BB SEGURIDADE PARTICIPAÇÕES SA

Transcription

BB SEGURIDADE PARTICIPAÇÕES S.A – Ordinary Shareholders’
Meeting 4/30/2014
Management Proposals and Other Documents for Information to
Shareholders
Ordinary Shareholders’ Meeting
1. Comments from Management (CVM 481, Article 9º, item III);
Note: the other documents on Article 9 were filed with the CVM, via
the IPE system, during the release of BB Seguridade results on
02/11/2014; Discussion of the allocation of net income for fiscal year
2013 and the distribution of dividends (CVM 481, Article 9º § 1º Item
II – Appendix 9 – 1 – II).
2. Election of Members of the Fiscal Council (CVM 481, Article 10).
3. Setting of compensation for members of the Fiscal Council. (CVM
481, Article 12, Items I and II);
4. Election of Members of the Board of Directors. (CVM 481, Article 10).
5. Setting of annual total compensation for members of the executive
bodies (CVM 481, Article 12, Items I and II)
Ordinary Shareholders’ Meeting
4/30/2014
COMMENTS FROM DIRECTORS
Fiscal year ending 12/31/2013
Pursuant to Article 9, Section III of
CVM Regulation 481, dated
December 17th,2009.
(Item 10 of the Reference Form)
10.1 - General financial and equity condition
We, the members of the Executive Board of BB Seguridade, pursuant to CVM Instruction 480,
1
commented in this section 10 of the Reference Form the main aspects related to the Company.
We declare that the information is true, complete and consistent.
Initially, in section 10.1, we present our position about the financial conditions of BB Seguridade,
its capital structure, sources of loan and its indebtedness level. We also present the composition
of the Balance Sheet - BS. The commented performance is based on the financial statements
using the IFRS - International Financial Reporting Standards, excepted as specified.
In section 10.2, we made comments on the main changes and impacts on operating and
financial results, including a brief analysis of the c onsolidated and combined financial
statements of the BB Seguridade Group.
As requested in section 10.3, we show the history since the Company’s incorporation to the end
of the fiscal year of 2013. We described in section 10.3 the impacts of the acquisition of share in
IRB Brasil Resseguros S.A., and reported the strategic partnership in development aimed at
setting up the Company’s business of dental insurance (Brasildental).
After this, in section 10.4, we comment on whether there are qualifications or emphases in the
independent auditors’ report on the financial statements.
In relation the significant accounting policies, in Section 10.5 we highlight the fair value of
financial instruments, the impairment of financial assets available for sale, the impairment of
non-financial assets, taxes on profit, recognition and assessment of deferred taxes, provisions
and contingent liabilities.
In section 10.6, we commented on the internal controls intended to assure the correctness of
the Financial Statements, which are based on the best market practices and corporate
governance, besides the compliance with the legislation in force and the guidance from
regulatory bodies.
Section 10.7 is not applicable to the Company, since it did not conducted any fund raising
through public offerings in 2013.
In sections 10.8 and 10.9, we discuss the off-balance sheet items, as well as their natures and
amounts.
In Section 10.10, regarding the business plan, we make comments on the investment plan
scheduled by BB Seguridade.
Finally, we kept in section 10.11 a history on other factors that have significantly affected the
operating performance and which have not been identified or commented in the other items of
this section.
(a)
Comments of executive officers on general financial and equity condition
BB Seguridade was incorporated on December 20, 2012, as fully -owned subsidiary of Banco do
Brasil, with the purpose of equity holding in insurance and premium bonds companies, private
pension corporations, as well as in other companies which corporate objective is the brokerage
and making viable businesses involving companies of this market segment.
The capital stock of the Company was fully subscribed and paid-in by its controlling
shareholder, Banco do Brasil. The capital contribution was made as follows: a small portion in
1 1
Free Translation for “Formulário de Refrência”
kind and most of it through a transfer of shares representing the capital stock of BB Seguros,
BB Corretora and BB Cor, which was carried out on December 31, 2012. On the same date, the
Company transferred the totality of its interests in BB Corretora to its fully-owned subsidiary BB
Cor.
Therefore, the Company started to hold as subsidiaries BB Seguros and BB Cor.
The table below presents the Company’s main consolidated equity items.
As of Decem ber 31,
2012
As of Decem ber 31,
2013
% Total
% Total
R$ thousands, except percentages
Assets
7,292,611
100
8,785,478
100
Cash and cash equivalents
1,327,931
18
1,785,284
20
398
0
3,046
0
5,385,543
74
6,221,050
71
--
--
35,356
0
18,098
0
88,120
1
5,762
0
6,377
0
Financial instruments
Investments in affiliates
Dividends receivable
Assets from current taxes
Assets due to deferred taxes
Other assets
554,879
8
646,245
8
1,654,237
23
1,844,205
21
5,718
0
8,637
0
624,698
9
344,719
4
92,756
1
152,910
2
Liabilities due to deferred taxes
269,654
4
273,977
3
Other liabilities
661,411
9
1,063,962
12
Shareholders' equity
5,638,374
77
6,941,273
79
Liabilities and shareholders' equity
7,292,611
100
8,785,478
100
Liabilities
Labor, tax and civil provisions
Dividends payable
Liabilities due to current taxes
In this context, we inform that the Company’s consolidated assets reached R$8,785 million as of
December 31, 2013, mainly composed of investments in subsidiaries and associated
companies (71%) and cash and cash equivalents (20%).
In the management’s view, the equity solidity of the Company is expressed in the predominance
of own funds (equity) in its ownership structure, lack of financial indebtedness and performance
of its debt ratio.
The Company’s equity reached R$6,941 million as of December 31, 2013, up 23% on
December 31, 2012. At the end of 2013, equity represented 79% of total liabilities of the
Company, while in December 2012 it stood at 77%.
The debt ratio (liability / equity) stood at 0.27 at the end of 2013, whereas it stood at 0.29 in
December 2012. Liabilities corresponded to 21% of the Company’s total liabilities in December
2013, while it stood at 23% at the end of 2012. It should be noted that most of the BB
Seguridade’s liabilities is composed of “other liabilities”, a line that mainly comprises
commissions to be appropriated arising from the consolidation of the statements of BB
Corretora.
For further information on the financial condition of BB Seguridade, see Section 10.2 of this
Reference Form, in which we present an analysis based on the combined and consolidated
financial statements of the BB Seguridade Group.
(b)
capital structure and possibility of redemption of shares and quotas
BB Seguridade was incorporated with the initial capital stock of R$15 million, fully subscribed by
Banco do Brasil, through the payment of R$1.5 million in cash, with a contra-entry in cash of the
Company.
As of December 31, 2012, the capital stock of the Company was increased by R$5,632 million,
which was fully subscribed and paid-in by the controlling shareholder, Banco do Brasil, by
means of the transfer of the shares representing the capital stock of BB Seguros, BB Corretora
and BB Cor. The remaining balance of the capital stock corresponding to R$13.5 milli on was
paid in cash by the controlling shareholder Banco do Brasil in January 2013.
The following table presents the breakdown of the Company's capital structure between own
capital and liabilities:
In R$ thousands, except
percentages
Liabilities
Liabilities and shareholders'
equity
As of Decem ber
31, 2012
%
Total
As of Decem ber 31,
2013
1,654,237
23
1,844,205
21
5,638,374
77
6,941,273
79
7,292,611
100
8,785,478
100
% Total
As of December 31, 2013, the Company’s liabilities were mainly composed of dividends payable
and commissions to be appropriated, the latter being related to the deferral of brokerage
revenue by BB Corretora.
Hypotheses of redemption
There are no hypotheses of redemption of BB Seguridade’s shares besides those established
by law.
It should be noted that BB Seguridade is capable of initiate the private trading of its own shares,
according to the authorization from the Brazilian Securities Exchange Commission, announced
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to the market by means of the material fact on January 28 , 2014, with the sole intention to
provide, by means of them, the payment of a portion of the share-based compensation to the
members of the Board of Executive Officers, carried out by means of shares.
Formula for calculating the redemption amount
Not applicable.
(c)
payment ability in relation to the financial commitments assumed
As of the date of this Reference Form, BB Seguridade operated mainly with own capital, and
the Company’s liabilities were mainly composed of dividends payable and appropriated
commissions. The Company basically finances its activities with the dividends received from its
wholly-owned subsidiaries BB Seguros and BB Cor. If necessary, the Company may raise funds
among third parties, which will be repaid with the funds provided by its subsidiaries and
associates.
After evaluating the operations of its affiliates and subsidiaries, the current position of its assets
and liabilities, the cash generation and the outlook for the markets where the Company
operates, Management believes that BB Seguridade has funds to give continuity to its
businesses in the future. The Management is not aware of any material uncertainty that could
generate significant doubts on the capacity to continue as a going concern.
(d)
funding sources for working capital and investments in non-current assets
utilized
The Company finances its operations mainly with own capital, not having contracted any loans,
financing or credit facilities. As of December 31, 2013, the Company’s li abilities were mainly
composed of dividends payable and commissions to be appropriated. Investments in noncurrent assets were made by means of paid-in capital through Banco do Brasil, in the setting up
of BB Seguridade, and with the dividends received from subsidiaries.
(e)
funding sources for working capital and investments in non-current assets to be
used to cover liquidity deficits
The Company intends to maintain its funding strategy, specially with own capital and believes
that it will have sufficient funds to comply with its operating obligations. However, it may
complement this strategy by using other financing types, including: (i) entering into loans and
financing with financial institutions; and (ii) fundraising, through debt instruments or issuance of
shares, in the capital market.
(f)
indebtedness levels and characteristics of such debts
i. significant loan and relevants financing agreements
As of the date of this Reference Form, the Company did not have any loan agreements and
financing.
ii. other long-term relations with financial institutions
As of the date of this Reference Form, the Company did not have other long-term relationships
with financial institutions.
iii. degree of subordination among debts
As indicated in the item “i” above, as of the date of this Reference Form, the Company did not
have any loan agreements and financing. In order to comply with the provisions of item 9.2.9 of
the Superintendency of Relationship with Businesses (SEP) Official Letter 1/2014, we clarify
that as of the date of this Reference Form:

Company’s total assets,
("Shareholder`s Equity");

Comprise the liability of the Company, in this subordination order;
79%
was
financed
by
the
funds
of
shareholders
1.
Labor, tax and civil provisions – In the amount of R$8.6 million in December 2013
and R$5.7 million at the end of 2012;
2.
Current and deferred tax liabilities – In the amount of R$426.9 million in December
2013 and R$362.4 million at the end of the previous year;
3.
Dividends and bonus payable – Balance of R$344.7 million at the end of 2013 and
R$624.7 million in December 2012;
4.
Other liabilities – This line mainly comprises commissions to be appropriated arising
from the consolidation of the statements of BB Corretora, and, therefore, was
classified as the highest subordination level in relation to other obligations. Its
balance reached R$1,064.0 million at the end of 2013 and R$661.4 million at the
end of the previous year.
iv. any restrictions imposed on the issuer, especially in relation to indebtedness limits
and the contracting of new debts, to the distribution of dividends, to the divestiture of
assets, to the issuance of new securities and to the sale of controlling interest
We inform that there are no restrictions imposed to BB Seguridade in respect to indebtedness
limits and contracting of new debts, distribution of dividends, sale of assets, issuance of new
securities and sale of ownership control, besides those provided for by law.
(g)
limits on the use of the financing obtained
Up to December 31, 2013, the Company did not have any loans, financing or credit facilities
contracted.
(h)
significant changes in each item of the financial statements
The financial statements for the year ended 2012 (combined) and 2013 (consolidated) were
prepared in accordance with the International Financial Reporting Standards (IFRS) issued by
the International Accounting Standards Board (IASB) and accounting practices adopted in
Brazil.
As it is a holding company, the movements of BB Seguridade are basically made because of
investments, dividends or interest on capital payable or receivable, and financial investments,
besides the expenses necessary to support the operations. In addition, the consolidated
statements of BB Seguridade include the revenues, expenses and asset and liability accounts
of BB Capitalização, BB Corretora, BB Cor Participações and BB Seguros, companies
controlled by the Company.
The changes in the profit or loss accounts are included in item 10.2 of this Reference Form,
which shows an analysis of the Income statement for 2013, the first years of the Company’s
operations, taking into account that between December 20, 2012 (incorporation date) and
December 31, 2012, BB Seguridade did not record any revenue or expenses.
Consolidated Balance Sheet – Assets
As of Decem ber 31,
2012
As of Decem ber 31,
2013
% Total
% Total
R$ thousand, except percentages
Assets
7,292,611
100
8,785,478
100
1,327,931
18
1,785,284
20
398
0
3,046
0
5,385,543
74
6,221,050
71
--
--
35,356
0
18,098
0
88,120
1
5,762
0
6,377
0
554,879
8
646,245
8
Financial instruments
Investments in affliates
Dividends receivable
Other assets
As of December 31, 2013, the consolidated assets of BB Seguridade reached R$8,785 million,
a growth of 20.5% on December 31, 2012. The lines comprising assets are broken down below:
Cash and cash equivalents: this item amounted to R$1,328 million as of December 31, 2012
and R$1,785 million as of December 31, 2013. At the end of 2013, the line of cash and cash
equivalents represented 20.3% of the Company’s consolidated assets. In 2013, the cash
generated from operating activities was nearly R$1,116 million and that generated from
investing activities totaled R$799 million. The net change of this line, which also takes into
account the capital contribution of R$13.5 million and discounts the amount paid as dividends of
R$1,472 million, amounted to R$457 million.
Financial instruments: recorded balance of R$398 thousand as of December 31, 2012 and
R$3.0 million as of December 31, 2013. This line comprises bank deposit certificates and
variable-income fund quotas held by BB Corretora.
Investments in subsidiaries and affiliated companies: This line is composed of the balance of
investment in the companies BB Mapfre SH1, Mapfre BB SH2, Brasilprev, Brasilcap and IRB RE. In the amount of R$6,221 million, the line of investments represents 70.8% of BB
Seguridade’s consolidated assets as of December 31, 2013. In the comparison to the year
2012, there was a growth of 15.5%, mainly due of equity income for 2013, deducted from the
dividends received and after equity adjustments and other events, and the acquisition of 20.5%
IRB Brasil RE shares.
Current and deferred tax assets: at the end of December 2013, this line reached R$94 million,
an increase of R$70.6 million in 12 months, justified by the increase in the balance of current
tax assets.
Other assets: As of December 31, 2013, the balance of other assets reached R$646 million, an
increase of 16.5% over 12 months. The growth of this line was mainly caused by the increase in
income receivable, essentially related to commissions receivable of BB Corretora from affiliates.
Consolidated balance sheet – Liabilities and Shareholders’ Equity
As of Decem ber 31,
2012
As of Decem ber 31,
2013
% Total
% Total
Liabilities
1,654,237
23
1,844,205
21
5,718
0
8,637
0
624,698
9
344,719
4
92,756
1
152,910
2
269,654
4
273,977
3
Other liabilities
661,411
9
1,063,962
12
5,638,374
77
6,941,273
79
Liabilities and shareholders' equity
7,292,611
100
8,785,478
100
Dividends payable
The consolidated liabilities of BB Seguridade amounted to R$1,884 million on December 31,
2013. Breakdown of consolidated liabilities is as follows:
a) Labor, tax and civil provisions: The balance at the end of December 2013 amounted to R$9
million, an increase of 51.0% in 12 months. Amounts allocated in this line refer to lawsuits of
BB Corretora classified as probable risk, as follows:

R$3 million related to tax lawsuits originated from municipal tax assessments in respect
to ISSQN; and

R$6 million related to civil lawsuits, mainly requests of miscellaneous reimbursements
(property damage, pain and suffering, etc.), litigations related to the payment of claims
and applicability of the consumer defense code.
b) Dividends payable: this line showed a balance of R$625 million as of December 31, 2012
and of R$345 million as of December 31, 2013, a reduction of 44.8%. The reduction was
caused by the fact that until December 31, 2013, the Board of Directors had not yet
approved the distribution of dividends at a percentage in excess of the minimum provided for
th
in the Bylaws, which only took place on February 7 , 2014.
c) Current and deferred tax liabilities: In December 2013, the balance reached R$427 million,
recording a growth of 17.8% in 12 months. The balance refers to the amount arising from the
consolidation of subsidiaries.
d) Other liabilities: the balance on December 31, 2012 was R$661 million and on December 31,
2013 reached R$1,064 million, an increase of 60.9% in 12 months, an amount equivalent to
12.1% of consolidated liabilities. The growth was driven by the increase in commissions to
be appropriated of BB Corretora, which are generated by the deferral of a portion of
brokerage revenues on accrual basis.
e) Shareholders' equity: As of December 31, 2013, the consolidated equity of BB Seguridade
amounted to R$6,941 million, whereas it amounted to R$5,638 million as of December 31,
2012, recording an increase of 23.1% in 12 months. The equity as of December 31, 2013
corresponds to a net book value of R$3.47 per share.
10.2 Operating and financial income
a) results on the issuer's operations, mainly:
i. description of revenue important components
Described in item ii.
ii. factors that materially affected operating results
With the intention to provide comparability and a better understanding of the operating
performance delivered by BB Seguridade in 2013, taking into account that the Company was
th
incorporated on December 20 , 2012, in this section of the Reference Form the combined
financial information of the year ended December 31, 2012 was included.
The consolidated financial statements for the year 2013 and the 2012 combined financial
statements of the BB Seguridade include the financial statements of BB Seguridade,
consolidated financial statements of BB Seguros, and financial statements of BB Corretora, BB
Capitalização and BB Cor.
Balances regarding intra-group transactions as well as any unrealized revenues or expenses in
combined inter-company transactions (combined and consolidated), are eliminated when
preparing financial statements. Unrealized gains originating from transactions with investees
recorded using the equity method are eliminated against the invest ment in the proportion of the
BB Seguridade's share in the investee.
The combined financial statements are submitted in order to support additional analyses on the
Company’s operations and do not represent the individual or consolidated financial statements
of BB Seguros and its affiliated companies, nor of BB Corretora, and should not be taken as a
basis for calculating dividends, taxes or for other corporate purposes or performance analysis.
BB Seguridade Income Statement– 2012 (Combined) and 2013 (Consolidated)
Operating income
Revenue from commissions
Equity Income
Life, mortgage and rural insurance
Property insurance
Pension plan
Premium bonds
Reinsurance
Other income and expenses
Revenues w ith interest from financial instruments
Personnel expenses
Administrative expenses
Other expenses
Incom e before taxes
Taxes
Net incom e for the year
2012
2013
Var (%)
1,928,971
1,036,355
892,616
485,406
- 36,826
331,953
112,083
- 510,789
76,918
-18,588
-543,017
- 26,102
1,418,182
-178,070
1,240,112
3,297,363
1,736,407
1,560,956
741,199
194,602
443,981
123,405
57,769
-349,641
119,849
-25,581
- 277,515
-166,394
2,947,722
-473,969
2,473,753
71
68
75
53
34
10
-32
56
38
-49
537
108
166
99
BB Seguridade recorded a net income of R$2.5 billion in 2013, its first year of operations. The
reported result is equivalent to 39.3% of the return on average equity, and is 99.5% in excess of
that reported in the combined financial statements for 2012, which indicates what the
Company’s result would be, taking into account the data reported in the year by the subsidiaries
and affiliated companies which currently comprise the BB Seguridade Group.
The expansion of results arises from the growth of 70.9% of operating revenues, along with a
reduction of 31.5% in the result of “Other income and expenses”. This performance is mainly
explained by the following:



