,348)
2,292
(22,168)
(53,982)
Life
insurance
(9,769)
(1,345)
(11,114)
(1,408)
766
(2,034)
(13,790)
Voluntary
resignation
program
(4,444)
(4,444)
(505)
1,744
(154)
(3,359)
The table above does not include variable private pension plan obligations (CV), as the actuarial obligation is irrelevant and the set
of assets is unexpressive. The actuarial obligation of this plan is restricted to the amount of the sponsor’s contributions.
57
b) Bank commitment to benefit plans (Continued)
The expenses incurred with defined benefit plans are summarized below:
Bank
Cost of current service
Net interest cost
Expected contributions for administrative
expenses
(Expenses) recognized in P&L (*)
(*)
58
Private
pension plan
2,847
12,834
15,681
12/31/2013
Healthcare
Life
plan
insurance
860
127
5,116
1,304
968
6,944
1,431
Resignation
Private
program
pension plan
56
1,265
6
3,291
62
4,556
12/31/2012
(restated)
Healthcare
Life
plan
insurance
590
130
2,914
1,278
844
4,348
1,408
Resignation
program
124
381
505
Expenses were posted to the books as under: R$ 8,911 (2012 – R$ 4,434) as “Personnel Expenses” and R$ 15,207 (2012 – R$ 6,383) as “Other Operating
Expenses”.
c) Information of actuarial studies for defined benefit plans in November 2013 and, for restatement purposes, in December 2012.
c.1) Net value of liabilities
Bank
Defined benefit obligation
Plan assets
Net actuarial (liabilities)
Private
pension plan
(748,638)
707,174
(41,464)
11/30/2013
Healthcare
Life
plan
insurance
(84,261)
(10,033)
19,342
(64,919)
(10,033)
Resignation
program
(1,947)
(1,947)
Private
pension plan
(970,899)
810,910
(159,989)
12/31/2012
Healthcare
Life
plan
insurance
(76,170)
(13,790)
22,188
(53,982)
(13,790)
Resignation
program
(3,359)
(3,359)
c.2) Reconciliation of net actuarial liabilities
(i) Changes in present value of defined benefit obligation
Bank
Private
pension plan
Defined benefit obligation at the beginning
of the period
- Cost of current services
- Interest cost
- Contributions paid by the participants of
the plan
- Benefits paid
- Actuarial (gains) / losses – Changes in
assumptions (salary increase and turnover)
- Actuarial (gains) / losses – Changes in
assumptions (discount rate)
- Actuarial (gains) / losses – Experience
adjustments
Defined benefit obligation at the end of the
period
59
11/30/2013
Healthca
Life
Resignation
re plan insurance
program
Private
pension plan
12/31/2012
Healthcare
Life
plan
insurance
Resignation
program
970,899
2,897
84,255
76,170
789
6,477
13,790
121
1,211
3,359
55
6
722,237
1,265
79,492
50,842
590
5,677
11,114
129
1,224
4,444
124
381
6,928
(45,605)
1,674
(4,663)
(685)
(2,241)
7,618
(49,263)
1,684
(5,028)
(712)
(1,744)
(764)
-
12,632
2,521
222
11,467
(270,414)
(33,945)
(3,940)
12
191,401
16,886
2,252
114
(11,789)
37,759
300
756
5,517
2,998
(439)
40
748,638
84,261
10,033
1,947
970,899
76,170
13,790
3,359
c.2) Reconciliation of net actuarial liabilities (Continued)
(ii) Changes in fair value of plan assets (Continued)
Bank
11/30/2013
12/31/2012
Private pension
Healthcare
Private pension
Healthcare
plan
plan
plan
plan
Fair value of plan assets at the
beginning of the period
Interest income
Contributions paid by the employer
Participants’ contributions
Benefits and/or expenses paid
