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GUSTAVO ZENO
SRGIO KARIYA
YES
CVM code
385-9
Auditor type
Name/Social Reason
Nacional
Deloitte Touche
Tomahtsu
CPF/CNPJ
49.928.567/0001-11
Period of service
4/18/2011 a 3/9/2016
In the fiscal year ended 2015 the services provided by Deloitte of independent audit of the financial statements of
Mills Estruturas e Servios de Engenharia S.A. (Company or Mills) for the fiscal year ended 2015, with issuance of
the opinion, and limited review of quarterly financial statements for the periods ended March 31, June 30 and
September 30, 2015, with the issuance of the related reports; In the fiscal year ended 2014 the services provided
by Deloitte of independent audit of the financial statements of Mills Estruturas e Servios de Engenharia S.A.
(Company or Mills) for the fiscal year ended 2014, with issuance of the opinion, and limited review of quarterly
financial statements for the periods ended March 31, June 30 and September 30, 2014, with the issuance of the
related reports; and services related to the release of previously agreed procedures (PAP) about the financial
statements ended December 31st of 2013 of the investee Rohr S.A Estruturas Tubulares.
In the fiscal year ended 2013 the following services were provided by Deloitte: (i) independent audit of the financial
statements of Mills Estruturas e Servios de Engenharia S.A. (Company or Mills) for the fiscal year ended 2013,
with issuance of the opinion, limited review of quarterly financial statements for the periods ended March31, June
30 and September 30, 2013, with the issuance of the related reports, and limited review of Industrial Services
financial statements for the purpose of its disposal.
In the fiscal year ended in December 2014, the Company registered R$ 366.4 thousand of fees paid to Deloitte,
referring to limited reviews of financial statements and the Audit Report of that year. In the fiscal year ended in
December 2014, the Company registered R$ 448.0 thousand of fees paid to Deloitte, referring to limited reviews of
financial statements and the Audit Report of that year and
Total amount of remuneration of auditors separated by ; R$ 30.2 thousand related to the release of previously agreed procedures (PAP) about the financial statements
offered services
ended December 31st of 2013 of the investee Rohr S.A Estruturas Tubulares.
Replacement justification
8/6/2014 a 3/9/2016
Adress
Avenida Presidente Wilson, 231, Centro, Rio de Janeiro, RJ, Brasil,
CEP 20030-021, Telefone (21)
004.400.929-14
39810500, Fax (21) 39810600, e-mail: feleite@deloitte.com
Auditor?
YES
CVM code
418-9
Auditor type
National
Name/Social Reason
CPF/CNPJ
57.755.217/0022-53
Period of service
28/03/2016
KPMG was hired to audit the financial statements of Mills Estruturas e Servios de Engenharia S.A.
Description of contracted service
Total amount of remuneration of auditors separated by
offered services:
It hs not made any payment to KPMG, since the contract started on 3/28/2016
Replacement justification
28/03/2016
Endereo
Avenida Almirante Barroso, 52, 0, Centro, Rio de Janeiro, Brasil, CEP
20031-000, Telefone (21)
079.525.807-01
35159400, Fax (21) 35159000, e-mail: lcaraujo@kpmg.com.br
2013
1,016,513
1,059,397
962,231
1,801,245
832,262
497,328
172,592
1,892,723
794,166
431,786
64,268
1,637,957
576,106
232,327
(97,801)
126,955,111
127,816,990
125,779,503
7.98
1.35
8.27
0.50
7.65
(0.78)
2015
2014
(in thousands of R$)
2015
293,853
157,938
(65,578)
136,888
168,259
169,641
EBITDA
430,741
326,197
104,063
293,853
(88,156)
1,541
(65,578)
19,673
1,546
207,238
111,830
(44,359)
() Av erage invested
capital .....................................................
(=) net equity (2) ......................................................................
(3)
(+) capital from third parties .................................................
(-) Cash and Cash equivalents...............................................
1,471,402
943,023
619,452
91,073
1,675,840
1,058,376
722,302
104,838
1,505,823
1,026,158
660,509
180,844
14.10%
6.67%
-2.9%
2013
Operating Income before financial results ....................................
(+) Income tax and CSLL provision (1)...........................................
(+)Remuneration of affiliated companies
Operating profit before financial income, after taxation and remuneration of affiliated companies
.................................................................................................
2015
________________________________________
(1) Theoretical rate of 30%.
3.3
The Board of Directors on February 5, 2016, approved by unanimous vote and without any reservations or restrictions, except for the member who said prevented the increase in the
Company's capital stock, within the authorized capital limit, with the possibility of partial approval, through the issuance, for private subscription of new common shares issued by the
Company, in accordance with the following terms and conditions indicated:
Value of the Capital Increase: at least R $ 105,435,311.36 (105.435 million three hundred and eleven reais and thirty -six cents) and a maximum of R $ 124,999,999.71 (one hundred
and 24.999 million nine hundred and ninety-nine reais and seventy one centavos) through the private placement of a minimum of 40,089,472 (forty million eighty -nine thousand, four
hundred and seventy-two) and a maximum of 47,528,517 (47,528,000 five hundred and seventeen) common shares, with no par value.
Issue Price: R $ 2.63 (two reais and sixty-three cents) per share. The issue price per share was set without unjustified dilution for the existing shareholders of the Company,
pursuant to Article 170, paragraph 1, item III, of the Law of Corporations, based on the price of the Company's shares on the stock values, considering the average price (average of
the weighted daily closing prices by trading volume) of the Company's shares on the BM & FBovespa SA - Securities, Commodities and Futures Exchange in trading sessions
between conducted between November 27, 2015 (inclusive) and February 4, 2016 (inclusive), a criterion which, in the opinion of the Board, best fits the current reality of the
Company.
Objectives of the capital increase: The capital increase aims to (a) strengthen the Company's capital structure, strengthening its cash to meet the medium and long-term capital
needs for the development of its activities; (B) strengthen the Company's liquidity levels and reduce its debt margins; and (c) enable the Company to take advantage of market
consolidation opportunities that may arise in the medium term.
There were receipts relating to the capital increase now disclosed on the date of February 5, 2016 the following shareholders on the dates of 24 and 25 February 2016.
Number of shares
(in thousands)
Shareholders
Controlling shareholders
15,209
The actions described above to the reporting date of the consolidated financial statements for the year ended 12/31/2014 were unsubscribed.
3.4
Shareholders
Meeting held in April
25, 2014, it was
approved
the
constitution
of
statutory reserves in
the net income in the
amount of (i) R$
118,273,166.08 of net
income retention, that
will be used to defray
part of the planned
investments in the
Companys
capital
budget to acquire
equipment
for
expansion
and
investment in facilities
and
information
technology to support
the
planned
expansion; and (ii)
R$8,629,606.52
destinated
to
the
Legal Reserve.
The
Companys
shareholders
are
entitled to receive the
mandatory minimum
dividend of 25% from
the
adjusted
net
income
(after
allocation to the legal
reserve).
At
the
Ordinary
Shareholders
Meeting held in 2014,
it was approved the
payment of 25% of
the
adjusted
net
income recorded in
2013
to
its
shareholders,
as
dividends and interest
on capital.
Shareholders
Meeting held in April
28, 2015, it was
approved
the
constitution
of
statutory reserves in
the net income in the
amount of (i) R$
33,567,832.00 of net
income retention, that
will be used to defray
part of the planned
investments in the
Companys
capital
budget to acquire
equipment
for
expansion
and
investment in facilities
and
information
technology to support
the
planned
expansion; (ii) R$
3,213,392.43
destinated
to
the
Legal Reserve; and
(iii) R$ 2,405,624.23
destinated
to
expansion Reserve.
The
Companys
shareholders
are
entitled to receive the
mandatory minimum
dividend of 25% from
the
adjusted
net
income
(after
allocation to the legal
reserve
At
the
Ordinary
Shareholders
Meeting held in 2014,
it was approved the
payment of 39% of
the
adjusted
net
income recorded in
2014, higher percent
than the mandatory
dividend under the
form of interest on
equity.
The Company's
shareholders are
entitled to receive the
mandatory minimum
dividend of 25% of
adjusted net income
(after allocation to the
legal reserve).
Dividends are
distributed as decided
by the Annual General
Meeting. The
Restrictions to dividend
distribution
3.5
AGO.
AGO.
No restrictions.
No restrictions.
Company may
distribute interest on
capital, by resolution
of the Board of
Directors, and charge
the amount distributed
to the mandatory
dividend.
No restrictions.
In R$
2013
2014
2015
163,962,523.90
61,054,456.23
0.00
46,497,455.75
25,081,000.00
0.00
43,014,000.00
25,081,000.00
0.00
30/4/2014
5/6/2015
25.0%
39.03%
17.0%
5.76%
118,273,166.08
33,567,832.00
4/25/2014
4/28/2015
3,483,455.75
4/30/2014
3.6
The dividends presented in the chart of item 3.5 were declared in the net income of the last three fiscal years.
3.7 - Debt
Social Exercise
12/31/2015
Type Index
18,959,222.80
6,276,318
259,658,466
265,934,785
2,347,222.80
5,054,502
159,426,156
164,480,657
Over 5 years
5,574,654.15
599,724
599,724
Total
54,892,335.75
15,115,324
605,718,340
620,833,664
3.9
4.1
Risk Factors
a.
to the Company.
Companys activities consist of providing solutions and assistance to demand of several economy
sectors, specially in civil construction, oil and gas and industrial segments. Consequently, its
operations are subject to similar risks faced by other companies of the sector.
The Heavy Construction business unit offers customized solutions to companies involved in the
implementation of large infrastructure projects, while the Real Estate business unit provides services to
residential and commercial construction companies. The products offered by Rental business unit are
leased to companies operating in a broad number of industrial segments. Consequently, the Companys
financial condition and results of operations are directly linked to the growth and performance of these
several industries, and the Company is exposed to many of the risks faced by companies operating in
these industries.
Events that may negatively affect these industries in such sectors, includes macroeconomic factors,
adverse climate conditions, deterioration of the Brazilian social conditions, decreases in investment,
changes to laws and regulations that adversely affect these industries, credit restrictions, supplier problem,
reductions in client purchasing power, and difficulties in the management of the clients business, among
others, are beyond the managements control and may cause an adverse material effect on the Companys
operations and results.
Additionally, the Company presents relevant exposure in its revenues to companies related to the ongoing
investigations known as Car-wash operation. Consequences of investigations may include reduction or
even extinction of companies involved, which can bring delays on current construction works, lower future
construction activity and, consequently, lower demand for equipment and services of the Company.
The Companys equipments are needed on projects with construction methods that require onsite
concrete. In case there is significant modification in construction firms to other construction methods, as, for
instance, steel or pre-molded structures, the demand for Companys equipment and services can be
reduced.
The Company may not be able to fully implement its business strategy
The continued growth depends on several factors, many of them are beyond the Companys control. In
particular, the Companys strategy for the expansion of its business units depends on, specially, the
performance of civil construction and industrial sectors in the next years in Brazil. The performance
depends on private and public investments to improve Brazilian infrastructure in several areas, such as
energy, sanitation, transportation and housing, including housing program Minha casa minha vida and the
package of projects which includes the Package of Logistics Investments - Programa de Investimentos em
Logstica, among others. In case these investments are not implemented, delayed or generate a lower
demand than expected, the Company may not be able to implement its expansion st rategy adequately.
The organic growth strategy of Rental business unit includes, yet, activities for geographic expansion,
counting with opening of new branches. The Company may not be able to successfully establish business
in different cities and regions of Brazil due to several factors, as, for instance, skilled labor shortage, lack of
reliable suppliers in the local, local competitors, expensive and hard to find terrains, licensing term, and
difficulties to brand acceptance. Even though geographic expansion comes to happen, the Company is
subject to new local economy risks.
Additionally, the Companys future performance will depend on its ability to manage the growth of its
operations. The Company cannot warrantee that it will be able to manage its growth successfully, or that
this growth will not have an adverse effect on its existing business. If the Company is unable to manage its
growth, it may lose its leading market position, which could have a material adverse effect on its financial
condition, results of operations and the negotiation price of its shares.
With operations growth current facilities may become insufficient to store our equipment and provide space
to maintenance and handling of the equipment in an efficient way, which can result in an increase of our
operational costs or a need of moving to new facilities. In case of moving, Company may suffer increase in
rental costs, incur termination fines and may necessitate a supplementary improvement investment on the
new branches.
Adverse conditions in the financial and credit markets, or the Companys failure to secure financing
on adequate terms, may adversely affect its ability to run its business or to implement its strategy.
The implementation of the Companys expansion strategy, as well as the maintenance of its operational
capacity, could demand additional investments and require additional capital, which may not result in an
equivalent increase in its operating income. In addition, the Company may face an increase in operating
costs as a result of other factors, as, for instance, shortages of raw materials, equipment or skilled labor,
increased equipment costs and increased competition in the segments in which it operates. The Company
may need to raise additional funds through securities offerings, including offerings of its shares or debt
instruments, or through credit financings, in order to meet its future capital needs. The Company may not
be able to secure such funds on favorable terms, or at all.
The Company future capital needs will be determined by a number of factors, which includes growth rate of
its revenues, cost and significance of future acquisitions, and expansion of its business operations.
Depending on the investment volume needed, or of costs that may incur, the Company may be forced to
increment cash flow and/or search alternate sources of funds, including creating strategic partnerships.
Anny effort to increment cash flow, by increasing sales, costs reduction, more efficient receivables charge,
and inventory reduction, can be unsuccessful. In addition, the Company may not be able to raise funds to
finance the Companys operations on favorable terms, in which case it may be unable to take advantage of
future opportunities, to react to an increase in competition, or to meet its existing debt obligations. Any of
the events mentioned above could have a material adverse effect on its financial condition, operation
results and the negotiation price of its shares.
The current funding lines from the Company represented, on December 31 of 2015, total debt of R$ 620.8
million. Pursuant to the terms of the Companys existing financing agreements it must comply with certain
conditions which restrict, among other things, its ability to incur additional debt, pay dividends and carry out
capital reductions. As a result of these restrictions, the Company may have difficulty in securing additional
financing to run its operations. New financing contracts may require even more severe restrictions.
In addition, some of the Companys clients are dependent on the credit availability to finance their
investments. A scenario of credit shortages and high interest rates may adversely affect its clients ability to
fund their projects and, consequently, purchase the Companys services, which m ay have a material
adverse effect on its financial condition and results of operations.
The Company is also exposed to the fact that counterparts to its financing agreements may be prevented
from fulfilling their obligations toward the company, should they go bankrupt or into receivership due to a
sharp decrease in their liquidity levels, so great that such institutions may be prevented from fulfilling their
obligations. The Companys difficulty in the credit scarcity may also adversely affect its suppl iers.
Therefore, should the Companys financial counterparts or suppliers be unable to satisfactorily meet their
obligations under the terms of the Companys existing agreements, the Company may need to secure
alternative financing and/or approach alternative suppliers in order to meet its own obligations toward its
clients. Such events could also lead to litigation with its partners or clients, which could have a significant
adverse impact on its reputation, operation and financial condition.
Service cycle leads the Company to apply significant financial and technical resources even before
engaging.
Companys services require high level of initial investment, directed to new process development and,
mainly, to machinery and equipment acquisition which will be used in clients operation, besides the
constant improvement of employees. Some of these investments are performed without any assurance that
the company will be hired in a continuous base to provide service. Thus, the company is particularly
vulnerable to its equipment idleness, until it is reallocated in a project.
The loss of members of the Companys management team may have a material adverse effect on its
operations.
The Companys current market position and its ability to maintain this position is largely dependent on the
skill of its highly experienced management team. None of the Companys executive officers are subject to
long-term employment contracts or non-compete agreements.
The Company cannot guarantee that it will be able to retain its current executive officers or hire other
qualified professionals. The loss of a few of the Companys senior executive officers, or its failure to attract
and retain experienced professionals, may adversely affect its business.
Flaw in asset management can affect credibility and profitability of the Company.
As a rental Company, it needs to manage efficiently its assets, being in investment and disinvestment
decision or in its equipment rental contracts, equally both.
The Company performs investment and disinvestment based on a demand forecast for its services. In case
this forecast does not happen or changes, the Company may have increase on its idle capacity, affecting
its profitability in terms of return on invested capital, or loss of market share.
In its rental contracts, the Company counts the amount of rented equipment in delivery versus the amount
returned. In case the Company is not efficient in account of rented s pare parts, it can have its credibility
affected by charging its clients improper compensation or having not enough equipment to replace lost or
broken equipment, if it charges lower than payable.
All of the Companys business units face significant competition in the markets in which they
operate.
The Company faces strong competition in all of the segments in which it operates. Moreover, the Company
may be exposed in the future to additional competition from new market players, as well as from forei gn
competitors entering the Brazilian market. The Company operates in a fragmented market which
demonstrates considerable potential for growth and is served by a substantial number of companies
offering less sophisticated and, therefore, less cost services. The Companys clients decision to hire a
particular service provider is influenced by a number of factors, including the quality of the services, the
reliability of the contractor and its ability to offer innovative solutions, and the price charged for the services
required. The Companys competitors are making substantial efforts to improve their market positions and
the Company may lose certain clients to these competitors, including long-standing clients that regularly
employ its services.
In addition, if construction companies and industries create new in-house departments to complement their
core operations, and no longer require the Companys services (or even to compete with the Company).
Competition could also come from substitute products, such as scaffolding, stairs and other types of access
equipment, in the case of motorized access equipment. All these events can lead to a reduction in demand
for Companys services, and a potential increase in competition, which may adversely affect its market
stock price and results of operations.
The development of engineering solutions and technological innovations which add value to the
Companys services i s critical to the protection of its leading market position and to the expansion
of its business.
Due to the nature of the Companys business, it must remain abreast of the latest engineering solutions
and technological innovations in its industry. The Company must employ qualified personnel, maintain an
adequate infrastructure, and expand relationships with suppliers that have a successful track record.
Should the Company fail to provide value-added engineering solutions, or to buy or license new
technologies developed by third-parties on acceptable terms, the services rendered by the Company could
become outdated or obsolete in comparison to the services offered by its competitors. Any failure to remain
at the technological forefront of the industry would adversely affect its relationship with clients and,
consequently, its financial condition and results of operations.
In case the Company is unable to hire qualified professionals and provide training to its staff.
In case there in growth in its activities, the Company will need to hire new qualified professionals active in
the most various business sectors. However, it faces significant competition in the hiring of qualified
personnel from other providers of engineering and industrial services and there can be no assurance that it
will be able to attract the number of professionals necessary to implement its expansion plan in the desired
timeframe. In addition, the Company may face difficulties in retaining its current staff if it is unable to
preserve its corporate culture and offer competitive compensation packages. The Company believes that
the hiring and retention of skilled labor is a critical factor for business success and its growth strategy. If the
Company does not achieve its strategy, it can affect operation and future results.
The Companys operations have already been interrupted in the past by labor issues, and the
Company cannot guarantee that such interruptions will not occur in the future.
As of December 31, 2015, approximately 0.3% of the Companys employees were members of labor
unions, primarily in the civil construction and trade industries. The Company has entered into collective
bargaining agreements with each of these unions, which agreements are renegotiated on an annual basis.
The renegotiation of these agreements could become more difficult as unions campaign for salary
increases on the basis of the growth of its operations. During 2013 and 2014, the operations of Industrial
Services business unit have been interrupted during negotiation of new collective bargaining agreements,
the segment was sold in 2013.
The Companys success depends, to a large extent, on the quality and safety of its services and
products.
The Companys success depends, to a large extent, on the quality and safety of the machinery and
equipment that it uses in the provision of its services or that are rented to its clients. If the Companys
products are in any way defective, incorrectly assembled or unsafe, if they cause any kind of accident or
delay in its clients operations, or if they do not meet the expected quality and safety standards, the
Companys relationships with its clients and partners could suffer, its reputation and strength of its brand
could be adversely affected, and the Company could lose market share, besides being exposed to
administrative proceedings and lawsuits in connection with any potential failures of its machinery or
equipment and incur significant expenses. The occurrence of any of these factors could adversely affect
the Companys activities.
In addition, the sales contract of the Industrial Services business unit, from 2013, allow the buyer to use the
brand and expression Mills for 3 years. In this way, Mills brand reputation depends too on quality and
safety of services and products offered by the buyer while he can use the brand.
Proceeds from the Companys insurance policies may not be sufficient to cover damages resulting
from a contingent event.
The Company cannot guarantee that proceeds from its insurance policies will be sufficient to cover the
damages resulting from any event covered by such policies. Accordingly, certain risks may not be covered
under the terms of its insurance policies (such as war, fortuitous events, force majeure and interruption of
certain operations). Therefore, if any non-covered event occurs, the Company may incur additional
expenses to rebuild or refurbish its buildings, or to repair or replace its equipment. Furthermore, the
Company cannot guarantee that the proceeds from its insurance policies will be sufficient to cover the
damages caused by any event for which its insurance policies provide coverage. There can be no
assurance that the Company will be able to renew its insurance policies on favorable or acceptable terms,
or at all, or enter into new insurance policies with alternate providers.
The interests of the Companys controlling shareholder may conflict with the interests of its
investors.
The Companys controlling shareholder has the ability, among other things, to elect the majority of the
members of its board of directors and determine the outcome of decisions requiring shareholder approval,
including with respect to transactions with related parties, corporate restructurings, asset sales and
partnership agreements, and will have power to influence the amount and timing of any dividends to be
distributed in the future, subject to the provisions of the Brazilian corporate law regarding the payment of
mandatory dividends. The Companys controlling shareholder may choose to pursue acquisition
opportunities, dispose of assets, and enter into partnership and financing agreements or similar operations
which may conflict with the interests of its other shareholders.
The Company is a diffused controlled company, since it does not have a controlling shareholder or
group of shareholders holding more than 50% of its voting capital, which can allow it be
susceptible to alliances and conflicts between shareholders and other events resulting from the
absence of a controlling shareholder or shareholder group holding more than 50% of the voting
capital.
The Company does not have a shareholder holding more than 50% of its voting capital. Alliances or
agreements can be made between the new shareholders, which could have the same effect as having a
group of shareholders. In the event of a group of shareholders and this group takes a hold of the decision
power of the company, it can suffer sudden and unexpected changes in the corporate policies and
strategies, including through mechanisms such as the replacement of the Companys management staff.
Besides this, the Company may be more vulnerable to hostile attempts to acquire control and conflicts from
this outcome.
Additionally, the Company's shareholders can possibly change or exclude these provisions from its bylaws
which provide a public offering for share acquisition by a shareholder who becomes holder of 20% of its
share capital and then disregard their obligation to make a public offering to acquire shares as it is required
by its bylaws. The absence of a controlling shareholder or controlling group of shareholders of more than
50% of the voting shares of the Company may also hinder certain decision-making processes, which could
not be reached the quorum required by law for certain decisions. In the case that there isnt a control ling
shareholder holding the absolute majority of the voting shares of the Company, the Company's
shareholders may not use of the same protection granted by Share Companies Law against abuses
practiced by other shareholders and, consequently, may have difficulty in repairing the damage caused.
Any sudden or unexpected change in the Company's management team in its business policy or strategic
direction, attempt to acquire control or any dispute among shareholders concerning their respective rights
may adversely affect the Company's business and operating results.
c.
to the shareholders.
An active and liquid market for the Companys shares may not develop. The volatility and lack of
liquidity of the Brazilian capital market could substantially limit the investors ability to sell their
shares at the desired price and time.
An investment in securities traded in emerging market countries such as Brazil frequently involves a
greater degree of risk when compared to investments in securities of issuers located in major international
securities markets, and are generally considered to be more speculative in nature. The Brazilian securities
market is substantially smaller, less liquid, more concentrated and usually more volatile than major
international securities markets such as the United States.
These characteristics of the Brazilian capital market may substantially limit investors ability to sell the
Companys shares for the desired price and at the desired time, which in turn may have a significant
adverse effect on the price of its shares.
As of December 31, 2015, the BM&FBOVESPA represented, with an average daily trading volume of R$
4.2 million during the year.
Shareholders may not receive dividends.
The Companys bylaws provide that 25% of the net profit for any year, adjusted pursuant to the provisions
of the Brazilian corporate law, should be distributed to shareholders as mandatory dividends or as interest
on stockholders equity. Despite the requirements regarding the payment of mandatory dividends, the
Company may limit such payment to the realized portion of the dividends or suspend the distribution of
dividends to its shareholders in any year, if the Companys board of directors determines that such
distribution would not be advisable given its financial condition.
The Company may need additional funds in the future and may issue additional securities to secure
such funds. This may adversely affect the price of the shares and result in a dilution of the
investors percentage interest in the Companys shares.
The Company may need to raise funds in the future through an additional public or private offering of
shares or securities convertible into or exchangeable for shares. Any additional funds raised by the
distribution of shares or securities convertible into or exchangeable for shares may impact their price and
dilute the investors percentage interest.
Provisions in the Companys bylaws may discourage, delay or make more difficult a change of
control of the company or the approval of transactions that might otherwise in the best interests of
its shareholders.
The Companys bylaws contain provisions intended to avoid the concentration of ownership of its shares in
small groups of investors and to foster a dispersed ownership. These provisions require that any
shareholder that: (a) acquires or becomes the holder, of the Companys shares with 20% (twenty percent)
or more of emited shares of the company shall, within sixty (60) days from the date of acquisition or event
that resulted in the ownership of shares in an amount equal to or exceeding 20% (twenty percent) of the
total shares issued by the Company; (b) acquires or becomes the holder of other rights such as (i) other
Corporate Rights over a volume equal to or greater than 20% (twenty percent) of the total shares issued by
the Company or that might result in the acquisition of shares issued by the Company in an amount equal to
or greater than 20% (twenty percent) of the total shares issued by the Company, or (ii) derivatives that give
the right to shares of the Company representing 20% (twenty percent) or more of the shares of the
company, or that give the right to receive corresponding to 20% (twenty percent) or more of the shares of
the Company, shall apply or request for registration for subsequent realization of an OPA of all shares
issued by the Company, observing the applicable CVM regulations, to the Novo Mercado, the other
regulations of BM&FBOVESPA and the terms of the Company's Bylaws.
These provisions could have the effect to discourage, delay or even prevent the Company to merge with
another company or be acquired by another company, including transactions in which the investor may
receive a bonus over the market value of the Companys shares. Likewise, statutory provision might allow
the maintenance or perpetuation of the staff members of the Company nominated and elected by
shareholders holding less predominant portion of the Company's capital.
d.
to its suppliers.
Fluctuations in the price of raw materials, components and equipment used in the Companys
operations, as well as of commodities, may adversely affect its results.
Certain raw materials and components used in the Companys operations are prone to sudden and
significant fluctuations in price, over which it has no control. The final price of components, machinery and
equipment that are acquired or rented from third parties correlates to a significant extent with the price of
commodities such as steel and aluminum. A substantial increase in the price of such commodities
generally results in an equivalent increase in the Companys suppliers operating costs and, consequently,
in an increase in the prices they charge for their products. The Company may not be able to pass these
price increases on to its clients, which could have an adverse effect on its operating costs and financial
condition and results of operations.
In addition, all of the equipment used by the Rental business unit is imported, as there is no equipment of
comparable quality available locally, and their prices are defined in foreign currencies. Brazilian Real
depreciation against the foreign currencies in which the Company purchases equipment increases costs
and the Company may not be able to reflect the increased cost of equipment in the rental prices charged.
The components, machinery and equipment used in the Companys operations are manufactured
and supplied by third parties.
The components, machinery and equipment used in the Companys operat ions are manufactured by thirdparties. The Company also buys other materials used in its operations from local or foreign companies. The
Company generally does not carry a very large inventory of equipment in its warehouses, only the
minimum required for the provision of its services. As a result, the Company is vulnerable to delays in the
delivery of equipment or increases in the prices charged by its suppliers, which could prevent from
providing its services or renting its equipment to its clients in a timely manner. Also, if the Companys
suppliers are not prepared for and are unable to meet potential increases in the demand for their products,
it may not be able to buy the amount of equipment or volume of raw materials necessary to carry out its
operations. The same can occur if the company interrupts its purchases with a supplier and, because of the
interruption, this supplier is not able to serve by having compromising its production to another client or by
any other reason. If such delays in delivery or lack of products become recurrent, the company may not be
able to find new suppliers quickly enough to meet its clients needs. In addition, the introduction of
restrictions on the acquisition of imported goods, or the increase of taxes due on imported equipment, may
have a negative impact on the Companys business, in particular on the operations of the Rental business
unit.
If any of the events above happens, the Company may suffer demand contraction, which, consequently,
will impair its results and financial situation.
f.
to its clients.
The Company may be unable to attract new clients or to develop new busi ness at the pace required
for the expansion of the Real Estate and Rental business units.
The average term of the service agreements between the Real Estate and Rental business units and their
clients is generally shorter than that of the service agreements negotiated by the other business units. As a
result, both the Real Estate and Rental business units rely on the constant generation of new business in
order to maintain their revenue at a constant level. Due to the high degree of competition faced by the Real
Estate and Rental business units, the Company must make significant investments in order to attract new
clients and retain existing ones, in addition to offering its services at competitive prices. If the Company is
unable to generate new business at the rate required by the Real Estate and Rental business units, the
operations and expansion of the activities carried out by these business units could be adversely affected.
The Company may be unable to meet the needs of all of its clients or deliver its services in a timely
manner.
The Company owns a limited number of machinery and equipment, which must be properly allocated to
each project in which it is involved. Delays or interruptions in the manufacturing and maintenance of such
equipment and its component parts, as well as sudden increases in the demand for the Companys
services, could prevent from providing its services in the agreed timeframe or from meeting the needs of its
clients satisfactorily and efficiently, as a result of any of the following factors:
inability to foresee the needs of its clients;
delays caused by its suppliers;
insufficient production capacity;
equipment failure;
shortage of qualified workers, strikes and labor claims;
interruption in the provision of public services, in particular power cuts;
delays or interruption of the equipment transportation system;
changes to customs regulations;
macroeconomic factors; and
natural disasters.