Expansion of 67.5% in the brokerage revenue, in view of the increase in the sales of
insurance, private pension and premium bonds products in the banking network, and
also the revision of the contractual conditions that regulate the relationship between
Banco do Brasil and BB Corretora, as further detailed in this section;
Increase of 74.9% in revenues from investments in equity share;
Reduction of 48.9% in administrative expenses, also in view of the revision of the
contractual clauses that regulate the relationship between Banco do Brasil and BB
Corretora. From 2013, BB Corretora quit to compensate Banco do Brasil for the access
to its customer base.
Income from commissions
In 2013, the commission revenue of BB Corretora reached R$1.7 billion, an increase of 67.5%
as compared to 2012, with the increase in brokerage revenues of all the affiliated companies, of
which we highlight the life, mortgage and rural segment, besides premium bonds, which share
in total commission increased considerably in 2013.
The share of the life, mortgage and rural segments increased from 48.2% in 2012 to 50.3% in
2013, while the premium bonds segment, which achieved a record level of contributions in
2013, posted an increase in its share in commissions revenue from 12.5% in 2012 to 16.3% in
2013.
In relation to the segments that reduced their shares in commission revenues, the property and
private pension ones should be mentioned. Whereas the property segment reported a share
reduction from 19.8% in 2012 to 17.3% in 2013, the private pension decreased from 16.8% in
2012 to 15.6% in 2013.
Revenues from investments
The income from investments in shares equities totaled R$1.6 billion in 2013, a 74.9% increase
on 2012, explained by the increase in the sale of insurance, private pension and premium
bonds products, which leverage the results of affiliates. Another factor that contributed to the
increase in the income from investments in share equities, was the acquisition of 20.5% in IRB
Brasil RE in August 2013.
a. Life, mortgage and rural: the revenue from investments in the life, mortgage and rural
segments totaled R$741.2 million in 2013, a growth of 52.7% on 2012. The development
resulted from the growth in the revenue from insurance operations, promoted by the expansion
of earned premiums and the improvement in loss ratios. Extraordinary items like the adherence
to the REFIS by companies related to the affiliates BB Mapfre SH1, and the rei nforcement in the
provision named IBNER (claims occurred but not sufficiently reported) impacted the result in
2013.
b. P&C: the revenue from investments in the property segment totaled R$194.6 million in 2013,
an increase of R$231.4 million as compared to 2012. The performance in 2013 is explained by
the increase in earned premiums, together with the fall in loss and commission ratios. The
results for 2012 and 2013 were also impacted by several extraordinary effects like the
adherence to the REFIS by the companies related to Mapfre BB SH2 and the reinforcement in
the IBNER provision in 2013. Other determining factor was the end of the allocation of priority
dividends to Mapfre in Mapfre BB SH2 – agreed upon the formalization of the partnership
between BB Seguros and the Spanish group Mapfre – and of the payments for back office
service made to SulAmérica, both effects that limited the revenues from investments in 2012,
and did not repeat in 2013.
c. Pension plan: the revenue from investments in private pension segment reached R$444.0
million in 2013, an increase of 33.7% on 2012. The performance was supported by the growth
in the result of private pension and insurance, which followed the expansion in the revenue from
collection and reserves. The comparison basis in 2012 was also impacted by the elimination of
the unrealized gain arising from the disposal of the share in Mapfre Nossa Caixa Vida e
Previdência, from BB Seguros Participações to Brasilprev.
d. Premium bonds: the revenue from investment premium bonds segment totaled R$123.4
million in 2013, up 10.1% on 2012. The result of this segment was impacted by the growth in
the result of premium bonds, promoted by the increase in the collection arising from premium
bonds, besides extraordinary income earned in 2013, resulting from the change in the
accounting for unique payments plans.
e. Reinsurance: the revenue from investments in the reinsurance segment totaled R$57.8
million in 2013, with the acquisition of IRB in August 2013.
Distribution of equity income
Relevant items
As observed in the analysis above, material items were found in the combined and consolidated
financial statements for 2012 and 2013, which had significant impacts on the results of BB
Seguridade. These events are better detailed as follows:
Refis – in November 2013, BB Corretora de Seguros e Administradora de Bens (“BB
Corretora”) and the affiliates Mapfre Vida, a wholly-owned subsidiary of BB Mapfre SH1, and
Mapfre Seguros Gerais, a wholly-owned subsidiary of Mapfre BB SH2, joined the Tax Recovery
2
Program (REFIS), according to the Law No. 12,865, of October 9, 2013. As provided for in the
Joint Ordinance PGFN/RFB No. 08/2013, pursuant to the provisions of art. 92 of the Provisional
Measure No. 627/2013, the cash payment provided the reduction of 100% (one hundred
percent) of the late payment and voluntary penalties; of 100% (one hundred percent) of
individual penalties; of 100% (one hundred percent) of late payment penalties; and of 100%
(one hundred percent) on the amount of the legal charge. In view of the volumes of reserved
amounts are in excess of the amounts involved for the payment of obligations, there were
reversal of provision, and, consequently, a net positive impact on the result of BB Seguridade of
R$82.7 million related to the SH1, R$108.1 million related to the SH2 and R$12.6 million related
to BB Corretora.
IBNER – the SUSEP Circular No. 462/13 regulated the adjustment of the IBNER (Claims
Occurred and Not Sufficiently Reported), defining as a portion of the PSL (Reserve for
3
Unsettled Losses) . This amount is characterized as an aggregate adjustment of the claims
reported and not yet paid, and should be used only when the individual revaluation of each
claim is not possible. This reinforcement in the provision entered into effect in December 2013,
negatively impacting the BB Seguridade, on net basis, in R$21.5 million, related to the SH1, and
R$13.1 million, related to the SH2.
SH2 – Priority dividends – with the objective of equating the share of Banco do Brasil and
Mapfre in Mapfre BB SH2, was attributed to the special class to the preferred shares held by
Mapfre in this Holding. To this new special class of shares the receipt of fixed cumulative priority
dividends was ensured until the amount of R$309.5 million, adjusted by the CDI, between the
date of BB Seguros joined in Mapfre BB SH2, in June 2011, and the dividend payment dates.
The dividends distributed by Mapfre BB SH2, in 2012, were sufficient for the payment of the
totality of said priority dividends and the consequent termination of the Company’s obligation to
make payments to this special class of preferred shares relating to the above-mentioned priority
dividends. So the preferred shares held by Mapfre in Mapfre BB SH2 started to be entitled to
the share profit of the Company on conditions equal to those of the preferred shares held in that
Company by BB Seguros. Such extraordinary effect produced a negative impact on the result of
BB Seguridade of R$135.5 million in 2012, net of taxes.
SH2 – Payment to SulAmérica – Once the partnership in the automobile insurance area was
terminated with SulAmérica, Brasilveículos was included in the Segurador BB Mapfre Group, as
a wholly-owned subsidiary of Mapfre BB SH2. Until Segurador BB Mapfre Group assumed the
back office activities arising from the policies sold by Brasilveículos, SulAmérica operated as the
provider of these services. The contract with SulAmérica was terminated in September 2012
and was not renewed. The payments were made until the month when the contract was
terminated, and produced a negative impact of R$15.5 million after taxes on the combined
result of BB Seguridade for 2012.
Brasilcap – Change in the accounting of unique payments plans – Until 2012, the revenue
from unique payments premium bonds, as well as the expenses of technical and sales
provisions reserves, were recognized on deferral basis, throughout the effective term of the
product (statements under the IFRS). In 2013, the revenues and expenses started to be
recognized at the extent they were effectively carried out. Once such decision was made, the
2
Free translation for “Programa de Recuperação Fiscal”
3
Free translation for “Provisão de sinistro a liquidar”
net revenues and deferred expenses and their respective tax effects were also reversed, which
produced a net positive impact of R$35.3 million on the profit earned by BB Seguridade in 2013.
BB Corretora – New remuneration – The sales of insurance, private pension and premium
bonds products by means of the Banco do Brasil branch network is regulated by a set of
contracts which: 1) ensure the access by affiliates to BB Corretora, and; 2) establish the
conditions on which BB Corretora sells the products in the branch network. From February
2013, the contracts were amended, so that BB Corretora started to recognize revenues which
were recorded by Banco do Brasil thus far, which increased the average brokerage fee. If the
current conditions were in effect in 2012, the combined net result of BB Seguridade for that year
would be added by R$196.5 million. Likewise, if these conditions were in effect, in January
2013, the net income of BB Seguridade for the year would be added by R$18.2 million.
BB Corretora – Remuneration paid by BB Corretora for sharing the customer base of
Banco do Brasil – among the instruments that regulate the relationship between Banco do
Brasil and BB Corretora, until the end of 2012 a contract was in effect which provided for the
payment by BB Corretora to Banco do Brasil of approximately 40.21% in 2012 for brokerage
revenue, net of certain expenses necessary for generating the revenue, for sharing of the
st
Bank’s customer base. This contract was canceled and, from January 1 , 2013 a new
agreement entered into effect, which does not provide for this type of expense, Banco do Brasil
being remunerated only for the reimbursement of the costs related to labor, distribution network,
among other resources (physical, technological and administrative). This agreement is true for
20 years, without clause on early cancellation. In 2012, these expenses negatively impacted the
net combined result of BB Seguridade by R$177.7 million.
IRB PIS/COFINS Revaluation of provisions – as a result of the process for periodic
revaluation process of the impacts on equity originated from lawsuits, in which the IRB is the
defendant, plaintiff or interested party, an income after taxes was recorded for the 4Q13 of
R$133.8 million in IRB, and that impacted the income from the investments of BB Seguridade in
the amount of R$ 27.4 million, which refers to the reversal of principal and monetary adjustment
of the provisions related to PIS/COFINS.
BB Seguros – Sale of Mapfre Nossa Caixa e Previdência – gain of BB Seguros
Participações after the sale of its share in Mapfre Nossa Caixa Vida e Previdência to Brasilprev.
As a consequence of this effect, there was a net positive impact on the result of BB Seguridade
of R$ 46.2 million in 2012.
Private Pension – Unrealized gain on the acquisition of Mapfre Nossa Caixa Vida e
Previdência – Elimination related to the intergroup transactions in the equity income of
Brasilprev to BB Seguros. It refers to the unrealiz ed gain of BB Seguros on the sale of its
interest in Mapfre Nossa Caixa Vida e Previdência to Brasilprev. BB Seguros could only
recognize the gain related to the interest of Principal Financial Group in the capital of Brasilprev.
The remaining portion (74.995%) was deducted from the equity income of Brasilprev to BB
Seguros. Such elimination had a negative impact on the result of BB Seguridade of R$34.6
million in 2012, net of taxes.
Market share
4
5
According to the data disclosed by SUSEP (Superintendence of Private Insurance) , while the
market recorded a growth of 13.2% in the comparison between 2012 and 2013 – total premium
4
This reference form, when mentioned data from the SUSEP, comparative analyzes of the cumulative grow th
performance until November of each year (2013 and 2012). The market share data are accumulated until December
2012 and for the year to November in the case of financial year 2013. This limitation is due to the fact that, until the date
of this report, the regulator has not provided updated data until December 2013.
and contribution revenues from insurance, private pension and premium bonds segments,
except health insurance –BB Seguridade reported a growth of 29.8%. This growth reflected in a
larger market share of BB Seguridade, which reached 24.3%, as compared to 21.2% in 2012.
2012 x 2013 Growth – Premiums and Contributions in Insurance, Private Pension and
Premium bonds
Source: Susep Data – November / 2013
The growth in premiums and contributions result from the strategies adopted by the Company,
highlighting the banking channel operations – increase in the penetration of products in the
customer base of Banco do Brasil – and to widen the target audience of the mix of products.
The interest income of financial instruments totaled R$119.9 million in 2013, a growth of 55.8%
in relation to 2012, justified by the growth in the revenue from investment s in purchase and
resale commitments, resulting from the increase in the volume of these investments.
Administrative expenses totaled R$277.5 million in 2013, a reduction of 48.9% as compared to
2012. The drop is explained by the cancellation of the contract in which BB Corretora
remunerated Banco do Brasil for sharing the customer base, effective until December 2012.
The other operating revenue and expenses accumulated a negative amount of R$166.4 million
in 2013, a growth of 69.1% as compared to 2012. This increase is due to the fact that this
account was favored in 2012 by the accounting of revenues of R$94.6 million related to the sale
transaction of Mapfre Nossa Caixa Vida e Previdência of BB Seguros to a Brasilprev.
b) changes in revenues from price variations, foreign exchange rates, inflation, changes
in volume and introduction of new products and services:
The revenue growth for the period is mainly explained by the business expansion and the sales
mix. No variations in revenue attributable to changes in prices, exchange rates and inflation
5
Free tranlation for Superintendência de Seguros Privados)
indexes were shown in 2013 that represented a material impact on the revenues of BB
Seguridade.
c) impact of inflation, variation of prices of key inputs and products, variation of
exchange and interest rates in the operating income and in the financial income of the
issuer:
As highlighted in the analysis above, the result for 2013 was driven by the business expansion,
which ensured the growth in brokerage revenue and investments in shares equities. The
operating gains earned by associates were partially offset against smaller financial results,
which limited a more solid expansion in the net income of those Companies, and, accordingly,
in the consolidated result of BB Seguridade. The financial income of associates was influenced
by the following factors:


Reduction in the average SELIC rate, which stood at 8.18% in 2013, as compared to
8.53% in the previous year, which caused an impact on the return of portfolio of floatingrate securities.
Opening of the future interests curve, which caused a negative result of mark-to-market
of fixed and floating-rate securities adjusted by price indexes classified into the
“Available-for-sale” category.
No material impact was found on the consolidated result of BB Seguridade in 2013 arising from
price and exchange rate fluctuations.
10.3 – Events with material effects, both past and expected, on the financial
statements
(a)
acquisition or disposal of an operating segment
In 2013 BB Seguridade acquired through BB Seguros an ownership interest of 20.51% in the
capital of IRB-Brasil Re. With this acquisition, BB Seguridade introduced the segment of
reinsurance in its business portfolio. Further information on this acquisition and other strategic
movements are available in Sections 10.3 (b) and 6.5 of this Reference Form.
(b)
constitution, acquisition or disposal of equity share
On December 20, 2012, Banco do Brasil incorporated its wholly -owned subsidiaries BB
Seguridade and BB Cor, with initial capital of R$15 million and R$1.2 million, respectively.
On December 31, 2012, there was a capital increase of BB Seguridade, made through the
transfer of the total interest held by Banco do Brasil in BB Seguros, in BB Cor and in BB
Corretora. As a consequence of such capital increase, BB Seguridade now holds directly 100%
of the capital stock of BB Seguros, BB Cor and BB Corretora.
On December 31, 2012, there was a capital increase of BB Cor, made through the transfer of
the total interest held by BB Seguridade in BB Corretora. As a result of the aforesaid capital
subscription, BB Cor became the direct holder of 100% of the capital stock of BB Corretora.
At the end of this corporate restructuring, the Company’s ownership interest is now as follows:
(a)
100% of the shares of BB Cor, company engaged in holding interest in companies of
management of assets, brokerage and feasibility of business involving companies
operating in insurance, pension plan and premium bonds segments. BB Cor holds the
wholly-owned subsidiary BB Corretora;
(b)
100% of the shares of BB Seguros, company engaged in holding interest in insurance,
premium bonds and supplementary open pension entities. BB Seguros, in turn, holds
interest in the following companies:
(i)
74.99% of the total shares (of which 49.99% common shares) of BB Mapfre
SH1.
(ii)
50.0% of the total shares (of which 49.0% common shares) of Mapfre BB SH2.
(iii)
74.9% of the total shares (of which 49.9% common shares) of Brasilprev, which
operates in the pension segment in partnership with Principal; and
(iv)
66.7% of the total shares (with 49.9% common shares) of Brasilcap, which
operates in the premium bonds segment in partnership with Icatu Seguros S.A.
and Aliança da Bahia.
(v)
100% of the shares of Nossa Caixa Cap, which operates in the premium bonds
segment.
Acquisition of equity share at IRB-Brasil Re
th
On January 18 , 2013, the Resolution CND No. 03/2013 was published, establishing that the
Federal Government, BB Seguros Participações S.A., Bradesco Auto Re – Companhia de
Seguros, Itaú Seguros S.A., Itaú Vida e Previdência S.A. and Fundo de Investimentos Caixa
Barcelona would sign a Shareholders’ Agreement for defining the controlling stake of IRB after
its privatization.
st
The Central Bank of Brazil authorized on April 1 , 2013 that Banco do Brasil held interests,
indirectly, of up to 25% in the capital of IRB.
th
6
On April 17 , 2013, a decision of the Administrative Council of Economic Defense was
published approving without restrictions the monopolistic act No. 08700.002270/2013-01, which
provided for the capital restructuring of the Reinsurer.
7
Still in April 2013, the Federal Accounts Court (“TCU”) approved four of the five inspection
stages provided for in the Regulatory Instruction TCU No. 27/98, which provides for the TCU
inspection of privatization processes.
th
BB Seguros, subsidiary of BB Seguridade, signed on May 24 , 2013, a contract for purchase
and sale with the Federal Government, to acquire from it 20.51% of share in IRB, represented
by 212,421 common shares. On the same date, the Shareholders’ Agreement between the
Federal Government, BB Seguros Participações S.A., Bradesco Auto Re – Companhia de
Seguros, Itaú Seguros S.A., Itaú Vida e Previdência S.A. and Fundo de Investimentos Caixa
Barcelona was entered into with the intervening-consent of Banco do Brasil and IRB itself.
th
On August 20 , 2013, the Extraordinary Shareholders’ Meeting was held for approving the
capital increase of IRB, condition precedent for the payment by BB Seguros of the acquisition of
th
common shares. Also on August 27 , 2013, BB Seguros started to hold 20.51% in the capital of
IRB by effective purchase of shares.
th
On September 12 , 2013, Susep granted the final approval for the transfer of the shareholding
control and the interference in the business of the Reinsurer for the signatories of the
Shareholders’ Agreement.
8
The corporate acts of the privatization were recorded in the Board of Trade of Rio de Janeiro
st
on January 1 , 2013.
th
Finally, on January 17 , 2014, BNDES, in the use of its attributions conferred by the CND,
published, in the Diário Oficial da União (official gazette of the federal executive), the act of
termination of the privatization process.
In compliance with the study on the allocation of the price paid prepared by a specialized and
independent company, the transaction resulted in a bargain purchase in the amount of R$ 7,444
thousand, recorded in other operating revenues.
The identified intangible assets have been amortized according to the terms shown in the study
on the allocation of the price paid. For the year 2013, the amortized amounts totaled R$ 4,261
thousand.
For further information about corporate restructuring, see section 6.5 of this Reference Form.
6
Free traslation for “Conselho administrativo da defesa econômica”
7
Free Translation for “Tribunal de Contas da União”
8
Free Translation for “Junta Comercial”
Brasildental – Strategic partnership for the dental insurance segment
On June 11, 2013, Banco do Brasil S.A., BB Seguros Participações S.A. (BB Seguros), BB
Corretora de Seguros e Administradora de Bens S.A. (BB Corretora), Odontoprev S.A
(Odontoprev) and Odontoprev Serviços Ltda. (Odontoprev Serviços) signed a Agreement for
Joint Ventures and Other Covenants (Agreement) with the objective of, by means of a new
corporation, named Brasildental Operadora de Planos Odontológicos S.A. (Brasildental),
develop and disclose; and, by means of BB Corretora, distribute and sell dental plans using the
BB Dental trademark, with exclusivity in all BB channels in the national territory.
Brasildental will have an initial capital stock of R$ 5 million, distributed in 100 thousand common
shares (ON) and 100 thousand preferred shares (PN), with the following ownership structure:
Brasildental Operadora de Planos Odontológicos S.A.
% of total capital
% ON
% PN
BB Seguros
74.99
49.99
100.00
BB Seguros Participações S.A.
25.01
50.01
--
BB Seguros and Odontoprev will be responsible for the contribution of the initial capital of
Brasildental in the respective proportion of their share.
The joint venture was approved by the Administrative Council of Economic Defense (CADE) on
August 2, 2013 and on September 19, 2013, the Central Bank of Brazil (BACEN) authorized the
indirect interest of Banco do Brasil S.A. in the capital of Brasildental.
The following stages to be completed are as follows:
a) Constiuition of the company; and
b) obtaining the authorization from the National Regulatory Agency for Private Health Insurance
9
and Plans (ANS) for Brasildental to operate and market its products in the Brazilian dental plan
market.
The Agreement shall be true for 20 years, and may be extended for equal periods.
Setting up of a partnership for marketing insurance products in the branches
of the Empresa Brasileira de Correios e Telégrafos (“ECT”)
nd
On November 22 , 2013, BB Seguridade Participações S.A. and ECT entered into a
Memorandum of Understanding, of non-binding character, with the purpose of conducting
studies to assess the viability of establishing a partnership for the offering of insurance products
in the ECT branches.
For further information about corporate restructuring, see section 6.5 of this Reference Form.
(c)
unusual events or operations
Not applicable.
9
Free translation for Agência Nacional de Saúde Suplementar
10.4 - Significant changes in accounting practices - Qualification and emphasis
in the independent accountants' report
(a)
significant changes in accounting practices
There have been no significant changes in the accounting practices as of December 31, 2013.
(b)
significant effects of changes in accounting practices
Not applicable.
(c)
qualification and emphasis in the independent accountants' report
Our Officers inform that our independent auditors included in their report on the financial
statements for the year 2013, an emphasis of matter paragraph relating to the difference
between accounting practices adopted in Brazil and the IFRS related to the valuation of
investments. Our Officers remark that in the case of BB Seguridade, according t o accounting
practices adopted in Brazil applicable to the individual financial statements, investments in
subsidiaries and affiliates companies must be valued by the equity method of accounting, while
for IFRS purposes they would be stated at cost or fair value.
10.5 - Executive Officers’ Comments on critical accounting policies
Our Directors informed that the preparation of the Consolidated Financial Statements in
accordance with accounting practices adopted in Brazil and under IFRS requires the
Management to make judgments and estimates affecting the recognized amounts of assets,
liabilities, income and expenses. Estimates and assumptions adopted are analyzed in a
continuous basis, and revisions are carried out and recognized in the period in which the
estimate is revalued, with prospective effects.
Taking into consideration that there are certain alternatives to accounting treatments, the results
which are disclosed could be different, in the event a different treatment would have been
chosen. Management considers that the choices made are appropriate and that the
Consolidated Financial Statements fairly present the consolidated financial position of BB
Seguridade and the consolidated result of its operations in all substantially relevant as pects.
Significant assets and liabilities subject to such estimates and assumptions include items mainly
for which an evaluation at fair value is needed. The most important adoptions of exercise of
judgment and use of estimates occur in:
(a)
Fair value of financial instruments
When the fair value of financial asset and liabilities accounted for cannot be derived from an
active market, it is determined using valuation techniques that include the use of mathematical
models. The variables of these models are derived from data observable in the market
whenever possible, but when the market data is not available, a judgment is necessary to
establish the fair value.
(b)
Impairment of financial assets available for sale
The Bank considers that there exists impairment loss of its financial assets available for sale
upon occurrence of a significant or prolonged decline in its fair value to below cost. Such
determination of what is significant or prolonged requires judgment in which the Bank evaluates,
among other factors, the ordinary volatility of prices of financial instruments. In addition, the
recognition of impairment loss may be appropriate whenever there is evidence of a negative
impact in the financial health of the investee company, the performance of the economic sector,
changes in technology and in financing and operating cash flows.
Additionally, impairment evaluations take into consideration in its preparation the market prices
(mark to market) or evaluation models (mark to model ), which require utilizat ion of certain
assumptions or judgments in establishing fair value estimates.
(c)
Impairment of non-financial assets
It is annually evaluated, based on internal and external sources of information, if there is any
indication that a non-financial asset may have recoverability problems. If such indication exists,
estimates are used to define the asset recoverable value.
Annually it is evaluated if there is any indication that a loss for reduction to the recoverable
value recognized in prior periods for an asset, except for the goodwill for expectation of future
profitability, may no longer exist or may have decreased. If there is such indication, the
recoverable value of such asset is estimated.
Irrespective of any indication of reduction in the recoverable value, the impairment test of an
intangible asset with indefinite useful life is made every year, including goodwill acquired in a
business combination, or an intangible asset not yet available for use.
The determination of the recoverable value in the valuation of impairment of nonfinancial assets
requires estimates based on prices quoted in the market, calculations of present value or other
pricing techniques, or a combination of several techniques, requiring Management to make
subjective judgments and to adopt assumptions.
(d)
Income taxes
Since the corporate object of the Company is to obtain profits, the income generated is subject
to income tax payment in the various jurisdictions where the Bank conducts its operating
activities. Determination of the global amount of income taxes requires certain interpretations
and estimates. There are several transactions and calculations for which determination of the
final value of tax payable is uncertain during the ordinary cycle of business. Other
interpretations and estimates could result in a different value of income taxes recognized in the
period.
Tax authorities may review the procedures adopted by the Company during a period of five
years from the date in which taxes are deemed to be due. Hence, it is likely that such tax
authorities may question procedures adopted by the Company, mainly those arising from
differences in interpreting tax legislation. However, the Management believes that there will be
no significant adjustments in income taxes stated in the consolidated financial statements.
(e)
Recognition and evaluation of deferred taxes
Deferred tax assets are calculated on temporary differences and on tax loss carryforwards, and
are accounted for whenever the Company expects to generate taxable profit in subsequent
years in amounts sufficient to offset such values. The expected realization of the Company's tax
credit is based on the projection of future income and on technical analysis, in line with the
prevailing tax legislation.
The estimates considered by the Company for the recognition and valuation of deferred taxes
are reviewed based on current expectations and projections of future events and trends. The
main assumptions found by the Company that could affect these estimates are related to factors
such as (i) changes in the governmental regulation affecting tax issues; (ii) changes in the
interest rates; (iii) changes in inflation rates; (iv) adverse lawsuits or legal disputes; (v) credit
and market risks and other risks arising from credit and invest ment activities; (vi) changes in
internal and external economic conditions.
(f)
Technical provisions of liabilities from insurance contracts
Technical and mathematical provisions related to insurance contracts and pension funds of the
investees and affiliates companies of the Company are recognized according to standards
established by the National Council of Private Insurance (Conselho Nacional de Seguros
Privados - CNSP) for insurance and pension. The values are determined based on methods
and hypotheses defined by the actuary and validated by Management, reflecting the current
value of the best estimate, on the calculation base date, of future obligations derived from the
insurance and private pension agreements.
At each period of presentation, the suitability of their liabilities is analyzed for all the agreements
that meet the definition of insurance agreement and which are in effect on the execution date.
This procedure, classified as test of suitability of liabilities, considers as net book value the
liabilities of insurance agreements less deferred selling expenses and related intangible assets.
For the preparation of this test, actuarial methodology was used to estimate the present value of
all the future cash flows based on actuarial assumptions valid on the testing date. In this test,
the contracts are grouped with a basis on the similar risks or when the insurance risk is
managed in conjunction by Management.
The main assumptions adopted by the insurers for performing the liability adequacy test were
the following: (i) discount rate adopted for bringing the projected flows to present value; (ii) loss
ratio, administrative expenses, acquisition costs, cancellation, future contributions, partial
redemptions and conversions into income based on performance history; and (iii) mortality and
survivorship follow biometric tables specifically drawn up based on Brazilian insurance market
experience.
(g)
Provisions and contingent liabilities
Contingent liabilities are recognized in the financial statements when, based on the opinion of
legal advisor and Management, the risk of loss of legal or administrative proceedings is
considered probable, with a probable outflow of financial resource for the settlement of
obligation and when the amounts involved are measurable with sufficient assurance, and
judicial figures when reporting monthly and revised.
10.6 - Internal controls relating to the preparation of financial statements Efficiency and deficiency level and recommendations in the auditor's report
(a) efficiency level of such controls, indicating eventual imperfections and actions to
correct them
The Management of BB Seguridade, a wholly-owned subsidiary of Banco do Brasil,
incorporated on December 20, 2012, is in charge of defining, maintaining and improving internal
controls in connection with the financial statements so these financial statements will be free of
material misstatements.
These controls are based on policies and procedures put in place in place to assure, with a
reasonable degree of comfort, that the financial statements do not contain data and/or
comments likely to induce investors into error.
The Internal Controls Policy, approved at the level of the Company’s Board of Directors, is an
integral part of the General Policy on Operating Direction, which also comprise the Risks and
Insurance Policies.
This strategic direction is an evidence of the Company’s alignment with the practices and
principles in the development of internal control actions, following the applicabl e legal provisions
and regulation; and its commitment to the implementation of internal controls in all levels,
according to the nature, complexity and risks of the performed activities and operations.
However, owing to inherent limitations, the internal c ontrols related to the financial statements
may not avoid or detect errors timely. Even recognized and deemed to be efficient systems can
only provide reasonable security on the preparation and disclosure process of the financial
statements.
Management assessed the efficacy of internal controls regarding the consolidated financial
statements as of December 31, 2013 and concluded with a reasonable degree of comfort that
internal controls are adequate.
(b) deficiencies and recommendations on
independent auditor's report:
internal
controls addressed
on
the
In its opinion without exceptions on the Financial Statements for the year ended December 31,
2013, Ernst & Young Auditores Independentes S.S. did not express anything about having
observed any weakness that would involve the internal controls structure and its operation, or
that would consider the weakness material as to the internal controls related to the financial
statements.
10.7 – Comments by Directors on the allocation of resources from public
distribution offerings and possible deviations
Not applicable, as the Company has not raised funds in the market by means of public
distribution offerings of securities.
10.8 - Relevant items not included in the financial statements of BB Seguridade
On the date of this Reference Form, the Company did not have
not evidenced in its balance sheets: operating leases, written
which the entity maintains risks and liabilities, future sale and
or services, non-concluded building agreements and future loan
the following assets or liabilities
down receivables portfolios over
purchase agreements for goods
agreements.
BB Seguridade does not have off-balance sheet assets and liabilities.
10.9 Comments by Directors on items not shown in the financial statements
BB Seguridade does not have off-balance sheet assets and liabilities.
10.10 - Main elements of BB Seguridade's business plan
(a)
Investments
(i)
Quantitative and qualitative description of ongoing and forecast investments
There is no expectation of material investments for the following years.
The Company announced the signature of the agreement with Odontoprev for operation in
dental plans segment, described in item 10.3, which will not result in significant investments or
in material changes in its equity structure.
In November 2013, BB Seguridade and Empresa Brasileira de Correios e Telégrafos – ECT
signed a Memorandum of Understanding, without binding effect, to perform studies and assess
the viability of establishing a partnership for marketing insurance, private plan and premium
bonds products in the ECT branches.
In addition, the Company is studying alternatives for the distribution of health insurance
products, and has been developing Credit Life Insurance type of products targeted at
companies.
It should be mentioned that BB Seguridade is always considering alternatives to expand its
operations in its target markets (insurance, reinsurance, private pension, premium bonds and
distribution of insurance, private plan and premium bonds products). In case opportunities are
found, these will be strictly evaluated, considering the attractiveness and the involved risks,
particularly in view of the business under evaluation and market conditions.
(ii)
Investment funding sources
The Company intends to finance its investments with its own funds.
(iii)
Material ongoing and forecast divestitures
Not applicable, as BB Seguridade has no relevant disinvestments in progress and none under
consideration.
(b)
provided that already disclosed, report the acquisition of plants, equipment,
patents or other assets which shall significantly impact the production capacity of the
issuer
The Company did not acquire any plants, equipment, patents, or other assets which m aterially
influenced its productive capacity.
(c)
new products and services, informing:
(i)
description of the research under development already disclosed;
Not applicable, as the Company has no research in progress that it has disclosed.
(ii)
total amounts spent by the issuer on research to develop new products or
services;
Investments with market research for new product or service development are undertaken by
the operating companies.
(iii)
projects under development already disclosed; and
Not applicable, as the Company has no projects in progress that it has disclosed.
(iv)
total amounts spent by the issuer to develop new products or services.
Investments for new product or service development are undertaken by the operating
companies.
10.11 - Other factors which had a material impact on operating performance
Section 10.2 shows an analysis of the result achieved by BB Seguridade in 2013, its first year of
operations. In that section, for purposes of comparability and better understanding of the
operating performance of BB Seguridade, the combined financial information for 2012 was
included.
In this section, also for comparability purposes the combined financial information for 2012,
2011 and 2010, included in the Reference Form presented in 2013, is maintained.
The combined financial statements audited were prepared in accordance with the International
Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board
(IASB).
The combined financial statements are being presented solely for the purpose of providing,
through only one financial statement, of information related to BB Seguridade's operating
activities as a whole, regardless of its corporate structure and financial statement presentat ion
requirements defined by regulatory agencies.
There are no other factors which had a material impact on operating performance and which
were not mentioned in this section.
Combination criteria
The combined financial statements of the BB Seguridade Group include the financial
statements of BB Seguridade, consolidated financial statements of BB Seguros, and financial
statements of BB Corretora, BB Capitalização and BB Cor.
Balances regarding intra-group transactions as well as any unrealized revenues or ex penses in
combined inter-company transactions, are eliminated when preparing combined financial
statements. Unrealized gains originating from transactions with investees recorded using the
equity method are eliminated against the investment in the proportion of the BB Seguridade's
share in the investee.
The combined financial statements are submitted in order to support additional analyses on the
Company’s operations and do not represent the individual or consolidated financial statements
of BB Seguros and its affiliates companies, nor of BB Corretora, and should not be taken as a
basis for calculating dividends, taxes or for other corporate purposes or performance analysis.
BB Seguridade’s combined financial statements include the BB Seguros and BB Corretora
consolidated financial statements, as described in the table that follows:
Total share
Decem ber 31
Activity
2010
2011
2012
BB Seguridade Participações S.A.
Holding
--
--
100%
BB Seguros Participações S.A.
Holding
100%
100%
100%
Premium bonds
100%
100%
100%
BB Cor Participações S.A.
Holding
--
--
100%
BB Corretora e Adm. de Bens S.A.
Broker
100%
100%
100%
BB Aliança Participações S.A.(2)
Holding
100%
--
--
Insurance
company
100%
--
--
Insurance
company
100%
--
--
Holding
100%
--
--
Insurance
company
100%
--
--
Nossa Caixa Capitalização S.A.
Companhia de Seguros
Brasil(2)
(1)
Aliança do
Aliança do Brasil Seguros S.A.(3)
BB Aliança Rev Participações S.A.
(3)
Brasilveículos Companhia de Seguros
S.A. (3)
(1) Inv estment held by BB Seguros Participações S.A.
(2) Corporate share disbursed to create BB Mapf re SH1 Participações S.A., on entering into a partnership with Mapf re.
(3) Corporate share disbursed to create BB Mapf re SH2 Participações S.A., on entering into a partnership with Mapf re.
During the 2010 fiscal year, the BB Seguridade Group had corporate share in its operating
subsidiaries Aliança do Brasil, Brasilveículos and AB Seguros. The combination of these
investments is reflected line by line in the Combined balance sheet and in the Combined
Statement of Income for that fiscal year.
During the 2011 fiscal year the corporate share in these operating subsidiaries were transferred
to create the holding companies BB Mapfre SH1 and Mapfre BB SH2, which were then
assessed under the equity accounting method. For this reason, a comparative analysis of
information contained in these combined financial statements should consider this corporate
reorganization.
Below follows the list of corporate interests held by BB Seguros during the periods covered by
the combined financial statements.
Share in total capital in
Decem ber 31
2010
2011
2012
Direct
Indirect
Direct
Indirec
t
Direct
Indirect
49.99%
--
66.66%
--
66.66%
--
74.99%
--
74.99%
--
74.99%
--
49.00%
--
49.00%
--
--
74.99%
--
--
74.99%
--
74.99%
--
100.00%
--
--
74.99%
--
--
Companhia de Seguros Aliança do Brasil(3)
--
100.00%
--
74.99%
--
74.99%
Mapfre Participações Ltda.(5)
--
--
--
74.99%
--
--
Mapfre Vida S.A.
--
--
--
74.99%
--
74.99%
Vida Seguradora S.A.
--
--
--
74.99%
--
74.99%
Mapfre BB SH2 Participações S.A.
--
--
50.00%
--
50.00%
--
100.00%
--
--
50.00%
--
--
Brasilveículos Companhia de Seguros
--
100.00%
--
50.00%
--
50.00%
Aliança do Brasil Seguros S.A.(4)
--
100.00%
--
50.00%
--
50.00%
Mapfre Seguros Gerais S.A.
--
--
--
50.00%
--
50.00%
Mapfre Affinity Seguradora S.A.
--
--
--
50.00%
--
50.00%
Mapfre Assistência S.A.
--
--
--
50.00%
--
50.00%
Brasilcap Capitalização S.A.
Brasilprev Seguros e Previdência S.A.
Mapfre Nossa Caixa Vida e Previdência S.A.
BB Mapfre SH1 Participações S.A.
Aliança Participações S.A.
(2)(5)
Aliança Rev Participações S.A.(6)
(1)
(2)
(3)
(4)
(5)
(6)
(1)
Inv estment made by Banco do Brasil in BB Aliança on January 28, 2011;
Inv estment made by Banco do Brasil in BB Seguros on February 25, 2011;
Inv estment held by BB Aliança since 2009;
Inv estment held by Aliança do Brasil since 2009;
Inv estment absorbed in 2012 by the BB Mapf re SH1 holding company ;
Inv estment absorbed in 2012 by the BB Mapf re SH2 holding company .
BB Corretora has no investments in other companies.
Accordingly, we show below the items of Section 10 of this form based on the combined
financial statements of the Company:
See below the subitems of section 10.1 based on the combined financial statements of
the BB Seguridade Group:
a) General financial and equity conditions
In 2012, the BB Seguridade Group reported a net income, based on the combined statements
of profit or loss, of R$1,240 million. As of December 31, 2012, the s hareholders’ equity
amounted to R$5,637 million, while the balance of assets amounted to R$7,291 million.
In 2011, the BB Seguridade Group reported a net income, based on the’combined statements of
profit or loss, of R$1,629 million. As of December 31, 2011, the shareholders’ equity amounted
to R$5,016 million, while the assets balance was R$6,096 million.
b) Capital structure and possibility of redemption of shares or quotas
The following table presents the breakdown of the Company's capital structure between own
capital and liabilities, based on the combined balance sheets:
As of December 31,
R$ thousand
2010
Breakdow n %
2011
Breakdow n %
2012
Breakdow n %
Liabilities
4,463,029
57.9
1,080,655
17.7
1,654,237
22.7
Shareholders’ Equity
3,248,163
42.1
5,015,683
82.3
5,636,754
77.3
Total liabilities and
Shareholders’ Equity
7,711,192
100.0
6,096,338
100.0
7,290,991
100.0
In relation to the possibility of redemption of shares or quotas, see Section 10.1.b of this
Reference Form.
c) Payment ability in relation to the financial commitments assumed
An analysis based on the combined financial statements is not applicable to this item. See
section 10.1.c of this Reference Form.
d) Sources of financing for working capital and for investments in non -current
assets used
An analysis based on the combined financial statements is not applicable to this item. For
further information, see the Section 10.1.d of this Reference Form.
e) Sources of financing for working capital and for investments in non -current
assets that it intends to use for coverage of liquidity
further information, see the Section 10.1.e of this Reference Form.
f)
Indebtedness levels and characteristics of such de bts
further information, see the Section 10.1.f of this Reference Form.
g) Limits of use of the financings already contracted
further information, see the Section 10.1.g of this Reference Form.
h) Significant changes in each item of the financial statements
Combined Income Statements
Year ended at Decem ber 31,
R$ thousand
2010
2011
2012
1,985,769
1,666,909
1,928,971
Revenue from commissions
97,490
903,099
1,036,355
Equity Income
309,621
763,810
892,616
Insurance operations
1,578,658
--
--
Retained premiums
3,820,724
--
--
Reinsurance ceded
(276,990)
--
--
Net Premiums w ritten
3,543,734
Changes in technical provisions
(268,736)
--
--
(1,402,862)
--
--
Selling expenses
(61,581)
--
--
Other operating income and expenses
(231,897)
--
--
(21,034)
122,041
(510,789)
Revenues w ith interest from financial instruments
347,661
48,197
76,918
Others Income
679,013
802,891
72,297
Personnel expenses
(114,013)
(16,569)
(18,588)
Administrative expenses
(678,569)
(639,789)
(543,017)
Other expenses
(255,126)
(72,689)
(98,399)
Income (loss) before taxes
1,964,735
1,788,950
1,418,182
Taxes
(507,445)
(159,913)
(178,070)
Current
(372,725)
(79,591)
(176,787)
Deferred
(134,720)
(80,322)
(1,283)
Net income for the year
1,457,290
1,629,037
1,240,112
Operating Income
Retained claims
Source: Combined Financial Statements under IFRS
Operating Income
Operating revenues refer to revenues from:

net income from commissions: income arising from brokerage fees in the sale of
insurance, private pension plans and premium bonds, besides other kinds of services;
and