Return on plan assets (Actuarial
gains/ (losses) on assets)
Fair value of plan assets at the end
of the period
60
810,910
71,779
6,599
6,928
(45,605)
22,188
1,993
2,304
1,674
(5,541)
685,036
76,133
7,300
7,618
(49,263)
21,084
2,701
2,328
1,684
(5,846)
(143,437)
(3,276)
84,086
237
707,174
19,342
810,910
22,188
c) Information of actuarial studies for defined benefit plans in November 2013 (Continued)
c.2) Reconciliation of net actuarial liabilities (Continued)
(iv) Reconciliation of net actuarial liabilities
Bank
Private
pension plan
Net actuarial (liabilities) /assets
at beginning of period
- Net cost for the period
- Net actuarial capital gains
(losses)
- Employer’s estimated
contributions
Net actuarial (liabilities) /assets
at end of period
11/30/2013
Healthcare
plan
Life insurance
Resignation
program
Private pension
plan
12/31/2012
Healthcare
plan
Life insurance
(159,989)
(15,373)
(53,982)
(6,151)
(13,790)
(1,332)
(3,359)
(61)
(37,201)
(4,624)
(29,758)
(4,384)
(11,114)
(1,353)
(4,444)
(505)
127,299
(7,090)
4,404
(768)
(125,464)
(22,168)
(2,035)
(154)
6,599
2,304
685
2,241
7,300
2,328
712
1,744
(41,464)
(64,919)
(10,033)
(1,947)
(159,989)
(53,982)
(13,790)
(3,359)
c.3) Allocation of the fair value of plan assets
Bank
11/30/2013
Private pension
Healthcare
plan
plan
Category of assets
Government bonds
Private credit and deposits
Market index fund
Shares and share funds
Real estate investments
Loans and financing
Other
61
Resignation
program
37.06%
15.34%
8.98%
22.39%
4.93%
1.45%
9.85%
71.28%
21.21%
7.51%
12/31/2012
Private pension
Healthcare
plan
plan
56.81%
12.51%
0
17.20%
4.39%
1.33%
7.76%
58.26%
35.62%
6.12%
c.4) Actuarial Assumptions
Actuarial studies that present the BDMG obligations in November 2013 and the projection
of expenses until November 2014 are based on the following assumptions:
11/30/2013
Type of plan
Actuarial assessment method
Statutory discount rate for the actuarial liability
9.851%
12.49%
5.60%
9.851%
5.73%
Technical professional
Min 7.41%
Max 9.58%
Min 6.72%
Max 7.80%
Analyst
Min 7.41%
Max 9.58%
Min 6.72%
Max 7.80%
Position of trust
Min 7.41%
Max 9.58%
3.00%
Min 6.72%
Max 7.80%
3.00%
Annual projection of actual growth in medical
expenses (2)
Turnover:
- less than three years of service
- from three to five years
- Over 5 years
Overall actuarial table
8.31%
0.45%
0.45%
AT-2000 (Basic table reduced by
10%) segregated by gender
Disability table
Disability mortality table
Structure of beneficiary families
Álvaro Vindas reduced by 50%
Winklevoss reduced by 50%
Active: Standard family
Pensioner members: Actual family
Life expectancy to calculate reduction social
security factor ("fator previdenciário")
Other hypothesis
Brazilian Institute of Geography
and Statistics (IBGE) table - 2011
All participants retire in the 1st
eligibility;
Null salary growth for selfsponsored participants
(1)
(2)
Defined benefit plan
Projected credit unit
12.49%
Estimated annual statutory rate of return on
investments
Estimated future annual inflation rate
Statutory rate of future salary growth
62
Defined benefit plan
Projected credit unit
Bank
12/31/2012
Except for Resignation Program with discount rate of 0% in November 2013;
Only applicable to Health plan.