Besides being subject to applicable penalties, if the Company is unable to meet its deadlines, either due to
internal problems, or as a result of events over which it has no control or not, it may lose the trust of its
clients and, therefore, experience a decrease in the demand for its services, which could adversely affect
its financial condition and operation results.
Fluctuations in the price of commodities may impact the Companys clients investment decisions
and the cost of equipment and, consequently, the Company may face cancellations or delays
affecting its existing and future projects or loss of revenue.
Fluctuation in commodity prices may affect the Companys clients in many areas. For example, for clients
engaged in the oil and gas, copper and fertilizers business, fluctuation in their product prices may have a
direct impact in the profit margins and cash flows, and consequently influence decisions between
maintaining existing investments or making new expenditures. Should the Companys clients choose to
postpone new investments and/or to cancel or delay the execution of existing projects, the demand for the
Companys services would drop, which could have a material adverse effect on its operations and financial
condition.
The Companys operations and financial situation has been adversely affected in the past, and could be
substantially affected in the future, due to cancellations and delays in connection with projects in which it
was or is involved.
g.
changes in tax policy, price control, currency devaluation, controls the flow of capital and certain limits on
goods and services imported. The Company has no control and cant predict what measures or policies
the Brazilian government may adopt in the future. The Companys business, financial condition and
results of operations, as well as the market value of the shares may be adversely affected due to changes
in public policy at the feral, state and municipal, referring to public tariffs and exchange controls, as well
as other factors such as:
interest rates;
exchange controls and restrictions on remittances abroad;
changes in exchange rates;
inflation;
social and political instability;
expansion or contraction of global and Brazilian economy;
liquidity in the domestic financial and capital markets and lending markets;
tax burden, fiscal policy, tax regime; and
political, social and economic developments that may affect Brazil.
The uncertainly about the implementation of changes promoted by the government regarding the policies
or standarts that may affect these or other factors in the future can contribute to economic uncertainty in
Brazil and heightened volatility in the securities market in the country .
It is not possible to predict whether the current or future management of the Federal Government Will
implement changes in fiscal, Exchange rate policies, monetary, social security, among others, or what will
be the consequences of such policies in the Brazilian economy and the Companys operations.
Efforts of the Federal Government to combat inflation may slow the growth of the
Brazilian economy and harm our business.
In the past, Brazil experienced extremely high rates of inflation and, consequently, adopted monetary
policies that resulted in one of the hightest real interest rates in the world. In 2015, SELIC showed average
of 13.38%. The annual inflation calculated by the IGP-M was 5.51%, 3.39% and 10.53% in 2013, 2014 and
2015, respectively, and by the IPCA was 5.91%, 6.41% and 10.67% in 2013, 2014 and 2015, respectively.
Inflation and the measures adopted by the Federal Government to combat it, mainly through the Central
Bank, have had and may have significant effects on the Brazilian economy on the Companys business.
Tight monetary policies with high interest rates may restrict Brazils growth and the availability of credit.
Conversely, government policy and looser monetary, the decrease in interest rates and intervention in the
foreign Exchange and stock market adjust or fix the real value may trigger increases in inflation and,
consequently, the volatility of growth and the need for sudden and significant increases in interest rates. In
addition, the Company may not have conditions to adjust the prices to offset the effects of inflation on its
cost structure. Any of these factors could affect their business negatively.
The demand for the Companys services is directly linked to the volume of public investment in the
engineering, construction and infrastructure sectors.
The public sector is generally involved in the implementation of large engineering and infrastructure
projects in Brazil, either by means of direct investment in such projects or through financing agreements.
According to estimates from BNDES, the public and private sectors are expected to invest R$ 187 billion in
investments in highways, railways and ports. Although there is great uncertainty about the terms of its
accomplish, that depends on improving in planning and on balancing concession model and financing.
In Brazil, public investments have historically been influenced by macroeconomic, political and legal
factors, which are all beyond of the Companys control. Such factors could determine, among other things,
the suspension or cancelation of projects that require the involvement of the public sector. Any such
suspension or cancellation could have a material adverse effect on the Companys clients operations and
on the demand for its services. If estimates regarding the level of future investments in construction and
infrastructure are not correct, or if such investments are not made, the Companys clients operations (and,
consequently, the Companys financial condition and operations) may be adversely affected.
The Company may have difficulties in adjusting the prices charged by it to offset the
effects of inflation
The Company seeks to pass along the effects of price inflation which charges for its products
and services. However, in case of long-term contracts, the adjustment is only permitted by
Brazilian Law every 12 months. The main price ndices used for the correction values in its longterm contracts are the IGP-M (ndice Geral de Preos do Mercado), [released by Fundao
Getlio Vargas (FGV)], and the IPCA (ndice de Preos ao Consumidor Amplo), released by
Instituto Brasileiro de Geografia e Estatstica (IBGE). In addition, the cost of the Company's
workforce is impacted by increases agreed in collective bargaining, with adjustments generally
also defined according to price indices.
In periods of low demand and therefore price pressure, you probably cant pass on the effects of
inflation the prices it charges for its products and services and hence profitability could suffer
reduction.
Raw Material Price Risk and Imported Equipment
Increase in the price of commodities used in the manufacture of the equipment used in
providing the Company's services, such as steel and aluminum above the inflation rate used in
the adjustment of their contracts may also compromise their future earnings until these real
increases are incorporated into prices.
Additionally, in the case of contracts in which imported equipment is used, such as business unit
Rental, increases the exchange rate above inflation also compromise their future earnings until
these increases can be incorporated into prices.
h.
Costs related to laws and workplace safety regulations as well as those third-party professionals.
Such costs can be relevant and adversely impact the Companys results.
As of December 31, 2015, the Company had 1.558 active employees (to further information go to section
14 in this Reference Form). Due to the nature of the services provided, both the Companys employees and
employees of third parties face risks when executing its projects, which could result in serious injury or
death.
In accordance with existing labor laws and regulations, the Company is required to provide and ensure the
use of safety equipment for its employees and other individuals working on its projects, under the
Companys responsibility. If the Company fails to provide all necessary safety equipment and ensure its
proper use, or if it works with companies that are not sufficiently committed to ensuring the safety of their
staff, the Company could be deemed responsible for any accidents that take place at the worksites where it
provides services. Any accidents at the worksites where it provides its services could potentially reduce the
number of able bodied employees available to carry out its operations and would expose the Company to
the payment of fines and penalties to the workers involved.
Any changes to existing safety regulations may impose additional obligations on the Company and result in
an increase in its expenses with respect to safety equipment and procedures. The Company cannot predict
whether any such changes would have a significant impact on its operations. For example, changes
imposing a reduced work day, for safety reasons, could result in a drop in employee productivity, therefore
forcing the Company to hire additional staff. Similarly, provisions requiring the Company to install additional
safety components could increase the cost of its equipment and, therefore, adversely impact its operating
costs and financial results.
In addition, the Company engaged a third-party labor provider to hire temporary employees during periods
of rapid increases in the demand for the Companys services. As a result, the Company could be
considered responsible for meeting any employment obligations relating to such professionals, or deemed
to be their employer under the terms of existing laws and regulations, and would be subject to potential
costs associated with failure to comply with workplace s afety regulations with respect to such
professionals. Besides, the editing of stricter legal and regulatory provisions regarding the use of
outsourced personnel, or of provisions imposing additional obligations on the contractor of outsourced
services, could increase the Companys labor costs and have a negative effect on its financial condition
and results of operations.
The technical requirements and the use of the Companys equipments, as well as, the way which
the Company renders its services, may suffer relevant changes due to the incident of drastic
climate change. Moreover, the Companys inability to adapt to climate change may adversely affect
its business and financial results. Additionally, the Company is subjected to several environmental
laws and regulations that may become stricter in the future, as a response to the drastic climate
changes, and may result in higher duties and greater capital investment.
Climate change, including flooding or erosion caused by increased rainfall, could adversely affect the
technical requirements in the projects and equipment to which the Company is subjected to, the way in
which the Company uses its equipment and the way it render its services. In addition, variations in weather
caused by climate change may lead to postponements in project schedules, which in turn may lead to a
decrease in the demand for the Companys services. The Companys inability to adapt its operations to
such climate change and maintain its quality standards from our equipment and services, may lead to a
decrease in its market share, adversely affecting its business and financial results.
The Companys operations are subject to several federal, state and municipal environmental laws and
regulations, including protocols and international treaties to which Brazil is party. Such regulatory
framework may become more stringent in the future due to, among other things, climate change.
i.
Operations are subject to extensive federal, state and local legislation on environmental
protection, which covers even the normative introduced in the legal system in international
function of agreements and treaties to which Brazil is or may become a party. The occurrence
or perception about climate change at national and international level can lead to the issue of
more stringent environmental standards.
Compliance with the provisions of these laws and regulations is monitored by certain governmental bodies
and agencies that are responsible for applying administrative sanctions in the event of the breach of any
relevant provisions. These sanctions may consist of fines ranging from R$500 to R$50,000,000, result in
the cancelation of our licenses and, ultimately, the temporary or permanent suspension of the Companys
operations, among other penalties. Environmental laws and regulations may become stricter in the future,
which may require the Company to make additional investments in compliance and, as a result, affect its
existing investment program. Such changes may cause an adversely affect to its financial condition and
results of operations. Besides, the failure to comply with such laws and regulations, such as operating
without the necessary environmental licenses and permits, or failing to adequately dispose of residues
arising from the Companys painting and equipment maintenance services, may result in the application of
criminal and administrative sanctions, as well as the obligation to repair the alleged harm or pay penalties
for any potential damage to the environment. Criminal sanctions may include, among other things, the
arrest of the persons responsible for the breach, the revocation or restriction of tax incentives and the
cancelation or suspension of credit facilities provided by public financial institutions. The Company could
also be prohibited from providing services to the public sector. The application of any of these sanctions
could have an adverse effect on the Companys revenues and prevent us from being able to raise capital in
the financial markets. The introduction of additional environmental obligations in the future as a result of
legal or regulatory changes or as a consequence of an increase in the environmental impact of the
Companys operations, or failure to obtain any necessary environmental licenses and permits, may result in
additional and substantial compliance costs and have an adverse effect on its business, financial condition
and results of operations.
4.2
Comments on the Companys expectations to reduce or increase its exposure to the risks
factors
Mills Estrutura e Servios de Engenharia S.A. (Mills or Company) is exposed, in particular, to
the following marketing risks: risks of interest rates and monetary, credit, currency and liquidity
risk.
Risks Interest Rate and Monetary Restatement
The Company's indebtedness is subject, mostly at floating interest rates , especially rates CDI,
IPCA and TJLP. There is a risk that the Company may incur losses due to fluctuations in
interest rates, which increase financial expenses related to loans, financing and debentures
obtained in the market.
On December 31, 2013, 2014 and 2015, the CDI rate was 9.8%, 11.57% and 14.14%,
respectively; IPCA was 5.91%, 6.41% and 10.67%, respectively; and TJLP was 5.5%, 5.0% and
6.25%, respectively.
As a management policy, the Company does not use any instruments to mitigate its exposure t o
fluctuations in interest rates. This is a market risk due to macroeconomic and regulatory
conditions inherent to all companies operating in Brazil.
The Company analyzes its exposure to interest rate dynamically. Various scenarios taking into
consideration refinancing, financing and hedging are simulated. Based on these scenarios, the
Company defines a reasonable change in the interest rate. The scenarios are run only for
liabilities that represent the major interest-bearing positions. See below sensitivity analysis of
possible fluctuations in interest rates.
Sensitivity analysis
Below, the analysis chart of sensitivity of financial instruments, describing the risks that may
result in material losses for the Company, with the most probable scenario (scenario I)
according to an evaluation carried out by management, considering a horizon of one year. In
addition, two other scenarios are presented in terms determined by the Brazilian Securities
Commission, through Instruction No. 475/2008 in order to provide 25% and 50% deterioration in
the risk variable considered, respectively (scenarios II and III) :
Cash equivalents
Financial investments
Debt
BNDES
1 Issuance of debentures
2 Issuance of debentures
1st Serie
2nd Serie
3rd Issuance of debentures
Indicator
Atual
CDI
Total
231,867
231,867
24,775
24,775
25,00%
16,517
16,517
50,00%
Indicator
Atual
TJLP
CDI
(15,116)
(92,751)
(1,023)
(4,115)
CDI
IPCA
CDI
Total
(169,629)
(142,277)
(202,527)
(622,300)
(19,156)
(19,016)
(29,925)
(73,235)
Variation
(1,072)
(5,075)
(1,119)
(6,018)
(23,427)
(27,635)
(21,880)
(24,806)
(37,056)
(44,093)
(88,510) (103,671)
20,86%
41,56%
The sensitivity analysis presented above considers changes relating to the risk of interest rate,
holding constant other variables associated with other risks.
References
Prospective
Taxes
CDI (%) (i)
TJLP (%) (ii)
IPCA(%) (iii)
14,25%
7,50%
7,57%
12/31/15
Scenario
II
25%
Scenario
III
50%
17,81%
9,38%
9,46%
21,38%
11,25%
11,36%
(I) As regards the interest rate risk, the Company's Management considered as the probable premise (Scenario I) for its
financial instruments a rate of 14.25%, extracted from the FOCUS report information released by the Central Bank of
Brazil on 26 February 2016 considering an increase in the CDI rate in line with the expected increase in the Selic rate,
since there is a direct relationship between charges, and an increased rate as the premise for the other two scenarios,
according to the impairment scenario.
(Ii) For financial liabilities related to loans and financing - BNDES, the Company's Management considered as the
probable premise (Scenario I) would be the maintenance of the TJLP rate, since there is no evidence of change in the
rate in the short term and increased rate as the premise for the other two scenarios.
(Iii) For financial liabilities related to the second series deben tures, the Company's Management considered as the
probable premise (Scenario I) the expectation of the IPCA in 2016 described the FOCUS report released by the Central
Bank of Brazil on February 26, 2016, since there is no evidence of change in the rate in the short term and increasing
rate as the premise for the other two scenarios.
Credit Risk
Credit risk arises from the possibility of the Company suffering financial loss if a customer or
counterparty to a financial instrument fails to meet its contractual obligations arising from its
operating activities (primarily with respect to trade receivables) and financing, including deposits
in banks and financial institutions.
The Company periodically invoices values for leases and sales due by its customers by overdue
periods ranging typically from 30 to 60 days, the average collection period in 2015 was 63 days.
Thus, it is subject to default risk with respect to accounts receivable. Primarily, the portfolio of
the Company's commercial credit is focused on domestic clients. The Company establishes a
provision for impairment when understands that there is a risk of not receiving the amounts due.
The customer credit risk management is exercised by the Company's financial management,
which assesses the financial ability to pay customers. This analysis is carried out before the
actual trade agreement between the parties and such, are individually analyzed each client,
taking mainly into consideration the following information: (i) registration data; (Ii) information
and financial indicators; (Iii) risk classes (SERASA methodology); (Iv) majority controller; and (v)
disputes and protests in Serasa.
The Company believes that the credit risk concentration is limited because the customer base is
comprehensive and there is no relationship between customers. The Company has no
customer concentration in its revenue and accounts receivable, there is no single customer or
economic group that represents 10% or more of their accounts receivable in any of its business
units.
The table below shows the items Accounts Receivable Gross and Allowance for Doubtful
Accounts (PDD) of the Company open for business unit and consolidated the dates indicated:
2013
(in
Bills to
Receive
Construction
150,962
ADD
On December, 31
2014
R $ thousands)
Bills to
Receive
PDD
2015
Bills to
Receive
132,357
PDD
Buildings
Infrastructure
Industrial services
Rental
Events
Total
82,177
68,785
4,408
73,468
3,769
232,634
29,786
16,071
13,715
4,408
18,637
1,030
53,861
150,520
62,407
88,113
3,992
93,079
2,022
249,613
51,117
25,428
25,689
3,992
36,313
91,422
75.932
3,551
3,551
91,967 48,673
227,875 128,156
Remaining amount receivable of Industrial Services business unit operations, discontinued on November 30, 2013.
Amount receivable from the sale of the asset segment events that was discontinued in 2008.
In addition, the risk of credit balances with banks and financial institutions is managed by the
Company's treasury in accordance with the policy established by this. Excess funds are
invested only in approved counterparties.
The Company's practice to use only large financial institutions, whic h are among the 10 largest
banks with assets in Brazil. Management does not expect any counterparty to fail to meet its
obligations.
Cambial Risk
The Company's policy is to reduce the risk related to the cash exchange rate, conservatively,
since all its revenues are in reais. To this end, the Company enters into contracts NDF (nondeliverable forward) with financial institutions for hedging purposes. All of these agreements
provide for the establishment of the future exchange rate of reais for dollars.
Operationally, the Company is exposed to foreign exchange risk associated, in particular the US
dollar and the euro. Notably, this risk is found in equipment imports (mainly of aerial platforms
and forms) that the Company may hold.
At December 31, 2015, the Company doesnt have significant foreign exchange exposure or
derivative instrument open. The commercial dollar (sale) was R $ 2.3 R $ 2.7 and R $ 3.9,
December 31, 2013, 2014 and 2015, respectively.
Liquidity Risk
Liquidity risk arises from the possibility that the Company encounters difficulties in meeting the
obligations associated with its financial liabilities that are settled with cash payments or other
financial assets. The Company's approach to managing liquidity is to ensure, as much as
possible, you always have sufficient liquidity to meet its obligations as they fall due under
normal and stress conditions, without causing unacceptable losses or risk damaging the
reputation of the Company.
The Company's finance department monitors rolling forecasts of the Company's liquidity
requirements to ensure it has sufficient cash to meet operational needs. The monthly forecasts
take into account the plans of our debt financing, compliance with contract terms and
compliance with internal goals as the Company's strategic plan. In addition, the Company has
credit lines with major financial institutions operating in Brazil.
The chart below analyzes the main financial liabilities by maturity, corresponding to the
remaining period in the balance sheet to the contractual maturity when the Company expects to
make payment:
Up to
one
month
Betw een
one and
three
months
Betw een
three
months
and one
year
355
700
3.088
7.150
More
than 5
years
Total
2.658
17.865
Debentures
Pr oviders
6.844
11.464
-
226.833 192.054
-
347.308
-
Interest rates (CDI and TJLP) estimated for the future commitments reflect market rates for
each
period.
777.659
6.844
4.3 Judicial, administrative or arbitral awards, which are not under confidentiality, in
which the company or its subsidiaries are part and whose apelles are administrators or
former administrators, owners or ex-owners or investors of the company or its
subsidiaries.
Mills Estrutura e Servios de Engenharia S.A. (Company) is a party to judicial and
administrative proceedings in the civil, tax, social security, labor as described below. Its
reserves are recorded in the financial statements the total amount of probable losses. At
December 31, 2015, the total value of cases involving contingent liabilities was R $ 118.6
million, and the total amount involved in processes with probable loss, according to an
evaluation of the Company and its legal counsel, was R $ 16 6 million, as indicated below:
Fiscal year ended
December, 31:
Contingencies
2013
2014
2015
(R$ thousand)
Civil
Probable Losses
Possible Losses
Remote Loss
Fiscais e
Previdencirias
Probable Losses
Possible Losses
Remote Loss
467
4,812
11
787
5,191
13
2,419
5,198
2,560
6,518
26,442
17,878
7,815
31,559
24,692
7,958
40,461
33,215
Trabalhistas
Probable Losses
Possible Losses
Remote Loss
3,588
10,944
3,303
3,978
15,232
4,655
6,235
18,006
2,620
Others
Probable Losses
Possible Losses
Remote Loss
Provisions
10,573
12,580
16,612
Judicial Deposits
10,053
10,422
11,023
The Company believes that the provisions for judicial and administrative contingencies are
sufficient to cover probable losses. The main processes in which the Company is a defendant
are described below.
Civil Proceedings
The Company is defendant in 35 proceedings concerning civil liability and indemnification payments,
regarding, above all, contract terminations and indemnification payments, whose total value was of R$ 10.2
million on December 31, 2015. Based on the advice of the Companys external legal counsel, as of
December 31, 2015 it has recorded provisions of R$ 2.4 million to cover probable losses arising from these
proceedings.
Process n 0053271-19.2013.8.17.0001
Jurisdiction
Instance
1st Instance
Date of filing
7/4/2013
Mills Estruturas e Servios de Engenharia S.A. e
Habitacional Empreendimentos LTDA.
R$ 3.671 thousand (materials damage updated on
12/31/2015)
Object: This is Indemnity action filed by Housing
Empreendimentos Ltda. against the company seeking
payment by way of damages in the amount of R $
3,671,000 (property damage) updated on 31/12/2015,
and moral damages, because the contract to provide
concrete structure for implementing service signed the
Housing and Reserva do Paiva Company Residence
South Real Estate Development Ltda.
Possible
In the event of an unfavorable decision, the Company
will have to collect fiscal credit subject matter of the
administrative procedures in question, in the updated
amount of R$3.671 thousand (until December 31,
2015). Since this is an isolated fact, which is not a
habitual practice of the Company, the Company does
not believe that an unfavorable decision would have a
material adverse effect on its financial situation or on
its operating results.
goods or rights
Main facts
Chances of loss
Estadual Justice
Instance
1st instance
Date of filing
6/29/2001
Aluma Systems Formas e Escoramentos
(sucedida pela Companhia) and Federal District
goods or rights
Main facts
Chances of loss
Ltda.
Process n 0505089-94.2008.4.02.5101
Jurisdiction
Federal Justice
Instance
1st Instance
Date of filing
6/7/2006
Mills do Brasil Estruturas e Servios Ltda. (sucedida
pela Companhia) and Unio Federal
goods or rights
IRS
Instance
Date of filing
5/23/2005
Mills do Brasil Estruturas e Servios Ltda. (sucedida
pela Companhia) e INSS
goods or rights
Main facts
Chances of loss
Process n 0026197-47.2005.4.02.5101
Jurisdiction
Federal Justice
Instance
2nd Instance
Date of filing
9/21/2005
Mills do Brasil Estruturas e Servios Ltda. (sucedida
pela Companhia) e INSS
goods or rights
Main facts
Chances of loss
Process n E-04/062000/2011
Jurisdiction
Instance
Date of filing
Parties in the suit
Amounts,
involved
goods or rights
Main facts
Chances of loss
Process n 12259.000998/2008-65
Jurisdiction
Administrative Instance
Instance
Date of filing
Parties in the suit
Amounts,
involved
goods or rights
Main facts
Chances of loss
Administrative Instance
5/23/2005
Instituto Nacional da Previdncia Social INSS e Mills
Estruturas e Servios de Engenharia S.A
R$ 5.554 thousand on 12/31/2015
Tax delinquency notice served only to prevent the loss
of the right of the Treasury to release the social
security contribution debts discussed at the Annual
Action 0062493-78.1999.4.02.5101, plus late-payment
penalty.
Obs .: The Annual Action was filed in order to be
recognized the possibility of compensation payments
unduly Social Security contribution, based on the
systematic established by Law no. 9.711 / 98.
Last Progress on 3/11/2015: Judgment converted into
diligence. Resolution no. 2301-000533.
Possible
The Company shall collect credit in the amount of R $
5.554.000 (updated to 12/31/2015). Given the amount
involved in the demand, the Company does not believe
that an unfavorable decision will result in a material
adverse effect on its financial condition or results of
operations.
-
Process n 4019432-32.2013.8.26.0405
2 Vara de Fazenda Pblica da Comarca de Osasco
Jurisdiction
do Tribunal de Justia de So Paulo.
Instance
1st Instance
Date of filing
10/31/2013
Secretaria de Fazenda do Estado de So Paulo e Mills
Parties in the suit
Estruturas e Servios de Engenharia S.A
Amounts, goods or rights
R$ 3.167 thousand on 12/31/2015
involved
It is common share to cancel the collection of debt
embodied in the Notice of Violation no. 4.017.635. due
to the illegality of the ICMS requirement on lease
agreements.
Latest Progress on 2/4/2015: Delivered dispatch: "The
Main facts
feat has been cleaned up and is determined to carry
out technical expertise, given the controversial point
regarding the nature of commercial operation. No
more, before the deposit for the provisional fees and
submitted questions, the expert indicated if intime will
fl. 415 to start the work. "
Chances of loss
Remote
The Company shall collect credit in the amount of R $
3,167,000 (updated to 12/31/2015). Given the amount
Analysis of impact in the case involved in the demand, the Company believes that an
of losing the suit
unfavorable decision would not cause a material
adverse effect on its financial condition or results of
operations.
Amount
provisioned (if any)
Process n 2001.51.01.017629-0
Jurisdiction
Tribunal Regional Federal da Segunda Regio
Instance
2nd Instance
Date of filing
9/14/2001
Mills Estruturas e Servios de Engenharia S.A e Unio
Parties in the suit
Federal
Amounts, goods or rights
R$ 4.384 thousand on 12/31/2015
involved
It is the absence of Tax Legal Relationship Declaratory
Main facts
action Precept damning the Misuse repeat. Action was
presented with the objective of removing the fine on
goods or rights
Main facts
Chances of loss
Possible
Sentence condemned the plaintiff to pay the costs and
attorneys' fees, set at 10% of the cause, duly
corrected.
Latest Progress on 4/26/2016: They opposed new
Declaration Embargoes in view of the judgment
dismissing the grievance of the Company and rejected
the ED presented above. Pending completion. The
decision not to have recourse not to be the fine of 1%
for having procrastinating character. There will be no
payment of costs and the tax because the amount has
already been paid.
Obs .: Interlocutory Appeal (2010.02.01.014806-2).
-
Process n 2004.51.01.004267-5
Jurisdiction
12 Vara Federal do Rio de Janeiro
Instance
2nd Instance (Sobrestados)
Date of filing
4/11/2004
Petitioner: Mills Estruturas e Servios de Engenharia
S.A., sucessora por incorporao de JAH
INDSTRIA
E
COMRCIO.
Parties in the suit
Fileds: Delegado da Delegacia da Receita Federal de
Administrao Tributria (DERAT) e Delegado da
Delegacia da Receita Federal de Fiscalizao
(DEFIC).
Amounts, goods or rights
R$ 3.655 thousand on 12/31/2015
involved
This is a Writ of Mandamus aiming away from the
increase in COFINS PIS rate imposed, respectively, by
Main facts
Law No. 10,637 / 02 and 10,833 / 03, on the grounds
of offense to several constitutional provisions.
Chances of loss
Possible
The Company will not have to collect the tax credit of R
$ 3.655 thousand, as of 12/31/2015, given that the
Analysis of impact in the case
amount involved in the lawsuit was filed in court until
of losing the suit
September 2005.
distributed action on 3/11/2004. Decision favorable 1st
Process n 5240450/2013
Jurisdiction
Instance
Date of filing
Parties in the suit
Amounts,
involved
goods or rights
Main facts
Chances of loss
Labor Claims
The Company is defendant in 402 labor claims, and with the advisory of an external legal counsel, the
Company has recorded provisions on the amount of R$ 26.7 million (corresponding to probable losses) on
December 31, 2014, to cover probable losses resulting from the labor claims filed against the Company,
and net legal and appellate provision amount was of R$ 4 million.
The labor claims filed against the Company relate to the following matters: (i) payment of indemnifications
for material damages; (ii) payment of risk, hazard, transfer and night shift allowances; (iii) length of lunch
and shift breaks; (ix) payment of equal pay for equal work; (v) workplace accidents; (vi) re-hiring as a result
of the development of professional illness; (vii) recognition of employment relationships; and (viii) existence
of subsidiary (or joint and several) responsibility between the Company and its services providers, with
respect to outsourced workers employed by such providers and allocated to providing services for the
Company. Below, the Company included a structured summary of the major labor claims that it is part:
Process n 0001793-43.2013.5.05.0134
Jurisdiction
16 Vara do Trabalho de Salvador/BA
Instance
Execution 1st Instance
Date of filing
8/22/2013
Autor: N. N. S. Jr
Parties in the suit
Sought: Mills Estruturas e Servios de Engenharia
S.A.
Amounts, goods or rights
involved
R$ 1.220 thousand on 12/31/2015
Main facts
In the present action, was granted to the Complainant
Chances of loss
Analysis of impact in the
case of losing the suit
Amount provisioned (if any)
the overtime pay and profit sharing for the year 2012,
in addition to salary increases provided for in the
collective agreement, from January to April 2012 and
regulatory fines.
Started running, the Complainant submitted
calculations of R $ 175.665,48, which were approved
by the judge.
Mills secured the amount of R $ 168.507,37, given the
existence of an appeal bond in the case, which
supplemented the total amount of R $ 175.665,48.
Guaranteed judgment, Mills presented motions to stay
execution in which he argued to be due, only the
amount of R $ 53.041,38.
Before the motions to stay execution, the author
presented manifestation and this time, it claimed that
the amount due to him was R $ 103,774.77.
Current position: Still no trial of motions to stay
execution.
Possible
Judged the motions to stay execution, the Company's
sentencing will be in an amount of R $ 53,041.38 and
R $ 103,774.77, which amount must be updated to the
date of payment.
-
Process n 020691-64.2013.5.04.0124
Jurisdiction
4th Vara do Trabalho de Rio Grande/RS
Instance
3rd Instance
Date of filing
11/21/2013
Autor: STMMMERG
Parties in the suit
Sought: Mills Estruturas e Servios de Engenharia
S.A.
Amounts, goods or rights
R$ 952 thousand on 12/31/2015
involved
Sentence extinguished the action 20/6/2014 and
judgment dismissing ordinary appeal remained
Main facts
decision, extinguishing the action, on 24/9/2014.
Current position: Waiting unappealable.