income from investments in equity: revenues from Company’s share in operating
companies.
Operating revenues totaled R$ 1,929 million by year-end 2012, and 15.7% rise as compared to
2011.
In 2011, operating revenues totaled R$1,667 million, down 16.1% in c omparison with the sum of
R$1,986 million in 2010.
Please see below details of the changes in each of the lines that compose these revenues:
Income from commissions
Revenues with commissions rose to R$ 1,036 million in 2012, a 14.8% increase as compared to
2011. A large part of this growth is explained by the fact that the partnership with Mapfre,
responsible for an expressive portion of net revenues from commissions, began to produce
results as of June 2011, while 2012 was impacted positively by this partnership’s beneficial
effect.
In 2011, revenues from commissions totaled R$ 903 million, a 826.4% rise as compared to the
total sum for 2010. During 2010, BB Seguridade Group had wholly -owned in its operating
subsidiaries Aliança do Brasil, Brasilveículos and AB Seguros, which expenses with the sale of
insurance are born by BB Corretora. Hence, for fiscal year 2010 revenues from commissions on
the sale of insurance by BB Corretora were eliminated with the sales expenses by those
operating subsidiaries. As of 2011, the corporate shares in the operating subsidiaries were
transferred to create the holding companies BB Mapfre SH1 and Mapfre BB SH2, which
changed the manner of assessing these investments. For this reason, a comparative analysis of
information contained in these combined financial statements should consider this corporate
reorganization.
We show below the breakdown of revenues from commissions:
Year ended at December 31,
In thousands of reais
2010
2011
2012
71,253
868,478
1,001,459
BB Mapfre SH1
-
515,790
630,779
Mapfre BB SH2
-
266,847
267,729
Brasilprev
36,656
43,364
53,759
Brasilcap
32,901
39,973
47,202
Other companies
1,696
2,504
1,990
Service to encourage marketing of products
22,557
29,723
30,043
Other services
3,680
4,898
4,853
Total
97,490
903,099
1,036,355
Comissions
Income from Investments in Equity
Revenues from investments in equity amounted to R$ 893 million in 2012, a growth of 16.9% as
compared to R$ 764 million in revenues recorded in 2011.
Please see below details of the composition of investments in equity, as well as changes in the
lines that make up these revenues:
In R$ thousands (except percentages)
2011
2012
Chg.% 12/11
295,083
485,406
64.5
(124,773)
(36,826)
(70.5)
289,269
330,956
14.4
79,277
112,083
41.4
Mapfre Nossa Caixa Vida e Previdência
S.A.(2)
1,705
997
(41.5)
178,471
--
(100.0)
44,778
--
(100.0)
(1)
BB Aliança Participações S.A. (3)
(3)
Source: Explanatory Notes f or the combined IFRS f inancial statements.
Notes:
(1) Due to the special condition of distribution of div idends, the BB Seguridade Group did not recognize equity in the earnin gs of
subsidiary and associated companies during the y ear 2011. This option prev ailed until August/2012, when there was the ef f ectiv e
distribution of div idends. There are no other conditions that prev ent the BB Seguridade Group f rom recording equity in the ea rnings of
subsidiary and af f iliated companies hereaf ter.
(2) Inv estment disposed of on July 31, 2012 to Brasilprev .
(3) Inv estments transf erred to create the BB Mapf re SH1 and Mapf re BB SH2 holding companies, respectiv ely . The inv estments we re
consolidated by the Group up to the signature date of the Mapf re partnership agreement.
BB Mapfre SH1: revenues under the equity accounting method by BB Mapfre SH1 totaled R$
485 million in 2012, a 64.5% increase as compared to the 2011 figures. Please note that the
partnership with Mapfre was started in June 2011. Hence, the 2012 and 2011 are not
comparable.
The next table reflects the chief performance indicators by BB Mapfre SH1 based on
performance by group companies over the 2011 and 2012 fiscal years:
BB Mapfre SH1
In R$ m illion
2011
2012
Earned premiums
3,049
3,349
(1,182)
(1,221)
Selling expenses
(790)
(835)
Gross margin
1,078
1,294
38.7%
36.4%
25.9%
24.9%
35.4%
38.6%
80.9%
79.9%
73.9%
73.3%
Expenses w ith claims
Loss ratio(1)
Commission ratio
(2)
Gross Margin(3)
Combined ratio
(4)
Expanded combined ratio(5)
Source: Combined Financial Statements under IFRS – Note 10
Notes:
(1) Expenses with claims / earned premiums
(2) Acquisition costs/premiums earned
(3) (Claims + acquisition costs) / earned premiums
(4) (Claims + sales expenses + other operating rev enues (expenses) + administrativ e expenses + tax expenses) / premiums earned
(5) (Claims + sales expenses + other operating rev enues (expenses) + administrativ e expenses + tax expenses) / (premiums earn ed +
f inancial income) | does not include income f rom priv ate pension operations.
Mapfre BB SH2: in 2012, Mapfre BB SH2 recorded loss of R$36.8 million, against a negative
result of R$ 124.7 million in 2011, resulting in negative equity for BB Seguros. This performance
is explained by the fact that in order to equalize the share by Banco do Brasil and Mapfre in
Mapfre BB SH2, a special class was attributed to the preferred shares held by Mapfre in this
holding company, with the prerogative to receive fixed accrued priority dividends up to R$ 309.5
million, updated for inflation with the CDI index, from the date of entry of BB Seguros into
Mapfre BB SH2 in June 2011 and the dividend payout dates. The dividends paid out by Mapfre
BB SH2 for 2012 were sufficient to end the prerogative granted and this special class of
preferred shares, so that the preferred shares held by Mapfre in Mapfre BB SH2 were then
entitled to share in the Company’s profits under equal conditions with the preferred shares held
in that company by BB Seguros. Please note that the partnership with Mapfre was started in
June 2011.
The next table reflects the chief performance indicators by Mapfre BB SH2 based on
performance by subsidiaries of Mapfre BB SH2 over 2011 and 2012:
Mapfre BB SH2
In R$ millions, except percentages
2011
2012
Earned premiums
5,170
5,566
Expenses w ith claims
(2,970)
(3,131)
Selling expenses
(1,354)
(1,399)
846
1,037
57.4%
56.2%
26.2%
25.1%
16.4%
18.6%
100%
99.1%
96.1%
93.6%
Gross margin
Loss ratio(1)
Commission ratio
(2)
Gross Margin(3)
Combined ratio (4)
Expanded combined ratio
(5)
Source: Combined Financial Statements under IFRS – Note 10
Notes:
(1) Expenses with claims / earned premiums
(2) Selling expenses / earned premiums
(3) (Claims + selling expenses) / earned premiums
(4) (Claims + sales expenses + other operating rev enues (expenses) + administrativ e expenses + tax expenses) / premiums earned
(5) (Claims + sales expenses + other operating rev enues (expenses) + administrativ e expenses + tax expenses) / (premiums earn ed +
f inancial income)
Brasilprev: revenues under the equity accounting method by Brasilprev totaled R$ 331 million
in 2012, a 14.4% increase as compared to 2011. This increase is explained chiefly by the
growth of revenues with management fees and others, that arose from the average volume
increase of funds captured in 2012.
Brasilcap: Brasilcap’s revenues under the equity accounting method rose to R$ 112 million in
2012, a 41.4% expansion as compared to 2011, which resulted from an increased interest by
BB Seguros Participações in Brasilcap’s equity capital, from 49.99% to 66.66% in July 2011.
Looking at the company’s profit figure on their own, net revenues for 2012 were R$ 165 million
in 2012, a 27.3% growth as compared to 2011. This variation results mainly from the growth of
41.5% in net revenue from premium bonds in 2012.
Mapfre Nossa Caixa Vida e Previdência: revenues under the equity accounting method by
Mapfre Nossa Caixa Vida e Previdência dropped to R$ 997 thousand in 2012, as against R$ 1.7
million in 2011. This decline is due chiefly to the partial spin-off on February 28, 2011, through a
segregation of assets, rights and liabilities in connection with individual insurance, which were
entirely absorbed by Vida Seguradora. This corporate action was a part of the first steps to
create Grupo Segurador BB Mapfre. Please note that following this spin-off, Mapfre Nossa
Caixa preserved only the assets, rights and liabilities with regard to its private pension portfolio,
which as of the merger of Banco Nossa Caixa by Banco do Brasil no longer sells new plans and
operates only in the management (and renewal) of existing plans.
BB Aliança Participações: revenues under the equity accounting method totaling R$ 178
million in 2011 were found from January to May 2011, during which period BB Seguros held
total equity control over this company, which in turn held total equity control over Companhia de
Seguros Aliança do Brasil. As of June 2011 investments in these companies were allocated in
order to create the holding company BB Mapfre SH1. Hence, from then on the income figures of
BB Aliança Participações were assessed under the equity accounting method by means of BB
Mapfre SH1.
BB Aliança Rev Participações: revenues under the equity accounting method of R$ 45 million
in 2011, were found from January to May 2011, during which period BB Seguros held total
equity control over this company, which in turn held total equity control over Brasilveículos and
Aliança do Brasil Seguros. As of June 2011 investments in these companies were allocated in
order to create the holding company Mapfre BB SH2. Hence, from then on the income figures of
BB Aliança Rev Participações were assessed under the equity accounting method by means of
Mapfre BB SH2.
In 2011 revenues from investments in equity holdings rose to R$ 764 million, a 146.7% rise as
compared to R$ 310 million in revenues stated in 2010. During 2010, BB Seguridade Group
held total equity control over the operating subsidiaries Aliança do Brasil, Brasilveículos and AB
Seguros, which revenues from investments were eliminated in the combination process and
was not repeated in the following years. As of the 2011, the corporate interests in these
operating subsidiaries were transferred to create the holding companies BB Mapfre SH1 and
Mapfre BB SH2, which changed the manner of assessing thes e investments. For this reason, a
comparative analysis of information contained in these combined financial statements should
consider this corporate reorganization.
Please see below the key changes in the lines that compose revenues from investments in
equity interests, in a comparison between 2012 and 2011:
In R$ thousands (save for percentages)
2010
2011
Chg.% 11/10
--
295,083
--
--
(124,773)
--
200,997
289,269
43.9
51,273
79,277
54.6
Mapfre Nossa Caixa Vida e Previdência
S.A.(2)
58,473
1,705
(97.1)
--
178,471
--
--
44,778
--
(1,122)
--
(100.0)
(1)
BB Aliança Participações S.A. (3)
(3)
Brasilsaúde Companhia de Seguros
(4)
Source: Explanatory Notes f or the combined IFRS f inancial statements.
Notes:
(1) Due to the special condition of distribution of div idends, the BB Seguridade Group decided not to recognize equity in the earnings
during the y ear 2011. This option prev ailed until August 2012, when there was the ef f ectiv e distribution of div idends. Th ere are no other
conditions that prev ent BB Seguridade Group f rom recording equity in the earnings of subsidiary and associated companies here af ter.
(2) Inv estment disposed at July 31, 2012 to Brasilprev .
(3) Inv estments transf erred to create the BB Mapf re SH1 and Mapf re BB SH2 holding companies, respectiv ely . The inv estments were
consolidated by the BB Seguridade Group up to the signature date of the Mapf re partnership agreement.
(4) Inv estment disposed of in July 2010.
BB Mapfre SH1: revenues under the equity accounting method by BB Mapfre SH1 totaled R$
295 million in 2011. As this partnership began in June 2011, in 2010 there were no revenues
under the equity accounting method for this company.
Mapfre BB SH2: in 2011, revenues under the equity accounting method by Mapfre BB SH2 was
negative at R$ 125 million. As this partnership began in June 2011, in 2010 there were no
revenues under the equity accounting method for this company.
Brasilprev: revenues under the equity accounting method by Brasilprev tot aled R$ 289 million
in 2011, a 43.9% increase as compared to the 2010 figures. This growth is basically resulting
from the following factors: (i) increase in the interest of BB Seguros Participações in the capital
of Brasilprev, from 49.99% to 74.99%, in May 2010; (ii) growth of revenues with management
fees and others, that arose from the average volume increase of funds raised in 2011; (iii) of the
increase in revenue from contribution and premiums; and (iv) the development of financial
result, substantially influenced by the growth in the financial income from exclusive financial
investment funds tied to PGBL and VGBL.
Brasilcap: revenues under the equity accounting method by Brasilprev totaled R$ 79 million in
2011, a 54.6% increase as compared to 2010. The growth noted in the comparative is
essentially resulting from the following factors: (i) increase in the interest of BB Seguros in the
capital of Brasilcap from 49.99% to 66.66% in July 2011; (ii) growth of 81.6% in the financial
result; and (iii) growth of 17.3% in net revenue from premium bonds.
Mapfre Nossa Caixa: revenues under the equity accounting method by Mapfre Nossa Caixa
Vida e Previdência dropped to R$ 1.7 million 2011, as against R$ 58 million in 2010. This
decline is due chiefly to the partial spin-off on February 28, 2011, through a segregation of
assets, rights and liabilities in connection with individual insurance, which were entirely
absorbed by Vida Seguradora. This corporate action was a part of the first steps to create
Grupo Segurador BB Mapfre. Please note that following this spin-off, Mapfre Nossa Caixa
preserved only the assets, rights and liabilities with regard to its private pension portfolio, which
as of the merger of Banco Nossa Caixa by Banco do Brasil no longer sells new plans and
operates only in the management (and renewal) of existing plans.
BB Aliança Participações: revenues under the equity accounting method totaling R$ 178
million in 2011 were found from January to May 2011, during which period BB Seguros held
total equity control over this company, which in turn held total equity control over Companhia de
Seguros Aliança do Brasil. These companies’ income figures in 2010 were combined line by line
in the combined income statements.
BB Aliança Rev Participações: revenues under the equity accounting method of R$ 45 million
in 2011, were found from January to May 2011, during which period BB Seguros held total
equity control over this company, which in turn held total equity control over Brasilveículos and
Aliança do Brasil Seguros. These companies’ income figures in 2010 were combined line by line
in the combined income statements.
Insurance operations
Insurance operations totaled R$ 1,579 million in 2010, due to transactions by the operating
subsidiaries Aliança do Brasil, Brasilveículos and AB Seguros. In 2010 the BB Seguridade
Group held total equity control over these subsidiaries. As of the 2011, the corporate interests in
these operating subsidiaries were transferred to create the holding companies BB Mapfre SH1
and Mapfre BB SH2, which changed the manner of assessing these investments. For this
reason, a comparative analysis of information contained in these combined financial statements
should consider this corporate reorganization.
The item other operating revenues and expenses includes (i) interest received from
investments; (ii) other revenues; (iii) personnel expenses; (iv) administrative expenses; and (v)
other expenses.
The total sum of other income and expenses was a net expense of R$511 million in 2012,
against income of R$122 million in 2011.
In 2011, the result of other income and expenses was net income of R$122 million, against net
expense of R$21 million in 2010. These changes had the contribution of:
a) Revenues with interest from financial instruments
Interest received from financial instruments totaled R$ 77 million in 2012, a 59.6% rise as
compared to 2011. This change is explained chiefly by the 64.3% rise in interest received
from investments in buy-back transactions.
Interest received from financial instruments in 2011 totaled R$ 48 million, an 86.1% decline
as compared to 2010. This change is due to the fact that during 2010 BB Seguridade
Group held complete equity control over the operating subsidiaries Aliança do Brasil,
Brasilveículos and AB Seguros. As of the 2011, the corporate interests in these operating
subsidiaries were transferred to create the holding companies BB Mapfre SH1 and Mapfre
BB SH2, which changed the manner of assessing these investments. For this reason, a
comparative analysis of information contained in these combined financial statements
b) Other income
Other revenues totaled R$ 72 million in 2012, a 91.0% decline as compared to 2011. We
found that this line was affected positively by R$ 792 million in 2011 owing to gains derived
from the Mapfre partnership. This gain refers to the deconsolidating process of the
businesses transferred and recognition of the new interest at fair value, accounted in
accordance with SIC 13, which provides that when applying IAS 31.48 to non-monetary
contributions in exchange for an equity interest, investors will recognize in the period’s
profit figures a portion of the gain or loss attributable to the equity interests of other
investors. There was also a positive impact in 2012, yet in a much smaller scale, of R$ 70
million due to gains in the disposal of Mapfre Nossa Caixa e Previdência to BrasilPrev.
In 2011 other revenues totaled R$ 803 million, a 18.2% expansion as compared to 2010.
As explained in the previous paragraph, this line was affected positively by R$ 792 million
in 2011 owing to gains derived from the Mapfre partnership. In 2010, a gain of R$555
million was recorded referring to the acquisition of Brasilveículos’ control and a capital gain
in the amount of R$114 million corresponding to the increase in the interest in Brasilprev
from 49.99% to 74.99%.
c) Personnel expenses
The personnel expenses line is a result of BB Corretora’s and BB Seguros’ expenses, most
part of which comes from BB Corretora. In 2012, personnel expenses rose to R$ 19 million,
a 12.2% rise as compared to R$ 17 million in expenses with personal in 2011. This change
is explained chiefly by the rise in expenses caused by salary readjustments.
In 2011, personnel expenses R$ 17 million, an 85.5% decline as compared to 2010. This
change is due to chiefly to the fact that during 2010 the BB Seguridade Group held
complete equity control over the operating subsidiaries Aliança do Brasil, Brasilveículos
and AB Seguros, and the results of these companies were combined line by line in the
combined statement of income. As of 2011, the corporate interests in these operating
subsidiaries were transferred to create the holding companies BB Mapfre SH1 and Mapfre
BB SH2, which changed the manner of assessing these investments and that were then
assessed under the equity accounting method. For this reason, a comparative analysis of
information contained in these combined financial statements should consider this
corporate reorganization.
d) Administrative expenses
Practically the entire administrative expenses are a result of expenses by BB Corretora. In
2012 administrative expenses rose to R$ 543 million, a 15.1% drop as compared to sum
recorded in 2011. This variation mainly arises from the decrease in the expenses of
remuneration to the branches of Banco do Brasil, paid by BB Corretora, which changed
from 67.58% of revenue in 2011 to 40.21% of revenue in 2012, deducted from the
expenses necessary for generating this gain .
In 2011 administrative revenues totaled R$ 640 million, a 5.7% decline as compared to
2010. This change is due to chiefly to the fact that during 2010 the BB Seguridade Group
held complete equity control over the operating subsidiaries Aliança do B rasil,
Brasilveículos and AB Seguros, and the results of these companies were combined line by
line in the combined statement of income. As of 2011, the corporate interests in these
operating subsidiaries were transferred to create the holding companies BB Mapfre SH1
and Mapfre BB SH2, which changed the manner of assessing these investments and that
were then assessed under the equity accounting method. For this reason, a comparative
analysis of information contained in these combined financial statements s hould consider
this corporate reorganization.
e) Other expenses
Other expenses increased by R$ 25 million, from R$ 73 million in 2011 to R$ 98 million for
2012. This change arose from: (i) the R$ 8 million increase in tax and levies expenses and
(ii) the R$ 17 million increase in other operating expenses.
A comparison of the 2011 year with that of 2010, there was a R$ 182 million drop, from R$
255 million to R$ 73 million in 2011, based mainly on the fact that during the 2010 the BB
Seguridade Group held complete equity control over the operating subsidiaries Aliança do
Brasil, Brasilveículos and AB Seguros, and the results of these companies were combined
line by line in the combined statement of income. As of 2011, the corporate interests in
these operating subsidiaries were transferred to create the holding companies BB Mapfre
SH1 and Mapfre BB SH2, which changed the manner of assessing these investments and
that were then assessed under the equity accounting method. For this reason, a
comparative analysis of information contained in these combined financial statements
Income before taxes
As a result of reasons previously mentioned, earnings before taxes was R$1,418 million in
2012, a 20.7% reduction in relation to the income recorded in 2011.
Profit before taxes totaled R$ 1,789 million in 2011, an 8.9% drop as compared to 2010 profit
figure.
Taxes
The taxes line includes current taxes and deferred taxes, both of which are recognized directly
in the income figures, save when they relate to items directly recognized in shareholders' equity.
Expenses with current taxes refers to income tax and social contributions payable or
recoverable, with regard to the period’s taxable income.
Expense with deferred taxes refers to tax assets and liabilities recoverable and payable in the
future, respectively. Deferred tax liabilities are a result of taxable temporary differences, and
deferred tax assets result from deductible temporary differences and future offsetting of unused
tax losses.
In 2012, as tax expenses amounted to R$178 million, an 11.4% increase when compared to the
R$160 million expended in 2011, due to higher expenses with current taxes in the period.
In 2011, expenses with taxes rose totaled R$ 160 million, a 68.5% drop as compared to R$ 507
million in expenses stated in 2010. This change is due to chiefly to the fact that during 2010 the
BB Seguridade Group held complete equity control over the operating subsidiaries Aliança do
Brasil, Brasilveículos and AB Seguros, and the results of these companies were combined line
by line in the combined statement of income. As of 2011, the corporate interests in these
operating subsidiaries were transferred to create the holding companies BB Mapfre SH1 and
Mapfre BB SH2, which changed the manner of assessing these investments and that were then
assessed under the equity accounting method.
Net income
Resulting from the reasons above mentioned, BB Seguridade Group reached a net income of
R$1,240 million in 2012, a 23.9% decrease in relation to the net income of R$1,629 million in
2011.
In 2011, BB Seguridade Group recorded R$1,629 in net profit, an 11.8% increase as compared
to the R$1,457 million figure for 2010.
It should be noted that 2011 and 2012 were impacted by a series of extraordinary factors and
events, detailed below:
(a) upon the effecting the joint venture with Mapfre, in June 2011, the process for
deconsolidating the businesses that were merged into the Company in the context of
the partnership and recognition of new joint venture at fair value were recognized
according to the accounting standards in effect. These standards established that the
non-monetary contributions in exchange for ownership interest would enable to
recognize, in the result for the year, the portion of a gain or loss limited to the ownership
interests attributable to other investors. The adoption of this rule generated a result net
of taxes in the amount of R$522,416 thousand for BB Seguros, a wholly -owned
subsidiary of the Company.
(b) negative impact of R$73,376 thousand, recorded through share of profit, in the year
ended December 31, 2011, to BB Mapfre SH1 and Mapfre BB SH2. This impact was
produced by the net effect between the write-off of the goodwill existing in the
ownership interests merged by the Company in the context of the partnership and
recognition of intangible assets. As the amount related to the write-off of the goodwill
was in excess of the recognition of intangible assets, the impact was negative.
(c) brokerage fees of BB Corretora provided for in the contracts effective in 2011 and no
longer applies, in view of the new contractual rules effective from February 2013. The
new remuneration fees are on average 22.7% in excess of the fees effective in 2011.
(d) remuneration paid by BB Corretora for the sharing of the customer base of Banco do
Brasil. This remuneration expense generated an expense of R$260,971 thousand, net
of taxes, in the net income of BB Corretora in 2011. According to the agreement of
covenants between BB Corretora and Banco do Brasil, effective during 2011, BB
Corretora paid to Banco do Brasil, for sharing the customer base of the Bank, the
amount corresponding to 67.58% of revenue, deducted of the expenses necessary for
generating this gain. From January 2013, the relationship between BB Corretora and