8.44%
0.41%
0.41%
AT-2000 (Basic table Basic
reduced by 10%) segregated by
gender
Álvaro Vindas reduced by 50%
Winklevoss reduced by 50%
Active: Standard family
Pensioner members: Actual
family
IBGE table - 2011
All participants retire in the 1st
eligibility;
Null salary growth for selfsponsored participants
c.4) Actuarial Assumptions
Bank
Expected average remaining working life
Average period until the benefits are
acquired
Obligation Duration (used to determine
the discount rate)
Average age for retirement
Private pension
plan
15.45
11/30/2013
Healthcare
Life
plan
insurance
13.14
15.24
Resignation
program
0.46
Private pension
plan
15.91
12/31/2012
Healthcare
Life
plan
insurance
15.45
13.96
15.45
13.14
15.24
0.46
15.91
15.45
13.96
0.95
12.95
59.71
12.95
58.12
12.95
59.44
1
56.38
12.41
59.26
12.41
59.26
12.41
59.26
0.43
59.26
c.5) Actuarial projections for November 30, 2014
(i) Projected net actuarial liabilities
Defined benefit obligation
Fair value of plan assets
Net actuarial (liabilities) / assets
63
Resignation
program
0.95
Private
pension plan
(790,441)
753,603
(36,838)
Bank
Projection for 11/30/2014
Healthcare
Life
plan
insurance
(91,925)
(10,532)
19,779
(72,146)
(10,532)
Resignation
program
-
c.5) Actuarial projections for November 30, 2014 (Continued)
(ii) Changes in present value of defined benefit obligation
Private
pension plan
Defined benefit obligation at beginning of period
(November 30, 2013)
- Cost of current services
- Interest cost
- Contributions paid by the participants of the plan
- Benefits paid
Defined benefit obligation at end of period
(November 30, 2014)
Bank
Healthcare
Life
plan
insurance
Resignation
program
748,638
(597)
90,090
8,541
(56,231)
84,261
858
10,311
1,973
(5,478)
10,033
80
1,205
1,947
31
(786)
(1,978)
790,441
91,925
10,532
-
(iii) Changes in fair value of plan assets
Bank
Private pension
plan
Healthcare plan
Fair value of plan assets at the beginning of the period
(November 30, 2013)
Interest income
Contributions paid by the employer
Participants’ contributions
Benefits and/or expenses paid
Fair value of plan assets at the end of the period
(November 30, 2014)
707,174
85,925
8,194
8,541
(56,231)
19,342
2,303
2,717
1,973
(6,556)
753,603
19,779
(iv) Changes in the projected net actuarial liabilities
Private
pension plan
Net actuarial (liabilities) /assets at beginning of
period
(November 30, 2013)
- Net cost for the period
- Employer’s estimated contributions
Net actuarial (liabilities) /assets at end of period
(November 30, 2014)
64
Bank
Healthcare
Life
plan
insurance
Resignation
program
(41,464)
(3,568)
8,194
(64,919)
(9,944)
2,717
(10,033)
(1,285)
786
(1,947)
(31)
1,978
(36,838)
(72,146)
(10,532)
-
c.5) Actuarial projections for November 30, 2014 (Continued)
v)
Projected cash flow
Actuarial studies in November 2013 presented the following estimates of
payments of benefits and contributions of the sponsor for November 2014:
Cash flow
projection
Estimated
payment of
benefits
Employer’s
estimated
contributions
Private pension
plan (BD)
Private pension
plan - CV
Bank
PRO-SAÚDE
program
Group life
insurance
Resignation
program
56,231
-
5,478
786
1,978
8,194
300
2,717
786
1,978
c.6) Sensitivity of defined benefit obligation
Changes in the assumptions that support the actuarial studies can have effects on the
value of the defined benefit obligation, as shown in the table below, the increases in
percentage resulting from changes in the main actuarial assumptions:
Private pension plan
Healthcare plan
Life insurance
Resignation program
65
1% decrease
p.a. in the
discount rate
11,56%
14,76%
10,32%
N/A
Bank
Changed assumptions
Reduction in
1% increase in the
the actuarial
trend rate of
table in one
medical costs
year
1,38%
N/A
3,11%
15,32%
2,05%
N/A
N/A
N/A
29. Subsequent events
On January 31, 2014, the shareholder Minas Gerais State paid up R$ 16,859 in BDMG
capital, as mentioned in Note 16 (a).
Board of directors
Paulo de Tarso Almeida Paiva
Chairman
Dorothea Fonseca Furquim Werneck
Vice-Chairman
Ângela Maria Prata Pace Silva de Assis
Board Member
Fabio Proença Doyle
Board Member
José Israel Vargas
Board Member
Leonardo Maurício Colombini Lima
Board Member
Matheus Cotta de Carvalho
Board Member
Mauro Lobo Martins Júnior
Board Member
Renata Maria Paes de Vilhena
Board Member
Executive Board
Matheus Cotta de Carvalho
CEO
Jose Santana de Vasconcellos Moreira
Vice-President
Bernardo Tavares de Almeida
Officer
Fernando Lage de Melo
Officer
Joao Antonio Fleury Teixeira
Officer
Julio Onofre Mendes de Oliveira
Officer
Controllership Department
Giovani Rosemberg Ferreira Gomes – Accountant CRC-MG – 075701/O-5
66

Financial Statements Banco de Desenvolvimento de Minas

Transcrição

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