Chances of loss
Remote
Payment amount claimed by way of unhealthiness and
Analysis of impact in the
reflexes to scaffolders, estimated at $ 952,000 on
case of losing the suit
12/31/2015.
Amount provisioned (if any)
Process n 00114.2008.131.05.00-4
Jurisdiction
1st Vara do Trabalho de Camaari-BA
Instance
3rd Instance
Date of filing
2/13/2008
Autor: V. R. D. S.
Parties in the suit
Sought: Mills Estruturas e Servios de Engenharia
S.A.
Amounts, goods or rights
R$ 564 thousand on 12/31/2015
involved
Judgment recognized the right of realization of
compensation in the amount of R $ 50 thousand as a
moral damages, and R $ 316 thousand by way of
Main facts
damages.
The Judgment dismissing the Ordinary Appeal ruled
the conviction for property damage.
Current position: Brought review appeal. not tried yet.
Chances of loss
Probable
To be refereed to compensation for moral and material
damages. Such values can be modified by the TST,
Analysis of impact in the
however, in the face of today's existing conviction,
case of losing the suit
reaches the approximate amount of R $ 90 thousand
on 12/31/2015.
Amount provisioned (if any)
-
Process n 0120300-11.2009.5.19.0005
Jurisdiction
5th Vara do Trabalho de Macei/AL
Instance
1st Instance
Date of filing
9/10/2009
Autor: C. F.
Parties in the suit
Sought: Mills Estruturas e Servios de Engenharia S.A.
Amounts, goods or rights
R$ 550 sought on 12/31/2015
involved
The Complainant filed a lawsuit demanding
compensation for moral and material damages arising
from occupational disease as well as the payment of
wages resulting from period of stability.
Plead also the payment of severance installments
Main facts
overtime, RSR, wage differentials, vacation + 1/3, 13th
salary, FGTS + 40% release of unemployment
insurance guides, fine art. 467 of the Labor Code.
Current position: Held medical expertise. Waiting for
results.
Chances of loss
Possible
Payment of the amounts arbitrated as compensation
for moral and material damages. Considering the
Analysis of impact in the
values pleaded by the Complainant in the application,
case of losing the suit
updated to 12/31/2015, reach the amount of
approximately R $ 550 thousand.
Amount provisioned (if any)
Process n 0002070-07.2014.5.09.0084
Jurisdiction
22nd Vara do Trabalho de Curitiba/PR
Instance
2nd Instance
Date of filing
12/11/2014
Autor: M. A. J. D. A.
Parties in the suit
Sought: Mills Estruturas e Servios de Engenharia S.A.
Amounts, goods or rights
R$ 550 thousand on 12/31/2015
involved
Sentence sentenced Mills to pay the fold 23 days of
vacation and compensation for moral damages in the
Main facts
amount of R $ 70 thousand. Current position: Brought
ordinary appeal. Awaiting trial.
Chances of loss
Possible
The Claimed shall pay to the former employee, of the
value of enforceable as compensation for moral
Analysis of impact in the damages and folded vacation, updated to 31/12/2015,
case of losing the suit
reach the amount of approximately R $ 133 thousand.
Awaiting judgment of the ordinary appeal, which can
interfere with the conviction installments.
Amount provisioned (if any)
Process n 0117200-48.2008.5.17.0002
Jurisdiction
2nd Vara do Trabalho de Vitria/ES
Instance
1st Instance
Date of filing
10/20/2008
Autor: Sindicato dos Trabalhadores nas Indstrias
Metalrgicas Mecnicas de Material Eltrico e
Parties in the suit
Eletrnico no Estado do Esprito Santo SINDIMETAL
Sought: Mills Estruturas e Servios de Engenharia
S.A. e Arcellormittal Brasil S.A.
Amounts, goods or rights
R$ 729 thousand on 12/31/2015
involved
The union author postulates the conviction of the
defendants to pay commuting time, the argument that,
every day, or every scale of toil, the opportunity of
joining the drudgery, and also during office hours end,
replaced would, by considerable time (fifty-five to
Main facts
seventy minutes every day), to provide its services
makers, on the way between the gate of the industrial
unit of the second defendant and the construction site
(where would the point marking), and vice versa, this
route it would be difficult to access and devoid of
regular public transport, other means not providing the
Chances of loss
Analysis of impact in the case
of losing the suit
Amount provisioned (if any)
Process n 0001836-27.2013.5.03.0007
Jurisdiction
7th Vara do Trabalho de Belo Horizonte
Instance
1st Instance
Date of filing
9/4/2013
Autor: R. F. E.
Parties in the suit
Defendant: Mills Estruturas e Servios de Engenharia
S.A
Amounts, goods or rights
R$ 600 thousand on 12/31/2015
involved
Action involving work accident claim for reinstatement
Main facts
to work with application of moral and aesthetic
damages beyond pension.
Chances of loss
Remote
The Company shall collect credit in the amount of R $
Analysis of impact in the
600 thousand (updated until 12/31/2015). Given the
case of losing the suit
amount involved in demand.
Amount provisioned (if any)
Process n 00000801420115020384
Jurisdiction
4th Vara do Trabalho de Osasco
Instance
Superior
Date of filing
1/19/2011
Autor: Esplio de A. V. F.
Parties in the suit
Defendant: Mills Estruturas e Servios de Engenharia
S.A
Amounts, goods or rights
R$ 1.072 thousand on 12/31/2015
involved
Action involving claim for compensation for material
and moral damages for the death of the worker hiccup.
The lawsuit was dismissed in 1st instance, but the
decision was revised and amended by the Regional
Main facts
Court, which ordered the Company to pay a
compensation for moral damages over a lifetime
monthly pension for the widow. The Company
appealed to the Superior Court, and is still waiting for
final decision.
Chances of loss
Possible
According to its legal advisors, if maintained the
decision of the Regional Labor Court - SP, the
Analysis of impact in the Company shall pay to the former employee Estate the
case of losing the suit
estimated amount of R $ 1.073 thousand on
31/12/2015. It has fired the liability insurance
company.
Process n 00000801420115020384
Jurisdiction
3rd Vara do Trabalho de Piracicaba
Instance
1st Instance
Date of filing
2/28/2014
Autor: V. D. S. D. e Outros
Parties in the suit
Defendant: Mills Estruturas e Servios de Engenharia
S.A
Amounts, goods or rights
R$ 1.261 thousand on 12/31/2015
involved
Action involving claim for compensation for material
and moral damages for the death of the worker in a
typical work accident (bridge fall over the river
Piracicaba). The action was upheld in part in 1st
instance, being the Mills ordered to indemnify the
Main facts
claimants for damages (R $ 450 thousand) plus a
monthly pension. On 04/06/16 the Company appealed
to the TRT-Campinas, and the plaintiffs also brought
an action seeking the increase of compensation. Still
awaits final decision
Chances of loss
Possible
According to its legal advisors, if maintained the lower
court decision, the Company shall pay the
Analysis of impact in the
complainants the estimated value in the judgment of R
case of losing the suit
$ 500 thousand. It has fired the liability insurance
company.
Amount provisioned (if any)
Process n 00000801420115020384
Jurisdiction
39th Vara do Trabalho de Belo Horizonte
Instance
1st Instance
Date of filing
12/5/2014
Autor: A. C. M.
Parties in the suit
Defendant: Mills Estruturas e Servios de Engenharia
S.A
Amounts, goods or rights
R$ 572 thousand on 12/31/2015
involved
Process involving application for reinstatement and
payment of all salaries and other benefits of the
withdrawal period or compensatory damages of
salaries and all other benefits from the exemption until
Main facts
the end of the stability period; compensation for moral
damages and invalidity non-compete agreement.
Process has not tried in the first instance, pending for
instruction hearing for the day 05/06/2016.
Chances of loss
Possible
According to its legal advisors, it upheld the action may
Analysis of impact in the
result in the company's conviction to pay about R $
case of losing the suit
572 thousand on 12/31/2015.
Amount provisioned (if any)
4.4
Judicial, administrative or arbitral awards, which are not under confidentiality, in which the
company or its subsidiaries are part and whose appellees are administrators or former
administrators, owners or ex-owners or investors of the company or its subsidiaries.
Not applicable, since the Company or its subsidiaries are not parties to proceedings in which
the opposing parties are managers or former managers, controlling shareholders or former
controlling shareholders or investors of the Company or its subsidiaries.
4.5 In relation to the relevant confidential proceedings to which the issuer or its
subsidiaries are a party and which have not been disclosed in items 4.3 and 4.4 above,
analyze the impact in case of loss and inform the amounts involved.
On December 31, 2015 the Company was not part of any confidential lawsuit.
4.6
Judicial, administrative or arbitral lawsuits, repetitive or related, non confidential and based
on similar legal facts and causes, which are not under confidentiality and which together, are
relevant.
Not applicable, since the Company or its subsidiaries are not parties to the repetitive or related
processes based on similar facts and legal causes, which are not confidential and that are
collectively relevant.
4.7
if the issuer has a formal policy of risk management, highlighting, if so, the organ which
approved it and the date of its approval, and if negative, the reasons why the issuer has not
adopted a policy.
The Company does not have a formal policy for managing operational risks as indicated in item
4.1 of this Reference Form. The Company formalized a risk management policy, understanding
that the practices adopted by it are sufficient to deal with the risks it is exposed.
b.
The Company seeks to protect the risks reported in item 4.1 of this Reference Form.
(ii) the instruments used for protection;
The Company believes adopt procedures to protect the risks mentioned in item 4.1 of this
Reference Form.
(ii)
Policies and risk control procedures are defined directly by the Board of Directors and implemented
by the Finance Director. The Board of Directors is also responsible to supervise compliance with
these practices.
(iii)
Policies and risk control procedures are defined directly by the Board of Directors and implemented
by the Finance Director. The Board of Directors is also responsible to supervise compliance with
these practices.
b.
Adequacy of operating structure and internal controls to verify the effectiveness of the
policy adopted
The Company's management analyzes its operating structure and internal controls, and believes
that the policies and adopted control procedures are adequate for the company's operational
structure. In the fiscal years ended December 31, 2013, 2014 and 2015, the reports of the
independent auditors did not identify any material deficiency in these controls.
In the fiscal years ended December 31, 2013, 2014 and 2015, the reports of the independent
auditors did not identify any material deficiency in these controls.
In order to protect the assets from exposure to commitments in foreign currency, the Company
has developed a strategy to mitigate such market risk. The strategy when applied, is carried out to
reduce the volatility of the desired cash flow, ie the maintenance of the planned fund
disbursements.
Mills believes that the management of these risks is fundamental to support its growth strategy
without potential financial losses reducing its operating results, as the Company does not wish to
obtain financial gains through the use of derivatives. Risk management in foreign currency is made
by the Management and Financial Management, that assess the possible risk exposures and
establish guidelines to measure, monitor and manage the risk related to the Company's activities.
The Company intends on using financial derivative instruments locally and abroad to manage the
exchange and interest rate fluctuation risks. In accordance with the accounting principles generally
accepted in Brazil, the derivative contracts are going to be recorded in the balance sheet based on
the fair market value recognized in the revenues statements, unless in cases when the specific
hedging criteria are met. The market value estimations are going to be held on a specific date,
usually based on the mark-to-market.
(iii)
closer - the final maturity of the commitment. Thus, on the settlement date, the result of the
swap and NDF may offset part of the impact of the exchange variation of the foreign
currency the real, contributing to stabilize the cash flow.
Derivative instruments are contracted by the Company to certain imports of equipment in
the interval between placing the order and the corresponding nationalization, against risks
of fluctuations in exchange rates, which are not used for speculative purposes.
The following table shows details of future contracts open currency at the end of the
reporting period:
Average Exchange
rate
Open
contracts
Cash flow
hedge
Menos de
trs meses
Total
Foreign currency
National value
Fair value
2,61
US$ thousand
R$ thousand
499
499
1.299
1.299
R$ thousand
-
26
26
In December 2013, the Company contracted operation of the foreign exchange swap
contracts, in order to hedge against exposure of US $ 16.9 million loan (see note 17 to
the Company's annual financial statements) to the exchange rate. The foreign exchange
swap for this operation consisted of the exchange of the exchange variation charges plus
interest of 2.31% pa by CDI plus 0.29% pa In January 2015, the Company paid the fair
value recorded R $ 43 in this operation (until December 31, 2014 - R $ 1,166 receivable).
(iv)
(v)
If the Company uses various financial instruments with various objectives for asset
protection (hedge) and what these objectives are
The Company operates financial instruments in order to maintain the price of imported
equipments and, consequently with foreign currency prices, in Brazilian reais, solely for hedge
purposes.
The Company's policy not to participate in any trading derivatives for speculative purposes.
(vi)
c. Adequacy of the operational structure and internal controls to verify the effectiveness of the
adopted policy
The Companys Board of Directors analyzes its operational structure and intern controls, and
believes that the policies and procedures of adopted controls are appropriate to the Companys
operational structure.
In fiscal years ended in December 31, 2013, 2014 and 2015, the opinion of independent auditors
did not identify deficiencies in those controls.
5.3 Regarding the controls adopted by the issuer to ensure the preparation of
reliable financial statements, indicate:
a. The main internal control practices and the degree of efficiency of such controls, indicating
any imperfections and measures adopted to correct them.
The board of the Company believes that its internal controls and trade policies, operational,
financial, tax and accounting and human resources are adequate to ensure the preparation of
reliable financial statements.
b. Organizational structures involved
All the Company's organizational structures are involved in the practices of internal controls, are
business units are the areas of business support.
c.
If and how the effectiveness of internal control is supervised by the issuer's management,
indicating the position of the persons responsible for such monitoring.
The effectiveness of internal controls is supervised by management constantly and reviewed at
least annually by the Board and Board of Directors, upon the issuance of Control Deficiencies of
Internal Communication by the Independent Auditors.
d.
Formalizing Need for Internal Control Procedures and Improving Accounting Policy
We found that the Company has no formalized internal control policies and should improve
certain aspects of its policy of accounting procedures. The standardization of internal control
policies, together with the improvement of the accounting procedures and policy filling
disclosure checklists allow standardization of procedures allowing the Administration has a
better view and control over financial information. A procedures manual must be easily
accessible to the accounting staff to ensure that the accounting policies are followed and
consistently applied. This manual also benefit the Company when key staff turnover. Policy
formalized internal controls provide management with greater assurance of the effectiveness
of compliance with the adopted policies consistently.
Recommendation
Implementation and formalization of internal control policies;
Improvement of accounting policies formalized by the company, the following:
Revenue recognition, including practice revenue provisions;
Hedge accounting;
Critical analysis of information received from external lawyers in relation to contingent liabilities;
Approval Policy for all unusual transactions, including manual entries;
Cancellations and remission of invoices;
Disclosures and records related parties;
Contract Monitoring aiming to identify embedded derivatives, and
Disclosure checklists Fill each closing (quarterly or yearly);
Accounting manual elaboration for the accounting staff. This manual should even include the
main requirements for closure, as well as address the disclosure requirements for significant
notes in the Company's business environment.
2.
The auditor identified differences in the recognition of revenue on an accrual basis, thus
generating distortions in revenue balances and receivables of the Company.
This deficiency causes the risk of revenue recognition not respecting the accrual basis, in order to
distort the presentation of the Financial Statements.
In the face of this deficiency, the independent auditor recommended the implementation of
controls and more accurate accounting routines in order to recognize revenue only when it meets
the CPC accounting standards 30 (R1).
efforts on operational efficiency. If these prospects remain in 2017, the Company's operations may
continue to be affected.
5.5
6.1 / 6.2 / 6.4 - Constitution of the Company, Company Lifetime and Date of registration with the
CVM
12/01/1980
Constitution of the Company The Company was established on December 1, 1980 as a limited liability
company. On January 29, 2009, the Companys shareholders approved a
corporate transformation of the Company, which became a privately held
corporation. The first company of Mills group, named Aos Firth Brown SA
was established in 1952 in the city of Rio de Janeiro, State of Rio de
Janeiro, in the form of privately held corporation.
Country of the Constitution
Brazil
Undetermined.
6.3
04/14/2010
The Company was formed in 1952 by the Nacht family, as a scaffold and shoring company which
provided services to the civil construction sector. Mr. Andres Cristian Nacht was a member of the
Companys management team from 1969 to 1998, being President Director from 1978 until 1998. In 1998,
Mr. Andres Cristian Nacht became Chairman of the Board of Directors of the Company, position that
occupies until this Reference Forms date.
In the 70s and 80s, the Company had substantial growth due to the significant civil construction
and industrial sectors expansion in Brazil. Among its activities from this period can be highlighted the
construction of the Rio-Niteroi Bridge (1971), the Itaipu Hydroelectric Plant (1979) and the first Brazilian oil
drilling platform (1983), among other projects.
During this period the Company made important partnerships with international companies that
cooperated with the Companys development. From 1974 to 1986, GKN plc, a large British conglomorate,
was the Companys shareholder, strengthening the beginning of good governance and credibility. In 1980,
the Company signed a partnership with the Canadian company Aluma Systems Inc., the Aluma Systems
Concrete Forms and Formwork Ltda., which had as main objective the introduction of aluminum formworks
in the civil construction sector in Brazil which lasted until 2001.
In the 90s, while seeking to expand the Companys portfolio of services, it made new strategic
partnerships. In 1996, the Company entered into a licensing contract with the German company NOESchaltechnik Georg Meyer-Keller GmbH, to produce and supply modular steel and aluminum panels
formwork to the Brazilian civil construction market. In 1997, the Company entered into a joint venture
partnership with the American company JLG Industries, Inc., to begin activities in the equipment rental
sector in Brazil.
In 2001, the Argentine company Sullair Argentina S.A., replaced JLG Industries, Inc. as the
Companys partner in the in the industrial equipment rental venture, and subsequently acquired its stake in
2003.
In 2007, the private equity funds, Peninsula FIP, managed by IP, and the Natipriv Global L.L.C.,
managed by the Axxon Group, became the Companys shareholders, acquiring, each one, 10% of the
Company for R$ 20 million. The resources from these investments were used, mainly, to acquire
equipment.
In 2008, the Company returned to its activities in the rental unit in an organic way, with the
establishment of the Rental business unit, and suspended the operations of its Events business unit, which
was responsible for providing temporary structures, such as outdoor stages and grandstands for the sports
and entertainment segment, as an objective to focus on the segments where it has competitive
advantages. Also in 2008, the Company acquired Jahu Indstria e Comrcio Ltda. (Jahu), which became
the Real Estate business unit, focused on providing engineering services to the residential and commercial
civil construction industry, complementing its activities in the Heavy Const ruction segment.
The Companys IPO was on April 2010, with a transaction totaling R$ 685 million, of which R$ 411
million related to the primary offering that, consequently, were used to enable its growth plan. Shortly after
the offer, the Companys free float was of 48%.
In October 2010, after the expiration from the lock-up period, due to the IPO, the private equity
funds, Peninsula FIP and Natipriv Global L.L.C., sold the joint participation of 6.2% of the Companys
capital, increasing its free float to 57.2%.
On January 19, 2011, the Company entered into a purchase and sales agreement to acquire
25.0% of the voting and total capital stock of Rohr S/A Estrutura Tubulares (Rohr), a privately held
company specialized in access engineering and solutions for civil construction, for R$90.0 million. This
strategic acquisition will enable the Company to broaden its exposure to the sectors it serves, especially in
the areas of infrastructure and the oil and natural gas industry. In September 2011, there was a rise in the
stake held in Rohr to 27.5%, resulting from the repurchase by Rohr of 9% of its shares held as treasury
stock.
In May 2011, the Company entered into a purchase and sales agreement to acquire 100% of the
voting and total capital stock of GP Sul, one of the largest players in the suspended scaffold rental market
to residential and commercial construction in the state of Rio Grande do Sul, for R$5.5 million, which was
merger into the Company in August 2011. This strategic acquisition, according to Managements opinion,
enabled the Company to become the leader in the suspended scaffold rental market in the state of Rio
Grande do Sul and to broaden its exposure to the residential and commercial construction market in the
South region, in line with the geographic expansion plan of the Real Estate business unit.
In July 10, 2013, the company entered into an agreement for the sale of its Industrial Services
business unit for a total sum of R$102 million, through the sale of their participation in the company
Albuquerque Participaes Ltda. On November 30, 2013, the transaction was completed and the Company
recorded a net gain of R$8,3 million. This sale was made in line with the Company's strategy to focus on
businesses where their skills are able to generate greater value for its shareholders and customers.
Therefore, the Company ceased to operate in the Industrial Services sector where they were offered
access services, industrial painting, surface treatment and thermal insulation, both during construction and
in the maintenance phase of large industrial plants.
6.5 Bankruptcy filings based on relevant values, judicial or extrajudicial recovery of the Company
Not applicable.
6.6 Other information that the Company deems relevant
There is no further relevant information about this item "6.
7.1
The Company holds as purpose: (a) the rental, commercial intermediation and sale, with or without
assembly, of mobile goods of its own manufacturing or acquired from third-parties, comprising forms,
shoring, scaffolding, pressurized dwellings, floors, structures and similar equipment, steel, aluminum,
metal, plastic and wood, as well as its parts, components, accessories and raw materials; (b) the rental,
with or without an operator, commercial intermediation and sale of aerial work platforms and telescopic
handlers, personnel training for the respective equipments operation, maintenance and technical
assistance of its own equipment or third-party; (c) import and export of the above described goods,
including its parts, components and raw materials; (d) the provision of painting, blasting, thermal insulation,
surface treatment, passive protection against fires, cargo movement, boiler, refractory, inspection and
nondestructive testing, including the access by rope used by the industrial climbers and other equipment
and services inherent to such activities, as wll as manufacturing, assembly and marketing of proprietary
products for such activities; (e) consulting and sale of engineering projects; (f) roofing construction in
structured tent with closing a plastic or similar; (g) low voltage electrical installations; and (h) participation
as a shareholder or partner in other companies or corporations.
According to information released in 2015 by the magazine "O Empreiteiro" and by the IRN - 100
(International Rental News) publication, the Company believes to be one of the specialty engineering
services company and the largest provider of temporary concrete formwork and tubular struct ures and
motorized access equipment for the Brazilian market. The Company offers its clients specialized
engineering services, providing differentiated solutions, skilled labor and equipment that are essential to
large infrastructure projects, residential and commercial construction and industrial. Customized
engineering solutions include planning, design and implementation of the temporary structures for civil
construction (such as concrete forms, shoring and scaffolding) and motorized access equipments (s uch as
aerial platforms and telescopic handlers), as well as technical assistance and skilled labor.
During 60 years of history, the Company has developed relationships with most of the largest and most
active Brazilian companies in heavy construction, residential and commercial construction and industry
sector. The Company enjoys strong reputation in accordance to the provision of services on a consistent,
timely, reliable, and quality manner, observing the high safety standards.
The services are offered by four business units: (i) Heavy Construction Business unit (heavy construction,
large-sized, such as infrastructure), (ii) Real Estate Business unit (residential and commercial construction)
and (iii) Rental Business unit (rental of motorized access equipment).
As described in Section 6, the Company entered into an agreement for the sale of its Industrial Services
business unit on July 10, 2013.
Heavy Construction
The Company estimates, according to data published by the O Empreiteiro magazine in 2015, that its
Heavy Construction business unit is Brazils leading provider of specialty engineering solutions and
equipment in revenue. In this unit, the Companys focus is directed to large engineering projects, including
infrastructure projects toward the logistics sectors (specially railways, underground urban networks,
highways, airports, ports and shipyards), social and urban infrastructure (including sanitation networks) and
energy (primarily regarding hydroelectric, thermoelectric and nuclear plants), besides the industrial and
large building construction projects. Such projects are characterized by long-term (usually over one year),
usually developed by the major construction companies in Brazil.
The Heavy Construction business unit offers its clients specific and customized engineering solutions for
every type of construction, considering all the peculiarities and specificities inherent to the location and
complexity of the construction works, with the objective of facilitating the project execution, ensuring safety,
cost, speed and schedule compliance optimization. In many situations, due to its vast experience, the
Company is looked for by its clients to participate in preliminary studies that will provide structuring for its
proposals in the biddings for the construction of large engineering projects.
The Company believes that its main competitive advantages are its expertise, agility, reliability, quality and
safety standards, as well as its ability to provide equipment on a large scale, factors that contribute to the
reduction of overall duration and costs from its clients projects. The Company provides services
throughout the Brazilian territory and also in international projects from its customers, providing high value
service and providing equipment.
The Company's extensive track record includes participation in several of the largest and most important
infrastructure projects in Brazil, such as the construction of the city of Brasilia, the Rio de Janeiro -Niteri Bridge
and the Itaipu Hydroelectric Power Plant. Recently, the Company participated in the construction of the Ring
Road, in So Paulo, the subway systems in the cities of Rio de Janeiro and Sao Paulo, airports and renovated
stadiums or built for the World Cup in 2014, the hydroelectric plant of Estreito, located in northern Brazil, in the
Joo Havelange Olympic Stadium and Olympic Park in the city of Rio de Janeiro. Typical contractual terms of
this business unit ranging from six to 24 months, since the services are critical for a large portion of the
construction project.
In order to facilitate the implementation of the solutions that the Company idealizes, it offers customers through
leasing contracts and in some cases selling a wide range of equipment, including concrete formwork and shoring
structures, including projects and technical studies, technical support and training necessary for its correct use.
Taking into account the specific needs of a particular project, there is flexibility to hire the manufacture of
specially modeled equipment for the work in question.
In general, customers use their own employees to implement solutions designed and assembly of the
Company's equipment. However, in the case of more complex assemblies, the client's discretion, company
employees may be allocated for the assembly and disassembly of structures.
Real State
While the Heavy Construction business unit is focused on large engineering and infrastructure projects, the
Real Estate Business unit attends, primarily, the residential and commercial construction contractors,
developing projects and providing services of concrete formwork, scaffolding, shoring and access
equipment. The Company also provides engineering services in connection with building refurbishing and
maintenance, primarily through the provision of suspended scaffolding. Inside of this business unit's
activities, the Company provides planning, project development, technical supervision, equipment and
related services.
In the third quarter of 2015, the commercial management of Infrastructure and Buildings was
unified into one board. The Operational boards and Engineering were also consolidated. As a
result, business units Infrastructure and Buildings are now reported in a unified way, now called
"Construction". We will continue following the recipes of Infrastructure and Buildings separately,
given the different dynamics of each market.
The business unit Construction held on December 31, 2015, 17 operational units located in the
states of Amazonas, Bahia, Cear, Distrito Federal, Esprito Santo, Gois, Maranho, Mato
Grosso, Minas Gerais, Par, Paran, Pernambuco, Rio de Janeiro, Rio Grande do Sul and So
Paulo.
Rental
The Company is one of the largest providers of motorized access equipment, in Brazil,
supplying aerial work platforms and telescopic handlers, to lift people and cargo to considerable
heights, based on data published in the O Empreiteiro magazine in 2015. The equipment
enables safe, fast, versatile and precise access for professionals to perform tasks safely and
efficiently at heights from two to 56 meters. The handlers allows materials weighing up to 5.000
kg to be lifted, transported and delivered to heights of over 21 meters, at a job site or within an
industrial plant.
The main objective of this segment is to increase productivity and security, it is also offered to
customers operating training certified by IPAF (world authority air access) and we serve all the
rules of NR 18.
Indications and Awards
- 2012 - Nominated for the award for Best Training Center
- 2012 - Winner of the Year Access Company award
- 2013 - Nominated as the company that invested in security
- 2014 - Winner of the Best Training Center award
- 2014 - Nominated as the Year Access Company
-2015 - Indicated as pioneer company in Motorized Access
- 2016 - Nominated as a Company with Contribution to secure access height
7 nominations in five years. 2 awards.
The Rental business unit serves the same sectors as the other business units, such as heavy or residential
and commercial construction and industrial construction, as well as other economic sectors, as the
automotive, retail and logistics sectors, among others. Therefore, its client base is diverse, including clients
from the other business units. Generally, the Company rents equipment on a monthly basis, being the
average contract length from two to three months, although 18-month or even longer contracts.
The Company introduced the large-scale use in Brazil of motorized access equipment specific for height
purposes in 1997, when it entered into a joint venture agreement with the American company JLG
Industries Inc., world leader in access equipment manufacturing, to rent aerial platforms and telescopic
handlers, the first joint venture in JLGs history.
In 1999, the Company introduced the large-scale use of telescopic handlers in the Brazilian market. This
motorized equipment can be used to transport loads to various heights and replaces a number of other
pieces of equipment traditionally used at construction sites, such as cranes, munck trucks and service lifts,
among other equipment. In 2001, Sullair, an Argentine equipment rental company, replaced JLG as the
Companys partner. In 2003, due to unfavorable market conditions in Brazil and t he lack of capital
necessary to carry out essential investments, the Company suspended its equipment rental operations and
transferred the joint venture to Sullair.
In December 2007, as part of its diversification strategy and based on favorable market and credit
conditions, the Company established its Rental business unit and began renting aerial platforms and
telescopic handlers again.
According to the Companys estimates, based on data of 2011 from Terex and Brazilian import statistic of
2011, there are currently 34 thousands aerial platforms and telescopic handlers in Brazil. In comparison,
789,000 aerial platforms and telescopic handlers are available in the United States based on data provided
by Yengst Associates. The Company believes that this gap, together with the current favorable economic
conditions in Brazil, indicates that this rental market is incipient in Brazil, offering significant opportunities
for expansion in the segment. The Company believes that its scale, specific industrial sector expertise,
reliability and safety record have been the primary factors driving the growth of the Rental business unit
since the beginning of its activities in 2008.
In addition, the Company may benefit from the introduction of stricter technical norms and procedures, in
particular with respect to safety regulations for work performed at significant heights or in areas that are
difficult to access. Among other provisions, Regulatory Norm 18 establishes that workers must be lifted
with the use of motorized access equipment, rather than manual equipment, which has resulted in an
expansion of the potential market for rental of its equipment.