Banco do Brasil started to be regulated by an agreement, which no longer provides for
the remuneration for the sharing of the customer base, maintaining only the
reimbursement to Banco do Brasil relating to the costs and expenses arising from the
use of its personnel, distribution network and material, technological and administrative
resources. The said agreement shall be valid for 20 years, without clause on early
termination.
(e) payment made by Brasilveículos to Sulamérica, for issuing policies, in the amount of
R$67,505 thousand, net of taxes. This contract was terminated in September 2012 and
not extended.
In 2012, the net income of the Company was impacted by the following factors:
(a) with the objective of equating the interests of Banco do Brasil and Mapfre in Mapfre BB
SH2, a special class was attributed to the preferred shares held by Mapfre in this
holding. This new special class of shares was entitled the receipt of cumulative fixed
priority dividends until the amount of R$309.5 million, adjusted by CDI, between the
data of entry of BB Seguros in Mapfre BB SH2, in June 2011, and the dividend payment
dates. The dividends distributed by Mapfre BB SH2, in 2012, were sufficient for the
payment of the totality of said priority dividends and the consequent termination of the
Company’s obligation to make payments to this special class of preferred shares
relating to the above-mentioned priority dividends. So the preferred shares held by
Mapfre in Mapfre BB SH2 started to be entitled to the profit sharing of the Company on
conditions equal to those of the preferred shares held in that company by BB Seguros.
As a result of the priority dividend of Mapfre in Mapfre BB SH2, the BB Seguridade
Group recorded, in the year ended December 31, 2012, a share of profit not proportion
to the interest of BB Seguros in Mapfre BB SH2, totaling an expense of R$36,826
thousand. Mapfre BB SH2 recorded, in the year ended December 31, 2012, a net
income of R$ 209,874 thousand, the net income attributable to the BB Seguridade
Group in that year being R$104,937 thousand.
(b) gain earned by BB Seguros in the disposal of ownership interests in Mapfre Nossa
Caixa Vida e Previdência to Brasilprev, in the amount of R$46,151 thousand, net of
taxes.
(c) elimination arising from intragroup transaction in the share of profit of Brasilprev for BB
Seguros, in the amount of R$34,640 thousand, related to the unrealized gain by BB
Seguros in the disposal of ownership interests in Mapfre Nossa Caixa Vida e
Previdência to Brasilprev.
(d) brokerage fees of BB Corretora provided for in the contracts in effect in 2012, and which
are no longer applicable, in view of the new contractual rules effective from February
2013. The new remuneration fees are on average 27.5% in excess of t he fees effective
in 2012.
(e) remuneration paid by BB Corretora for the sharing of the customer base of Banco do
Brasil. This remuneration expense generated an expense of R$177,720 thousand, net
of taxes, in the net income of BB Corretora in 2012, as previously explained.
(f) remuneration paid by Brasilveículos to Sulamérica, for issuing policies, in the amount of
R$15,526 thousand, net of taxes. This contract was terminated in September 2012, and
was not extended.
Combined balance sheet of BB Seguros and BB Corretora
Combined balance sheet – Assets
Decem ber 31
R$ thousand
2010
2011
2012
372,848
562,111
1,326,311
Financial assets at fair value through profit or loss
889,272
5,148
291
Financial assets available for sale
822,391
204
107
Financial assets held to maturity
855,786
--
--
Non-current assets available for sale
32,911
--
--
Equity investments
640,284
5,239,175
5,385,543
Fixed assets
18,705
--
--
Goodw ill on Investments
1,261,618
--
--
Other intangible assets
41,110
--
--
1,119,732
--
--
51,536
3,730
18,098
158,849
5,809
5,762
Other assets
1,446,150
280,161
554,879
Total assets
7,711,192
6,096,338
7,290,991
Assets
Insurance and reinsurance operations
Source: Combined Financial Statements under IFRS
Consolidated assets of BB Seguridade Group reached R$7,291 million on December 31, 2012,
a 19.6% growth when compared to the balance verified as of December 31, 2011. We detail
below the changes in each of the combined assets lines:
a) Cash and cash equivalents
Cash and cash equivalents totaled R$ 1,326 million on December 31, 2012 , a 136.0%
increase as compared to the balance as of December 31, 2011. This change resulted from
increased short-term investments, including buy-back transactions supported by Letras
Financeiras do Tesouro (LFT).
On December 31, 2011, cash and cash equivalents totaled R$ 562 million in 2011, a 50.8%
increase as compared to the balance as of December 31, 2010, driven by the rise in
financial investments.
b) Financial assets
Financial assets at fair value based on profits, available for sale and kept to maturity
reflected a R$889, R$822, R$856 million balance respectively on December 31, 2010, due
to short-term investments by the operating subsidiaries Aliança do Brasil, Brasilveículos
and AB Seguros. On December 31, 2010, BB Seguridade Group held total equity control
over these subsidiaries. As of 2011, corporate interests in these operating subsidiaries
were transferred to create the holding companies BB Mapfre SH1 and Mapfre BB SH2,
which changed the manner of assessing these investments and that were then
consolidated under the equity accounting method.
c) Equity interest investments
Investment in corporate interests totaled R$ 5,386 million on December 31, 2012, a R$ 146
million rise as compared to the balance as of December 31, 2011. This rise is a result of
equalizing corporate interests in the companies BB Mapfre SH1 and Mapfre BB SH2.
Investment in corporate interests totaled R$ 5,239 million on December 31, 2011, as
against R$ 640 million on December 31, 2010, a R$ 4,599 difference chiefly by virtue of the
creation of the BB Mapfre SH1 and Mapfre BB SH2 holding companies under the Banco do
Brasil and Mapfre partnership.
d) Fixed assets
The balance of fixed assets was R$19 million on December 31, 2010.
e) Goodwill on investments
Goodwill on investments reflected a R$ 1,262 million balance on December 31, 2010, due
to existing goodwill in the operating subsidiaries Aliança do Brasil and Brasilveículos. In
2010 the BB Seguridade Group held total equity control over these subsidiaries. As of the
2011, the corporate interests in these operating subsidiaries were transferred to create the
holding companies BB Mapfre SH1 and Mapfre BB SH2, which changed the manner of
assessing these investments. For this reason, a comparative analysis of information
contained in these combined financial statements should consider this corporate
reorganization.
f)
Other intangible assets
Balance of other intangible assets was R$41 million on December 31, 2010. In 2011, the
balance of other intangible assets was decreased due to partnership with Mapfre.
g) Insurance and reinsurance operations
Insurance and reinsurance transactions reflected a R$ 1,120 million balance on December
31, 2010, due to insurance and reinsurance premiums receivable from the operating
Group held total equity control over these subsidiaries. As of the 2011, the corporate
interests in these operating subsidiaries were transferred to create the holding companies
BB Mapfre SH1 and Mapfre BB SH2, which changed the manner of assessing these
investments. For this reason, a comparative analysis of informat ion contained in these
combined financial statements should consider this corporate reorganization.
h) Assets from current taxes
The balance of current tax assets as of December 31, 2012 totaled R$18 million, a R$14
million growth as compared to December 31, 2011.
The balance of current tax assets as of December 31, 2011 totaled R$ 4 million, a R$ 48
million drop as compared to 2010.
i)
Deferred tax assets totaled R$6 million on December 31, 2012, remaining practically the
same in relation to balance sheet as of December 31, 2011.
On December 31, 2011, the balance of deferred tax assets was at R$6 million, a decrease
of R$153 million compared to the balance as of December 31, 2010.
j)
Other assets
The sums stated in Other Assets totaled R$ 555 million on December 31, 2012, a R$ 275
million increase as compared to December 31, 2011. This increase mainly arises from the
following operations: (i) addition of R$268 million in income receivable; and (ii) addition of
R$9 million related to judicial deposits.
On December 31, 2011 the sums stated in other assets totaled R$ 280 million, a R$ 1,166
million decrease as compared to December 31, 2010. This variation is mainly due to the
fact that, in 2010, the BB Seguridade Group had a full corporate interest in the operating
subsidiaries Aliança do Brasil, Brasilveículos and AB Seguros, and the assets of these
companies shall be combined, line by line, in the consolidated assets of BB Seguridade
Group. As of 2011, the corporate interests in these operating subsidiaries were transferred
to create the holding companies BB Mapfre SH1 and Mapfre BB SH2, which changed the
manner of assessing these investments and that were then assessed under the equity
accounting method.
Combined Financial Statement – Liabilities and Shareholders’ Equity
As of December 31,
R$ thousand
2010
2011
2012
764,611
2,171
5,718
Insurance and reinsurance obligations
296,911
--
--
2,677,029
--
--
Dividends and bonuses payable
165,281
354,935
624,698
149,878
56,712
92,756
190,467
269,654
269,654
Other liabilities
218,852
397,183
661,411
Total liabilities
4,463,029
1,080,655
1,654,237
Total net assets
3,248,163
5,015,683
5,636,754
Total liabilities and net assets
7,711,192
6,096,338
7,290,991
Liabilities
Liabilities due to insurance contracts
Source: Combined Financial Statements under IFRS.
The balance of liabilities was R$1,654 million on December 31, 2012, a 53.1% increase in
relation to the balance on December 31, 2011. On December 31,2011, the balance of total
liabilities was R$1,081 million, a 75.8% reduction when compared to the balance on December
31,2010.
Please see below details of the changes of each of the lines that make up BB Seguridade’s
liabilities:
a) Labor, tax and civil provisions
Labor, tax and civil provisions totaled R$ 6 million on December 31, 2012, a R$ 4 million
rise over December 31, 2011, due chiefly to an increase in civil lawsuits with regard to
indemnity requests (moral and property damages, etc.) claims arising from incident
payments and applicability of the consumer defense code.
These provisions totaled R$ 2 million on December 31, 2011, a R$ 762 million decrease as
compared to the balance outstanding on December 31, 2010, mainly due to the change in
corporate interests by the BB Seguridade Group in companies in the insurance business.
As of the 2011, the corporate interests in these operating subsidiaries were transferred to
create the holding companies BB Mapfre SH1 and Mapfre BB SH2, which changed the
manner of assessing these investments. For this reason, a comparative analysis of
information contained in these combined financial statements should consider this
corporate reorganization.
b) Insurance and reinsurance liabilities
Insurance and reinsurance transactions reflected a R$ 297 million balance on December
31, 2010, due to insurance and reinsurance premiums payable by the operating
Group held total equity control over these subsidiaries. As of the 2011, the corporate
interests in these operating subsidiaries were transferred to create the holding companies
BB Mapfre SH1 and Mapfre BB SH2, which changed the manner of assessing these
investments. For this reason, a comparative analysis of information contained in these
combined financial statements should consider this corporate reorganization.
c) Liabilities due to insurance contracts
Insurance contract liabilities showed a R$ 2,677 million balance on December 31, 2010,
due to insurance and reinsurance contract liabilities by the operating subsidiaries Aliança
do Brasil, Brasilveículos and AB Seguros. In 2010 the BB Seguridade Group held total
equity control over these subsidiaries. As of the 2011, the corporate interests in these
reason, a comparative analysis of information contained in these combined financial
statements should consider this corporate reorganization.
d) Dividends and bonuses payable
The balance of dividends and bonuses payable was R$625 million on December 31,2012,
a 76.0% increase when compared to the balance as of December 31,2011.
On December 31,2011, the balance of dividends and bonuses payable was R$355 million,
an increase of 114,7% when compared to the balance December 31,2010.
e) Liabilities due to current taxes
The balance of current tax assets as of December 31, 2012 totaled R$93 million, a
R$63.6% million growth as compared to December 31, 2011.
The balance of current tax assets as of December 31, 2011 totaled R$ 57 million, a
R$62.2% million drop as compared to December 31, 2010.
f)
On December 31,2012, deferred tax liabilities totaled R$270 million, remaining practically
the same in relation to the balance recorded on December 31,2011.
On December 31,2011, deferred tax liabilities totaled R$270 million, an increase of R$79
million when compared to the balance as of December 31,2010.
g) Other liabilities
The amounts recorded in other liabilities totaled R$661 million on December 31, 2012, an
increase of de R$264 million in relation to the amount recorded on December 31, 2011.
This increase was the outcome chiefly of the R$197 million expansion in realizable
commissions on the sale of premiums.
On December 31, 2011 the sums stated in other liabilities totaled R$397 million, a R$178
million increase as compared to the December 31, 2010 figure, due mainly to the rise in
connection with realizable commissions on the sale of insurance. During the 2010 fiscal
year, the BB Seguradora Group held complete equity control over the operating
subsidiaries Aliança do Brasil, Brasilveículos and AB Seguros, which expens es with the
sale of insurance are held by BB Corretora, therefore, during the current fiscal year
realizable commissions on the sale of insurance by BB Corretora were eliminated with
those operating subsidiaries’ prepaid expenses. As of 2011, the corporate interests in the
reason, a comparative analysis of information contained in these combined financial
statements should consider this corporate reorganization.
h) Net assets
Consolidated net assets of BB Seguridade Group on December 31,2012 was R$5,637
million. An increase of 12.4% when compared to the balance on December 31, 2011.
On December 31,2011, combined net assets of BB Seguridade Group was R$5,016
million, a 54.4% increase in relation to the balance as of December 31, 2010.
We present below the subitems of section 10.2 based on the combined financial
statements of BB Seguridade:
(i)
Income from issuer's operations; details on any important revenue items;
The operating revenues of the Company are mainly generated by the net revenue from
commissions, originated by the brokerage in the sales of insurance, private pension and
premium bonds, and provision of other services, and the income from investments in ownership
interests, including the interest of the Company in operating companies.
Besides theses, the company obtain interest income from financial instruments and other
income that are not detailed in the previous item, which describes the significant changes in
each item of the combined financial statements, replicating the format of item 10.1.
(ii)
Factors that materially affected operating results;
BB Seguridade’s income figures arise basically from the result of investees. By means of these
companies, BB Seguridade provides solutions of the following: insurance, open-end private
pension, premium bonds and insurance brokerage.
Insurance: responsible for a significant portion of BB Seguridade’s income figures, covers a
broad diversity of goods and services made available by the companies comprised by the BB
Mapfre SH1 and Mapfre BB SH2 holding companies. Grouping business under these holding
companies took place in accordance with the expertise by each partner in its distribution
channels.
BB Mapfre SH1 grouped basically bancassurance, business, i.e.: with the greater share of sales
concentrated in the banking channel (Banco do Brasil) such as: individual insurance (life and
casualty), rural and home. Mapfre BB SH2 grouped solutions that are largely marketed by
market brokers, such as vehicle and asset insurance.
Pension Plans: private pension business is concentrated in Brasilprev, which markets
traditional plans (services no longer marketed) Plano Gerador de Beneficio Livre (PGBL) and
Vida Gerador de Beneficio Livre (VGBL), sold to individuals and legal entities. As a
predominantly bancassurance business, sales are directed to Banco do Brasil’s customers.
Premium bonds: the premium bonds solutions are provided by Brasilcap, through monthly
installment plans (PM), down payment plan (PU) and Incentive Certificates, available to
individuals and companies. As a business defined as bancassurance, sales are specially
directed to Banco do Brasil’s customers.
Insurance brokerage operation: the current brokerage revenues of BB Corretora de Seguros
are generated from the sale of insurance, private pension plans and premium bonds in the
distribution channels of Banco do Brasil.
The main factors that materially affected the results of the Company are detailed in the previous
item, in which we show an analysis of the changes found in the combined financial statements,
replicating the format of item 10.1
a)
Changes in revenues from price variations, foreign exchange rates, inflation,
changes in volume and introduction of new products and services;
As previously informed, the main sources of revenue of the Company are originated from the
net revenues from commissions and income of investment in ownership interests. The material
factors that influenced the variations in these revenues were detailed in the analysis of the
combined financial statements, including in this section 10.11, replicating the format of item
10.1, not existing additional material changes attributable to the changes in prices, exchange
rates, inflation, changes in volumes, and launch of new products and services, besides those
already mentioned in that item.
b)
Impact of inflation, variation of prices of key inputs and products, variation of
exchange and interest rates in the operating income and in the financial income of the
issuer.
The material factors that influenced the variations in these revenues were detailed in the
analysis of the combined financial statements, including in this section 10.11, replicating the
format of item 10.1, not existing additional material changes attributable to the changes in prices
and exchange, inflation and interest rates besides those already mentioned in that item.
In relation to the analysis of the subitems of section 10.3; based on the combined
financial statements regarding material effects that the following events have caused or
are expected to cause on the issuer's financial statements and results:
a.
Acquisition or disposal of an operating segment
An analysis based on the combined financial statements is not applicable to this item.
b.
Constitution, acquisition or disposal of equity interest
c.
Unusual events or operations
In relation to the analysis of the subitems of section 10.4 based on the combined
financial statements:
a.
Significant changes in accounting practices
b.
Significant effects of changes in accounting practices
c.
Qualification and emphasis in the independent accountants' report
The combined financial statements of the BB Seguridade Group contain an emphasis of matter
paragraph on the purpose of the combined financial statements, which are being submitted
exclusively with the objective of providing, by means of a single financial statement, information
relating to all the activities of BB Seguros and its subsidiary and associated companies, BB
Corretora, and other operations related to insurance, pension, premium bonds and insurance
brokerage, regardless of the arrangement of its corporate structure.
In relation to the analysis of section 10.5, based on the combined financial statements, in
which it refers to making comments on the critical accounting policies adopted by the
issuer:
further information see item 10.5 in this Reference Form.
which it refers to the internal controls adopted to ensure the preparation of reliable
financial statements:
a.
The level of efficiency of such controls, indicating potential imperfections and the
measures taken to correct them
b.
Weaknesses and suggestions regarding the internal controls included in the
independent auditor's report
In relation to the analysis of section 10.7, ba sed on the combined financial statements, in
which it refers to the public offering of securities:
In relation to the analysis of section 10.8, based on the combined fi nancial statements,
referring to the material items not evidenced:
relation to each one of the items not evidenced:
In relation to the analysis of section 10.10, based on the combined financial statements,
in relation to the main elements of the business plan of the issuer, elaborating the
following topics:
a.
Investments
An analysis based on the combined financial statements is not applicable to these
items.
b.
Provided that already disclosed, report the acquisition of plants, equipment,
patents or other assets which shall significantly impact the production capacity
of the issuer
items.
c.
New products and services
items.
MANAGEMENT PROPOSALS
Net Income appropriation
- Year 2013
To the Shareholders,
Pursuant to the provisions of Law 6.404, of December 15, 1976, and the Bylaws
of BB Seguridade Participações S.A., I submit for the resolution at this Meeting the
allocation of Net Income of the fiscal year of 2013, as follows:
(Amount in R$)
Net income ...........................................................................
2,473,752,766.27
Retained Earnings..................................................................
1
0.00
Adjusted Net Income .............................................................
2,350,065,127.96
Legal reserve..........................................................................
123,687,638.31
Remuneration to shareholders
1,979,002,213.02
- Interest on equity..........................................
0.00
- Dividends....................................................................
Statutory Reserve
371,062,914.94
- for Operational margin............................................
1
1,979,002,213.02
371,062,914.94
Obtained by the reduction of the Net Income of the fiscal year by the value allocated to forming the Legal Reserve.
For your consideration.
March 21, 2014.
Marcelo Augusto Dutra Labuto
Chief Executive Officer
Net Income Appropriation
CVM Instruction No. 481, of
December 17, 2009 – Attachment
9-1-II
Net income appropriation
1. Net income for the year: R$ 2,473,752,766.27
2. Global amount and per share amount of dividends: R$ 1,979,002,213.02 (R$
0.99 per share).
3. Percentage of distributed net income of the year: 80% (eighty percent).
4. Global amount and amount per share of dividends paid based on income from
prior years:
The company did not report profit arising from prior years.
5. Dividends/interest on equity, net of advanced dividends and interest on equity
already declared:
Not applicable. All values have been deliberate and spread their payments
made.
6. Dividends/interest on equity determined in six-month balances or shorter
periods:
a) Dividends/Interest on equity (IE) already declared:
Dividends
IE
1st Semester
R$ 817,848,127.02
None
2nd Semester
R$ 1,161,154,086.00
None
b) Date of the respective payments:
1st Semester
Dividends
IE
08/30/2013
None
2nd
Semester
02/26/2014
None
7. Comparative table indicating the amount per share of each type and class:
the capital of BB Seguridade, on December 31, 2013, was divided into
2,000,000,000 common shares:
a) Net income for the year and for the three (3) previous years:
Years
Net income
Net income
per common
share
2013
R$ 2,473,752,766.27
2012
R$ 0.00
R$ 1.24
R$ 0.00
2011
--
2010
--
--
--
b) Dividend and interest on equity paid in the year and in the last three
(3) years:
Years
Dividends
Dividends per
common
share1
IE
IE per
common
share
Total
Total per
common
share
2013
R$ 1,979,002,213.02
2012
R$ 0.00
R$ 0.99
2011
--
2010
--
R$ 0.00
--
--
R$ 0.00
R$ 0.00
--
--
R$ 0.00
R$ 0.00
--
--
R$ 1,979,002,213.02
R$ 0.00
--
--
R$ 0.99
R$ 0.00
--
--
1 – Div idends per common share f or the f irst half of 2013 – R$ 0.41
Div idends per common share f or the second half of 2013 – R$ 0.58
8. Legal reserve:
a) Amount allocated to the legal reserve: R$ 123,687,638.31.
b) Calculation form of legal reserve: According to Law 6.404, of
December 15, 1976, article 193, and the Company's Bylaws, article
39, 5% of net income shall be applied, prior to any allocation, in
creating legal reserve, which shall not exceed 20% of the capital
stock, and in the fiscal year in which the balance of the legal reserve
plus the amounts of the reserves of capital exceeds 30% of the
capital stock, it shall not be mandatory to allocate part of the net
profit of the fiscal year to create a legal reserve.
9. The Company does not have preferred shares.
10. Compulsory dividend
a) Description of the calculation form provided in the Bylaws:
The Company’s Bylaws establishes that at least 25% (twenty five
percent) of net profit, adjusted with the deductions and increases set
forth in Article 202 of the Brazilian Corporation Law, shall be
distributed to shareholders as mandatory dividend.
b) Inform if the dividends were fully paid:
The amount distributed to shareholders as dividends corresponds to
80% of net income of the year, exceeding the mandatory percentage.
c) Inform the amount eventually withheld:
There was a retention of R$ 123,687,638.31, 5% of the net income of
the company for the year, to create legal reserve and R$
371,062,914.94, 15% of net income, to set up the statutory reserve.
11. There was no retention of compulsory dividend due to the financial situation of
the Company.
12. There was no allocation of income to contingency reserve.
13. There was no allocation of income to unrealized profit reserve.
14. If there is allocation of income to statutory reserves
a) Describe the statutory clauses that determined the reserve:
According to article 39, item f of the Company’s Bylaws, the formation,
with technical justification and the Board of Directors’ and the Fiscal
Council’s approval of the values and destination, of a statutory reserve
to ensure an operating margin compatible with the development of the
Company’s operations, made up by a portion of up to 100% (one
hundred percent) of the balance of the net profit, after the previous
allocations, up to the limit of 80% (eighty percent) of the capital stock.
b) Identify the amount allocated to the reserve:
There was a retention of R$ 371,062,914.94, 15% of the net income of
the company for the year, to set up the statutory reserve.
c) Describe how the amount was calculated:
For setting the amount, the payout expectation of 80% indicated to the
shareholders when BB Seguridade went public, the requirement of
allocating 5% of the net income of the year to create the Legal Reserve
and the operating margin necessary for the development of the
Company’s operations were considered.
15. There was no profit retention provided in capital budget.
16. There was no allocation of the net income to tax incentive reserves.
ELECTION OF MEMBER OF THE BOARD OF
DIRECTORS
TERM OF OFFICE 2013/15
of BB Seguridade Participações S.A., and, according to the item V of the Call Notice, I
submit for resolution at this Meeting the following appointment for the position of
member of the Board of Directors of BB Seguridade:
a) Due to: i) the amendment related to the Article 15, paragraph 1, item (i), of the
Bylaws of the Company, approved at the Extraordinary Shareholders Meeting
on November 29, 2013, which changes the provision regarding the composition
of the Board of Directors of BB Seguridade; ii) the resignation from the position
of member of the Board of Directors presented by Mr. Fábio Franco Barbosa
Fernandes on January 31, 2014; iii) the appointment of Mr. Marcelo Augusto
Dutra Labuto, CEO of the Company by the Board of Directors, on February 7,
2014, as a member of the Board of Directors until the next shareholders’
meeting, according to Article 19, paragraph 2, of the Bylaws of BB Seguridade.
b) in compliance with the Article 15, paragraph 1, (i) of Bylaws, I appoint Mr.
Marcelo Augusto Dutra Labuto, CEO of the Company, for the position of
member of the Board of Directors, with term of office until the ordinary
shareholders meeting of 2015. MARCELO AUGUSTO DUTRA LABUTO,
Brazilian, married, bank employee, holder of the identity card no. 139096655,
issued by DETRAN DF, CPF/MF 563.238.081-53, with office in Setor Bancário
Sul, Quadra 1, Bloco A, Lote 31, Edifício Sede I, 15º andar, sala 04, Brasília
(DF).
March 21, 2014.
Alexandre Corrêa Abreu
Chairman of the Board of Directors
ELECTION OF MEMBER OF THE FISCAL
COUNCIL
TERM OF OFFICE 2014/15
of BB Seguridade Participações S.A., and pursuant to the item III of the Call Notice, I
submit for resolution at this Meeting, the following appointments for the position of
member of Fiscal Council of BB Seguridade (sitting and alternate):
a) Mr. Pablo Fonseca Pereira dos Santos, as representative of the National
Treasury Secretariat, for the position of sitting member of the Fiscal
Council of BB Seguridade, for the 2014/2015 term of office, in
compliance with the letter forwarded by the Finance Ministry.
b) Mr. Júlio César Costa Pinto, as representative of the National Treasury
Secretariat, for the position of alternate member of the Fiscal Council of
BB Seguridade, for the 2014/2015 term of office, in compliance with the
official letter forwarded by the Finance Ministry.
c) Mr. Antonio Pedro da Silva Machado, as representative of Banco do
Brasil S.A, for the position of sitting member of the Fiscal Council of BB
Seguridade, for the 2014/2015 term of office, in compliance with the
letter forwarded by the Controller;
d) Mrs. Ana Paula Teixeira de Sousa, as representative of Banco do Brasil
S.A, for the position of alternate member of the Fiscal Council of BB
Seguridade, for the 2014/2015 term of office, in compliance with the
letter forwarded by the Controller;
March 21, 2014.
ELECTION OF BOARD OF
DIRECTORS AND FISCAL
COUNCIL MEMBERS
Pursuant to Article. 10 of CVM
Regulation
481, dated December 17th,2009
12.6 / 8 - Composition and professional background of management and fiscal council
Board of Direcetors
Nam e
CPF
Age:
Management body
Date of election
Prazo de m andato
Profession
Elective position held
Installation Date
Foi eleito pelo controlador
42
563.238.081-53
Bank employee
Member of the Executive Board and the Board of
Directors.
02/07/2014
02/07/2014
Xx – Member of Board of Directors
Until OGM/ 2014
Yes
Other positions and roles perform ed in the issuer
563.238.081-53
42
Bank employee
Member of the Executive Board and the Board of
Directors.
03/15/2013
03/15/2013
Xx – Chief Executive Officer
3 years
Yes
Professional background / Declaration of possible convictions
Marcelo Augusto Dutra Labuto – 563.238.081-53
Considering the limitation of characters of EmpresasNet system, the complete Résumé of Mr. Marcelo Augusto Dutra Labuto is described in section 12.12 of this Reference Form
Fiscal council
Nam e
CPF
Age:
Management body
Date of election
Term of office
Profession
Installation Date
Was elected by the controlling
shareholder
Antônio Pedro da Silva Machado
56
Fiscal Council
03/15/2013
2013/2014
239.664.400 91
Law yer
43 – C.F.(Sitting) Elected by the Controlling
Shareholder
03/15/2013
Yes
None
Nam e
CPF
Age:
Management body
Date of election
Term of office
Profession
Installation Date
Was elected by the controlling
shareholder
Ana Paula Teixeira da Sousa
536.875..581-34
None
43
Fiscal Council
46 – C.F. (Deputy) Elected by the Controlling
Shareholder
Pablo Fonseca Pereira dos Santos
37
Fiscal Council
11/29/2013
2013/2014
782.539.001-63
Civil employee
43 – Appointed as Fiscal Council Member by MF
11/29/2013
Yes (Indirect)
42
Mechanical Engineer
Fiscal Council
48 – C.F. (Deputy)
Appointed by MF
02/22/2013
02/22/2013
2013/2014
Yes (Indirect)
Bank Employee
None
Júlio César Costa Pinto
579.940.641-91
None
Professional background / Declaration of possible convictions
Antonio Pedro da Silva Machado - 239.664.400-91
Considering the limitation of characters of EmpresasNet system, the complete Résumé of Mr. Antonio Pedro da Silva Machado described in section 12.12 of this Reference Form.
Ana Paula Teixeira de Sousa - 536.875.581-34
Considering the limitation of characters of EmpresasNet system, the complete Résumé of Mrs. Ana Paula Teixeira de Sousa described in section 12.12 of this Reference Form.
Pablo Fonseca Pereira dos Santos – 782.539.001-63
Considering the limitation of characters of EmpresasNet system, the complete Résumé of Mr. Pablo Fonseca Pereira dos Santos described in section 12.12 of this Reference Form.
Júlio César Costa Pinto - 579.940.641-91
Considering the limitation of characters of EmpresasNet system, the complete Curriculum Résumé of Mr. Júlio César Costa Pinto is described in section 12.12 of this Reference Form.
12.9 – Conjugal Relationship, common-law marriage or relationship up to the
second degree between
There isn’t conjugal relationship, common-law marriage or relationship up to the
second degree between administrators and subsidiaries, controlling shareholders.
12.10 - Subordination, service provision or controlling relationships among
administrators and subsidiaries, controlling shareholders and others.
Subordinate relations, service delivery or control maintained in the past 03
fiscal years between BB Seguridade's management:
a. A company directly or indirectly controlled by BB Seguridade.
Board of Directors
Board member: Marcelo Augusto Dutra Labuto
CPF: 563.238.081-53
Related Person: BB Cor Participações S.A.
CNPJ: 17.345.055/0001-36
Position/Function: Managing Director
Type of relationship between the Administrator and the related person: Control
Type of related person: Direct subsidiary
Year: 2013
Related Person: BB Seguros Participações S.A.
CNPJ: 11.159.426/0001-09
Position/Function: Chief Executive Officer
Type of related person: Direct subsidiary
Year: 2013
Related Person: BB Capitalização S.A.
CNPJ: 07.681.872/0001-01
Position/Function: Chief Executive Officer
Type of related person: Indirect subsidiary
Year: 2013
Executive Board
CPF: 563.238.081-53
See Board of Directors.
CPF: 563.238.081-53
Related Person: Banco do Brasil
CNPJ:00.000.000/0001-91
Position/Function: Insurance, Pension Funds and Capitalization Director
Type of relationship between the Administrator and the related person: Subordination
Type of related person: Direct controlling shareholder
Year: .2013
Fiscal Council
Incumbent member: Antônio Pedro da Silva Machado
CPF: 239.664.400-91
CNPJ:00.000.000/0001-91
Position/Function: Legal Director
Year: 2011, 2012, 2013
Incumbent member: Pablo Fonseca Pereira dos Santos
CPF: 782.539.001-63
Related Person: Federal Government
CNPJ: 02.961.362/0001-74
Position/Function: Economic Follow-up Secretary
Type of related person: Indirect controlling shareholder
Year: 2011, 2012, 2013
Alternate Board Member: Júlio Cesar Costa Pinto
CPF: 597.940.641-91
Related Person: Federal Government
CNPJ: 02.961.362/0001-74
Position/Function: Advisor at the Capital Market and Financial System Office in the Executive Secretariat
Type of related pers on: Indirect controlling shareholder
Year: 2011, 2012, 2013.
Alternate Board Member: Ana Paula Teixeira de Sousa
CPF: 536.875.581-34
CNPJ: 00.000.000/0001-91
Position/Function: Executive Manager
Year: 2011, 2012, 2013.
12.12 – Other relevants informations
Board of Directors:
Member – Marcelo Augusto Dutra Labuto
a.i Résumé, containing the main professional experiences over the last 5 years
Company: BB Seguridade Participações S.A.
Main activity of the Company: Investments in other companies whose objects are insurance, pensions, premium bonds,
brokerage, dental care plans and reinsurance and retrocession operations.
Position: Chief Executive Officer
Function: Charge by management, as well as enforcing their laws and the resolutions of the Shareholder’s Meeting and
the Board of Directors.
Period: since mar/2013
Does the company Belong to BB Seguridade Conglomerate? Yes
Company: Banco do Brasil S.A.
Main activity of the Company: Multiple Bank, with commercial portfolio
Position: Director of Insurance, Pension Plans and Premium Bonds
Function: Reply by developing strategies relating to the business of security and the governance of insurance shares in
the Conglomerate; the development and management of insurance products and services in insurance, pension plans
and premium bonds; the quality, reliability, suitability and integrity of internal controls, processes, products and services
provided by the Executive Board; ensure that products and services of the Executive Board are conducted in accordance
with applicable laws and regulations, the requirements of banking supervision, policies and procedures and the
legitimate expectations of society.
Does the company Belong to BB Seguridade Conglomerate? No
Company: BB Cor Participações S.A.
Main activity of the Company: Insurance Holding
Function: Directing the
affairs of the company.
Period: since apr/2013
Company: BB Capitalização S.A.
Main activity of the Company: Premium Bonds Company
Position: Director of Loans and financing
Function: Reply by the Bank's operational strategy in Banco do Brasil Credit Individuals market; by product lines and
loans and financing, such as mortgages, auto loans, consumer credit consumer, consortium, payroll loan; the quality,
reliability, suitability and integrity of internal controls, processes, products and services provided by the Executive
Board; ensure that products and services of the Executive Board are conducted in accordance with applicable laws and
regulations, the requirements of banking supervision, policies and procedures and the legitimate expectations of
society.
Period: since feb/2012 until mar/2013
Company: BB Seguros Participações S.A.
Position: General Manager os Estrategic Unit
Function: Reply by the result of the unit under its management; enabling conditions for which the defined objectives
are met for the unit; management of people, resources, processes and information observing institutional drivers;
representing and defending the interests of the Bank, provided preposto, in judicial and extrajudicial demands;
information provided by the unit; planning, coordination and control unit under its management; dissemination of
organizational drivers for the unit; service quality and customer satisfaction unit under its management.
Period: since aug/2011 until feb/2012
a.ii Indication of all management positions he has held in public companies (including before 5 years
ago):
Information available in the previous item.
The following companies are Public Company: Banco do Brasil S.A. e BB Seguridade Participações S.A..
b. Describe any of the following events occurring during the last 5 years:
- Any criminal conviction: no occurrences;
- Any conviction in CVM administrative proceedings and penalties applied: no occurrences;
- Any final and unappealable conviction at judicial or administrative levels that have suspended or disqualified to
practice any professional or commercial activity: no occurrences
Fiscal Council:
Member – Antonio Pedro da Silva Machado
Company: BB Seguridade Participações S.A.
Position: Fiscal Council Member
Function: established in article 163 of Law 6.404/76
Company: BB Tecnologia e Serviços S.A.
Main activity of the Company: As the Company Bylaws, Article 2 - The Company's object:
I - develop, produce, manufacture, market, rent, license granting the right to use, integrate, assemble, import, export
and distribute, including through representation of other companies, computer products, automation and asset
security, including equipment, terminals of self -service banking and parts, computer programs, digital electronic
systems and consumer electronics, peripherals, and associated software products, projects intellectual property,
supplies, supplies, materials and furniture for computer equipment ; II - develop and provide technical assistance,
technical support, adaptation, technological modernization ( trade-in ), approval, customization, deployment,
installation, repair, maintenance, training and monitoring of the products defined in the preceding paragraph, project
management, advisory services technical, planning, implementation, training and consulting solutions for data security
and information security, including free software and open source technologies; support and maintenance of the
operating environment of the Information and Communication Technology ( ICT ); management, analysis,
programming, coding, maintenance, deployment and operation of information systems, including management and
systems integration and database; management, monitoring, and data processing and logical and physical
environments, including lodging, reception, processing, support and monitoring of the data processing center (Data
Center ); electronic data interchange ( Electronic Data Interchange - EDI ) with implementation and management of
value-added network; provision of telecommunications services and providing value - added services in
telecommunication networks; microfilming, printing, photocopying, scanning, management and electronic processing,
finishing, handling and storage of documents, receiving, processing and data entry; support and operation of supply
and logistical support services and management activities related to banking and other services segments; Contact
Center management, active and receptive to telemarketing multichannel campaigns, consulta ncy projects and
technologies in the area of telemarketing and teleservices operations; correspondent bank.
Position: Board of Director member of BB Tecnologia e Serviços S.A.
Function: Board of Director member of BB Tecnologia e Serviços S.A.
Period: since april/2013
Company: Brasilcap Capitalização S.A.
Main activity of the Company: Operations in premium bonds area, may establish and market premium bonds plans, as
well as other products and services admitted to premiums bonds companies and to invest in other companies.
Position: Alternate member of the Board of Director
Function: established in article 142 of Law 6.404/76 and company’s Bylaw.
Position: Legal Director
Function: Reply for the legal defense of the interests of the Group before courts, prosecutors, police officers and
administrative oversight bodies and external control; effectiveness of the legal services of the Group; propose
strategies, policies and guidelines for management and provision of legal services wit hin the conglomerate and the
results therefrom; management of legal risk; quality, reliability, adequacy and integrity of internal controls, processes,
products and services provided by the Executive Board.
Period: since feb/2011
Position/Function: Legal Executive Manager
Main activity: Reply by ( o) ( s ) orientation, representing and defending the interests of the Bank on strategic issues of
high relevance before the High Courts and the organs and bodies of supervision and control; result of management;
enabling conditions for achieving the objectives defined for Management under its management; management of
people, resources, processes and information in compliance with the institutional drivers; representing and defending
the interests of the Bank , provided preposto, in judicial and extrajudicial demands; information provided by the
Department under its management; orientation, preparation and monitoring of judicial or administrative proceedings of
a strategic nature and high degree of relevance in any jurisdiction; guidance and development of legal arguments that
deal with causes of strategic interest and high relevance to the Conglomerate; monitoring of legal or administrative
proceedings of interest to the Bank; solution of legal differences between units in their are a of expertise; planning,
coordination and control of management under its management; dissemination of organizational drivers; service quality
and customer satisfaction of the Management under management.
Period: dec/2005 until feb/2011
ago):
Banco do Brasil S.A., Information available in the previous item.
Alternate Member – Ana Paula Teixeira de Sousa
Position: Executive Manager
Function: Management of market risk and liquidity Conglomerate BB; Manager in charge of submitting the application
for use of internal models ( advanced ) Basel the Central Bank of Brazil (2012 ); Financial management capacity of the
Conglomerate (external and internal area ); The level of mismatch of currencies , maturities and indexes Conglomerate
management; Proposing policies for managing market risk and liquidity management assets and liabilities and the use
of derivative financial instruments in the Conglomerate; Proposing and implementing strategies for risk management
and immunization of assets and liabilities of the Group; Definition of the best risk -return x capital allocation for the
operations of the Group; Definition, measurement and monitoring of market risk limits and liquidity for the portfolio
management of the Group; Assessment/measurement of interest rate risk, stocks, commodities and foreign exchange
exposure for the purposes of capital requirements as defined by regulatory agencies; Meas urement of the maximum
loss in the process of risk management market, estimated losses in adverse scenarios and conducting stress tests;
Proposition contingency plan market risk and liquidity; Coordination of the Internal Controls Risk Management Forum
and abroad, which includes representatives of the Directors of Finance, International, Capital Markets, Accounting,
Credit, Strategy and Organization, Asset Recovery, Legal and Governance Unit of Affiliated Entities which are discussed
and established methodologies for creating curves timeliness of products conglomerate.
Period: 2011- today
Company: FEBRABAN - Federação Brasileira de Bancos
Main activity of the Company: congregates bank financial institutions operating in the country, and associations
representing financial and similar institutions, national or regional level.
Position: Coordinator of Subcommittee of Market and Liquidity Risks.
Principais Atividades: Responsável pelas discussões, análises e proposições referentes aos assuntos relativos aos
riscos de mercado e de liquidez de todas as instituições financeiras participantes da
Febraban, junto aos órgãos reguladores e fiscalizadores.
Period: 2010 - Today.
Empresa: Banco do Brasil S.A.
Main activity of the Company: Multiple Bank, with commercial portfolio.
Position: Division Manager
Main activity: Monitoring the limits of market risks and liquidity of the Group BB; Development of models of future cash
flows for the products of income from financial intermediation; Development of models of curves of opportunity and
transfer price.
Period: 2006 until 2012.
ago):
Banco do Brasil S.A., Information available in the previous item.
Member – Pablo Fonseca Pereira dos Santos
Company: BB Seguridade PARTICIPAÇÕES S/A
Position: Fiscal council member
Period: since nov/2013
Company: Ministério da Fazenda;
Position/Function: Secretary for Economic Monitoring;
Period: since Oct/2013;
Main activity of the Company: Federal Public Adminsitration
Company: : Ministério da Fazenda;
Position/Function:: Deputy Secretary for Economic Policy;
Period: Feb/2011 until Oct/2013;
Does the company Belong to BB Seguridade Conglomerate? No;
Company: BB Tecnologia e Serviços;
Position/Function: Chairman of Board of Directors
Period: since May/2011;
Main activity of the Company: ITO E BPO
Company: NOVACAP;
Position/Function: Member of Board of Director
Period: May/2013 until Sep/2013;
Main activity of the Company: Indirect Public Administration body of Federal District Government
Company: Ministério do Planejamento, Orçamento e Gestão;
Position/Function: Economic Advisor – Minister Office;
Period: Sep/2009 until Feb/2011;
ago):
none
Alternate Member – Julio Cesar Costa Pinto
Company: BB Seguridade PARTICIPAÇÕES S/A
Position: Alternate Fiscal Council Member
Period: since dec/2012
Company: BB Cor Participações S.A.
Position: Fiscal Council Member
Function: Established in article 163 of law 6.404/76 .
Period: since 2012
Company: Universidade de Brasília - UNB
Main activity of the Company: Education
Position: Coordinator of Public Sector Economic Master
Function: Coordination
Period: since 2012
Company: CRSFN – Conselho de Recurso do Sistema Financeiro Nacional
Main activity of the Company: Collegiate body, second degree, part of the formant of the Ministry of Finance, as the law
9,069 of June 29, 1995.
Position: Alternate Member
Function: Established in article 4 decree 1935 of 20/06/1996.
Period: since 2011
Company: Banco Central do Brasil
Main activity of the Company: Agency
Position: Analyst/Coordinator/Head of Subunit/Senior Avisor
Function: Supervision of clearing and settlement os assets (Cetip, Selic and BMF&BOVESPA) sytems. Advising the Head
of Department of Banking Operations and Payments System.
Period: january/1998 until july/2011
Does the company Belong to BB Seguridade Conglomerate: No
Company: Ministério da Fazenda
Main activity of the Company: Federal Public Administration
Cargo: Advisor
Function: Advise the Board of the Capital Market and Financial System in the Executive Secreta ry.
Period: since july/2011
Company: Centro Universitário Unieuro
Main activity of the Company Education
Position: Teacher
Function: Teacher in Master of Administração e em Ciência Política.
Period: since agoust/2009
Company: Momentum Treinamento e Ensino LTDA
Main activity of the Company: Education
Position: Not managing partner
Function: Teacher in IBMEC
Period: since september/2013
ago):
none
REMUNERATION TO THE BOARD
OF AUDITORS MEMBERS AND
GLOBAL AMOUNT OF
REMUNERATION TO THE
MEMBERS OF THE
ADMINISTRATION
Pursuant to Article 12, items I and
II of CVM Regulation
481, dated December 17th,2009.
REMUNERATION OF THE MEMBERS OF THE
FISCAL COUNCIL
I submit for your examination, pursuant to the provisions of the Article 162,
paragraph 3, of Law 6.404, of December 15, 1976, and Article 1 of Law 9.292, of July
12, 1996, the proposal for setting the fees of the members of the Fiscal Council at 10%
of the monthly average remuneration received by the members of the Board of
Executive Officers, excluding the benefits other than fees:
March 21, 2014.
OVERALL
ANNUAL
AMOUNT
OF
REMUNERATION OF THE MEMBERS OF THE
MANAGEMENT BODIES
I submit for your examination the following:
a) The proposal for setting the global amount for payment of the fees and
benefits of the members of the Board of Executive Officers and Board of
Directors for the period from April 2014 to March 2015, at the maximum
of R$ 7,000,000 (seven million reais);
b) At the Extraordinary Shareholder´s Meeting held on 03.28.2013 the
amount of R$5,645,922.36 (five million, six hundred forty-five thousand,
nine hundred twenty-two reais and thirty-six cents) was approved as
remuneration of the directors of the Company for a period of april/2013
to march/2014. The amount effectively recognized for the year 2013 was
R$2,787,804.99 (two million, seven hundred and eighty-seven thousand,
eight hundred and four reais and ninety-nine cents). The difference
between the predicted and observed values mainly due to the following
factors:

Mismatch between the period covered by the original proposal
(figures for the period 2013/April to 2014/March) and the period
covered by the Reference Form (fiscal year 2013);

The amount stated in the original proposal to variable compensation
predicted the most susceptible value of payments to managers. The
compensation was
not performed in its entirety because the
achievement of goals, calculated pursuant to the Programa de
Remuneração Variável was below the parameters set for the receipt
of full value.

Until 2013, during the transition phase, when some activities were
still being conducted within the Insurance, Open-End Pension Plans
and Premium Bonds Directorship of Banco do Brasil, the CEO of BB
Seguridade received no remuneration for his duties in the Company.
Up to that year, the compensation received by the CEO was only
related to the exercise of his duties as Director of Insurance, Openend Pension Plans and Premium Bonds held in Banco do Brasil
(controlling shareholder) under the terms of Resolution CMN /
BACEN 3.921/2000). The amounts received in 2013 for his duties
were properly informed in section 13.15 of this Reference Form.
c) The proposal for setting the monthly fees of the members of the Board of
Directors at one tenth of the average monthly received by the members
of the Board of Executive Officers, excluding the benefits other than the
fees.
March 21, 2014.
DIRECTORS’ REMUNERATION
Pursuant to Article 12, items I and
II of CVM Regulation
481, dated December 17th,2009.
(Item 13 of Reference Form)
13.1 – Description of the compensation policy or practice, including Nonstatutory Board
(a)
Objectives of the compensation policy or practice
The managers of the Company approved at the meeting of the Board of Directors, held on
th
March 28 , 2013, the Share-Based Payment Program of the Board of Executive Officers
(“Compensation Program”). On December 20, 2013, the amendments to this Program were
approved by the Board of Directors, having been submitted to the Ministry of Finance and the
10
Department of Coordination and Governance of Government Companies
(DEST, in
Portuguese), a body related to the Ministry of Planning, where it is awaiting approval, promoting
some adjustments heeded by the company that did not alter the essence of the Program .
The total compensation of the management members of the Company is annually approved at
the Annual Shareholders’ Meeting (“AGO”, in Portuguese), the individual compensation of each
members being set at the meeting of the Board of Directors. The General Annual Meeting
cannot allocate amounts above 10% of the average fixed compensation paid to members of the
Executive Board to members of the Board of Directors and Fiscal Council. The global
remuneration is projected for the period from April of the current year to March of the following
year, when a new AGO is held. BB Seguridade does not have a non-Statutory Board.
The Compensation Program of the Board of Executive Officers of the Company establishes the
compensation terms and conditions of the Board of Directors, Executive Management, Fiscal
Council and Audit Committee. In relation to the compensation of the Related Party Committee, it
refers to non-compensated committee. As of the date of this form preparation, such committee
had not been installed.
The Compensation Program of the Company has the main duty of aligning the interests of the
key personnel of the Management and the goals of the Company, based on the best corporate
governance and market practices.
(b)
composition of remuneration
(i)
them
description of the compensation components and the objectives of each one of
Board of Directors
The Board of Directors members of BB Seguridade have the right to a fixed monthly
compensation, which shall not exceed 10% (ten percent) of the average monthly amounts paid
to the Statutory Board members. Represents the reward for services rendered to the Company.
Statutory Executive Board
The Statutory Board of the Company has the right to a monthly fixed compensation.
Direct and indirect benefits: part of the remuneration aimed at the quality of life of the
Directors and Officers.
Variable compensation: a portion of the compensation that aims at recognizing the effort of
the Statutory Board members in the achievement of the results, based on the attainment of
performance indicators. These indicators are as follows: Return on Average Equity (ROAE),
10
Free translation for Departamento de Coordenação e Governança das Empresas Estatais.
Bargaining/Employment
Assessment.
Agreement,
Individual
Performance
Assessment,
and
Joint
Of the amount allocated to the Share-Based Payment, 50% shall be immediately paid in cash
and 50% in shares deferred for four years. Of the total paid in shares, 20% shall be imm ediately
transferred to the beneficiary’s ownership and 80% shall be deferred, of which 20% for the
period of one year, 20% for the period of two years, 20% for the period of three years, and 20%
for the period of four years.
Previous to the release of deferred installments, the result determined for the immediately prior
year shall be verified, and compared with the performance observed in the year that gave rise to
the right to the share-based payment. Reduction in the results at a percentage equal to or in
excess of 20% shall imply the proportional or total reversal of share payment provided for in the
Program.
Fiscal Council
The members of the Fiscal Council of BB Seguridade have the right to a monthly fixed
compensation, corresponding to 10% (ten percent) of the monthly average of the amounts paid
to the members of the Statutory Board, besides the mandatory reimbursement of the expenses
for transportation and accommodation necessary for the performance of the duty (Bylaws,
Article 35, paragraph 6).
Audit committee
The members of the Audit Committee of BB Seguridade have the right to a monthly fixed
compensation not in excess of the average monthly compensation of the Statutory Board
Members. (Article 32, paragraph 3, item I)
(ii)
proportion of each item in total compensation
Board of Directors
The totality of the compensation of the members of the Board of Directors of the Company is
composed of a monthly fixed installment.
Statutory Board
Fees: 50%
13th salary: 6%
Variable Remuneration of the Executive Board: 40%
Direct and indirect benefits: 4%
Fiscal Council
The totality of the compensation of the members of the Fiscal Council of the Company is
Audit committee
The totality of the compensation of the members of the Audit Committee of the Company is
(iii)
calculation and adjustment methodology of each one of the remuneration
components
Board of Directors
The adopted amount shall not exceed 10% of the average monthly amount paid to the members
of the Statutory Board members and annually approved at the AGO. (Law 9,292/96)
The compensation of the Statutory Board is set by the Board of Directors, limited to the global
compensation approved at the AGO.
Direct and indirect benefits: is set by the Board of Directors, limited to the global
compensation approved at the AGO.
Variable compensation: is set by the Board of Directors, limited to the global compensation
approved at the AGO.
Fiscal Council
The adopted amount shall not exceed 10% of the average monthly amount paid to the members
of the Statutory Board members and annually approved at the AGO, besides the mandatory
reimbursement of the transport and accommodation expenses necessary to t he performance of
the duty.
Audit committee
The adopted amount is set by the Board of Directors, according to the working plan approved
by the Board, not exceeding the average monthly compensation of the Statutory Board
members.
(iv)
reasons that justify the composition of the compensation
Board of Directors
The compensation of the Board members refers to the responsibilities taken, the time spent in
their duties, their competence and professional reputation.
Statutory Board
The Company believes that the remuneration of the Statutory Board members values their
responsibilities, time devoted to their duties, their competence and professional reputation and
the value of their services on the market.
Variable compensation: aims to recognizes the principals' efforts in the construction of the
results achieved, besides motivation for attainment of the performance indicators.
Fiscal Council
The compensation of the Fiscal Council members is set at the Shareholders’ Meeting of the
Company, according to article 35, paragraph 6 of its Bylaws. It aims at compensating the
services rendered to the Company.
Audit committee
The composition of the remuneration is attributed by decision of the Board of Directors and
seeks to remunerate the services rendered to the Company.
(c)
Key performance indicators that are taken into account in determining each
remuneration component
Board of Directors
The compensation is fixed and is not tied to performance indicators.
The fixed compensation of the Statutory Board members is not tied to any performance
indicator.
On its turn, the amount to be attributed in the scope of the Share-Based Payment of the
Company shall result from the process for the assessment of each member and the results
achieved by the Company.
The assessment of the competencies of the top management of BB Seguridade is carried out
every six-month period, as follows: the CEO is assessed by the Chairman of the Board of
Directors, and the Executive Officers are assessed by the CEO of the Company.
It is also used the corporate climate survey as criteria for setting the share-based payment,
because it is a measurement that is representative of the leadership style adopted by the
manager, which addresses issues related to participatory management, fai rness, feedback,
cooperation and communication in the work environment.
The individual performance of the Management members, for the purposes of the share-based
payment, is composed of the weighting between the performance criteria: 70% for the
assessment of competence, and 30% for the management style (corporate climate survey).
The members of the Board of Directors also participate in the joint assessment process,
assessing the Board of Executive Officers as a whole, annually, in compliance with CGPAR
Resolution 3/2010.
For the assessment of the Business Unit of the company, the template of the
Bargaining/Employment Agreement is adopted, which is based on the principles and
perspectives of the Balanced Scorecard, a tool used by the Controlling Shareholder (Banco do
Brasil) to assess its units, with the adaptations necessary to the particularities of the Company.
In this instrument, the Company unfolds in goals its Corporate Strategy, measuring every six month period the performance of its Business Units.
In relation to the performance of the Company as a whole, the indicator of adjusted return on
average equity is adopted. In its calculation, the book net income of the Company is adopted,
free from nonrecurring events.
So the performance assessment of the Statutory Board of BB Seguridade, for purposes of
share-based payment, is composed of a weighting between the criteria provided in the following
table:
Evaluation Level
Performance Criteria
Assessment of competences (70%)
Individual
Corporate Climate Survey (30%)
Business unit
Fulfillment of the Bargaining/Employment Agreement
BB Seguridade Participações S.A.
Adjusted ROAE of BB Seguridade
Collegiate evaluation
Score assigned by the Company’s Board of
Directors
For activating the Program, it is necessary the minimum fulfillment set for each one of the
indicators of the table below, reaching 12 salaries depending on the overcoming of the minimum
targets set is needed.
Wheights
Minimum
CEO
Directors
06
-
-
Adjusted ROAE (*)
37%
60%
40%
Fulfillment of the
Bargaining/Employment Agreement
(**)
400
10%
30%
Individual performance evaluation
(***)
3.25
20%
20%
Collegiate performance evaluation
7
10%
10%
Amount of fees
(*) Goal aligned w ith the Guidance Released by the Company, in compliance w ith the CVM instruction 480. The
minimum amounts refer to w hat is provided for in the guidance in effect as of the date w hen this section w as
prepared, being subject to change.
(**) Score internally adopted by the Company, w ith scale betw een 100 and 600 points.
(***) Scale of 1 to 5 points
Fiscal Council
Audit committee
(d)
As the compensation is structured in such a way as to reflect the increase in the
performance indicators
Board of Directors
Statutory Board
It is structured so that the distribution of Variable Remuneration, accountable for up to 50% of
the total annual remuneration, is contingent upon the attainment of the target defined by the
Board of Directors. The release of the share-based payment installments deferred to the
following years depends on the performance attained in the following years, which collaborate
to the alignment of interests of the Officers with those of the Company.
Fiscal Council
Audit committee
(e)
How the compensation policy or practice is aligned with the short, medium and
long-term interests of the issuer
The Compensation Program of the Board of Executive Officers of BB Seguridade is aimed
aligning the interests of the administration personnel with the objectives of the Company,
seeking gains by the commitment of the management members to the short and medium -term
results.
Additionally, the Share-based program was created, 50% of which is paid in shares, stimulating
the Statutory Officers to seek the creation of value to the Company with sustainability in the long
term.
(f)
Existence of remunerated supported by subsidiaries or direct or indirect
controlling shareholders
There are no installments of pay received by members of the Board of Directors, the Executive
Board, Fiscal Council and other management bodies, according to the holding positions in BB
Seguridade, which are supported by subsidiaries or direct or indirect controllers.
(g)
Existence of any remuneration or benefit linked to the occurrence of a particular
corporate event, such as the disposal of the issuer's controlling interest
Not applicable, as there is not any compensation component of the Company’s management
member tied to corporate events.
13.2 - Overall compensation to the Board of Directors, Statutory Board and Fiscal
Council
Total com pensation observed in Fiscal Year 2013 - annual values
Board of
Directors
Statutory
Executive
Board
Fiscal Council
Total
61
42
3
13
134,646.57
1,077,172.50
80,787.94
1,292,607.01
Direct and indirect benefits
N/A
107,285.23
N/A
107,285.23
Participation in committees
N/A
N/A
N/A
N/A
30,295.48
318,889.37
18,177.29
367,362.14
Social Charges
(INSS)
Social Charges
(INSS)
Social Charges
(INSS)
Social Charges
(INSS)
Warrants
N/A
N/A
N/A
N/A
Profit sharing
N/A
444,482.36
N/A
444,482.36
Participation in meetings
N/A
N/A
N/A
N/A
Commissions
N/A
N/A
N/A
N/A
Others
N/A
131,585.89
N/A
131,585.89
Description of other fixed compensation
N/A
Social Charges
(INSS)
N/A
Social Charges
(INSS)
Post-employment
N/A
N/A
N/A
N/A
Cessation of the job position
N/A
N/A
N/A
N/A
Share-based
N/A
444,482.36³
N/A
444,482.36
164,942.05
2,523,897.71
98,965.23
2,787,804.99
Number of members
Annual fixed rem uneration
Salary or Director Compensation
Others
Variable com pensation
Total com pensation
1
The Chairman of the Company's Board of Directors renounced the compensation.
The CEO did not receive compensation in 2013 for performing his duties in BB Seguridade.
The value corresponds to the total stock-based compensation of the Directors of the Company, pursuant to the
Programa de Remuneração 2013. From this total, the percentage of 20% (tw enty percent) of the shares w ill be
immediately transferred to the beneficiaries, leaving the remainder in deferred equal installments over a period of four
years.
2
3
Total com pensation provided for the year 2014 – annual values
Board of
Directors
Statutory
Executive
Board
Fiscal Council
Total
6
4
3
13
305,506.58
2,206,436.44
152,753.29
2,664,696.31
Direct and indirect benefits
N/A
786,077.92
N/A
786,077.92
Participation in committees
N/A
N/A
N/A
N/A
68,738.98
829,714.97
34,369.49
932,823.44
Social Charges
(INSS)
Social Charges
(INSS + FGTS)
Social Charges
(INSS)
Social Charges
(INSS + FGTS)
Warrants
N/A
N/A
N/A
N/A
Profit sharing
N/A
1,018,355.28
Participation in meetings
N/A
N/A
N/A
N/A
Commissions
N/A
N/A
N/A
N/A
Others
N/A
765,890.74
N/A
765,890.74
N/A
Social Charges
(INSS + FGTS)
N/A
Social Charges
(INSS + FGTS)
Post-employment
N/A
N/A
N/A
N/A
Cessation of the job position
N/A
N/A
N/A
N/A
Share-based
N/A
1,018,355.28
N/A
1,018,355.28
Total compensation
374,245.56
6,624,830.63
187,122.78
7,186,198.97
Number of members
Annual fixed rem uneration
Salary or Director Compensation
Others
Variable com pensation
(a)
1,018,355.28
N
/
A
13.3 - Variable compensation of Board of Directors, Statutory Board and Fiscal
Council
Share-based Paym ent for 2013
Board of
Directors
Statutory
Executive
Board
Fiscal Council
Total
6
4
3
13
Minimum value established in the
compensation plan
N/A
N/A
N/A
N/A
Maximum value established in the
compensation plan
N/A
N/A
N/A
N/A
Value established in the
compensation plan - targets reached
N/A
N/A
N/A
N/A
Amount effectively recognized
N/A
N/A
N/A
N/A
Num ber of associates
In relation to the bonus (R$)
In relation to profit sharing (R$)
(b)
compensation plan
N/A
N/A
N/A
N/A
compensation plan
N/A
1,827,633.56
N/A
1,827,633.56
Value established in the
N/A
1,827,633.56
N/A
1,827,633.56
N/A (d)
1,020,550.61* (e)
N/A (f)
1,020,550.61
Am ount effectively recognized
(c)
* Value determined after the disclosure of the results of the Company and in accordance w ith the conditions set out in
the Programa de Remuneração 2013,being composed of R$444,482.36 for payment in cash (50%), R$ 444,482.89 for
payment in shares (50%) and social contributions, w hich totaled R$131,585.89 . The total paid in shares, the
percentage of 20% of the shares w ill be immediately transferred to the ow nership of the beneficiary and 80% w ill be
deferred in equal installments over a period of four years.
Variable Rem uneration estim ated for the year 2014
Board of
Directors
Statutory
Executive
Board
Fiscal Council
Total
6
4
3
13
compensation plan
N/A
N/A
N/A
N/A
compensation plan
N/A
N/A
N/A
N/A
Value
established
in
the
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
compensation plan
N/A
1,018,355.28
N/A
1,018,355.28
compensation plan
N/A
2,036,710.56
N/A
2,036,710.56
Value
established
in
the
N/A
2,036,710.56
N/A
2,036,710.56
N/A
N/A
N/A
N/A
Num ber of associates
In relation to the bonus (R$)
In relation to profit sharing (R$)