As of December 31, 2015, the Equipment Rental business unit was present through 32
operational branches, in the states of Amazonas, Bahia, Cear, Esprito Santo, Gois,
Maranho, Mato Grosso, Mato Grosso do Sul, Minas Gerais, Par, Paran, Pernambuco, Rio
de Janeiro, Rio Grande do norte, Rio Grande do Sul, Santa Catarina, So Paulo and Sergipe
and the Federal District.
Industrial Services
The Industrial Services business unit is focused on the provision of services to the oil and gas sector, as
well as to the chemical and petrochemical, naval, steel, pulp and paper, and mining industries. The
Industrial Services business unit was established in the 1980s with the recognition that certain equipment
used in its civil construction projects could also be employed to provide access to the structures and
facilities of large industrial plants. At that time, the Company began renting access equipment, such as
scaffolding systems, to carry out maintenance work in industrial plants, rapidly, expanding its services in
the industrial sector to include assembly and disassembly, a sector that the Company believed could easily
exploit in view of its past expertise in civil construction, and in sequence, it also began offering specialized
maintenance services, in particular, industrial painting and thermal insulation, which started to compete
with companies that had regularly rented the Companys access equipment for these purposes of providing
such surface treatment services and helping its clients manage their costs more effectively as they were
able to reduce the number of suppliers contracted for the provision of such services. This way, the
Industrial Services business unit provides the equipment and also the labor required for the provision of its
services, being labor-intensive.
Based on data published on 2013 by the O Empreiteiro magazine, the Company believes to be one of
Brazils major players in providing structures designed to provide access for personnel and materials
during the assembly of equipment and pipes, during the construction of industrial plants, as in the
maintenance phase, preventive and corrective. The Company also offers industrial painting services,
surface treatments and thermal insulation.
The Industrial Services business unit works, generally, together with the industrial contractor or the plants
maintenance department in planning, erecting and dismantling structures, when and where they are
needed, and performing painting and insulation, with own labor, as a way to guarantee the quality and
safety of its execution.
The contracts from the Industrial Services business unit with its clients are usually long-term, from one to
three years, being able to be renewed at the end of the contracted period. On most cases, this Business
unit is generally paid based on units of finished services or in service levels, such as meters of erected
scaffolding, or square meters of painted or insulated surface, being able to hire on a man-hour based price.
The Industrial Services business unit is present in the main industrial centers in Brazil, through seven
branches, in the states of Rio de Janeiro, So Paulo, Minas Gerais, Bahia, Pernambuco and Rio Grande
do Sul, and has a long history of developing innovative solutions and making on-time or early delivery of
projects, including with respect to deep sea oil platforms.
Customers of Industrial Services business unit prized for its reliability, quality, consistency and the
Company's award-winning performance in the security area. These factors ensured a high rate of contract
renewal and allowed to develop lasting relationships with customers such as Dow Brazil and Braskem
groups, which are the Company's customers for over 16 years. Customers looking for the Company for
expert, fast and flexible delivery of equipment and highly skilled installation, as well as deep understanding
of local needs.
The main sectors served by the Industrial Services business unit are oil and gas,
petrochemicals, steel, paper and pulp, mining, and naval. Oil and gas represented 61% of the
Industrial Services Business units revenue in 2013. The Companys clients include some of the
largest industrial groups in Brazil, such as Braskem, Camargo Corra, Dow do Brasil,
Petrobras, Queiroz Galvo, among others. The Industrial Services business unit has significant
synergies with the Heavy Construction business unit. After the completion of the concrete
structures in large industrial projects, such as plants or refineries, its clients often engage the
Industrial Services business unit to support the industrial construction of the plant and
subsequently to provide preventive and corrective maintenance.
The Companys commitment to safety, which is reflected in all of its operations, is particularly critical to the
clients from this business unit, many of which operate according to international safety standards
established by their headquarters. Many of its clients operations involve the use of flammable and toxic
substances. Seeking continuous improvement, along the years, the Industrial Services business unit has
secured several international safety certifications, such as OHSAS 18001, ISO 9001 and ISO 14001. The
Companys commitment to the application of robust safety standards has also been recognized by its
clients, as demonstrated by the following awards: Destaque Petrobrs, Braskem Ouro, TOP Copene,
Prmio Isopol de Segurana, Prmio DOW for 14 consecutive years of providing services without work
loss time injuries, Prmio 5 Estrelas Arcelor Mittal (five star award), Prmio Excelncia na Construo
Bahia (excellency in construction), Prmio Performance SSMA Millennium Cristal , Prmio
Reconhecimento pelos resultados de SSMA in the Braskem unit at Alagoas, Prmio Zero Acidente
Reportvel - Dow.
The sale of the Industrial Services business unit was completed on November 30, 2013 and the
Company earned net income of R $ 8.3 million from the sale. The agreed sale value of R $ 102
million, R $ 25 million was received in the contract signing date, in July, and the balance will be
paid in installments corrected by CDI, discounting the generation of this business case for Mills
between 1 June 2013 and the closing date, which was equal to R $ 6.8 million. This divestment
is in line with Mills's strategy to focus on businesses where their skills are able to generate
greater value for its shareholders and customers.
7.2 Regarding each operational segment(s) disclosed in the consolidated financial statements for the
past fiscal years
a. Commercialized products e services
Heavy Construction
Usually, the company employs a workforce only in the design of engineering solutions and equipment
use of surveillance, leaving it to their customers to assembly and disassembly. However, in more
complex situations, the Company allocates own labor also in the assembly and disassembly of
equipment.
Offered equipment:
The main equipment offered by the Company to the clients of the Heavy Construction business unit includes:
Steel Shoring Equipment: The primary shoring equipment the Company provides are Millstour shoring posts, a
versatile system capable of supporting loads ranging from 24 to over 156 tons per post, depending on the
configuration. In accordance with the Companys market perception, its shoring equipment is considered the
most flexible and versatile shoring system in Brazil. This system provides for ease of assembly with its heaviest
component parts weighing less than 13 kilograms. Each shoring post has an automatic locking element and can
support loads of up to six tons. Load-bearing capacity may be doubled or even tripled with the use of connecting
trusses. In addition, these telescopic shoring posts are fully adjustable to meet nearly any height requirement and
may be used in multiple applications. Millstour is typically used in the construction of bridges, viaducts and dams,
as well as in large-scale industrial projects.
Shoring Aluminium: The main equipment used is the Alu-Mills, a system of aluminum shoring with load capacity
up to 14 tons, which can be connected by trusses forming isolated towers of different heights. This system also
allows total displacement of the joint without the need for disassembly also bringing significant labor savings.
Compared to the shoring post systems or conventional steel shoring, this system is the one with the lightest
weight / resistance ratio, being up to 2.5x lighter, saving very much in the amount of equipment deployed in the
works. The Alu-Mills can be used in buildings and even heavy construction works reaching a wide range of
application.
Trusses: The Aspen Launching is a motorized horizontal truss able to transport and position precast beams
weighing up to 140 tons and spanning up to 45 meters. This truss may be used during all stages o f a
construction project, from the delivery of the beams at the construction site to positioning the beams on
permanent supports. The truss may also be used to launch braces for the construction of viaducts with a high
degree of safety and minimum labor. No additional equipment is required to launch such braces, as the Aspen
Launching Truss also transports the supports, stands and other accessories required for launching such braces.
Moreover, the truss may be operated at inclines as steep as 6% without additional components and without any
deterioration in its load-bearing capacity. The Aspen Launching Truss is typically used in the construction of
bridges, viaducts and industrial structures. The M150 Truss is a horizontal heavy duty truss used for laying
concrete. The Company believes that the M150 Truss has the highest load-bearing capacity among similar
products in the market, while remaining as light as conventional trusses. The M150 can bear positive stress of
150 tons per meter and negative stress of 100 tons per meter, thus requiring fewer modules than for conventional
trusses and less movement of materials, which reduces costs for labor and secondary equipment. The Company
believe that the M150 Truss is the only truss available in the market which is able to absorb negative stress and
which includes a curvature adjustment mechanism. The lower rail supports the truss via an exclusive connecting
post, eliminating the need for additional supports. The Companys Truss can be operated either with the use of
supporting structures, or through the even distribution of weight, providing it with the capacity to be operated at
significant heights over great spans.
Balanced Cantilevers: Balanced Cantilevers are used to build bridges and overpasses under conditions where
the constructive approach does not allow for shoring directly from the ground, when there is a need to implement
large spans, and when work has to be carried out without interrupting the traffic on urban roads. The principle
behind the Balanced Cantilever is the use of specific equipment (Mills' metal trusses and profiles) implementing
portions of the superstructure "hanging" right on the transversal section (staves) that go on swings, from the
pillars, stave to stave, until the entire span has been completed. The trusses are always anchored on the
previous, already prestressed staves, and all forces coming from the concrete are transferred to and then
supported by them.
Reusable metallic formwork systems: The formworks are used as molds for concrete. There are two different
formworks: vertical walls and pillars and horizontal beams and slabs for such as: SL 2000, ALU-L, ALUMA, Mills
Light, TOP MILLS, climbing, automatic climbing and special.
SL 2000: Using the German NOE technology, and with easy application and handling as its main feature, the
2000 SL formwork system allows a single worker to assemble and disassemble the panels.
It was designed especially for work for which there is no equipment available, such as cranes and hoists. It
consists of panels made of steel and coated with a plasticized 12-mm plywood plate that can withstand concrete
pouring pressures of up to 55 KN/sq.m. The SL 2000 formwork panel is light, 33 kgf/sq.m, and affords quick and
easy assembly (few components) in any situation and on any surface. It also allows any geometry to be formed,
whether rectangular or circular, with varying heights and radii. It is ideal for blocks and straps, adjustment layers,
gutters, beam sides and for pillars and walls. The SL 2000 supersedes any conventional formwork of the same
nature and can be used even for the simplest concrete tasks, cutting labor costs by up to 70% compared to
conventional formwork.
Top Mills: The Top Mills system consists of industrialized panels, made in steel and coated with a 21-mm
plywood plate specially designed to withstand concrete pressures of up to 80 KN/sq.m. It is ideal for broad area
formwork and is very efficient not only for use with reservoir walls, powerhouses and spillways, elevator shafts
and stairwells, but also to build large pillars. Panel modulation is smart and allows one to form a large variety of
heights and widths, significantly reducing the use of wood and conventional formwork complements and, thus,
allowing for excellent concrete surface finishing. With Top Mills, no complement needs to be larger than 15 cm.
The panels are interconnected by means of staples and may be transported to the next stage of the work in
isolation or coupled to form a rigid assembly providing a reduction of up to a third of the time in the concrete
pouring cyclic. Formwork assembly takes place at a rate of 0.22 Mh/sq.m, while the disassembly rate is 0.11
Mh/sq.m.
ALU-L: ALU-L is an aluminum formwork system manufactured in Brazil using the cutting-edge German NOE
technology. It is a large-area formwork panel system made with special aluminum profiles and coated with a 15mm high-resistance plasticized plywood plate that can withstand concrete pouring pressures of up to 60
KN/sq.m, affording excellent concrete finishing. It is self-alignable and ideal for application on large wall
formwork, whether in reservoirs, canals, galleries, cooling towers, rectangular silos or any other structure that has
large concrete pouring sides and repetitive formwork cycles. It is also used as a formwork solution for pillars. This
formwork system was developed for work that requires large cranes or hoists, but it can also be used manually.
The lightweight panels (average weight = 20 kg/sq.m) can be handled individually or joined to form a single panel
measuring up to 30 sq.m, and then transported to the next concrete pouring stage. The large panels that are put
together, as long as they are assembled at the application site, do not require full support from the hoist, which
can be used to tend to other needs at the construction site. Hoist support is only required when the panels are
positioned and/or transported. This affords great savings, not only in assembly and disassembly (0.17 Mh/sq.m assembly and 0.08 Mh/sq.m), but also in machine usage time, freeing them for other activities at the site. ALU-L
can also form circular walls using the same accessories as SL 2000. It is also compatible with the SL 2000
formwork system and it is possible to join panels from both of these two systems using joining clamps.
Aluma System: The Aluma Formwork System comprises broad area panels made with highly resistant aluminum
beams and headers that afford the work multiple applications in several geometries: walls, pillars, galleries,
tunnels and slabs. Its lightweight components allow broad panels to be built in any dimension with little weight
(40 kg/sq.m), high load capacity and easy assembly, doing away with the need for specialized labor and allowing
for excellent productivity. Its aluminum beams and headers have high impact absorption capacities, performing
three times better than steel. The advantage of aluminum, combined with the best weight/strength ratio afforded
by the Aluma panels, is that it allows for greater flexibility in projects that require speed. It is necessary to use a
machine to operate the panels.
Mills Light: Mills Light is a system of self-aligning panels, structured with steel profiles, covered with hardboard
plate, and with load capacity of 50 KN/m. It is indicated for all concrete structures of a large construction.
Climbing Formwork System: The Mills Climbing System was conceived to address the challenge of very high
walls and pillars, having been designed for vertical concrete structures where a single concrete pouring operation
is not feasible. It should be applied, preferably, in similar and repetitive stages, although this is not essential. Its
application is recommended for special industrial building structures, bridges and overpass pillars and,
especially, hydroelectric power plants. It can also be used to build elevator boxes and stairwells and for blind
gables in residential and commercial buildings. The basic principle behind the climbing formwork is its reuse in a
subsequent concrete pouring stage, always supported on an anchor made in the previous poured layer. A first
concrete pouring stage is carried out leaving a concrete anchorage point in the concrete, typically formed by a
small steel tail and a positioning cone (recoverable). After the removal of the formwork, the positioning cone is
substituted for a support cone, which will serve as a support for the next layer. The set will be raised when the
concrete has hardened. It is moved with the aid of the crane. The next stage is raised, formwork and scaffolding
both, with no need for additional scaffolding. It is compatible with all Mills panels: ALU-l, Top Mills and Aluma.
Automatic Climbing Formwork System: Mills' Automatic Climbing Formwork System comprises metal platforms
and form panels that move vertically, driven by a special hydraulic system, with no need for a crane. The process
takes place with maximum safety and the whole set (platforms and forms) is lifted to the next phase of the work
all at once. The Self-climbing System has advantages over the sliding formwork system: (a) When necessary, the
concrete pouring can be interrupted and then restarted; (b) It allows for labor cost reductions as it does not use
uninterrupted work processes (overtime) and specialized teams; (c) Improved final looks of the finished concrete,
with improved geometric control and greater accuracy; (d) Does not require special concrete, accelerators and
steel frame reinforcements; (e) Greater operating safety.
Modular Formwork and Shoring System: The SM Mills modular system is the new formwork and shoring solution
in a single system. This equipment has high load capacity and it is indicated for complex geometries and can be
moved, making the reuse without disassembly possible, with great labor savings. The SM Mills is formed by the
combination of metallic sections, that, when unified through special connections and combined with aluminum
beams, can form a variety of geometrical formations, attending various types of concrete structures, such as
tunnels, galleries, inclined slabs, suction, diversion and transition tunnels in big hydroelectric plants. The modular
steel composition, in the above described situations, replaces advantageously the traditional shoring systems
made of towers, tubes and clamps, increasing productivity and safety in the construction site. SM Mills is ideal for
repetitive sections, because it allows vertical shoring and horizontal formwork in a single system, and, with the
help of deformation and displacement equipment it is possible to lower it after the concreting and displace it to
the next work phase without the need for disassembly.
Carrelone is an equipment destined to transport pre-molded beams up to 45.00m of interspace and up to 140
tons of weight. This equipment is composed of two mobile gantries mounted above the tires, devoid of engine for
its self-handling, needing a loader type cat. 930 or 966 for traction of the set and longitudinal transportation of the
beams. Carrelone has a hydraulic system for direction of the set and lifting of the beams in the pre-molded
building side and its capacity is up to 70 tons per gantry.
Stave lifting cart car equipment: This is an equipment destined to lift pre-molded staves in bridge and viaduct
constructions. This equipment has a hydraulic system for levelling ADN adjustment of the cars and of the stave
and electric winches equipped with secure braking system.
Access Scaffolding: The Company offers a scaffolding system called Elite, which is a tubular metal tower system
that can be assembled into access structures of varying heights and dimensions. Elite is a simple system
composed of only three types of pieces: support posts, transverse pieces and diagonal supports, manufactured
from galvanized steel. Each post can bear loads of up to three tons. No tools, bolts or screws are required to
assemble the scaffolding system as each part is simply slotted into each other part. On average, a single worker
is generally able to assemble 15 linear meters of scaffolding per hour.
Mills Lock: a system of towers with multidirectional fittings that enables several geometric forms of towers and
can be used as Access scaffold, scaffold of facade, platforms and other ways.
Another access product are the assembled stairs, measuring 2.00 m x 3.30 m, with flat areas every 1.50 m
vertically, railing at heights of 0.70 and 1.20, and measuring 80 cm in working width. All measurements comply
with Standard NR18. Assembly (0.5 m in height/MH) and disassembly (1.0 m in height/MH) productivity exceeds
customer expectations.
Finally, the steel floor has the lightness demanded to build scaffolds, with the robustness proportioned by the
steel, ensuring a high resistant floor and reliability. The floors top coat is made of electrolytic galvanizing that
ensures long use in aggressive environments without suffering oxidation.
For the Buildings sector, projected to shoring solutions, forms and access providing special equipment for light
constructions such as residential and commercial buildings. The main equipment that the Company offers to its
customers through the business unit Construction for Building sector include:
Steel shoring: The main steel shoring system is the metallic modular towers, formed by the fitting of braced
tubular frames, which allows loads of up to 8 tons per tower. Connecting brackets make it possible to aggregate
additional frames to the tower, increasing its load capacity, and adjustable shoes and brackets allow the
millimetric adjustment of the top and base of the towers, providing great time reduction not only in the leveling but
also in the formwork removal. Metallic sections complete the system, allowing the perfect union of the slab
structure, providing great savings to the shoring. The shoring and bracing system for of buckets enables form
removal keeping the slab re-shored. It consists of metal guides to support buckets and drop heads on the heads
of the struts for quick formwork removal without strut removal. Re-shoring and conventional shoring for towers
and struts. Greater alignment and ease in positioning of the buckets. The system provides for the locking of the
buckets, preventing them from moving during the framework assembly, thus increasing safety.
Shoring aluminum: The flying table Aluma Light is a shoring system designed in aluminum trlias, highly resistant,
designed to speed up the construction of residential and commercial buildings with large cloths smooth slab and
preferably. The great advantage of Aluma Light is the labor savings in operations because it does not require
disassembly and reassembly of shoring every concreting. It is possible to form tables of up to 80 m fully ready for
implementation of the frame and the entire assembly is lifted by the crane and positioned in the upper level of the slab,
in the case of repeating vertical or slid forward, in the case of horizontal repetition. The Aluma Light System is ideal for
short schedule of works or structural design with many repetitions, whether vertical or horizontal, such as large
commercial and residential buildings, shopping centers and industrial facilities. The Alumills is an aluminum shoring
system with a load capacity up to 14 tons, which can be connected by trusses forming isolated towers units o f different
heights. The towers may be mounted horizontally, allowing a much more productive process and subsequently placed
in a vertical position. The sets can be reused without disassembly, allowing horizontal movement and vertical lifting
with a crane or hoist. This system also allows the total displacement of the assembly without disassembly also bringing
much labor saving. The light weight and high load capacity are the major attributes of Alumills system. These features
provide much lighter solutions and, in turn, more productive in the assembly, disassembly and reaproveitamentos.
Compared with the shoring towers or conventional steel stanchions systems, this system is the one with the lowest
weight / resistance, reaching 2.5 times lighter, saving a lot on the amount of equipment deployed in the works. The
Alumills can be used in buildings since even in heavy works reaching a wide range of application.
Formwork for concrete in modular reusable panels: The formwork is used as molds for the concrete. There are
two types of formwork: vertical, for walls and pillars, and horizontal, for beams and slabs, such as: SL 2000 and
Mills Deck.
SL 2000: The SL 2000 Formwork was designed to expedite concrete pouring for pillars, curtains, walls, stairwells
or elevators, suspended or buried reservoirs, foundation blocks, beams and walls in general. It affords increased
safety and a substantial reduction in time and labor costs thanks to its ease of assembly. Design based on
technology provided by the German company NOE; Easy to assemble, disassemble and transport, this
framework requires no training or skilled labor, a fact that affords gains in safety and finish quality; Its use
enables a 50 to 70% reduction in labor compared with conventional wooden formwork; Manufactured under strict
quality controls, this framework allows for superior concrete finishing; Because it is a highly versatile product
made in different dimensions, the SL 2000 Formwork allows for a simple, safe application for assemblers in any
work situation and geometry.
Mills Deck Light: The Mills Deck Light is a system of forms of flat slab formworks for the residential and
commercial segment. Formed by struts, aluminum panels and "dropheads" which allow the removal of the bottom
panels from the slabs keeping them shored, the Deck System provides the economy of a form set to the builder
and also provides more speed to the construction work.
Easy-set Formwork (used in the government program Minha Casa, Minha Vida): Easy-Set is a formwork
system that was conceived and developed by Aluma Systems Canada for residential, house and multiple floor
building work and withstands pressures of up to 60 KN/sq.m. With the Easy -Set system, execution time is
reduced to less than half compared with the traditional construction system. It allows for daily concrete pouring
cycles, resulting in a home per day.
Tubular Scaffolding: Real Estate business units scaffolding, of great tradition in the Brazilian civil construction
market, are present in the daily lives of countless workers in Brazil, which doubtlessly makes for a big operational
advantage un the development of the construction work. With fast and simple assembly, the scaffolding towers
are put together through the fitting of tubular frames, braced by diagonals embedded in the frames through
extremely functional latches. All types of frames used by the Company are a result of technological and market
research, aiming to ensure maximum safety and versatility upon use. As an example, the access stairs are
embedded to the tubular frame, making the workers access easier and contributing to the structural rigidity. They
are also equipped of frames and trusses that makes it ideal for use in urban centers, allowing the pedestrian to
walk freely, without being blocked by the tubular structure.
Suspended Scaffolding: Suspended scaffolding are systems that use steel cables fixed to the buildings faades.
The electric suspended scaffolding is meant for the execution of services that require extreme speed and agility
without any effort from its user, since it has a powerful engine and a simplified operation that allows a constant
speed of approximately ten meters/minute. The platforms have a non slip flooring and can be modulated in
various lengths with a minimum configuration of 2 meters and a maximum of 8 meters, and cable lengths that
reach up to 150 meters. The Real Estate Light Lifter/Puller Cable suspended scaffolding is suitable for work that
requires extreme speed and agility, but not a high load capacity. Using it in painting, wall cleaning and
waterproofing jobs or in facility or external piping renovation speeds the work up.
Mast Climbing Platform: The mast climbing platform, as it is automatic, allows greater speed in faade works
than traditional scaffolding, also providing much greater safety in its operation.
Rental
Offered equipament
The Rental business unit offers aerial platforms, new or semi-used, which allow workers to perform tasks at
different altitudes, and telescopic handlers, which are used to lift loads to varying heights.
Boom Platforms: Offered both telescopic and articulated boom platforms, which provide access to heights
ranging from 10 to 56.7 meters. Offered with several options, as two or four-wheel, all-terrain kits, models with a
narrow or wide base, and either diesel or electric engines.
Scissor Platforms: Scissor platforms provide an alternative to boom platforms that allow access to narrow
spaces. These platforms have a platform extension sliding system, and are available with either diesel or silent
electric engines. These platforms are available in a number of models which may be used in various types of
terrain and provide access to heights ranging from 6.4 to 18 meters.
Telescopic Handlers: Telescopic handlers are an extremely versatile type of equipment able to lift loads
weighting up to 5.000 kilos to a height of up to 21 meters.
Technical Assistance: To provide support both to rentals and equipment sales, the Company has highly qualified
technical staff trained to deal with the entire line of aerial work platforms and tele handlers. The staff is constantly
trained by equipment manufacturers and take regular refresher courses through an internal training program. The
Company owns a fleet of workshop vehicles, equipped with the tooling needed to carry out preventive and minor
corrective maintenance , thereby speeding up technical services and ensuring greater equipment availability.
IPAF Training: Mills is the first company to provide training for IPAF Operators and demonstrators in Brazil, and
the second to do so in Latin America. Additionally, it is a member of CBI - the Brazilian Council of the IPAF. One
of the main goals of this initiative pioneered by Mills is to instruct these professionals on the concepts of risk
perception/assessment and drive their ability to ensure the proper and efficient operation of Aerial Work
Platforms, increasing productivity and compliance with standards related to safety at work.
Industrial Services
The Company operated in two fronts:
Maintenance: The majority of revenue of this business came from the services that provided maintenance in a
continuous way in plants and installations already built, when the majority of the contracts had duration between
one and three years and, in large number of the cases, had been renovated during several years. Also, part of
the revenue came from interruptions in operational activities for longer periods for maintenance, which usually
occur once a year in industries that operated continuously. This interruption meant lower revenue to our clients,
which emphasized the performance of the Company in comparison to the competitors by demonstrating capacity
to conduct the labors properly with safety and punctuality, reasons why the Company was repeatedly hired.
New Plants: The Company offered services in assembly of access structures in new industrial plants, and also
for platforms and ships which operated in the Oil and Gas market. Many times the Company continued the
service with the Heavy Construction unit, that operates in civil works.
b. Revenue from the segment and its participation in the Company's net revenues
The table below indicates the net revenue from each of the business units and its share in the total net
revenue on the indicated periods:
Business unit
2013
Heavy Construction
Real State
Rental
Industrial Services
Total
Net
Revenue
% of
T ot a l
N et Re ve n u e
216,9
258,0
357,3
208,3
1.040,6
20,8%
24,8%
24,3%
20,0%
100%
F is ca l y ea r e n d e d De ce mb e r 31 :
2014
% of
Net
T ot a l
Rev enue
N et Re ve n u e
(e m R$ mi l he s, e x c eto
per c enta ge n s)
211,0
26,6%
212,4
26,7%
370,8
46,7%
794,2
100%
2015
% of
T ot a l
N et Re ve n u e
165,7
117,2
293,2
576,1
28,8%
20,3%
50,9%
100,0%
Pro-forma results consolidated data considering the Industrial Serv ices business unit, until its sale date.
c. Profit or loss resulting from the segment and its participation in the Company's net income.
The table below indicates the net income from each of the business unit and its share in the total net income
on the indicated periods:
Business unit
2013*
% Net
Net Revenue Revenue
Heavy Construction
74.414
43,10%
Rental
87.460
50,70%
Industrial Services
4.918
2,80%
Others
5.800
3,40%
Total
172.592
100%
Pro-forma
2015
% Net
Net Revenue Revenue
8.125
12,60%
58.783
91,50%
-2.640
-4,10%
64.268
100%
% Net
Net Revenue Revenue
-94.094
96,2%
13.634
-13,9%
-17.341
17,7%
-97.801
100,0%
considering
the
Industrial
until
its sale
7.3 Products and services that correspond to the operating segments disclosed in
item "7.2
a. Characteristics of the production process
The Company outsources the entire process of production of the equipment used in their operations. See
item 7.3(e) below.
b. Characteristics of the distribution process
The Company rents its equipment and provides their services according to the needs from their
clients. As of December 2015, the Company was present in 17 states with 52 branches.
For greater details about our equipment, see item 7.2 above.
c.
(i)
The Company believes to be Brazils leading provider of specialty engineering solutions and equipment,
such as formwork, shoring and scaffolding, and in the access motorized equipment rental for the for the
Brazilian market. However, there is no public information about the exact market share of the Company
and its competitors.
date.
(ii)
Heavy Construction
The Company believes that its Heavy Construction business unit enjoys an established leading
presence in its segments. The competition is highly qualified with companies which have been
in the market for a long time. However, the competitive environment presents stability, with few
new
entrants.
Real State
The sector of residential and commercial construction in Brazil is highly fragmented. In comparison with the
Heavy Construction unit, the Real Estate projects are spread, generally, through the whole country in
different cities, with smaller in physical dimension terms and have lower duration with average between
four to six months. The recognized reputation of the Company in the Brazilian market is very important for
the success in activities in this business unit. The Companys biggest advantage is the hi gh velocity to
answer the clients. With regional coverage, the Real Estate unit is closer to its clients, attending their
needs with agility and with a variety of equipment taking to better solutions.
In this market, the ability to reduce construction costs and to provide solutions for reducing execution time
and the use of labor is crucial to attracting new clients and securing participation in new construction
projects.
The Company believes that its Real Estate business unit is a leader in the residential and commercial
construction market.
Rental
Due to the participation in a still minor market with great potential for expansion, the Rental market
presents more dynamism, typified by the entry and exit of new companies and high investments of the
established competitors.
The Company believes that its Rental business unit is one of the major providers of motorized access
equipment, aerial platforms and telescopic handlers, both for lifting personnel and cargo to considerable
heights in Brazil. Besides the lack of public information about its competitors, the Company believes to be
leader in this segment.
Industrial Services
The Industrial Services business unit operated in highly competitive market segments. While in the access
segment the Company believed to have solid leadership, in the industrial painting and, in particular, the
insulation market, the Company competed with larger competitors.
The Company believes that the competitive in this sector consists on offering solutions both innovative and
high level of excellence at low cost, building long-term commercial relationships with its clients.
The information above related to Industrial Services is limited to the Companys evaluation up to the
conclusion of business unit sale, in November 2013.
d.
Seasonality
After purchasing the raw materials, the Company outsources the entire manufacturing process to third
parties, as well as subsequent to the assembly. In this manner, all of the equipment manufactured is done
by third-parties. Due to the very high quality standards that are needed from the equipment, the Company
has very careful restricted selected companies to perform the manufacturing. To catch up with demand,
equipment is also imported from China, through carefully verified suppliers, which must be within the
Companys high-quality standards.
Regarding the Equipment Rental unit, the aerial platforms and telescopic manipulators used are acquired
from third parties. The criterion that guides the choice of suppliers for these products is based on its quality
and on after-sale services. The main suppliers of finished products are JLG, Terex and Skyjack, of whom
the Company is partially dependent on, due to the small number of suppliers in the market. Furthermore,
motorized components and pieces are acquired from others suppliers, either national or foreign.
Regarding the inputs, gasoline and diesel are regularly acquired for the motorized equipment in the Rental
division. For the Heavy Construction and Real Estate unit, hardboards for the maintenance and
industrialization of the equipment are acquired, with the plasticized hardboards used to equip the formwork
in the aluminum chassis systems (Mills Deck-Light, Mills Deck and ALU-L), and in the steel chassis
systems, (SL 2000 formworks). Additionally, the Company buys spare parts for its motorized equipment
from other Brazilian and foreign supliers.
Generally, the agreements with the suppliers are short-term. The charged prices by the suppliers may
experience volatility as a result from the labor prices, and commodities that are used in the equipment
manufacturing, especially steel and aluminum. The Rental Business unit equipment, are impacted by the
exchange rate fluctuations.
7.4 Clients accounted for more than 10% of total net revenues of the Company
In the fiscal years ended December 31, 2013, 2014 and 2015, the Company had no sole clients
accounting for more than 10% of the total net revenue.
7.5 Relevant effects of state regulation on the Company's activities
a. The need for government authorization to exercise the activities and long-standing
relationships with the government to obtain such permits
There is no specific regulation on the activities that the Company carries. The Company does not need to
obtain permission or license in addition to those required to all commercial companies.
For more information about the judicial, administrative or arbitral not confidential and relevant Company,
see item 4.3 of this Reference Form.
b. environmental policy of the Company and costs incurred for compliance with
environmental regulation and, where appropriate, other environmental practices,
including adherence to international standards of environmental protection.
Considering the nature of the Companys activities, it does not adopt environmental policies and
regulations and is not subjected to specific environmental regulations.
The main environmental impacts of the Company regard the maintenance process of its equipment, which
involves, among others, hardboard, paint and lubricant oils. The Company seeks to mitigate the possible
environmental impacts coming from its activities through the survey of the aspects and research of its
proper disposal. As an example, the proper disposal of lubricant oils through separation and disposal in
licensed companies. Investments are also made in the separation systems of water and oil from the
lubrication and washing of machines.
With the objective of reducing use of oils in the lubrication of its equipment, the Company has invested
expressive resources in docking scaffolding for the industrial environment, which exempts the use of
clamps and bolted connection sleeves, and uses instead a system of fitting wedges, which, other than
dismissing the need for maintenance with lubricant oils, also provide gains in productivity and
competitiveness.
Since early 2003, the Company has invested expressive amounts of resources to gradually replace
wooden scaffolding floors with aluminum ones, that are more durable and environmentally correct, thus
contributing to the reduction of the extraction of trees, helping to raise a greener planet. Beyond that, the
Company has products that reduce environmental impact, especially the new formwork and shoring
systems and the metallic structures, which reduce the use of wood in the construction process.
The Company acts with environmental responsibility when acquiring the wood that will be used in the
execution of its services. All of the wood used in its equipment come from legal sources licensed by the
Brazilian Ministry Of Environment Brazilian Environment and Natural Renewable Resources Institute,
and the Company maintains archived copies of all the legal documentation regarding the origin, transport
and registry of its suppliers, with focus on: (2) DOF Forest Origin Document; (b) CTF Federal Technical
Certificate of Regularity for the use of Natural Resources; and (c) GF3 Forest Guide for the transport of
forest products.
The equipment that is damaged in the construction work, when classified as improper for reuse, are turned
into pieces of smaller sizes or discarded and sent to further recycling. In the discarding, carbon steel
pieces are sent to steel makers and turn into other metallic products; aluminum beams and floors are sent
for reprocessing in plants, returning to the Company in the form of new products with the same
characteristics; and the wooden floors are sent to accredited partners who transform this residue into an
energy source.
c. reliance on patents, trademarks, licenses, concessions, franchises, contracts,
royalties for the development of relevant activities.
In case the Company may not use its main brand, Mills, or if such brand loses distinctiveness, the
Company may have problems in relationships with their clients to tailor their services and equipment in the
market, which may prevent the development from its activities in a satisfactory condition. The development
from its activities does not dependent on secondary brands, patents, concessions, franchises and
contracts, royalties.
The Company has contracts of technology transfer for the exclusive manufacturing of several equipment,
as detailed in Item 9.1b. In case any of these contracts are discontinued or the regulation on patents or on
the use of technology changes, the Company may have its portfolio of products reduced and its
competitiveness affected.
7.6
a) revenue from the clients assigned to the host country and their participation share in the
Companys total net revenue;
The Company only operates in Brazil. The fiscal year ended on December 31, 2015, 98% of the
Company's revenue came from clients located in Brazil.
b) revenue from the clients assigned to each foreign country and their participation share in the
Companys total net revenue;
In the fiscal year ended December 31, 2015, 2.0% of our revenues came from clients in other
countries:
Country
AUSTRALIA
0.09%
BOLIVIA
0.13%
0.00%
CANAD
HOLANDA
PERU
REINO UNIDO
REPBLICA DOMINICANA
Grand total
0.96%
0.41%
0.30%
0.09%
1.98%
c) total revenue from foreign countries and their participation share in the Company's total net
revenue.
The fiscal year ended on December 31, 2015, 2.0% of the Company's revenue came from
clients located outside of Brazil.
7.7
7.8 In relation to environmental policies, indicate: (a) if the issuer disclose social and environmental information;
(B) the methodology followed in the preparation of such information; (C) if the information is audited or reviewed by
an independent entity; (D) the page on the World Wide Web which can be found this information
The Company is in the process design phase, aiming to act sustainably.
The company does not publish sustainability report or similar. Considering the significant increase of transparency about the
sustainability issue, the Company is considering formalizing a process of analysis (diagnosis) and action plan to improve its
sustainability practices.
7.9
On May 21st, 2015, the Companys Board of Directors approved its new code of conduct, available in
http://ri.mills.com.br/ptb/1936150521_CDIGO_DE_CONDUTAMILLS_p.pdf.
8. Extraordinary Business
8.1 Indicate the acquisition or disposal of any relevant asset that does not fit as normal operation in the issuer's busine
In the fiscal years ended December 31, 2013, 2014 and 2015, there was no acquisition or disposal of any relevant asset
Company's normal operation, except for the sale of the Industrial Services unit, as described in item 6.3 of this Form of reference
8.2 Indicate significant changes in the manner of conduct of business of the issuer.
In the last three years, there was no significant change in the conduct of business in order.
8.3 Identify the relevant agreements entered into by the issuer and its subsidiaries not directly related to its operating activi t
In the fiscal years ended December 31, 2013, 2014 and 2015, there was no celebration of relevant contracts that were not rel ated to t
activities.
8.4 Other information which the Company judges to be relevant.
There is no other relevant information pertaining to this item 8.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities
a) Fixed assets, including those subject to rent or lease, indicating its location.
Most of the Companys revenues are generated by the rental and use of equipment, as well the provision of services related
to such equipment, including insulation, industrial painting and equipment assembly and disassembly.
The Company also owns several fixed assets for its own use; mainly warehouses to storage the equipment described above,
offices, furniture, fixtures, and other general equipment used at the Companys facilities.
The Companys main fixed assets are listed in the table below:
Assets
2013
Custo
Dep re cia o
Ac um ulada
Lquido
2015
Dep re cia o
Ac um ulada
Lquido
24.274
(1.526)
22.748
24.274
(2.196)
22.748
24.211
(2.826)
5.470
(1.051)
4.419
7.058
(1.590)
5.468
8.711
(2.017)
6.694
1.491.854
(362.749)
1.129.105
1.623.268
(489.835)
1.133.433
1.499.502
(555.547)
943.955
13.886
(6.594)
7.292
16.003
(8.937)
7.066
16.511
(11.300)
5.211
31.625
(9.799)
21.826
40.961
(14.090)
26.871
43.700
(18.309)
25.391
1.567.109
(381.719)
1.185.390
1.711.564
(516.648)
(589.999)
1.002.636
39.086
39.086
5.232
5.232
1.431
1.431
1.606.195
(381.719)
1.224.476
1.716.796
(516.648)
1.200.148
1.594.066
(589.999)
1.004.067
1.194.916 1.592.635
21.385
Facility
Plot Size
Office/
Warehous
e
Office/
Warehous
e
Facility
Office/
Warehous
e
Office/
Warehous
e
Office/
Constructe Status
d Area
5.000 m
Rented
1.639 m
End of Term of
Lease
17/08/2019
City
State
M a ce i
AL
Location
Av. Deputado Serzedelo de
Ba rr os Cor r ei a, 6839, Cli ma Bom Macei / AL
4.200 m
Rented
1.200 m
01/01/2021
M a na us
AM
36.072,32 m
4415.29 m
Rented
05/05/2025
Ca ma a ri
BA
Warehous
e
Office/
13.552 m
Warehous
e
Office/
Warehous
e
Office/
Warehous
e
Office/
Warehous
e
Office/
Warehous
e
Office/
Warehous
e
Office/
Warehous
e
Office/
Rented
01/01/2019
F or ta le za
CE
3.900 m
1.750 m
Rented
06/05/2023
Bra sli a
DF
20.000 m
17.011 m
Rented
25/10/2021
Bra sli a
DF
10.000 m
3.675 m
Rented
03/09/2017
Se rr a
ES
47.076 m
Warehous
e
Office/
Warehous
e
4.360 m
3.388 m
Rented
03/01/2018
S o Lu s
MA
Office/
Warehous
e
Office/
Warehous
e
Office/
Warehous
e
Office/
2.869 m
64 m
Rented
10/02/2017
Ube rl ndia
MG
25.000 m
4.179 m
Rented
31/01/2023
Cont ag e m
MG
AV H e l e na Va sconce l os Cost a,
785, Cont ag e m - M i na s Ge r ai s
3.452 m
1.200 m
Rented
01/07/2019
Jui z de F or a
MG
Warehous
e
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
48.370 m
2.511 m
Rented
06/10/2019
Pouso
MG
Al e gr e
3.750 m
848 m
Rented
26/08/2018
Trs Lagoas
MS
Rented
4.320 m
Indeterminado
Cuia b
MT
7.500 m
1.280 m
Rented
01/11/2018
Parauapebas
PA
Rented
2.632 m
21/05/2019
Ana ni nde ua
PA
17.500 m
1.100 m
Rented
30/09/2017
Ana ni nde ua
PA
19.740 m
3.888 m
Rented
15/09/2019
Cabo de
PE
Santo
83 e 85 (Estacionamento),
Agostinho
17.982 m
7.365 m
Rented
30/04/2018
Curiti ba
PR
74.551 m
1.000 m
Rented
23/01/2017
Itatiaia
RJ
Rodovi a Pr e si de nt e D utr a, KM
316, Galpo 2, rea A, Ce ntro
Office/
Warehouse
Office/
Warehouse
54.793 m
Owned
N.A.
Ri o de
RJ
Ja neir o
N.A.
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
11.032 m
2.000 m
293 m
972 m
Owned
Rented
N.A.
09/05/2018
Ri o de
Ja neir o
Maca
Taquara
RJ
RJ
8.173 m
226 m
Rented
01/01/2018
Par na mi ri m
RN
23.316 m
3.015 m
Rented
10/07/2018
Cachoeirinha
RS
10.800 m
Rented
31/12/2019
Ri o Gr a nde
RS
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
5.105 m
687 m
Rented
14/09/2016
It aj a
SC
6.480 m
883 m
Rented
19/07/2018
Aracaju
SE
R O (D i str it o Industri al de
Aracaju), 185, Incio Barbosa
1.100 m
350 m
Rented
01/01/2020
So Jos dos
SP
Ca mpos
49.620 m
18.841 m
Rented
31/01/2018
Osa sco
SP
30.941 m
2.415 m
Rented
05/10/2017
Campinas
SP
1.170 m
343 m
Rented
01/01/2017
S o Vi ce nt e
SP
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Office/
Warehouse
Rented
05/02/2020
Ri beir o
Preto
SP
a. Fixed Asset
Country of
Location
Municipality
of Location
Type of
propriety
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Rio de Janeiro
Owned
Rio de Janeiro
Owned
Owned
Owned
Owned
Owned
b.
Patents, trademarks, licenses, concessions, franchises and contracts for technology
transfer:
COVERA GE
TERRITORY
NATIONAL
DURATION
REGISTRATION #
740164244
780190670
7200595
NATIONAL
NATIONAL
12/07/2022
08/30/2021
800121546
829369724
NATIONAL
NATIONAL
02/08/2019
812940792
NATIONAL
12/18/2021
821121316
NATIONAL
12/18/2021
12/18/2021
821121324
200018167
NATIONAL
NATIONAL
10/31/2015
10/31/2015
817692177
NATIONAL
817692215
NATIONAL
10/31/2015
10/31/2015
817692223
817692231
NATIONAL
NATIONAL
09/25/2019
09/25/2019
6989454
6989462
NATIONAL
NATIONAL
200065726
608965065
800221737
09/27/2018
812987683
NATIONAL
05/30/2019
812987691
NATIONAL
09/13/2018
813141010
NATIONAL
05/30/2019
813782414
NATIONAL
NATIONAL
815236662
02/12/2024
830724915
830724931
04/24/2017
824647548
NATIONAL
04/24/2017
03/25/2016
824647556
6268625
NATIONAL
NATIONAL
DURATION
REGISTRATION #
PI0705035- 6
NATIONAL
NATIONAL
NATIONAL
In requirement Status
06/13/2018
Order Status: Awaiting for
granting
Requirement compliance In
BR 30 2013
8
BR 30 2013
0
BR 10 2013
9
BR 30 2013
NATIONAL
NATIONAL
COVERA GE
TERRITORY
NATIONAL
002803-
NATIONAL
002802-
NATIONAL
013430-
NATIONAL
002801-
NATIONAL
order status
MU7801603- 7
MU7903337- 7
NATIONAL
NATIONAL
MU7902162- 0
NATIONAL
MU7903347- 4
MU8901783- 8
NATIONAL
NATIONAL
09/11/2024.
Order Status: Awaiting
granting
Order Status: Awaiting
granting
Order Status: Awaiting
granting
Order Status: Awaiting
granting
Order Status: Awaiting
granting
for
for
for
for
for
MU8901887- 7
PI1004014- 5
PI1101068- 1
PI1003939- 2
MU9101029- 2
NATIONAL
NATIONAL
NATIONAL
NATIONAL
NATIONAL
c.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Patents
Description
MU 7903347-4
Territory
NATIONAL
Duration
Concession period
expired
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Description
Territory
Duration
PI 1101068-1
NATIONAL
Awaiting approval
Patents
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Description
Territory
Duration
MU 8901783-8
NATIONAL
9/11/2024
Patents
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Patents
Description
MU89011887-7
Territory
NATIONAL
Duration
Awaiting approval
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Trademarks
Description
6268625
Territory
NATIONAL
Duration
3/23/2016
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
7200595
Territory
NATIONAL
Duration
3/25/2020
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
8001121546
Territory
NATIONAL
Duration
12/7/2022
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
812940792
Territory
NATIONAL
Duration
2/8/2019
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
821121316
Territory
NATIONAL
Duration
12/18/2021
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
817692177
Territory
NATIONAL
Duration
10/31/2015
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
817692215
Territory
NATIONAL
Duration
10/31/2015
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
817692223
Territory
NATIONAL
Duration
10/31/2015
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
817692231
Territory
NATIONAL
Duration
10/31/2015
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
6989454
Territory
NATIONAL
Duration
9/25/2019
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
6989462
Territory
NATIONAL
Duration
9/25/2019
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
200065726
Territory
NATIONAL
Duration
Awaiting Extension
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Patents
Description
BR 30 2013 002801-1
Territory
NATIONAL
Duration
Requirement to
comply
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
7200595
Territory
NATIONAL
Duration
Awaiting Extesion
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
812987691
Territory
NATIONAL
Duration
5/30/2019
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
813141010
Territory
NATIONAL
Duration
9/13/2018
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
813782414
Territory
NATIONAL
Duration
5/30/2019
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
830724915
Territory
NATIONAL
Duration
2/12/
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
830724931
Territory
NATIONAL
Duration
Awaiting renovation
INPI
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
82467548
Territory
NATIONAL
Duration
4/24/2017
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
824647556
Territory
NATIONAL
Duration
4/24/2017
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
780190670
Territory
NATIONAL
Duration
Awaiting extension
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
829369724
Territory
NATIONAL
Duration
8/30/2021
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
821121324
Territory
NATIONAL
Duration
12/18/2021
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
200018167
Territory
NATIONAL
Duration
12/18/2021
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Patents
Description
PI 1003939-2
Territory
NATIONAL
Duration
Awaiting approval
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Patents
Description
UM 9101029-2
Territory
NATIONAL
Duration
Awaiting approval
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
815236662
Territory
NATIONAL
Duration
Awaiting extension
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Patents
Description
MU 7902162-0
Territory
NATIONAL
Duration
Concession period
expired
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Patents
Description
PI 0705035-6
Territory
NATIONAL
Duration
Awaiting approval
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
800221737
Territory
NATIONAL
Duration
Awaiting extension
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Landmarks
Description
812987683
Territory
NATIONAL
Duration
9/27/2018
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Patents
Description
BR 30 2013 002803-8
Territory
NATIONAL
Duration
On demand status
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Patents
Description
BR 30 2013 002802-0
Territory
NATIONAL
Duration
6/13/2018
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Patents
Description
BR 30 2013 013430-9
Territory
NATIONAL
Duration
Awaiting approval
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Patents
Description
MU 7801603-7
Territory
NATIONAL
Duration
Concession period
expired
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Patents
Description
PI 1004014-5
Territory
NATIONAL
Duration
Awaiting approval
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities / 9.1.b - Patents, trademarks, licenses, concessions,
franchises and contracts for technology transfer:
Assets
Patents
Description
MU 7903337-7
Territory
NATIONAL
Duration
Concession period
expired
Events that may cause the loss of the rights Consequences of losing the rights
The requested brand registrations still
not granted by the INPI do not hav e
term of effectiv eness established and
may still be refused. The loss of rights
can occur by the expiry of the
concession term set forth by law, in
cases of patents and utility models, since
they cannot be extended. In the judicial
sphere, despite the fact that the
Company already is a holder of sev eral
brands, we cannot ensure that thirdparties will not claim that the Company
v iolated the intellectual property rights
and ev entually succeed in court. The
Company is not aware of any procedure
v iolation by the Company other than
those described in this Reference Form.
The brand registration maintenance is
done by periodic fee pay ments to the
INPI.
9.1 - Description of noncurrent relevant assets for the development of the Companys activities 9.1.c Investments in companies
Reason for not completing the table:
The Company has no subsidiaries or affiliates.
9.2
Discontinued Operations
In July 10, 2013, the company entered into a sale agreement of its Industrial
Services business unit to FIP Leblon Equities Partners V, a fund managed by
Leblon Equities Gesto de Recursos Ltda., through the sale of its stake in the
company Albuquerque Participaes Ltda. The sale price set on May 31, 2013,
trading date base, was R$ 102,0 million. During the 3-year period, beginning on
the closing date, the parties entered into a mutual agreement not to compete.
The transaction was closed on November 30, 2013, and the price was updated
based on CDI, adjusted by partial performance of the business and settled,
after adjustments, in local currency.
Investments
On January 19, 2011, the Company entered into a purchase and sale
agreement to acquire 25% of the voting and total capital of Rohr for R$ 90
million, paid on February 8, 2011.
Rohr is a private company specializing in access engineering and the provision
of construction solutions, with more than 45 years of experience in the market.
The company operates in the heavy construction and infrastructure, building
construction, industrial maintenance and events sector.
The Company does not participate in the management of Rohr, as this is a
strategic acquisition, whereby the Company aimed to increase its presence in its
areas of activity - infrastructure, residential and commercial construction, oil
and gas, etc. In September 2011, Rohr acquired 9.0% of its own stock, and, as
a result, the Company expanded its participation from 25.0% to 27.5% in Rohr.
(i) Company Name: Rohr S.A. Estruturas Tubulares
(ii) Headquarter: Avenida Francisco Matarazzo, 1400 Conjunto 181, cidade de
So Paulo, Estado de So Paulo, Brasil.
(iii) Activities developed: Rohr is a private company specializing in access
engineering and the provision of construction solutions, with more than 45
years of experience in the market. The company operates in the heavy
construction and infrastructure, building construction, industrial maintenance
and events sector.
(iv) Ownership: 27.5%
(v) Ownership profile: investment recorded at the cost of acquisition.
(vi) CVM registration: not applicable
(vii) Book value of participation: R$61.2 million (as of December 31, 2015)
(viii) Market value of ownership according to stock price at the date of
the fiscal year, when such stocks are traded on organised markets of
securities: not applicable
(ix) Appreciation or depreciation of such ownership, over the last 3
fiscal years, according to the book value: not applicable. On January 19,
2011, the Company entered into a purchase and sale agreement to acquire
25.0% of the voting and total capital of Rohr for R$90.0 million. In September
2011, there was a rise in the stake held in Rohr to 27.5%, resulting from the
repurchase by Rohr of 9.0% of its shares held as treasury stock.
During 2015, the Company has reviewed the recoverable amount of
the investment in Rohr through internal study. The recoverable of
the asset value was determined based on economic projections to
determine the recoverable amount of the asset, the income
approach, using cash flow projections discounted, within 10 years to
10.1
a.
The company presented, in 2015, net revenue of R$ 576.1 million and free cash
flow (net cash generated by the operating activities minus net cash applied in
investment activities) of R$ 202.4 million. This is the second time Mills achieved
positive cash generation, after years of high investments, which enabled its
organic growth, geographic expansion, and mainly, the consolidation of its
leadership in its markets. Net revenue amounted R$ 794.2 million in 2014 and
R$ 832.3 million in 2013.
According to the Company's balance sheet on December 31, 2015, the capital
structure of Mills was 58.7% equity, measured by the stockholders equity, and
41.3% capital from third party, measured by total liabilities.
According to the Company's balance sheet on December 31, 2014, the capital
structure of Mills was 56.0% equity, measured by the stockholders equity, and
44.0% capital from third party, measured by total liabilities.
According to the Company's balance sheet on December 31, 2013, the capital
structure of Mills was 56.4% equity, measured by the stockholders equity, and
43.6% capital from third party, measured by total liabilities.
On December 31, 2015, our debt was 31% short-term and 69% long-term, with
an average maturity of 2.8 years, at an average cost of CDI+1.21%. In terms of
currency, 100% of Mills debt is in Brazilian Reais. On December 31, 2014, our
debt was 21% short-term and 79% long-term, with an average maturity of 2.4
years, at an average cost of CDI+0.68%. On December 31, 2013, our debt was
20% short-term and 80% long-term, with an average maturity of 2.1 years, at an
average cost of CDI+1.00%.
On November 10th, 2014 Mills Board of Directors approved a program to
repurchase common shares of Mills issuance, with the objective of acquiring up
to 4,000,000 shares, with a deadline of 365 days as of the date of approval, for
treasury and subsequent cancellation or alienation, including in the context of
any exercise of options under its stock option program, in the case of exercise
of options. The board of directors approved, in the second quarter of 2015, the
alienation of 6,878 shares, that were in treasury, to attend the stock option plan.
Up to December 31st, 2014, the Company kept in treasury 2,278,422 shares.
The management of the Company typically use both equity, from operating cash
generation, and capital from third-party, though the contraction of new loans
and/or the issuance of debt securities, to finance the needs for investments in
non-current assets and working capital of the company. For strategic
operations, when necessary, the Company may resort to the capital from their
shareholders or third parties, through the issuance of shares.
There are no hypotheses of redemption of shares issued by the Company in
addition to the legally provided for.
c.
Payment capability in relation to the financial commitments
assumed
The Companys EBITDA for the year ended December 31 st 2015, was R$ 104.1
million. Excluding the non-recurring items of reorganization and impairment,
EBITDA would reach R$ 186.7 million. Financial expenses, net of financial
revenue in the same period were R$ 63.1 million. Thus, the Companys EBITDA
for year ended December 31st 2015 presented a coverage ratio of 3.0 times its
net financial expenses during the same period, excluding non-recurring items.
Only considering its financial expenses, which amounted to R$ 100.1 million as
of December 31st, 2015, the coverage ratio would be 1.9 time.
The Companys total indebtedness for the year ended December 31 st 2015,
amounted to R$ 620.8 million, or 2.1 times the Companys EBITDA excluding
the non-recurring items for the year ended December 31st 2015. The flow of
payment from this debt, considering the debt profile as of that date, will take
place in a period of six years, of which R$ 229.9 million in less than one year,
R$ 550.4 million from 2 to 5 years, and R$ 2.6 million in more than five years.
The Companys long-term debt profile has a policy for contracting loans and
financing aimed at ensuring that all financial commitments are honored, if
necessary, through its cash generation.
In addition, on December 31st 2015, the Company had registered on its balance
sheet the amount of R$ 10.4 million, which refers to the Tax Recovery Program
(REFIS) with a maturity of 180 months. The Company is compliant to the
remainder installments amounting R$ 9.6 million, of which the last installment
matures in December, 2024.
This way, the Company's management believes that its cash generation and
current liquid assets are sufficient to meet its financial commitments.
The Companys EBITDA for the year ended December 31 st 2014, was R$ 335.7
million and its financial expenses, net of financial revenue in the same period
were R$ 67.6 million. Thus, the Companys EBITDA for year ended December
31st 2014 presented a coverage ratio of 5.0 times its net financial expenses
during the same period. Only considering its financial expenses, which
amounted to R$ 67.6 million as of December 31 st, 2014, the coverage ratio
would be 3.6 times.
The Companys total indebtedness for the year ended December 31 st 2014,
amounted to R$ 745.4 million, or 2.2 times the Companys EBITDA for the year
ended December 31st 2014. The flow of payment from this debt, considering the
debt profile as of that date, will take place in a period of seven years, of which
R$ 153.8 million in less than one year, R$ 172.8 million from 1 to 3 years, R$
373.2 million in a period between 3 to 5 years and R$ 44.5 million in more than
five years. The Companys long-term debt profile has a policy for contracting
loans and financing aimed at ensuring that all financial commitments are
honored, if necessary, through its cash generation.
In addition, on December 31st 2014, the Company had registered on its balance
sheet the amount of R$ 10.1 million, which refers to the Tax Recovery Program
(REFIS) with a maturity of 180 months. The Company is compliant to the
remainder installments amounting R$ 10.1 million, of which the last installment
matures in December, 2024.
The Companys EBITDA for the year ended December 31 st 2013, was R$ 403.1
million and its financial expenses, net of financial revenue in the same period
were R$ 46.8 million. Thus, the Companys EBITDA for year ended December
31st 2013 presented a coverage ratio of 8.6 times its net financial expenses
during the same period. Only considering its financial expenses, which
amounted to R$ 60.0 million in the year ended December 31 st 2013, the
coverage ratio would be 6.7 times.
The Companys total indebtedness for the year ended December 31 st 2013,
amounted to R$ 632.6 million, or, 1.6 times the Companys EBITDA for the year
ended December 31st 2013. In addition, on December 31st 2013, the Company
had registered on its balance sheet liabilities in the amount of R$ 10.4 million,
which refers to the Tax Recovery Program (REFIS).
With regard to contractual limitations for assumption of new debt, there are
clauses in the Company's bank credit contracts that require adherence to
certain financial indicators, among which: the ratio between EBITDA and net
debt, the ratio of net short-term debt and total net debt, and the ratio between
net financial expenses and EBITDA.
On December 31st of 2013, 2014 and 2015, the Company was within the limits
of contractual financial indicators.
d.
Source of financing for working capital and investments in noncurrent assets.
The investments from the Company in non-current assets and working capital
are financed by its own cash generation and third party capital, through the
contraction of new loans and/or the issuance of debt securities. For strategic
operations, when necessary, the Company can turn to capital from its
shareholders or third parties, through the issuance of shares.
On December 6, 2013 the Company entered into a loan agreement with the
Nassau Branch of Banco Ita BBA S.A. totaling US$ 16.9 million (equivalent to
R$40.0 million, with a dollar rate on December 6 th, 2013). The settlement of the
loan will be made in a single installment, paid on January 30, 2015, without
rolling over. Payment of interest will occurred twice a year. In order to eliminate
the foreign exchange risk on this borrowing, on the same date a swap was
contracted with Banco Ita BBA S.A. in the amount of R$ 40 million so that the
obligations (principal and interest) are fully converted into local currency and
carried out on the same maturity dates.
On April 11th, 2014 the Company issued commercial promissory notes with a
total amount of R$ 200.0 million. Remuneration interest charges will fall due
corresponding to 106% of the accumulated variation in the average daily
Domestic Demand (DI) rates. The net proceeds of the offering were used for:
(a) refinancing of Companys debt, (b) rental equipment acquisition and (c)
Companys general uses and expenses.
On May 30th, 2014 the Company issued a series of simple debentures for a total
amount of R$ 200 million, non-convertible into shares, unsecured, with maturity
date on May 30rd, 2019. The nominal value of the this series debentures will be
amortized in three annual installments starting on the third year of the issuance,
and the interest paid semi-annually and equal to surtax of 108.75% per annum
of 100% of DI accrued variation. The liquid resources obtained by the Company
through the third debenture issuance were fully used to settlement of
Companys 4th edition promissory notes, issued on 11th April, 2014.
e.
Potential sources of financing used for working capital and for
investments in non-current assets.
The Companys main sources of liquidity are:
The management of the Company believes that the existing resources and the
cash flow to be generated from its operations, along with its borrowing capacity,
with proper leverage, will be sufficient to cover its investment plan and the need
for working capital during the same period.
f.