13.4 - Share-based compensation plan of the Board of Directors and Statutory
Executive Board
a.
general terms and conditions
The Share-based Payment of the Company provides for compensation based on shares to its
officers, as resolved by the Board of Directors. There is no resolution on share-based payment
to the Board of Directors.
The Compensation Program of the Board of Executive Officers was originally approved at the
th
meeting of the Board of Directors held on March 28 , 2013, the Annual Shareholders’ Meeting
(AGO, in Portuguese) having, on the same date, set the global compensation ceiling of the
Company Management. At the meeting held on December 20, 2013, the Board of Directors set
the distribution of the compensation amounts. The Departamento de Coordenação e
Governança das Empresas Estatais – DEST was favorable to the cause, promoting some
adjustments heeded by the company that did not change the essence of the Program.
The Compensation Program item that deals with the share-based payment was prepared with
the objective of aligning the interests of the management with those of shareholders, besides
aligning the Share-based Payment Program of BB Seguridade with the program adopted by its
Controlling Shareholder. The Program provides for the share-based payment to the members of
the Board of Officers, at a percentage equivalent to up to 50% of the global compensation. Of
this percentage, 50% shall be paid in cash, and the remaining portion in shares issued by the
Company itself. Of the amount to be paid in shares, the percentage of 20% shall be immediately
transferred to the beneficiaries, and the remaining shall be deferred in equal percentages over
four years.
The amount of the share-based payment to be received by each Officer varies between six and
twelve monthly salaries. It should be noted that the Compensation Program provides for
payment exclusively in local currency and payments backed by shares, and does not contain
any guarantee in stock options or other convertible securities.
b.
main objectives of the plan
The share-based payment plan of the Company is mainly aimed at aligning the interests of the
key personnel of Management with the objectives of the Company, based on the best practices
of Corporate Governance and the market.
c.
the way how the plan contributed for such objectives
Compensate the management members with the shares of the company itself stimulate them to
achieve better results and the valuation of the shares in the market. The release of the sharebased payment installments deferred to the following years depends on the performance
attained in the following years, which collaborate to the alignment of interests of the Officers
with those of the Company.
d.
how the plan is inserted in the Company’s compensation policy
The Share-based Payment Program of the Board of Executive Officers provides for payments in
cash (50%) and in shares (50%).
e.
how the plan aligns the interests of the officers to those of the Company in short,
medium and long term
As detailed in item 13.1, the portion of the share-based payment provides for the immediate
transfer of the ownership to the beneficiaries of 20% of total. The remaining is deferred in equal
percentages of 20% over four years, and its release is conditioned to the future performance of
the Company, which aligns the interests of management members.
f.
maximum number of shares covered
The number of shares shall be defined according to the average price and based on achieved
results.
g.
maximum number of options to be granted
Not applicable. The compensation is based only on shares.
h.
share acquisition conditions
The shares shall be acquired in the market, after the formal authorization from the Brazilian
Securities Exchange Committee (CVM, in Portuguese), annually, in the period between the
determination of the indicators comprising the Bargaining/Employment Agreement and the
(seven) business days that prior to the share-based payment.
The daily volume of acquisitions shall not exceed 20% of the daily average traded at the stock
exchange over the latest five trading sessions, considering the acquired ones through
occasional share repurchase program, which is in effect.
There shall be no acquisition over the quiet period and in the period between the announcement
date and the base date of dividends.
i.
criteria for fixation of the acquisition price or exercise
To define the quantity of shares to be paid to each Executive Officer, the amount in BRL
(Brazilian “reais”) shall be divided by the average daily closing price of BB Seguridade shares
(BBSE3) in the week before the payment.
j.
criteria for fixation of the exercise term
Not applicable. The compensation is based only on shares.
k.
settlement method
Not applicable.
l.
restrictions to the transfer of shares
Reduction in results at a percentage equal to or higher than 20% shall imply proportional or total
reversion of the payment in shares provided for in the Program.
m.
criteria and events that, when checked, will cause the suspension, change or
extinction of the plan
The non-fulfillment of the projected results, especially the adjust ROAE, will cause the nonpayment of the compensation to the management members, in cash or shares.
n.
effects of the removal of the officer from the Company’s bodies on its rights
provided for in the share-based compensation plan
The members of the Board of Executive Officers who resign or are removed, as well as in the
case of retirement or death, shall have their shares released in the originally scheduled terms.
13.5 - Interest in shares, quotas and other securities convertible into shares or
quotas, held by the Management and Fiscal Council members – by body
Year ended December 31, 2013
BB Seguridade shares
Board of Directors
0
Executive board
0
Fiscal Council
0
Total
0
Year ended December 31, 2013
Banco do Brasil shares
Board of Directors
5,592
Executive board
1,538
Fiscal Council
1,994
Total
9,124
13.6 - Share-based compensation of the Board of Directors and of the Statutory
Board
Not applicable to the Board of Directors. The share-based payment applies only to the Board of
Executive Officers. The year 2013 shall be the first in which the share-based payment is made
to the members of the Executive Board of BB Seguridade Participações S.A. The shares will be
bought in the first half of 2014.
Share-based remuneration estimated for the current year (2013)
Board of Directors
Statutory Board
Number of members
-
04*
Granting of stock options
-
Not Applicable
Grant date
-
Not Applicable
Number of options granted
-
Not Applicable
Term for the options to become exercisable
-
Not Applicable
Maximum term for the exercise of options
-
Not Applicable
Term of restriction to the transfer of shares
-
4 years
Weighted average exercise price:
-
Not Applicable
(a) Options outstanding at the beginning of the fiscal
year
-
Not Applicable
(b) Options lost during the fiscal year
-
Not Applicable
(c) Options exercised during the fiscal year
-
Not Applicable
(d) Options expired during the fiscal year
-
Not Applicable
Fair value of options on the date of granting (R$ thousand)
-
Not Applicable
Potential dilution in case of exercise of all options granted
-
Not Applicable
* As further explained in the item 13.2, in 2013, during the transition phase, when some
activities were still being conducted by Banco do Brasil statutory Directorship of Insurance,
Open-end Pension Plans and Premium Bonds, BB Seguridade CEO didn’t receive
remuneration related to its duties at BB Seguridade. Until that year, the remuneration received
by the CEO was only that related to his duties as Director of Insurance, Open-end Pension
Plans and Premium Bonds at the controlling shareholder Banco do Brasil S.A., pursuant
Brazilian Central Bank rule 3.921/2000. Therefore, the payment of BB Seguridade share-based
compensation will be made to three executive officers.
For the year 2014, the share-based payment is also expected to be made in the form of
Company’s shares to management members. However, as of the date of this Form, the involved
amounts were not yet set.
13.7 - Information on outstanding shares held by the Board of Directors and
Statutory Board
Not applicable. There is no variable remuneration based on Company’s stock options.
13.8 Options exercised and shares delivered relating to the share -based
compensation of the Board of Directors and of the Statutory Board
Not applicable. There is no variable remuneration based on Company’s stock options.
13.9 - Information required to understand the data disclosed in items 13.6 to
13.8 – Pricing method of the value of shares and options
After determining all the program indicators and further definition of the individual amount of
each officer, the taxes due will be withheld and the total net value will be used by the BB
Seguridade for purchase of shares in the market. This purchase operation occurs in conformity
with CVM regulations.
To define the quantity of shares to be paid to each Executive Officer, the amount in BRL
(Brazilian “reais”) shall be divided by the average daily closing price of BB Seguridade s hares
(BBSE3) in the week before the payment.
Of the total allocated to the share-based payment, 50% shall be paid in cash, and 50% in
shares of BB Seguridade (BBSE3). Of the total paid in shares, 20% shall be immediately
transferred to the ownership of the beneficiary, and 80% shall be deferred in equal installments
for the period of four years.
13.10 - Information on pension plans granted to Board members and Statutory
Board officers
The statutory officers of the Company are career civil servants lent by Banco do Brasil who,
upon taking the duties in the Company, have pension plans on the same conditions of the
associates of its controlling shareholder.
13.11 - Maximum, minimum and average individual compensation to the Board of
Directors, Executive Board and Fiscal Council
On March 28, 2013, the Annual Shareholders’ Meeting (AGO, in Portuguese) of the company
approved the global compensation ceiling of R$ 6.0 million, including therein the compensation
of the Board of Executive Officers, Board of Directors and Fiscal Council, composed as follows:
- Board of Executive Officers: 4 (four) members;
- Board of Directors: 6 (six) members;
- Fiscal Council: 3 (three) members.
The members of the Board of Directors of BB Seguridade have the right to a fixed
compensation that shall not exceed 10% (ten percent) of the average monthly amount paid to
the Statutory Officers.
The Statutory Board has the right to a fixed compensation and other direct and indirect benefits,
th
as follows: Corporate Health Plan of the parent company, 13 salary, group life insurance,
pension plan of the parent company, annual health evaluation and housing allowance
(extraordinary). The share-based payment shall depend on the individual and joint performance,
and of the results achieved by the Company annually.
Compensation of each Fiscal Council working member will correspond to 10% of the average
amount attributed as compensation to each Company’s officer, not considering benefits,
representation budget and profit sharing.
In the following table, note that the chairman of the Board of Directors of the Company waived
the right to his compensation, reason why the average compensation was calculated based on
five members (including the chairman, the Company’s Board currently has six members).
Moreover, as detailed in item 13.2, the CEO didn’t receive remuneration in 2013 fiscal year
(base date of the following table) related to its duties at BB Seguridade. Therefore, the amounts
were calculated with the remuneration of the other Executive Officers.
Maximum, average and minimum compensation
Board of
Directors
Statutory Board
Fiscal Council
Number of members
06
04
03
Amount of the highest
compensation
R$ 32,988.41
R$ 841,299.24
R$ 32,988.41
Amount of the lowest
compensation
R$ 32,988.41
R$ 841,299.24
R$ 32,988.41
Average amount of
compensation
R$ 32,988.41
R$ 841,299.24
R$ 32,988.41
13.12 - Compensation or indemnification mechanisms for the Management
when removed from office or retired
The Company has no contract arrangements, insurance policies or other instruments of
compensation or indemnity for its Management members in case of dismissal or retirement.
In case of retirement or removal from a position of any management member of the Company,
the conditions provided for the other management members of the parent company shall apply,
once all management members are employees from that company.
13.13 - Percentage on the total compensation held by the Management and
members of the Fiscal Council, who are the parent companies' related parties
Fiscal Year 2013
Board of
Directors
Statutory
Executive
Board
Fiscal
Council
Total remuneration of the body (R$)
164,942.05
2,523,897.71
98,965.23
Total remuneration of the members appointed
by the controlling shareholder (R$)
132,589.56
2,523,897.71
88,151.10
Percentage of remuneration of the appointees
in relation to the total amount paid
80%
100%
89%
13.14 - Compensation of members of the board of directors and fiscal
council, grouped by body, for any reason other than the position that they
occupy
None.
13.15 - Compensation of management and members of the fiscal council
recognized in the profit or loss of direct and indirect controlling
shareholders, jointly-subsidiaries and subsidiaries of the issuer.
BB Seguridade was established on December 20, 2012 and, in the period from that date to
December 31, 2012, its Management was comprised only of Executive Board members. The
members of the Fiscal Council were elected at the Shareholders’ Meeting of December 31,
2012, having the right to the compensation only in 2013 and the Board of Directors was
established at the Shareholders’ Meeting of March 15, 2013, date when the respective board
members took office.
The members of the Board of Directors and Fiscal Council, appointed by the direct controlling
shareholder of BB Seguridade, that is, by Banco do Brasil S.A. (“BB”) are career civil servants
and compensated according to the positions they took in BB.
Members appointed by the indirect controlling shareholder are public officials and paid by the
Federal Government according to the positions held at that level.
BB Seguridade only bears the monthly remuneration of the members for their participation in its
collegiate bodies. Board members are paid monthly, regardless of the quantity of meetings,
under the limits established by internal norms.
The table below shows the amounts paid as remuneration received by the members of each
body, which were borne by the direct controlling shareholder of BB Seguridade.
Amounts in R$
2011
2012
2013
Board of Directors
0.00
0.00
1,426,476.08
0.00
65,416.64
1,225,961.98
Fiscal Council
0.00
41,923.41
900,227.73
The table below shows the amounts paid as fees received by the members of each body, which
were borne by companies controlled by BB Seguridade.
Amounts in R$
2011
2012
2013
Board of Directors
0.00
1,470.62
58,982.79
0.00
0.00
0.00
Fiscal Council
0.00
2,941.25
174,934.92
13.16 Other relevant information
All the information deemed relevant was disclosed in the above items.
TEMPLATES OF PROXY INSTRUMENTS
FOR THE EXERCISE OF VOTING RIGHTS
P O WE R O F AT T O R N E Y
By this proxy, [shareholder’s name], [nationality], [marital status], [occupation], enrolled
with Identity Card under number [nnn] and CPF/MF under number [nnn.nnn.nnn-nn],
resident and domiciled at [address], (“Grantor”), hereby appoints and constitutes Mr.(s),
[proxys’ name], [nationality], [marital status], [occupation], enrolled with Identity Card
under number [nnn] and CPF/MF under number [nnn.nnn.nnn-nn], resident and
domiciled at [complete address], his/her Proxy, to whom grants powers to represent
him/her as shareholder of the BB Seguridade Participações S.A. (“Company”), at the
Ordinary and/or Extraordinary General Meetings of the Company, that will occur at [nn]
o’clock of [month] [day], [year], at [address] of Edifício Sede I, Setor Bancário Sul,
Building 1, in Brasília (DF), declaring his vote with accordance of the vote’s orientation
as follow.
The proxy will have limited powers only to represent the Grantor at the General
Meeting and to declare his vote with accordance of the vote’s orientation as follows,
without rights nor obligations to take any other decision that is not necessary to fulfill
the vote’s orientation indicated as follows. The proxy is authorized to abstain in any
deliberation or matter that he/she had not received enough specific vote’s orientation.
This power of attorney will be valid for the period of [nnn] days, beginning at the
signature’s date bellow.
[City], [Month] [day], [year].
[Shareholder’s name]
[Authenticated signature]
VOTE´S ORIENTATION
P O WE R O F AT T O R N E Y
By this proxy, [Registered Name], [legal entity’s identification], enrolled with CNPJ/MF
under number [nn.nnn.nnn/nnnn-nn], estabilished at [address], [city], [province], in this
act represented by the [function at the institution], [representative’s name], [nationality],
[marital status], [occupation], enrolled with Identity Card under number [nnn] and
CPF/MF under number, resident and domiciled at [address], (“Grantor”), hereby
appoints and constitutes Mr(s)., [proxy´s name], [nationality], [marital status],
[occupation], enrolled with Identity Card under number [nnn] and CPF/MF under
number [nnn.nnn.nnn-nn], resident and domiciled at [complete address], its Proxy, to
whom grants powers to represent, as shareholder of the BB Seguridade Participações
S.A. (“Company”), at the Ordinary and/or Extraordinary General Meeting of the
Company, that will occur at [nn] o´clock of [month] [day], [year], at the [address] of
Edifício Sede I, at Setor Bancário Sul, Building 1, in Brasília (DF), declaring his vote
with accordance of the vote’s orientation as follows.
The proxy will have limited powers only to represent the Grantor at the General
Meeting and to declare his vote with accordance of the vote’s orientation as follows,
without rights nor obligations to take any other decision that is not necessary to fulfill
the vote’s orientation indicates as follows. The proxy is authorized to abstain in any
deliberation or matter that he/she had not received enough specific vote’s orientation.
This power of proxy will be valid for the period of [nnn] days, beginning at the
signature’s date bellow.
[City], [Month] [day], [year].
[representative’s name of the shareholder]
[Authenticated signature]
VOTE´S ORIENTATION

BB SEGURIDADE PARTICIPAÇÕES SA

Transcription

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