As of December 31 ,
Yearly Interest Rate
2013
2014
2015
CDI+0.29%
40.2
44.7 2
TJLP+0.2% to 0.9%
23.4
18.7
15.1
8.2
112.5% of CDI
274.4
184.4
92.8
st
Non-convertible debentures
Non-convertible debentures
165.9
168.1
169.7
120.6
128.7
142.3
108.75% of CDI
202.0
202.5
632.6
746.6
622.3
Total
On December 31, 2014.
Including loans with f inancial institutions indexed to the U.S. dollar plus 2.13% interest per year in the amount of R$ 39.9 million contract or $16.9
million and a swap operation to cancel the risk of exchange rate variation of this loan.
Short-Term Debt
As of December 31, 2015, short-term debt amounted to R$ 189.8 million, compared to R$ 155.0 million as of
December 31, 2014, an increase of R$ 34.9 million or 22.5%. This increase was due to, mainly: (i) loan
agreement with the Nassau Branch of Banco Ita BBA S.A. totaling US$ 16.9 million (equivalent to R$ 40.0
million, with dollar rate of December 6th, 2013); and (ii) transfer from long-term debt to short-term debt of the
first portion of the amortization, in August, 2016, of the second issuance of debent ures, CDI first series,
launched in August, 2012. In April 2015 there was an amortization, and the last one will occur in April, 2016.
As of December 31, 2014, short-term debt amounted to R$ 155.0 million, compared to R$ 125.3 million as of
December 31, 2011, an increase of R$ 29.7 million or 23.7%. This increase was due to the interest and
monetary adjustment of Companys 3rd debentures issuances issued in May, 2014.
Long-Term Debt
As of December 31st, 2015, the Companys long-term debt amounted to R$ 431.0 million, compared to R$
590.4 million as of December 31, 2014, an reduction of R$ 159.4 million or 27.0%. This decrease was mainly
due to following points: (i) to the transfer of long-term debt to short-term debt of third installment amortization
of the first issuance of debentures issued in April 2011; and (ii) transfer from long-term debt to short-term
debt of the first portion of the amortization, in August, 2016, of the second issuance of debentures, CDI first
series, launched in August, 2012.
As of December 31st, 2014, the Companys long-term debt amounted to R$ 590.4 million, compared to R$
507.3 million as of December 31, 2013, an increase of R$ 83.2 million or 16.4%. This increase was mainly
due to following points: (i) the liquid effect of 3rd debentures issuances in May 2014; and (ii) to the transfer of
long-term debt to short-term debt of 2nd installment amortization in April 2014, of debentures issued in April
2011.
Relevant Financial Contracts
Borrowings were used for financing the expansion of Companys investments and for its general expenses
and uses, being indexed to CDI, TJLP and US dollars. For borrowings in foreign currency, financial
instruments were contracted to hedge the Company against fluctuations in foreign exchange rates.
Financing agreement for rental equipment were agreed based on Long-Term Interest Rate (TJLP in Brazil)
plus interest of 0.2% to 0.9% per year, with monthly amortization through June 2021.
The financial institutions with which the Company has borrowings as at December 31, 2014 are as follows:
Banco do Brasil
Ita BBA
On December 6, 2013 the Company entered into a borrowing agreement with Banco Ita BBA S.A., Nassau
Branch, in the amount of US$16.9 million (equivalent to R$40.0 million, with dollar exchange rate on
December 6, 2013). The settlement of the loan will be made in a single installment, paid on January 30,
2015, without rolling over. Payment of interest will occurred twice a year. In order to eliminate the foreign
exchange risk on this borrowing, on the same date of the borrowing the Company entered into a swap
transaction with Banco Ita BBA S.A. in the amount of R$40.0 million in order to convert the obligations
(principal and interest) into local currency and on the same maturity dates.
Debentures
On April 8, 2011 approval was granted for the issuance by the Company of a total of 27,000 debentures in a
single tranche, of non-convertible unsecured debentures, of a total amount of R$ 270.0 million, and unit face
value of R$ 10,000, issued on April 18, 2011. The debentures have maturity on April 18, 2016, with
remuneration equivalent to 112.5% of the CDI rate and semi-annual payments of interest and amortization in
three consecutive installments, with the first maturity date on April 18, 2014. The transaction costs
associated with this issue, in the amount of R$ 2.4 million, are being recognized as Company funding
expenses, in accordance with the contractual terms of the issue.
On August 3, 2012 approval was granted for the issuance by the Company, in two series of simple
debentures, non convertible into shares, unsecured, public offering object with limited placement efforts,
pursuant to CVM Instruction 476. On August 15, 2012, 27,000 debentures were issued, each with a nominal
value of R$ 10,000.00, of which: i) 16,094 debentures of the first series, amounting to R$ 160.9 million, with
maturity date on August 15, 2017, not subject to monetary adjustment. The nominal value of the first series
debentures will be amortized in two annual installments starting on the fourth year of the issuance, and the
interest paid semi-annually and equal to surtax of 0.88% per annum of 100% of DI accrued variation. ii)
10,906 debentures of the second series, amounting to R$ 109.1 million, with maturity date on August 15,
2020, subject to monetary adjustment by the accrued variation of the IPCA. The nominal value of the second
series debentures will be amortized in three annual installments starting on t he sixth year of the issuance,
and the interest paid annually and equal to 5.50% per annum of the above mentioned monetarily adjusted
amount. Transaction costs related to this issuance are recognized as capital funding expenses, according to
contract terms.
On April 23, 2014 approval was granted for the issuance by the Company of a total of 20,000 debentures in
a single tranche, of non-convertible unsecured debentures, of a total amount of R$ 200.0 million, and unit
face value of R$ 10,000, issued on June 18, 2014. The debentures have maturity on May 30, 2019, with
remuneration equivalent to 108.75% of the CDI rate and semi-annual payments of interest and amortization
in three consecutive installments, with the first maturity date on May 30, 2017. The transaction costs
associated with this issue, in the amount of R$ 0.7 million, are being recognized as Company funding
expenses, in accordance with the contractual terms of the issue.
As of December 31, 2015 the balance of debentures including transaction costs was R$ 187.3 million in
current liabilities and R$ 419.9 million in non-current liabilities, and R$ 186.6 million and R$ 419.1 million, net
of transaction costs, respectively.
Promissory Notes
On December 7, 2011 the Company issued a single series of three commercial promissory notes with unit
face value of R$ 9.0 million, for a total amount of R$ 27.0 million with maturity on December 1 st, 2012.
Remuneration interest charges will fall due corresponding to 100% of the accumulated variation in the
average daily Domestic Demand (DI) rates, plus 1.10% per annum. Remuneration was fully paid upon the
maturity date.
On April 23, 2012 the Company issued a single series of thirty commercial promissory notes with unit face
value of R$ 1.0 million, for a total amount of R$ 30.0 million with maturity on December 3, 2012.
Remuneration interest charges will fall due corresponding to 100% of the accumulated variation in the
average daily Domestic Demand (DI) rates, plus 4.9% per annum. Remuneration was fully paid upon the
maturity date.
On April 11, 2014 the Company issued in a single series 20 commercial promissory notes with unit face
value of R$10,000, totaling R$200,000 and with maturity on August 8, 2014. The unit value of the promissory
notes bears interest equivalent to 106% of the accumulated fluctuation of the average daily interbank deposit
(DI) rates. On June 18, 2014 the Company fully paid these promissory notes with the proceeds from its third
issue of debentures.
Finance leases
Referred basically to agreements for purchase of rental equipment with periods between 36 and 60 months,
maturities through 2015 and indexed to the CDI plus interest of 2.50% to 3.80% per year. This obligation was
collateralized by the its own leased assets. The Company settled in advance all the existing finance lease
agreements during the third quarter of 2014.
(ii) other long-term relationships with financial institutions
The Company adopts the policy of reducing the cash risk relating to foreign exchange variation on a
conservative basis since all its revenues are earned in Brazilian reais. Therefore, the Company enters into
NDF contracts with financial institutions for hedging purposes. All these contracts set the future exchange
rate from reais to dollars.
These derivative instruments contracted by the Company have the intention to protect it, on their equipment
import operations, in the interval between the placing of orders and nationalization against the risk of
fluctuation in the exchange rate, and are not used for speculative means.
The Company has also borrowing agreements in dollars and in order to cover substantially the foreign
exchange risk it entered into swap transactions.
On December 6, 2013 the Company entered into a borrowing agreement with Banco Ita BBA S.A., Nassau
Branch, in the amount of US$16.9 million (equivalent to R$40.0 million, with a dollar exchange rate as of the
date of the contract settlement). Principal was settled in a bullet payment on January 30, 2015 without rolling
over. In order to eliminate the foreign exchange risk on this borrowing, on the same date of the borrowing the
Company entered into a swap transaction with Banco Ita BBA S.A. in the amount of R$40.0 million in order
to convert the obligations (principal and interest) into local currency and on the same maturity dates.
On December 31st, 2015, the Company did not have any purchase orders with foreign suppliers of
equipment, being the value presented US$ 0.2 million in foreign suppliers account related basically to
installment purchase of equipment (in 2014 these orders totaled US$ 0.3 million, and in 2013 these orders
totaled US$ 71.3 million).
(iii) degree of subordination between the debts
The Debentures issued by the Company are all unsecured debentures.
Most of the guarantees offered by the Company refers to loans contracted in previous years, prior to the
Initial Public Offering (IPO), when the financial situation required that the Company offered substantial
guarantees to facilitate its access to credit.
After its initial public offer of shares held in April 2010, the Company conducted financing operations with real
guarantee only for FINAME, credit line from BNDES to finance investments in manufacturing portion of its
equipment, where, at the request of the financing contract, the equipment manufactured is disposed to the
end of the financing contract, presenting a balance of R$ 27.1 million in guarantees on 31 st of December,
2015.
The management of the Company believes that the existing terms relating to the provision of guarantees
does not significantly restrict the ability to contract new debt to meet our capital needs.
(iv) any restrictions imposed on the issuer, in particular, for limits of indebtedness and contracting of new
debts, the distribution of dividends, disposal of assets, the issuance of new securities or disposal of
corporate control
Some of the Companys long-term financial instruments contain obligations relating to the maintenance of
certain levels for determined financial indicators. The main conditions imposed on financial instruments
entered into by the Company are: (i) the ratio between EBITDA and net debt (total bank debt minus cash
equivalents); and (ii) the ratio between EBITDA and net financial expenses. Thus, the Company is required
to maintain a relatively low indebtedness and a satisfactory capacity to pay its financial obligations, and the
hiring of new borrowings should meet these prerequisites. On the fiscal years ended December 31 st, 2013,
2014 and 2015, the Company was in compliance with the required levels for the indicators.
Additionally, some of the Companys long term financial instruments have restrictions related to (i) change of
transfer of the controlling stake (direct or indirect) and (ii) asset disposals when the amount represents more
than 15% of the total assets of the Company, based on the consolidated Financial Statements of the
Company. In the case the Company is in default of any of its financial obligations, it will not be able to
distribute any profits to its shareholders above the minimum mandatory dividend as determined by Law, as
defined in the relevant documents.
The management of the Company believes that the current provisions will not significantly restrict the ability
to recruit new debt to meet its capital needs.
g.
On December 31, 2015, the Company had no limits to use in financing transactions already contracted. At
the same date the Company had unsecured overdraft account, not used, reviewed annually of R$ 109.6
million and secured bank credit account used of R$ 15.1 million, 12.1% of the total amount, with varying
maturities and that can be extended in a common agreement.
On December 31, 2014, the Company had no limits to use in financing transactions already contracted. At
the same date the Company had unsecured overdraft account, not used, reviewed annually of 570.2 million
and Secured bank credit account used of R$ 64.5 million, with varying maturities and that can be extended in
a common agreement.
On December 31, 2013, the Company had no limits to use in financing transactions already contracted. At
the same date the Company had unsecured overdraft account, not used, reviewed annually of 477.5 million
and Secured bank credit account used of R$ 71.5 million, with varying maturities and that can be extended in
a common agreement.
The Company maintains relationships with major financial institutions operating in Brazil and, the evaluation
of its board has conditions and the risk rating of credit that enable the Company to contract new debt in the
amount required to meet the current needs of cash for short and long term.
h.
In accordance with the existing accounting policies adopted in Brazil, the revenue reported in the income
statement should include only the gross inflows of economic benefits received and receivable by the
Company, when originating from their own activities. Amounts collected on behalf of third parties - such as
sales taxes, taxes on goods and services and from taxes on added value - do not generate benefits for the
Company and do not result in an increase in equity and therefore are excluded from revenue. Thus, the
comments below relating to variations between the results for the years ended December 31 st, 2013, 2014
and 2015 refer only to net revenue, not to the gross revenue.
MANAGEMENTS
OF OPERATIONS
2013
AV(1) (%)
AH (2) (%)
2014
AV(1) (%)
AH (2) (%)
2015
AV(1) (%)
AH (2) (%)
832.3
100.0%
-5.3%
794.2
100.0%
-4.6%
576.1
100.0%
-27.5%
Heavy Construction
217.0
26.1%
24.6%
211.0
26.6%
-2.7%
165.7
28.8%
-21.5%
Real Estate
258.0
31.0%
8.4%
212.4
26.7%
-17.7%
117.2
20.3%
-44.8%
-100.0%
357.3
42.9%
41.0%
370.8
46.7%
3.8%
293.2
50.9%
-20.9%
-334.9
40.2%
-18.5%
-362.4
45.6%
8.2%
-343.8
-59.7%
-5.1%
497.3
59.8%
6.2%
431.8
54.4%
-13.2%
232.3
40.3%
-46.2%
8.3
1.0%
-57.1
-225.4
27.1%
3.2%
-273.8
34.5%
21.5%
-240.8
-41.8%
-12.1%
Operating Profit
280.2
33.7%
12.1%
157.9
19.9%
-43.6%
-65.6
-11.4%
-141.5%
Financial Expenses
-60.0
7.2%
17.2%
-92.8
11.7%
54.6%
-100.1
-17.4%
7.8%
Financial Income
13.2
1.6%
9.1%
25.2
3.2%
90.9%
36.9
6.4%
46.4%
233.4
28.0%
10.8%
90.3
11.4%
-61.3%
-128.7
-22.3%
-242.6%
-65.7
7.9%
11.0%
-26.1
3.3%
-60.3%
30.9
5.4%
-218.5%
167.7
20.1%
10.7%
64.3
8.1%
-61.7%
-97.8
-17.0%
-252.2%
4.9
0.6%
172.6
20.7%
13.9%
64.3
8.1%
-62.8%
-97.8
-17.0%
Industrial Services
Rental
Gross Profit
Operating Revenues
(Expenses)
(1)
(2)
-252.1%
Year ended December 31st, 2015 compared with year ended December 31st, 2014
Revenue of Products Sold and Services Provided
In the year ended December 31st, 2015 the Companys net revenue from sales and services reached R$ 576.1
million. For comparison purposes, there was a reduction of R$ 218.1 million, or 27.9% yoy. This decrease
comes mainly from the lower rental revenue, with a contribution of 82% of this reduction. The analysis of the
Company's management regarding the factors that led to these changes is listed below.
In September 2015, Heavy Construction and Real Estate commercial management have been brought together
in a single business unit. Engineering and operational Officers functions were also consolidated. As a result, the
Heavy Construction and Real Estate business units will now be reported together, under the label
Construction. We will continue to monitor Heavy Construction and Real Estate revenues separately, due to its
different market dynamics.
Heavy Construction
Net revenue from the Heavy Construction business unit totaled R$ 165.7 million in 2015, with a drop of 21.5%
compared to 2014. The management of the Company attributed this reduction as a result of the 24.1% drop in
rental revenues, due to a less number of contracts.
Real Estate
Net revenue from the Real Estate business unit, totaled R$ 117.2 million in 2015, with a drop of 44.8%
compared to 2014, negatively impacted by a decrease of 55.8% in sales revenues and of 40.9% in rental
revenues. The sales of semi-new equipment related to Easyset product represented 78% of sales in 2014. The
management of the Company attributed this reduction as a result of a deterioration of the Real Estate market in
Brazil, influenced by political and economic uncertainties, higher interest rates and weakness of economic
activity.
Rental
Net revenue from the Rental business unit totaled R$ 293.2 million in 2015, being 20.9% lower yoy. On the
evaluation of the management of the company, this decrease is mainly associated with m arket retraction, with
consequent higher idleness and pressure on prices.
Cost of products sold and services rendered and general and administrative expenses
The table below shows the Companys cost of goods sold and services rendered by nature in fiscal years ended
December 31, 2014 and 2015.
2015
Nature
2014
Direct
General
project
and
and administrative
rental
costs
-74.2
Personnel
-4.9
Third parties
-12.1
Freight
Construction/maintenance
-42.3
and repair materials
Equipment rental
-5.8
and others
-2.4
Travel
0.0
Cost of
-34.7
sales
Depreciation and amortization -151.9
-12.8
Write-off of assets
Allowance for doubtful debts
Stock option plan
Provisions
Provision for impairment
-2.6
Others
-343.8
2015 x 2014
Direct
General
project
and
and administrative
Direct
General
project
and
and administrative
expenses
and others
Total
rental
costs
expenses
and others
Total
-97.6
-20.5
-3.3
-171.8
-25.4
-15.4
-63.0
-6.5
-16.3
-113.3
-28.2
-0.6
-176.4
-34.7
-16.9
-5.8
-48.2
-44.5
-7.0
-51.5
-19.5
-25.4
-5.3
-18.2
-23.6
-6.4
0.0
-8.8
0.0
-34.7
-169.6
-12.8
-38.2
-9.6
-4.4
-57.1
-20.2
-641.7
-3.8
0.0
-53.2
-152.9
-13.7
-10.5
0.0
-42.3
-9.5
-2.5
-14.3
0.0
-53.2
-168.3
-13.7
-42.3
-9.5
-2.5
-26.2
-273.8
-29.4
-636.2
-17.7
-38.2
-9.6
-4.4
-57.1
-17.6
-297.9
-3.2
-362.4
-15.4
The table below shows the Companys cost of goods sold and services
rendered and general and administrative expenses by business unit in fiscal
rental
costs
expenses
and others
-11.2
1.6
4.2
2.2
0.0
-0.5
0.0
1.4
0.0
18.5
1.0
0.9
0.0
0.0
0.0
0.0
0.6
18.6
15.7
7.7
-2.7
1.2
0.0
-1.3
0.0
4.1
0.0
0.0
-2.3
0.0
4.1
-0.1
-1.9
-57.1
8.6
-24.1
Total
4.5
9.3
1.5
3.3
0.0
-1.8
0.0
5.5
0.0
18.5
-1.4
0.9
4.1
-0.1
-1.9
-57.1
9.2
-5.5
years ended December 31st, 2014 and 2015. The information provided in this
table does not reflect the effects of depreciation on such costs.
Year ended December 31 st
2014
(%)
(1)
2015
2015 x 2014
(%)
(1)
(in R$ million)
Construction
(284.4)
60.8%
Heavy Construction
(122.1)
26.1%
Real Estate
(162.3)
34.7%
(174.1)
(9.5)
Industrial Services
Rental
Total
(281.6)
59.6%
-1.0%
37.2%
(160.6)
34.0%
-7.8%
2.0%
(30.9)
6.4%
216.0%
(468.0)
100.0%
(472.0)
100.0%
0.9%
Percentage share of the business unit of goods sold and serv ices prov ided and general and administrative
expenses
(2)
Percentage increase (decrease) of the total registered from one period to another.
(1)
Cost of goods sold and services provided and General and Administrative expenses, excluding the effects of
depreciation, went from R$ 468.0 million in the year ended December 31, 2014 to R$ 472.0 million year
ended December 31, 2015, an increase of R$ 4.1 million, or 0.9%. Excluding the impairment cost of R$ 30.9
million in Construction business unit, the total costs would be R$ 441.1 million, 5.7% lower when compared
to 2014.
The depreciation of assets used in services rendered, which is part of the costs of goods sold and services
rendered increased, from R$ 168.3 million for the year ended on December 31, 2014 to R$ 169.6 million in
the fiscal year ended December 31, 2015, maintaining the average depreciation period of 10 years .
The ratio between the Companys operating, general, and administrative expenses in relation to the net
operating income went from 27.1% in the fiscal year ended December 31, 2013 to 34.5% in the fiscal year
ended December, 2014 and to 41.8% in the fiscal year ended December, 2015.
Operating Profit
Operating profit before financial result decreased from R$ 157.9 million in the fiscal year ended December
31, 2014 to a net loss of R$ 65.6 million in the fiscal year ended December 31, 2015. Such reduction was a
consequence of the impairment in Construction business unit and investment on Rohr of R$ 57.1 million, and
lower rental revenues.
Financial Results
Net financial expenses decreased from R$ 67.6 million in the fiscal year ended December 31, 2014 to R$
63.1 million in the fiscal year ended December 31, 2015, representing a decrease of R$ 4.5 million. The
Company's bank debt, which was R$ 745.4 million in December 31, 2014 decreased to R$ 620.8 million in
December 31, 2015.
Income Tax and Social Contribution
Expenditure on income tax and social contribution went from R$ 26.1 million in the fiscal year ended
December 31, 2014 to a positive value of R$ 30.9 million in the fiscal year ended December 31, 2015. As of
December 31, 2015, the Company has not determined taxable income from income tax and social
contribution. The amounts prepaid in 2015 and withheld at source on invoices and financial investments
make up the negative balance of IRPJ and CSLl that will be used during 2016.
In the fiscal year ended December 31, 2014, the Companys deducted from its income tax and social
contribution the amount of R$ 8.5 million, due to the provisioning of interest on equity for distribution of part
of the annual results, while in fiscal year ended December 31, 2013 this deduction totaled R$ 14.6 million.
Moreover, the effective rate of 2014 was of 28.9%, after non-deductible tax items adjustment, against 28.2%
in 2013.
Net Income
For 2015, the Company reported a net loss of R$ 97.8 million, compared to R$ 64.3 million net profit in 2014.
In 2015, net profit was negatively impacted by non-recurring effects amounting to R$ 82.7 million, relating to
(i) R$ 8.6 million restructuring indemnities, (ii) R$ 12.9 million in ADD expenses related to on going
investigations of Lava Jato, and (iii) R$ 0.4 million related to branch office relocation/closing.
In 2014 there were non-recurring items with a negative effect of R$ 21.7 million, of which (i) R$ 7.1 million
from the Industrial Services business unit due to the payment of indemnity, related to events that happened
before the completion of the sale, although the request for indemnity occurred this year; (ii) R$ 12.3 million
from Easy Set formwork cost adjustment, due to higher raw material use than technical specifications and to
customized equipment sale as scrap ate the end of the rental contract ; and (iii) R$ 2.3 million in cost
provision and adjustments from the raw material and goods for resale inventories. The inc rease of
depreciation (R$ 37.3 million) and negative financial result (R$ 20.8 million) figures also contributed to the
Net Income decrease.
Year ended December 31st, 2014 compared with year ended December 31st, 2013
Revenue of Products Sold and Services Provided
In the year ended December 31st, 2014 the Companys net revenue from sales and services reached R$
794.2 million. For comparison purposes, there was an reduction of R$ 38.1 million, or 4.6% yoy. This
decrease comes mainly from the lower revenue from sales and technical assistance. The analysis of the
Company's management regarding the factors that led to these changes is listed below.
Heavy Construction
Net revenue from the Heavy Construction business unit totaled R$ 211.0 million in 2014, with a slight drop of
2.7% compared to 2013. The management of the Company attributed this reduction as a result of the 29.7%
drop in sales revenues, technical assistance and others, due to projects not favorable to equipment
purchase, instead of renting.
Real Estate
Net revenue from the Real Estate business unit, totaled R$ 212.4 million in 2014, with a drop of 17.7%
compared to 2013, negatively impacted by a decrease of 17.9% in rental revenues and of 25.3%, in sales
revenues. The management of the Company attributed this reduction as a result of a deterioration of Real
Estate market in Brazil, influenced by political and economic uncertainties, higher interest rates and
weakness of economic activity.
Rental
Net revenue from the Rental business unit totaled R$ 370.8 million in 2014, new annual record, being 3.8%
greater than that 2013. On the evaluation of the management of the company, this increase is mainly
associated with increasing fleet of equipment and, therefore, in rented volume due to investments in organic
growth since 2010.
Cost of products sold and services rendered and general and administrative expenses
The table below shows the Companys cost of goods sold and services rendered by nature in fiscal years
ended December 31, 2013 and 2014.
Year ended on December 31st,
2013
Direct
Genera
cost of
l and
constru
Admini
ction
strative
and
Expens
renting
es
Total
(in R$ million)
Labor
Third-party
Serv ices
Freight
Construction
Material /
Maintanance and
Repair
Rent Equipment
-58.8
-107.4
-166.2
-63.0
-113.3
-176.4
-4.3
-5.9
-10.2
-5.0
-20.4
-25.5
-6.5
-28.2
-34.7
-1.5
-7.8
-9.2
-15.5
-0.8
-16.2
-16.3
-0.6
-16.9
-0.8
0.1
-0.7
-43.5
-6.1
-49.6
-44.5
-7.0
-51.5
-1.0
-0.9
-1.9
-5.9
-15.0
-20.8
-5.3
-18.2
-23.6
0.5
-3.3
-2.8
Travel
Cost of Sales
Depreciation ad
Amortization
Asset impairment
Allowance f or
Doubtf ul Debts
Stcok Option
-5.0
-68.0
-11.6
0.0
-16.5
-68.0
-3.8
-53.2
-10.5
0.0
-14.3
-53.2
1.2
14.9
1.0
0.0
2.2
14.9
-122.6
-8.4
-131.0
-152.9
-15.4
-168.3
-30.3
-7.0
-37.3
-8.9
0.0
-8.9
-13.7
0.0
-13.7
-4.9
0.0
-4.9
0.0
-16.2
-16.2
0.0
-42.3
-42.3
0.0
-26.1
-26.1
0.0
-9.0
-9.0
0.0
-9.5
-9.5
0.0
-0.6
-0.6
0.0
0.0
-1.9
0.2
-18.8
-12.0
0.2
-18.8
-13.8
0.0
0.0
-3.2
-2.5
0.0
-26.2
-2.5
0.0
-29.4
0.0
0.0
-1.3
-2.7
18.8
-14.2
-2.7
18.8
-15.6
-334.9
-225.4
-560.4
-362.4
-273.8
-636.2
-27.4
-48.4
-75.8
(1)
The table below shows the Companys cost of goods sold and services
rendered and general and administrative expenses by business unit in fiscal
years ended December 31st, 2013 and 2014. The information provided in this
table does not reflect the effects of depreciation on such costs.
2014 x
2013
(%) (1)
2014
(%) (1)
(in R$ million)
Var.
(%) (2)
25.9%
(122.1)
26.1%
39.0%
(162.3)
34.7%
12.1%
-1.2%
37.1%
(174.1)
37.2%
11.6%
-1.9%
(9.5)
2.0%
N.A.
100.0%
(468.0)
100.0%
11.2%
(1)
Percentage share of the business unit of goods sold and serv ices prov ided and general and administrative
expenses
(2)
Percentage increase (decrease) of the total registered from one period to another.
N.A. Not applicable
Cost of goods sold and services provided, excluding the effects of depreciation, went from R$ 421.0 million
in the year ended December 31, 2013 to R$ 468.0 million year ended December 31, 2014, a increase of
R$ 47.0 million, or 11.2%, mainly due to a greater allowance for doubtful debts (ADD).
The depreciation of assets used in services rendered, which is part of the costs of goods sold and services
rendered increased 28.4% due to higher investments in the past years, from R$ 131.0 million for the year
ended on December 31, 2013 to R$ 168.3 million in the fiscal year ended December 31, 2014, maintaining
the average depreciation period of 10 years.
The ratio between the Companys operating, general, and administrative expenses in relation to the net
operating income went from 27.1% in the fiscal year ended December 31, 2013 to 34.5% in the fiscal year
ended December, 2014.
Operating Profit
Operating profit before financial result increased from R$ 280.2 million in the fiscal year ended December
31, 2013 to R$ 157.9 million in the fiscal year ended December 31, 2014, a reduction of R$ 122.3 million,
or 43.6%. Such reduction was a consequence of higher depreciation, and General, administrative and
operating expenses, both mainly impacted by increase in ADD of the fiscal year.
Operating profit
represented 19.9% of net revenues in December 31, 2014, compared to 33.7% of net revenues in
December 31, 2013.
Financial Results
Net financial expenses decreased from R$ 46.8 million in the fiscal year ended December 31, 2013 to R$
26.1 million in the fiscal year ended December 31, 2014, representing decrease of R$ 20.8 million due to
higher gross debt level and interest rates in the period. The Company's bank debt, which was R$ 632.6
million in December 31, 2013 increased to R$ 745.4 million in December 31, 2014.
Income Tax and Social Contribution
Expenditure on income tax and social contribution went from R$ 65.7 million in the fiscal year ended
December 31, 2013 to R$ 26.1 million in the fiscal year ended December 31, 2014, decreasing R$ 39.6
million, or 60.3%.
In the fiscal year ended December 31, 2014, the Companys deducted from its income tax and social
contribution the amount of R$ 8.5 million, due to the provisioning of interest on equity for distribution of part
of the annual results, while in fiscal year ended December 31, 2013 this deduction totaled R$ 14.6 million.
Moreover, the effective rate of 2014 was of 28,9%, after non-deductible tax items adjustment, against
28.2% in 2013.
Net Income
The net profit increased from R$ 172.6 million in the fiscal year ended December 31, 2013 to R$ 64.3
million in the fiscal year ended December 31, 2014, a R$ 108.3 million decrease. In 2013 there was a net
positive effect of R$ 8.2 million in the net earnings from continuing operations due to the sale of the
Industrial Services business unit. In 2014 there were non-recurring items with a negative effect of R$ 21.7
million, of which (i) R$ 7.1 million from the Industrial Services business unit due to the payment of
indemnity, related to events that happened before the completion of the sale, although the request for
indemnity occurred this year; (ii) R$ 12.3 million from Easy Set formwork cost adjustment, due to higher
raw material use than technical specifications and to customized equipment sale as scrap ate the end of
the rental contract ; and (iii) R$ 2.3 million in cost provision and adjustments from the raw material and
goods for resale inventories. The increase of depreciation (R$ 37.3 million) and negative financial result
(R$ 20.8 million) figures also contributed to the Net Income decrease.
Year ended December 31st, 2015 compared to year ended December 31st, 2014
Current Assets
The Companys current assets increased from R$ 425.3 million as of December 31, 2014 to R$ 435.5
million as of December 31, 2015, an increase of R$ 10.2 million or 2.4%. The main reasons for such
increase, in the assessment of the management of the Company, were:
Increase of R$ 38.4 million in cash and cash equivalents, due to higher liquidity mainly derived from
the slower pace of investments in rental equipment and sales;
Increase of R$ 20.7 million in assets maintained for sale, as a result of the sale contract in Rental
business unit;
Increase of 10.0 million in recoverable taxes;
decrease of R$ 54.8 million in accounts receivable, including revenue from the sale of the investee;
and
Reduction of R$ 3.4 million in inventories.
Non-current Assets
The Companys non-current assets of R$ 103.7 million as of December 31, 2014 was decreased to R$
90.4 million as of December 31, 2015, a reduction of R$ 13.3 million or 12.9%.
Investment
The investment dropped from R$ 87.4 million as of December 31, 2014 to R$ 61.2 million as of December
31, 2015, a reduction of R$ 26.2 million, or 30.0%, related to the impaiment in investment on Rohr.
PP&E Property, Plant and Equipment
The Companys PP&E decreased from R$ 1,200.1 million as of December 31, 2014 to R$ 1,004.1 million at
December 31, 2015, a decrease of R$ 196.1 million, or 16.3%.
Intangible assets
The Companys intangible assets decreased from R$ 76.1 million as of December 31, 2014 to R$ 46.8
million as of December 31, 2015.
In the beginning of 2014, the Company concluded SAP implementation, unifying and standardizing its
information systems aiming at achieving a higher efficiency level for its internal controls, mainly on the
financial and operational sides.
Current liabilities
The Companys current liabilities decreased from R$ 221.2 million as of December 31, 2014, to R$ 218.9
million as of December 31, 2015, a reduction of R$ 2.3 million. The main factors that led to this change,
according to the managements opinion, were:
Increase of R$ 81.3 million in the sort-term debentures balance, as a result of the reclassification of
the first installment of the second issue from the long to the short term.
decrease of R$ 46.5 million in the short-term loans and financing balance, due to a reclassification
from long to short-term referring to installment to be settled in 2015;
reduction of R$ 21.8 million in the balance of dividends and interest on equity, as dividends or interest
on equity were not distributed in 2015; and
reduction of R$ 9.7 million in suppliers account, due reduction of acquisition of rental equipment of our
PPE.
Non-current liabilities
The non-current liabilities decreased from R$ 612.1 million as of December 31, 2014 to R$ 456.8 million as
of December 31, 2015, a reduction of R$ 155.3 million, or 25.4%. On the Companys management
evaluation, the main factor that led to this variation was:
Reduction of R$ 156.5 million in the long-term debentures balance, as a result of the reclassification of
the third installment of the first issuance of the debentures, the first installment of the second issue of
the long to the short term and also the proceeds from the third issuance of debentures.
Stockholders Equity
Shareholders equity decreased from R$ 1,059.4 million as of December 31, 2014 to R$ 962.2 million as of
December 31, 2015, a reduction of R$ 97.2 million, or 9.2%. On the Companys management evaluation,
the main factor that led to this variation was:
Reduction of R$ 97.8 million in earnings reserve account, as a result of the reduction of profit.
Year ended December 31st, 2014 compared to year ended December 31st, 2013
Current Assets
The Companys current assets increased from R$ 319.5 million as of December 31, 2013 to R$ 425.3
million as of December 31, 2014, an increase of R$ 105.8 million or 33.1%. The main reasons for such
increase, in the assessment of the management of the Company, were:
increase of R$ 167.9 million in cash and cash equivalents, due to higher liquidity mainly derived from
the slower pace of investments in rental equipment.
decrease of R$ 29.9 million in accounts receivable, including revenue from the sale of the investee;
reduction of R$ 14.5 million in inventories;
reduction of R$ 10 million in recoverable taxes;
Non-current Assets
The Companys non-current assets of R$ 101.5 million as of December 31, 2013 was increased to R$
103.7 million as of December 31, 2014, a growth of R$ 2.2 million or 2.2%.
Investment
In 2014 the Company maintained the same registered investment value as 2013 of R$ 87.4 million. In
January, 2011 it acquired 25.0% of the total voting capital of Rohr for R$ 90.0 million.
PP&E Property, Plant and Equipment
The Companys PP&E increased from R$ 1,224.5 million as of December 31, 2013 to R$ 1,200.1 million at
December 31, 2014, a decrease of R$ 24.4 million, or 1.99% reflecting investments in line with book
depreciation and sale of semi-new equipment.
Intangible assets
The Companys intangible assets increased from R$ 68.4 million as of December 31, 2013 to R$ 76.1
million as of December 31, 2014, mainly due to R$ 7.7 million in software acquisition.
In the beginning of 2014, the Company concluded SAP implementation, unifying and standardizing its
information systems aiming at achieving a higher efficiency level for its internal controls, mainly on the
financial and operational sides.
Current liabilities
The Companys current liabilities increased from R$ 255.0 million as of December 31, 2013, to R$ 221.2
million as of December 31, 2014, a reduction of R$ 33.8 million. The main factors that led to this change,
according to the managements opinion, were:
increase of R$ 36.9 million in the short-term loans and financing balance, due to a reclassification
from long to short-term referring to installment to be settled in 2015.
reduction of R$ 21.4 million in suppliers account, due to installment purchase of rental equipment
of our PPE.
reduction of R$ 19.2 million in dividends and payable interest on capital, due to the lower level of
profit distribution of 2014;
decrease of R$ 18.7 million in the profit sharing payable account, since there will not be profit
sharing in 2014;
reduction of R$ 7.2 million, in the short-term debentures balance, due to the amortization of part of
the debentures in 2014.
Non-current liabilities
The non-current liabilities increased from R$ 529.7 million as of December 31, 2013 to R$ 612.1 million as
of December 31, 2014, an increase of R$ 82.4 million, or 15.6%. On the Companys management
evaluation, the main factor that led to this variation were:
increase of R$ 201.2 million referring to the third issuance of Debentures held by the Company;
reduction of R$ 90 million referring to amortization of principal of first Debentures issuance;
reduction of R$ 43.9 million in long-term borrowings and financing due to its transfer to short-term.
Stockholders Equity
Shareholders equity increased from R$ 1,016.51 million as of December 31, 2013 to R$ 1,059.4 million as
of December 31, 2014, an increase of R$ 42.9 million, or 4.2%. On the Companys management
evaluation, the main factor that led to this variation were:
increase of R$ 39.1 million in earnings reserve account referring to the net earning registered in
2014 of R$ 64.3 million deducted R$ 25.1 million of dividends and payable interest on capital
registered in 2014;
increase of R$ 10.1 million in stockholders equity due to the exercise of options by the
beneficiaries;
reduction of R$ 1.4 million in capital reserve account, due to R$ 11.0 million in buyback of shares
and to R$ 9.5 in stock option premium reserve amounting; and
Reduction of R$ 5.0 million in valuation adjustment to equity, due to cash flow hedges in 2014.
CASH F LOW
Year ended December 31st
2013
2014
2015
(in R$ millions)
Cash flow from operating services...........................................................................
263.4
120.9
200.3
2.1
(164.1)
38.4
In 2015 the Company changed the accounting method for acquisition of fixed
assets for rental in its cash flow from investment activities to operational
activities. The cash flow values of 2014 and 2015 already reflect this change.
The main reason is that the company considers as operational activities sales of
fixed assets, and, therefore, its cash flow should reflect this reality.
For comparison purposes, below is the 2013 adjusted cash flow reflecting this
change:
Cash Flow
DFs 2013
Cash flow from operating services..............................................
Cash flow from investment activities............................
Cash flow from (used in) financing
activities.................................................................................................
Increase (decrease) in liquidity..............................................
changes
263.4
538.4
-258.1
-538.4
DFs 2013
adj usted
801.8
-796.5
-23.7
-23.7
-18.4
-18.4
The gross investments in PPE for the years ended December 31, 2013, 2014 and 2015 amounted to R$
489.4, R$ 186.7 million, and R$ 21.3 million, respectively.
In 2013, the Company invested to continue seizing attractive opportunities in its operating markets.
In 2014 due to the market contraction due to economic and politic uncertainties, the Company reduced its
investments.
In 2015 due to continuous market contraction as a result of economic and politic uncertainties, the Company
reduced, even more, its investments.
The table below shows the investments in PP&E made in 2013, 2014 and 2015:
Year ended December 31st,
2013
2014
2015
(in R$ millions)
Gross investments, before PIS and COFINS credits ....................................................
(489.4)
(186.7)
(21.3)
(21.3)
18.2
1.0
(20.3)
2013
2014
2015
(in R$ millions)
(8.7)
(21.8)
Repayment of borrowings.................................................................................
(38.5)
(300.6)
(133.5)
The cash flow from financing activities includes new loan agreements, the
amortization of the principal and payment of interest on existing loans, as well
as increases in the capital stock, and dividend payment.
In 2014, the Company issued promissory notes totaling R$ 200 million, and its
third debentures issuance, in May, amounting to R$ 200 million, which were
used, in June, to fully pay the promissory notes issued in April.
On April 11, 2014 the Company issued in a single series 20 commercial
promissory notes with unit face value of R$10,000, totaling R$200,000 and with
maturity on August 8, 2014. The unit value of the promissory notes bears
interest equivalent to 106% of the accumulated fluctuation of the average daily
interbank deposit (DI) rates. On June 18, 2014 the Company fully paid these
promissory notes with the proceeds from its third issue of debentures.
In 2014, the Company captured R$ 200.0 million through its third issue of
Company debentures simple, nonconvertible, registered, unsecured, in a single
series with unit face value of R$10.00. These debentures mature on May 30,
2019 and pay interest equivalent to 108.75% of the CDI, payable semiannually,
and amortized in three annual, consecutive installments, commencing on May
30, 2017. The proceeds obtained by the Company with the third issue of
debentures were fully used to settle the commercial promissory notes
amounting R$ 200 million of the Companys fourth issue, issued on April 11,
2014.
10.2
a.
(i)
2014
2015
84.1%
9.4%
1.4%
Indemnifications..............................................................................
4.2%
5.3%
5.1%
(ii)
Cost of Products Sold and Services Rendered and Operational, General and
Administrative Expenses
The main cost of products sold and services rendered relates to costs for executing
the projects in which the Company are involved, including (i) personnel for
assembly and disassembly of equipment rented to its clients when such tasks are
carried out by the Company; (ii) cost of the equipment sub-leased from third parties
when the Companys inventories are insufficient to meet demand; (iii) expenses
with materials used in the provision of its services, which include individual safety
equipment, wood, paint and insulation material; and (iv) freight costs relating to the
transportation of equipment between its branches and eventually to its clients.
Costs related to the execution of its projects represented 43.7%, 43.9% and 45.1%
of its principal costs of sales and services rendered, excluding depreciation, in the
years ended December 31, 2013, 2014 and 2015, respectively.
The Companys main general and administrative expenses refer to contract
coordination, encompassing the project teams and engineers in the commercial
area, responsible for the management and supervision of each of its projects,
which correspond basically to salaries, payroll charges and benefits, with the rest
relating to travel, representation and communications expenses, as well as the
overhead of the administrative areas. Other material general and administrative
expenses include: (i) administrative expenses incurred with respect to its financial,
investor relations, and human resources departments, as well as its executive
management, including salaries and benefits, (ii) expenses in connection with the
Companys employee profit-sharing plans and expenses related to its stock option
plans, and (iii) other administrative expenses, which include, in particular, expenses
resulting from adjustments to its provisions for contingencies.
ADD represented 6.6% of net revenues in 2015, versus 5.3% in 2014 and 2.0% in
2013.
With equipment and maintenance operational synergy from Heavy Construction
and Real Estate, we will see improvement in operational efficiency and,
consequently, a reduction in unit costs for maintenance. In 2014, we had intense
maintenance activities, despite of weaker demand, to equalize deferred
maintenance of our equipment.
Furthermore, we have some initiatives underway in order to reduce Company
expenses, such as (i) a leaner corporate structure and, thus, the disposal of some
administrative and management positions; (ii) procurement centralization; and (iii)
insourcing of some third-party services, such as IT; (iv) Closure of three branches
in the Rental business unit and five branches in the Construction business unit; and
(v) In October, we moved our head office from Barra da Tijuca to our address in
Jacarepagu, where our warehouse is located.
Financial Results
The Companys financial results consist of its financial expenses, net of financial
revenues. The Companys main financial expenses include interest payments on
loans, leasing operations, and costs associated with discounting to present value
certain long-term receivables derived from the sale of equipment owned by its
former Events division. Its main financial revenues consist of income from its
financial investments and interest in connection with late payments by its clients.
The net financial result was a negative R$ 46.8 million, R$ 67.6 million and R$ 63.1
million in 2013, 2014 and 2015, respectively.
Impact of public politics
In 2015, the Federal Government announced a new phase of the program of
investment in logistics (PIL Programa de Investimento em Logstica), which will
privatize airports, highways, railways and ports. The plan announced by the
Government stipulates that the companies that win the concessions will invest R$
198.4 billion in infrastructure works in the country. These resources will be invested
in construction and reform of highways, railways, ports and airports. Of this amount,
R$ 69.25 billion should be applied between 2015 and 2018, according to the
Federal Government. The other R$ 129.2 billion will be invested from 2019 and
until the end of the concession period, which varies according to the work, and may
reach 30 years. Has not yet been defined how will the model be adopted to each
grant. Therefore, there is no prediction of how much the Government will raise with
the auctions.
The expansion or contraction of housing credit and changes in interest rates
influenced Real Estate market in the past, therefore, it can affect future revenues of
Construction business unit.
b.
C.
Impact of inflation, price variations of main inputs and products,
exchange rate and interest rate on operating profit and the issuer's financial
result.
Companys operations and results are directly impacted by variations of: (i) Inflation
rates, which index are used to adjustment of Companys long-term contracts; (ii)
Interest rates, that affect interest-bearing debt of the Company; and (iii) cost of
material used in construction works or equipment maintenance of the Company.
The Companys expenses are subject to impact of inflation via wage increases for
employees, a raise in the cost of the hired services, such as freight, and inputs
used in the provision of services and through financial expenditure due to the
remuneration of the debentures which are subject to monetary restatement by the
accumulated variation of IPCA. Moreover, the equipment the Company invests in to
use at its services are also subject to increases due to inflation and changes in
commodity prices, mainly steel and aluminum. In the case of Rental business unit,
the prices of the equipment the Company uses can increase according to the
fluctuation of the exchange rate, because they are imported.
The indebtedness of the Company is subject to floating interest rates, especially
CDI rate, IPCA (inflation) and TJLP. There is a risk of the Company come to incur
losses due to fluctuations in interest rates, which increases financial expenses
related to loans, financings and debentures obtained on the market
10.3 The directors must comment on the relevant effects that the events
listed below may have caused or are expected to cause on the Companys
financial statements or its results
a.
In 2013, the Company sold, through the sale of the company Albuquerque
Participaes Ltda., the Industrial Services business unit, as described in item (b)
below. The Company did not introduce or dispose of any segment in fiscal years
2014 and 2015.
b.
for the nine months ended September 2013 (end of the last quarter before
the actual sale), net profit of R$ 6.1 million 30 representing in the same period,
4.8% of total net profit of Mills, and net income of R$ 168.4 million, over the same
period, 21.3% of consolidated net revenue of Mills;
in fiscal year 2012, net income of R$ 2.3 million, in the same period, 1.2% of
total net profit of the Mills, and net income of R$ 213.8 million, over the same
period, 24.3% of consolidated net revenue of Mills.
The sale is aligned with the Companhys strategy to focus on businesses in which
its competencies are able to add higher value to its shareholders and clients.
Therefore, the Company ceased to operate in the Industrial Services sector, in
which were offered access services, industrial painting, surface treatment and
thermal insulation, during both construction and maintenance phase of large
industrial plants.
The sale of the Industrial Services business unit was concluded in November 30,
2013, and the Company recorded gain of R$ 8.3 million with the sale. Of the
agreed sales price of R$ 102 million, (i) R$ 25 million was received on the date of
the sale agreement, in July; (ii) R$ 17 million were paid in April 2014, net of R$ 6.8
million related to adjusts settled between the Buyer and the Company; and (iii) the
outstanding amount of R$ 60 million will be paid in installments adjusted by the
Interbank Deposit Certificate CDI rate. This disposal is in line with Mills strategy
to focus on businesses in which its competences are able to add higher value for its
shareholders and clients.
c.
There were no unusual transactions or events in fiscal years 2013 and 2014,
except as described above.
In 2015, the Company recognized R$ 57.1 million of impairment in Construction
business unit and in the investment on Rohr.
Applying the premises of Technical Pronouncement CPC-01 - Impairment of
Assets, the Company performed impairment tests on its assets. After said tests, it
was verified that it was necessary to establish an impairment provision amounting
to R$ 26.2 million for the investment in Rohr and R$ 30.9 million for the
Construction Cash Generating Unit. For the assets of the Rental business unit and
other assets of the Company, no need to perform impairment tests were identified.
The recoverable amount of those assets was determined based on economic
forecasts for determining the market value of the investee, upon through a revenue
approach, through a 10-year term discounted cash flow forecast, for purposes of
substantiating the amount paid, considering the long maturity period of
infrastructure and civil construction investments. The main assumptions included:
(i) revenues were forecast based on historical data and growth prospective for the
segment and Brazilian economy; (ii) negative operating loss for 2015, resulting
from the reduced activity of the industry; (iii) performance of a continuous
productivity improvement program and reduction of costs and expenses will cause
the evolution thereof to be lower than revenue growth percentage, (iii) the
corresponding cash flows are discounted at the average discount rate, obtained
using a methodology typically applied by the market, taking into account the
weighed average cost of capital (WACC); (iv) a strict working capital evolution
control policy, during the forecasted period.
10.4
a.
An asset is impaired when its carrying amount exceeds its recoverable amount,
which is the higher of an asset's fair value less costs to sell and its value in use.
The value in use calculation is based on the discounted cash flow model. Cash
flows derive from the budget and Managements expectations for the next five
years and do not include reorganization activities to which the Company has not yet
committed or significant future investments that will improve the asset base of the
cash-generating unit or investment subject to testing. The recoverable amount is
sensitive to the discount rate used in the discounted cash flow method, as well as
to the expected future cash receipts and to the growth rate used for extrapolation
purposes.
(ii)
Taxes
When the fair value of financial assets and liabilities, such as stock options,
securities and hedging instruments presented in the statement of financial position,
cannot be obtained from active markets, it is determined by using valuation
techniques, including the discounted cash flow method. Inputs for these methods
are based on market inputs, when possible; however, when this is not feasible, a
certain level of judgment is required to establish the fair value. Judgment includes
considerations on the inputs used, such as liquidity risk, credit risk and volatility.
Changes in assumptions on these factors could affect the reported fair value of the
financial instruments.
(v)
The Company recognizes a provision for tax, civil and labor risks. The assessment
of the likelihood of loss includes examining available evidence, the hierarchy of
laws, former court decisions, the most recent court decisions and their relevance in
the legal system, and the assessment of the outside legal counsel. The provision is
reviewed and adjusted to take into account any changes in circumstances, such as
the applicable prescriptive periods, conclusions of tax audits or additional
exposures identified based on new matters or court decisions.
(vii)
The Company reviews the estimated useful lives of its property, plant and
equipment annually at the end of each reporting period. During the year the
Company assessed the useful lives of its assets and concluded that the ten-year
period adopted in prior years reasonably represents the average useful life of the
Company's assets and should be maintained for its equipment in 2015.
(viii)
Revenue recognition
Financial Instruments
Financial assets and liabilities are recognized when the Company becomes a party
to the contractual provisions of the respective instrument.
Financial assets and financial liabilities are initially measured at fair value.
Transaction costs that are directly attributable to the acquisition or issue of financial
assets and financial liabilities (other than financial assets and financial liabilities at
fair value through profit or loss) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or
financial liabilities at fair value through profit or loss are recognized immediately in
profit or loss.
ii)
Income tax expense comprises current and deferred taxes. Taxes on income are
recognized in the income statement, except when they relate to items that are
recognized directly in equity or in other comprehensive income, in which case, the
tax is also recognized in equity or in other comprehensive income.
The current income tax and social contribution expense is calculated based on tax
rates prevailing in Brazil at the end of the reporting period, which are 15% for
income tax, plus a 10% surtax on taxable profit exceeding R$240 thousand, and
9% on taxable profit for social contribution. Management periodically reviews
positions taken in respect of tax matters that are subject to interpretation and
recognizes a provision when the payment of income tax and social contribution
according to the tax bases is expected.
A majority of the Company revenues come from property, plant and equipment for
operational rental and use, either solely through rental, or rental combined with
assembly and disassembly.
Property, plant and equipment for own use consists mainly of facilities to store
equipment, office, improvements, furniture and equipment necessary for the
operation of these facilities.
Property, plant and equipment are carried at historical cost, less accumulated
depreciation and accumulated impairment losses. Historical cost includes
expenditure directly attributable to the acquisition of the property, plant and
equipment items.
The items of PP&E are valued at historic cost, less accumulated depreciation. The
historic cost includes expenditures as well as any exchange rate hedge gain or loss
cash flow directly attributed to the acquisition of such fixed assets.
Subsequent costs are added to the residual value of property, plant and equipment
or recognized as a specific item, as appropriate, only if the future economic benefits
associated to these items are probable and the amounts can be reliably measured.
Depreciation is calculated under the straight-line method, taking into consideration
the estimated economic useful lives of assets. Land is not depreciated.
Assets held under finance leases are depreciated over their expected useful lives
on the same basis as owned assets or, where shorter, the term of the relevant
lease.
Any gain or loss arising on the disposal of an item of property, plant and equipment
is determined as the difference between the sales proceeds and the carrying
amount of the asset and is included in operating income or expense.
The residual values and estimated useful lives of assets are reviewed at the end of
each reporting period, with the effect of any changes in estimate accounted for on a
prospective basis.
(iv)
Goodwill
(v)
Impairment of assets
At the end of each reporting period, the Company reviews the carry ing amount of
its tangible and intangible assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where it is not possible to estimate the recoverable
amount of an individual asset, the Company estimates the recoverable amount of
the cash-generating unit to which the asset belongs, for this purpose the Company
considers its divisions as cash-generating units. When a reasonable and consistent
basis of allocation can be identified, corporate assets are also allocated to
individual cash-generating units, or otherwise they are allocated to the smallest
group of cash-generating units for which a reasonable and consistent allocation
basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available
for use are tested for impairment at least annually, and whenever there is an
indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal and value in
use, and the latter is the method used by the Company in testing the impairment of
the goodwill recognized in the cash-generating unit Construction. In assessing
value in use, the estimated future cash flows are discounted to their present value
using a pretax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the estimates of future
cash flows have not been adjusted. If the recoverable amount of an asset (or cashgenerating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognized immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset
(or cash-generating unit) is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognized
for the asset (or cash-generating unit) in prior years. A reversal of an impairment
loss is recognized immediately in profit or loss.
(vi)
Provisions
Provisions are recognized when the Company has a present obligation (legal or
constructive) as a result of a past event, it is probable that the Company will be
required to settle the obligation, and a reliable estimate can be made of the amount
of the obligation.
The provisions for tax, civil and labor claims are recognized at the amount of
probable losses, according to the nature of each provision. Based on the opinion of
its legal counsel, management believes that the recognized provisions are sufficient
to cover any losses on ongoing lawsuits. Provisions are measured at the present
value of the expenditures expected to be required to settle the obligation using a
pre-tax rate that reflects current market assessments of the time value of money
and the risks specific to the obligation. The increase in the provision due to
passage of time is recognized as expense.
(vii)
The Company offers stock option plans to certain employees and executives. The
fair value of the options granted is recognized as an expense during the period over
which the right is vested, that is, period during which specific vesting conditions
should be met. At the end of the reporting period, the Company reviews its
estimates of the number of options whose rights must be vested based on the
conditions.
This recognizes the impact of the revision of the initial estimates, if any, in the
statement of profit or loss, as a balancing item to the capital reserve in equity.
The amounts received, net of any directly attributable transaction costs, are
credited to capital when options are exercised.
(viii)
Revenue recognition
In the evaluation of the management, there are no significant items not included
in the balance sheet of the Company in the years 2013, 2014 and 2015.
10.7 For each of the items that are not evidenced in the financial
statements listed in item 10.6, management must comment:
a.
how such items change or may change the revenues, expenses,
operating results, financial expenses or other items of the financial
statements of the company
In the evaluation of the Management, there are no relevant items not evidenced
in the financial statements of the company of in the years 2013, 2014 and 2015.
a. nature and the purpose of the operation
In the evaluation of the Management, there are no relevant items not evidenced
in the financial statements of the company of in the years 2013, 2014 and 2015.
b.
In the evaluation of the Management, there are no relevant items not evidenced
in the financial statements of the company of in the years 2013, 2014 and 2015.
10.8
Management shall indicate and comment on key elements of the
Company's business, specifically exploring the following topics:
a.
Investments, including: (i) quantitative and qualitative description
of investments in progress and forecasted investments; (ii) financing
sources of investments and (iii) relevant alienations in progress and
forecasted alienations
The Company plans its investment policy in accordance with its demand
prospects, cash flow and credit availability in the market. The Companys
internal policy is to maintain its leverage around 1.0x net debt to EBITDA. To
ensure the necessary amount of capital for the implementation of its investment
plan, the Company constituted a statutory reserve, of which the shareholders
may allocate up to 75% of net income, provided that such reservation does not
exceed the limit of 80% of the capital. The cash generation of the Companys
normal operations, from the retention of profits was used to partially finance the
investments made in 2013, 2014 and 2015.
In 2015 the Company recognized net loss, therefore no reserve constitution was
necessary.
In 2014, the amount of R$ 2.4 million were designated to this reservation,
whereas there was not any amount for this reservation in 2013.
The management presents below the major investments made in the course of
the years ended December 31, 2013, 2014 and 2015, and highlight the
investment budget for fiscal year 2016.
sponsored actions related to urban art with graffiti, in projects in Rio de Janeiro,
Sao Paulo, Fortaleza, Belo Horizonte, Brasilia and Salvador. The Company also
sponsored the show "pera do Malandro", which used the Company's
equipment as scenario and had presentation in nine of the locations where the
Company operates, providing relationships with clients who were invited to
watch the show.
Projections
Name
Date of
Birth
Profession
CPF
Title
Date of
Last
Election
Date of
office
Termo f
office
Other titles
in the
Company
Elected by
the
controling
shareholders
If independent
member,
criterion used to
determine the
independence
Number of
consecutive
terms
Andres
Cristian
Nacht
8/1/1942
Business
Administrator
098.921.337Chairman
49
No
Y es
Not applicable.
Elio
Demier
1/28/1951
Bachelor of
260.066.507- Vice
Social
20
Chairman
Communication
Y es, is
member of
the Human
Resources
Y es
Not applicable.
Business
Administrator
No
Y es
Not applicable.
Francisca
Kjellerup 12/28/1970
Nacht
Jorge
Marques
de
Toledo
Camargo
4/28/1954
Geologist and
Physicist
114.400.151- Independent
04
Director
No
Y es
Ay mar
Ferreira
de
Almeida
Junior
6/16/1971
Production
Engineer
098.052.728- Independent
77
Director
No
No
Roberto
Pedote
2/24/1967
Lawy er and
Public
Administration
115.324.298- Independent
27
Director
No
Y es
Is an
independent
member. The
criteria used by
the Company to
determine its
2
Independence
was established
by the Listing
Regulation of the
Novo Mercado of
BM&FBOVESPA.
Is an
independent
member. The
criteria used by
the Company to
determine its
Independence
was established
by the Listing
Regulation of the
Novo Mercado of
BM&FBOVESPA.
Is an
independent
member. The
criteria used by
the Company to
determine its
Independence
was established
by the Listing
Regulation of the
Novo Mercado of
BM&FBOVESPA.
According to the Novo Mercado Listing Rules and the Companys bylaws, the companys board of directors must have at least 20% independent members.
Whenever the percentage of 20% mentioned above results in fractional number of members, the number shall be rounded to reach a whole number: (i)
immediately above, if fractional number is equal to or higher than 0.5; or (ii) immediately below, if fractional number is lo wer than 0.5. Since the Companys
Board of Directors is composed of six members, it should have at least one independent director. The Independent director should be identified as such in the
minutes of the General Shareholders meeting that elects him. Currently Mr. Nicolas Arthur Jacques Wollak and Mr. Jorge Camarg o are the Companys
Independent Directors.
The decisions of the Companys Board of Directors are taken by a majority vote of the members that are present. Under Brazili an corporate law, members of
the board of directors are prohibited to vote in any meeting ou General Meeting, on any matter or intervene in any transaction that would create a conflict of
interest between the Company and that board member.
EXECUTIVE BOARD
The Companys Executive Officers are responsible for the management of daily operations of the business and for implementing the general policies and
guidelines established by the Board of Directors.
The Brazilian corporate law provides that executive officers must reside in Brazil and that they may or may not be shareholders of the company in which they
serve. In addition, up to one-third of the members of a companys Board of Executive Officers may also serve as members of the Board of Directors.
The Companys board of directors elects the members of the board of executive officers for one-year term and they may be reelected. Any executive officer
may be removed by the board of directors before the expiration of his or her term. According to the Companys bylaws, the board of executive officers must be
comprised of four to eleven officers, including one chief executive officer, one chief financial officer and the remaining without specific designation.
All the members of the Board of executive officers must a sign a Consent Agreement of the Administrators, in which their resp ective position will depend on
the signing of the document. Through the Consent Agreement, the Companys new members of the Board of executive officers are personally responsible to
act in accordance with the Contract of Novo Mercado, Regulation of the Market Arbitration Chamber and the Rules of the Novo Mercado.
The table below indicates the name, age and title of the board of executive officers.
Name
Date of Birth
3/2/1974
Profession
Engineer
CPF
197.064.378-19
9/28/1965
Engineer
857.596.607-30
9/6/1968
Engineer
987.271.927-68
12/26/1975
Economist
078.413.147-36
Srgio Kariy a
Av elino Pinto da Silv a Garzoni
Title
Chief Executive Officer
Off icer
Off icer
Chief Financial and Investor
Relations Officer
Date of Last
Election
3.9.2015
Date of office
3.9.2015
4.28.2015
4.28.2015
9.17.2015
4.26.2016
Termo f Office
Until August, 2017
Until August, 2017
Other titles
No
No
Y es
9.18.2015
No
Y es
4.26.2016
No
Y es
FISCAL COUNCIL
Under the Brazilian Corporate Law, the Fiscal Council is responsible for: (i) reviewing, by any of its members, the actions o f management and verify
compliance with its legal and statutory duties; (ii) opine on management's annual report, including in its opinion the additional information it deems necessary
or useful to the General Meeting decision; (iii) give their opinion on the administrations proposals, to be submitted to the General Meeting, relating to changes
in capital, issuance of debentures or warrants, capex plans or capital budget, capital distribution, dividend distribution, transformations, incorporations, merger
or split up; (iv) report, by any of its members, to the administrators or, if they do not take the necessary action to protect the interests of the company, to the
general meeting, the mistakes, fraud or crimes they find out, and suggest necessary measures to the company; (v) convene the ordinary shareholder meeting,
if the administrative bodies delay for more than one month calling, and extraordinary, whenever there are serious or urgent matters, including in the agenda
the subjects they deem relevant; (vi) analyze, at least quarterly, the balance sheet and other financial statements periodically prepared by the company; (vii)
review and give an opinion on the financial statements of the fiscal year; and (viii) exercise those powers during the settlement, i n view of the special rules that
govern it.
According to the Company's Bylaws, the Fiscal Council works on a permanent basis, and consists of three members and an equal number of alternates,
shareholders or not, resident in Brazil and elected at the General Meeting, when will determine their remuneration. The Chairman of the Fiscal Council is
elected at the General Meeting.
All new members of the Fiscal Council must sign a Fiscal Council Compliance Statement, conditioned on possession in their respective offices the signing of
this document. Through the Compliance Agreement, new members of its Board of Directors are personally responsible to act in accordance with the Novo
Mercado, with the Rules of the Arbitration Chamber and the Novo Mercado Listing Rules.
At the Ordinary and Extraordinary General Meeting held on April 19, 2011, the Company's shareholders requested the installation of the Fiscal Council and
elected three members and three alternates. At the Extraordinary General Meeting held on April 20, 2012, the Audit Committee became a permanent body.
The members of the Supervisory Board appointed by the controllers were elected at the Annual General Meeting held on 28 April 2016, in which the Lords
Isabella Saboya de Albuquerque (holder) and Walter Luis Bernardes Albertoni (alternate) were elected separately by minority s hareholders.
The table below presents name, age and title of the Fiscal Council members:
Name
Eduardo
Botelho
Kiraly hegy
Date of
Birth
3/13/1979
Leonardo
Roslindo
5/25/1976
Pimenta
Marcus
Vincius
10/2/1957
Dias
Sev erini
Vera Lucia
de Almeida 8/11/1958
Pereira Elias
Isabella
Saboy a de
8/25/1970
Albuquerque
Walter Luis
Bernardes
9/29/1968
Albertoni
ADVISORY COMMITTEES
Profession
Lawy er
Lawy er
CPF
Title
President
of the
082.613.217Fiscal
03
Council
016.749.907- Substitute
66
Accountant/
632.856.067- Member
Engineer
20
Accountant
492.846.497- Substitute
49
Other titles
Elected by
the
Controlling
Shareholder
If independent
member,
criterion used
to determine
the
independence
Number of
consecutive
terms
1 y ear
No
Y es
Not applicable.
4.28.2016
1 y ear
No
Y es
Not applicable.
4.28.2016
1 y ear
No
Y es
Not applicable.
4.28.2016
1 y ear
No
Y es
Not applicable.
No
No
Not applicable.
No
No
Not applicable.
Date of
Last
Election
Date of
office
Office
term
4.28.2016
4.28.2016
4.28.2016
4.28.2016
4.28.2016
1 y ear
Consultant
017.919.007- Member
55
4.28.2016
4.28.2016
Lawy er
147.427.468- Substitute
48
4.28.2016
4.28.2016
1 y ear
With the goal of improving the decision-making process, sustaining the execution of our growth plan, and supporting it in its functions, the Board of Directors
has approved the creation of the Human Resources Committee, in line with the best practices of c orporate governance.
The Human Resources Committee is responsible for: (a) supervision and support during the development, planning and execution of strategies that enable
the company to attract and retain talent, as well as the improvement of the work environment, and (b) proposals for the remuneration of Mills executive
officers for analysis and approval by the Board of Directors.
The current members of the Human Resources Committee are Elio Demier (Vice-Chairman of Mills Board of Directors) and Jos Felipe Vieira de Castro.
Committees of this type are non-permanent and therefore can be either created or extinguished anytime by the Board of Directors.
The table below presents the names, ages and positions of the Human Resources members:
Human Resources Committee
Date of Last
Election
Name
Age
Elio Demier
64
Profession
Bachelor of Social
Communication
Srgio Kariy a
41
Engineer
CPF
Title
260.066.507-20
Member
197.064.378-19
Member
5.21.2015
4.26.2016
Starting Date
Term of Office
Other positions
Elected by Controlling
Shareholder
5.21.2015
1 y ear
Y es
Y es
4.26.2016
1 y ear
Y es
Y es
Is the responsibility of the Chief Executive Officer: (i) to convene and chair meetings of the Executive Officers meetings; (ii) to maintain permanent
coordination between the Executive Board and the Board of Directors; (iii) To Comply with and enforce, within his authority, these Articles provisions and the
resolutions made by the Executive Board, Board of Directors and Shareholders Meetings.
The Director of Investor Relations is responsible: (i) release and inform CVM and BM&FBOVESPA, if necessary, any act or relevant fact occurred or related to
the Companys business. As well as, ensure the immediate dissemination, simultaneously in all markets where such securities a re negotiated, besides other
duties established by the Board of Directors; (ii) provide information to the investors; and (iii) keep the registration of the Company in accordance with the
applicable rules of the CVM.
The remaining Directors will have the assignments that may be established by the Board of Directors upon his election, as set forth in the Company's Bylaws.
e. Mechanisms for evaluating the performance of the Board of Directors, committees and the Executive Board
See item 12.1(c).
12.2
Take the management accounts, examine, discuss and vote the management report and the Company's financial statements, accompa nied by the
independent auditors and the opinion of the Audit Committee;
Assign stock dividends and decide on any grouping and splitting of actions;
Establish option granting plan or subscription for shares to directors and employees of the Company and its subsidiaries;
To decide, in accordance with Chapter VII of the Bylaws, on the delisting from the New Market; and
Choose the specialized company responsible for preparing the appraisal report of the shares the Company, in case of public company deregistration
with the CVM and exit New Market, among the companies indicated in a triple list by the Board of Directors.
c. Addresses (physical or electronic) where the documents relating to the General Assembly will be available to shareholders for analysis
Documents relating to matters to be decided by the General Assembly are available to shareholders at the Company's headquarters located at Road
Guerengu, 1381, Taquara, Jacarepagu, ZIP code 22713-002, in the City and State of Rio de Janeiro.
Moreover, these documents are available to shareholders in the electronic addresses of the Company (www.mills.com.br/ri), CVM (www.cvm.gov.br)
and BM & FBOVESPA (www.bmfbovespa.com.br).
d. Identification and management of conflicts of interest
The Companys Code of Conduct, approved on May 21, 2015 for the Board of Directors, contains elements for identification and managent of conflicts
of interest, applying even Company meetings to.
Among others, the Code of Conduct provides that Mills employees can not be members or owners, or have a spouse or children, as owners of
companies that provide materials and services for the Company. Employees may not also favor relatives or friends in any form, including recrui tment and
service contracting process.
The employee who has kin ship with people linked to suppliers or potential suppliers of Mills, including kin ship 2nd degree, brother and father in law,
should report indeed formally to his immediate superior, so that there is transparency and impartiality in the acquisition. In that case, it is up to the Board to
authorize the participation of competition and the employee must have a degree of kin ship should automatically get out of the decision of the hiring process.
Additionally, in accordance with the Code of Conduct, transactions with related parties should be avoided and carried out should be clearly beneficial
to the Company, or should seed conditions equal or better than the market, adjusted for risk factors involved.
For a description of the Companys mechanisms to prevent and mitigate conflicts of interest in transactions with related parties, see item 16.3.
e. Request proxy by management for the exercise of voting rights
The proxy request follows the legal and regulatory requirements. To date, the Company management has never made a public request for proxy.
f.
Necessary for acceptance of proxies granted by shareholders, indicating that the Company requires or waiver notarization,
notarization, consularization and certified translation and the Company accepts proxies granted by shareholders by electronic means
Subject to the provisions of article 126 of Law 6,404 / 76, to shareholders who are represented by proxy, are requested to deliver the headquarters of
the office of the Company and the documents attesting the powers of the legal representative, preferably with the advance of two (2) business days from the
date of the Meeting.
Under the Company's Bylaws, shareholders may be represented at Meetings Company general by a proxy appointed less than a year and that is
a shareholder or Company manager, attorney or financial institution.
In the meetings held in the last fiscal year, the Company adopted the following practices as the procedures for acceptance of proxies granted by
shareholders:
were required to, in the case of attorney issued by a legal entity, the power of attorney was acc ompanied by documentation proving the powers of the
representatives who signed it; and
asked if that documents from abroad were notarized in their country of origin, consularized, translated by a public translator and registered in the
registry office papers and documents in Brazil.
g. Necessary for acceptance of ballot distance when sent directly to the Company, indicating that the Company requires or waiver
notarization, notarization and consular
Not applicable for the years ended December 31, 2015, 2014 and 2013. The Company does not intend to adopt distance voting in 2016 year,
pursuant to CVM Instruction No. 570, of November 18, 2015.
h. If the Company provides electronic system for receiving the ballot the distance or distance participation
Not applicable for the years ended December 31, 2015, 2014 and 2013. The Company does not intend to adopt distance voting in 2016 year,
pursuant to CVM Instruction No. 570, of November 18, 2015.
i.
Instructions for shareholder or group of shareholders including proposed resolutions, plates or candidate members of the Board of
Directors and Fiscal Council ballot distance
Not applicable for the years ended December 31, 2015, 2014 and 2013. The Company does not intend to adopt distance voting in 2016 year,
pursuant to CVM Instruction No. 570, of November 18, 2015.
j.
If the Company offers forums and pages on the World Wide Web to receive and share shareholders' comments on the agendas of
meetings
The Company does not maintain forums or pages on the World Wide Web intended to receive or share feedback from shareholders.
k. Other information needed to participate distance and the right of remote voting
As indicated in items "g" to "i" above, and in accordance with CVM Instruction No. 570, of November 18 2015, the Company adopted no distance
voting in the last three fiscal years and do not intend to adopt this practice in the 2016 exercise.
12.3
The Board of Directors shall consist of a minimum of five (5) and a maximum of eleven (11) members, shareholders or not, of which 20% shall be
independent, elected at a General Meeting for a unified 2-year term of office and who may be reelected. In the event of a fractional number of independent
directors as a result, due to the compliance with this percentage, the fractional number shall be rounded off to: (i) the next higher whole number, where the
fraction is equal or higher than 0.5 (five tenths); or (ii) next lower whole number, where the fraction is lower than 0.5 (five tenths).
a. Number of meetings held during the last fiscal year, broken down number of ordinary and extraordinary meetings
Ordinary 12
Extraordinary 18
b. If there are, the provisions of the shareholders' agreement establishing restrictions or linking the exercise of members voting of the Board
of Management
None.
c. Rules for identification and management of conflicts of interests
See item 16.3.
12.5
Board of Directors
The Companys Board of Directors is currently comprised of six members, elected by the controlling shareholders at the Ordinary Shareholders Meeting held
on April 28, 2016. The members were elected for a two-year term expiring in the 2018 Ordinary General Meeting.
The table below presents the information of the appointed candidates for the Board of Directors.
Date of
Last
Election
If independent
member,criterion used to
determine the
independence
Number of
consecutive
terms
No
Yes
Not applicable
2 y ears
Yes, is member of
the Human
Resources
Committee
Yes
Not applicable
2 y ears
No
Yes
Not applicable
Profession
Andres
Cristian
Nacht
08/1/1942
Business
A dministrator
098.921.33749
Chaiman
04/25/2014 04/25/2014
2 y ears
Elio
Demier
01/28/1951
Bachelor of
260.066.507Social
20
Communication
Vice
Chairmar
04/25/2014 04/25/2014
Francisca
Kjellerup
Nacht
12/28/1970
Business
A dministrator
Director
04/25/2014 04/25/2014
Name
CPF
124.175.65706
Title
Jorge
Marques
04/28/1954
de Toledo
Camargo
Geologist and
Phy sicist
114.400.15104
Independent
Director
Ay mar
Ferreira
de
Almeida
Junior
Production
Engineer
09805272877
Independent
Director
16/06/1971
Date of
Office
Elected by
the
Controlling
Shareholder
Date of
Birth
04/25/2014 04/25/2014
NA
NA
Termo f
Office
Other titles in
the Company
2 y ears
No
Yes
No
No
Is an independent member.
The criteria used by the
Company to determine its
Independence was
established by the Listing
Regulation of the Novo
Mercado of BM&FBOVESPA .
Is an independent member.
The criteria used by the
Company to determine its
Independence was
established by the Listing
Regulation of the Novo
Mercado of BM&FBOVESPA
Roberto
Pedote
02/24/1967
Lawy er and
Public
A dministration
115.324.29827
Independent
Director
NA
NA
No
Is an independent member.
The criteria used by the
Company to determine its
Independence was
established by the Listing
Regulation of the Novo
Mercado of BM&FBOVESPA
Yes
Fiscal Council
At the Extraordinary General Meeting held on April 20, 2012, the Fiscal Council became a permanent body.
For the purposes of article 10 of CVM Instruction 481/2009, the controlling shareholders of the Company support the election, in the fiscal year of 2016, of
the members of the Fiscal Council as indicated below.
The table below presents information of the appointed candidates.
Name
Eduardo
Botelho
Kiraly hegy
Leonardo
Roslindo
Pimenta
Marcus
Vincius Dias
Sev erini
Vera Lucia de
Almeida
Pereira Elias
Isabella
Saboy a de
Albuquerque
Walter Luis
Bernardes
Albertoni
Date of
Birth
Profession
CPF
Title
Date of Last
Election
Date of
Office
Termo f
Office
Other titles in
the Company
Elected by
the
Controlling
Shareholder
If independent
member,criterion
used to determine
the independence
Number of
consecutive
terms
03/13/1979
Lawy er
082.613.217-03 President
04/28/2015
04/28/2015
1 y ear
No
Yes
Not applicable
05/25/1976
Lawy er
016.749.907-66 Alternate
1 y ear
No
Yes
Not applicable
10/02/1957
Accountant/
Engineer
632.856.067-20 Member
04/28/2015
04/28/2015
1 y ear
No
Yes
Not applicable
08/11/1958
Accountant
492.846.497-49 Alternate
04/28/2015
04/28/2015
1 y ear
No
Yes
Not applicable
08/25/1970
Consultant
017.919.007-55 Member
No
No
Not applicable
09/29/1968
Lawy er
147.427.468-48 Alternate
No
No
Not applicable
1.
Professional experience and any convictions
Board of Directors
Andres Cristian Nacht - 098.921.337-49
Mr. Andres Cristian Nacht has been the Chairman of the Companys Board of Directors since 1998. The son
of Mr. Jose Nacht, one of the founders of the Company, Mr. Nacht has a degree in Engineering from
Cambridge University, England. In 1965, Mr. Nacht joined GKN, a British engineering company, where he
worked during three years, holding engineering posts in the UK. In 1967, he worked during one year as an
Engeneer in Echafaudages Tubulaires Mills from France. Mr. Nacht became a director of the Company in
1969 and was appointed managing director in 1978, a position he held until 1998 when he became the
Chairman of the Board of Directors.
Mr. Andres Cristian Nacht has not been involved in any criminal conviction, in any conviction in a CVM
administrative proceeding and in any final unfavorable judicial or administrative decision, which has
resulted in his suspension or impediment to the exercise of any professional or commercial activity, being
thus qualified to practice his professional activities.
Francisca Kjellerup Nacht - 124.175.657-06
Mrs. Francisca Kjellerup Nacht holds a degree in Business Administration and Economy from the
Copenhagen Business School, Denmark, since 1995. The granddaughter of Mr. Jose Nacht, one of the
founders of the Company, and daughter of Andres Cristian Nacht, Chairman of the Board of Directors of
the Company, has built her career in Europe, where she lives since 1990. Francisca worked for Procter &
Gamble Nordic between 1997 and 2010, mainly in the fields of leadership and business development.
Among other positions, Francisca was responsible for the commercial integration after Gillettes acquisition,
as well as for the business with the largest retailer of Denmark. In her last position at P&G, she was
responsible for initiating and leading the pharmaceutical division in the Nordic region. Since 2011, is a
member of the Board of Directors for the foreign social business Bybi. In the last five years, besides her
position at P&G, Francisca. Nos ltimos cinco anos, alm de sua posio na P&G, Francisca works in the
area of social entrepreneurship, in Denmark, and in Family governance in Brazil.
Mrs. Francisca Kjellerup Nacht has not been involved in any criminal conviction, in any conviction in a CVM
administrative proceeding and in any final unfavorable judicial or administrative decision, which has
resulted in her suspension or impediment to the exercise of any professional or commercial activity, being
Board of Directors
Andres Cristian Nacht
Elio Demier
Francisca Kjellerup Nacht
Jorge Marques de Toledo
Camargo
Aymar Ferreira de Almeida
Junior
Roberto Pedote
49
50
49
52
% participation of the
member in the meetings
after election
94.2%
96.2%
94.2%
100.0%
Fiscal Councel
Eduardo Botelho Kiralyhegy
Leonardo Roslindo Pimenta
Marcus Vincius Dias
Severini**
Vera Lucia de Almeida
Pereira Elias
Isabela Saboya de
Albuquerque
Walter Luis Bernardes
Albertoni
% participation of the
member in the meetings
after election
100.0%
100.0%
0*
0%
*Alternate me mber of the Fiscal Council that was not inv ited to participate of any meeting during its
term.
** Was e lected in April 2015
12.7 Provide the information referred to in item 12.5 in respect of members of the statutory committees, as well as audit committees,
risk, and financial remuneration, even if these committees or structures are non-statutory
Currently, the Company has only a Human Resources Committee, whose members are elected by the Board of Directors.
For the purposes of art. 10 of CVM Instruction 481/2009, the appointed member of Board of Directors, Elio Dernier, is a member of that Committee, and his
information is on item 12.5 above.
12.8 For each of the person who acted as a member of the statutory committees, as well as audit committees, risk, and financial
remuneration, even if such structures or committees are not statutory, inform, in table format, the percentage of participation in meetings
held by the agency in the same period, which occurred after the tenure in Office
Currently, the Company has only a Human Resources Committee, whose members are elected by the Board of Directors.
For the purposes of art. 10 of CVM Instruction 481/2009, below is a table with the participation in meetings for the Human Resources Committee for the
appointed member of Board of Directors Elio Dernier:
Number of meetings held
after election
Board of Directors
Elio Dernier
Srgio Kariya
12.9
3
1
% participation of the
member in the meetings
after election
100%
100%
Relationship (as a spouse or significant other) or relationship to the second degree between:
b. (i) members of the Board of Directors, Executive Board and Fiscal Council and (ii) members of management of entities controlled by
the Company, either directly or indirectly
There is no marital relationship, stable Union or kinship up to the second degree between the Company's administrators and managers of subsidiaries, directly
or indirectly, of the Company.
c. (i) members of management of entities controlled by the company, either directly or indirectly; and (ii) Companys direct or indirect
controlling shareholders
Administrator of the Company or controlled Company:
Name: Andres Cristian Nacht / CPF: 098.921.337-49
Corporate name of the issuer company or controlled: Mills Estruturas e Servios de Engenharia S.A. / CNPJ: 27.093.558/0001-15
Title: Chairman of the Board of Directors
Related person:
Name: Jytte Kjellerup Nacht / CPF: 289.858.347-20
Corporate name of the issuer company or controlled: Mills Estruturas e Servios de Engenharia S.A. / CNPJ: 27.093.558/0001-15
Title: Direct Controlling Shareholder
Type of relationship: Husband/wife
-------------------------------------Administrator of the Company or controlled Company:
Name: Andres Cristian Nacht / CPF: 098.921.337-49
Corporate name of the issuer company or controlled: Mills Estruturas e Servios de Engenharia S.A. / CNPJ: 27.093.558/0001-15
Title: Chairman of the Board of Directors
Related person:
Name: Tomas Richard Nacht / CPF: 042.695.577-37
Corporate name of the issuer company or controlled: Mills Estruturas e Servios de Engenharia S.A. / CNPJ: 27.093.558/0001-15
Related person:
Name: Pedro Kjellerup Nacht / CPF: 127.276.837-66
Corporate name of the issuer company or controlled: Mills Estruturas e Servios de Engenharia S.A. / CNPJ: 27.093.558/0001-15
Title: Direct Controlling Shareholder
Type of relationship: Father/son
-------------------------------------Administrator of the Company or controlled Company:
Name: Francisca Kjellerup Nacht / CPF: 124.175.657-06
Corporate name of the issuer company or controlled: Mills Estruturas e Servios de Engenharia S.A. / CNPJ: 27.093.558/0001-15
Title: member of the Board of Directors
Related person:
Name: Jytte Kjellerup Nacht / CPF: 289.858.347-20
Corporate name of the issuer company or controlled: Mills Estruturas e Servios de Engenharia S.A. / CNPJ: 27.093.558/0001-15
Title: Direct Controlling Shareholder
Type of relationship: Mother/daughter
-------------------------------------Administrator of the Company or controlled Company:
Name: Francisca Kjellerup Nacht / CPF: 124.175.657-06
Corporate name of the issuer company or controlled: Mills Estruturas e Servios de Engenharia S.A. / CNPJ: 27.093.558/0001-15
Title: member of the Board of Directors
Related person:
Name: Tomas Richard Nacht / CPF: 042.695.577-37
Corporate name of the issuer company or controlled: Mills Estruturas e Servios de Engenharia S.A. / CNPJ: 27.093.558/0001-15
Title: Direct Controlling Shareholder
Type of relationship: Brother/Sister
-------------------------------------Administrator of the Company or controlled Company:
d. (i) members of the Board of Directors, Executive Board and Fiscal Council and (ii) members of management of entities controlled by
the Company, either directly or indirectly
There is no marital relationship, stable relationship or kinship up to the second degree between the management of the Company and administrators of
entities controlled direct or indirectly by the Company.
12.10 Subordination, rendering of services or control relationships for the previous three fiscal years between administrators and:
a.
Controlled entities, either directly or indirectly by the company, with the exception of those in which the company holds, directly or
indirectly, the entire share capital
Not applicable. The Company does not control, directly or indirectly, any entity.
b.
Mr. Eduardo Kiralyhegy, by the entity Negreiro, Medeiros & Kiralyhegy Advogados, provided in the last three fiscal years legal services to Mr. Andres Cristian
Nacht, controlling shareholder of the Company, by means of the Nacht Participaes S.A., also controlled by Mr. Andres Cristian Nacht.
c.
In case its relevant, supplier, client, debtor or creditor of the Company or its controlled or controlling shareholders
Mr. Eduardo Kiralyhegy is an associate of Negreiro, Medeiros & Kiralyhegy Advogados, which provided services of legal advisory to the Company over the past
three fiscal years.
12.12
12.12 Inform if the issuer follows a code of good governance practices corporate giving, if so, the code followed
and practices differentiated corporate governance adopted because of it.
The Company follows the rules of the Novo Mercado Listing Rules, not guided at that time by any other code of
good governance practices.
Name
Marcelo Yamane
Fernanda P inheiro Copeman
Curriculum
Profession
E ngineer
P sychologist
Title
N on-Statutory Officer
of Rental Business
U nit
N on-Statutory Officer
of P eople
Management
Other titles
Elected by the
Controlling
Shareholder
No
Yes
No
Yes
Marcelo Yam ane is Officer of Rental Bus iness Unit since May 2015. He joined the Company in 2010 and has held the Technical
Manager, Country Manager and Technical Operations and Operations Superintendent positions. Pr eviously, he w orked at Otis for 18
years and AVL South America for tw o years. Degree in Electrical Engineering from Universidade So Judas Tadeu, Post Graduate in
Pr oduction Management from Escola Superior de Administrao de Negcios ( ESA N), an MBA from Business School of Sao Paulo
(BSP) and Global MBA University of Pittsburgh.
Fernanda Pinheiro Copem an is currently the Officer of People Management since July 2016. Degree in Psychology from Santa Ursula
University and postgraduate degree in Know ledge Management and Human Capital UFRJ / COPPE. Prev iously, she has worked in
several companies as Pepsico, Brazil Brokers and Profar ma. She w as responsible for the implementation of HR and Management ar ea
leading phar maceutical distribution business segment and implementation of the Program Technical Career, w hich had a training cycle
aimed at operational excellence.
13.1 Description of the compensation policy or practices for the Executive Board, the Statutory and NonStatutory Boards, the Fiscal Committee, the Statutory Committees and the Audit, Risk, Finance and
Compensation Committees, covering the following topics:
a.
Board of Directors
For the Board of Directors of the Company, the total remuneration is fixed in a discretionary amount determined by the
general meeting, with no relationship with the remuneration policy applicable to officers and other employees of the
Company and, therefore there is no goal of the policy or specific remuneration practice of this body defined by the human
resources department of the Company.
As part of total discretionary remuneration approved by the general meeting, there is a fixed component and a variable
component, according to the results of the Company. The Company believes that the variable remuneration of the
members of the Board of Directors is a way to encourage them to successfully lead the Company's business by aligning
the interests of members of the Board of Directors with those of shareholders.
Statutory Directors and Non-Statutory Directors
For statutory directors and non-statutory directors of the Company, the remuneration policy aims to attract and guarantee
that the qualified professionals required remain in the Company and have a proper remuneration. The fixed amount of the
remuneration of the Directors includes the salary and direct and indirect benefits tailored for statutory directors and nonstatutory directors. In addition to the fixed compensation, there is a variable component, which includes profit-sharing in
the Companys results and the granting of stock options or subscribing to shares issued. The Company believes that the
profit-sharing and stock option programs benefiting statutory directors and non-statutory directors is a way to motivate
them to carry out the Companys business in its best interest, thus stimulating an entrepreneurial and results orientated
culture in line with the interests of both shareholders and management.
Fiscal Council
Members of the Fiscal Council are entitled to remuneration equivalent to 10% of the average remuneration of the
statutory directors, corresponding to the minimum set by law. In this way, their remuneration is not correlated to the
remuneration policy applicable to officers and other employees of the Company and therefore there is no objective of the
policy or practice of remuneration for that body.
Advisory Committee
The members of the existing committees will be entitled to remuneration, from May 2016 onwards, equivalent to 100% of
the monthly remuneration of the members the Board of Directors. The Committee members who are officers, managers
or employees of the Company shall not be entitled to remuneration. The remuneration of members of the Committee may
be amended at any time by the Board. The purpose of this remuneration policy is to adequately compensate Committee
members for time spent in office, except by those who are already paid by the Company as its directors or employees.
b.
Composition of compensation packages: (i) description of the different elements of the
compensation packages and the objectives of each of them; (ii) proportion of each element to make up the
total compensation package; (iii) the method for calculating and adjusting each of the elements in the
compensation packages; (iv) reasons for the composition of remuneration; and (v) the existence of
unremunerated members by the issuer and its reason
(i) Description of the different elements of the compensation packages:
The fixed remuneration of the statutory directors and non-statutory directors is designed to recognize and reflect the
value of the job position internally and externally, considering the competitors of the Company and companies of similar
size in terms of their gross revenues. The comparison with the market remuneration is carried out by a hired market
research consulting firm or through database purchased from a consultant. The Company conducted market research with
company Towers Watson in 2013 and 2014. In 2015, the Company used the database of market remuneration from the
consulting company Towers Watson.
For the Board of Directors of the Company (and consequently the Advisory Committee), the remuneration, fixed and/or
variable (the last as bonus), is discretionary determined by the general meeting with no relationship with the
remuneration policy applicable to officers and other employees of the Company and therefore there is no objetive of a
policy or remuneration practice of this body. Members of the Fiscal Council are entitled to remuneration equivalent to
10% of the average remuneration of the statutory board, corresponding to the minimum set by law. In this way, their
remuneration is not correlated to the remuneration policy applicable to officers and other employees of the Company and
therefore there is no aim of policy or practice of remuneration for that body.
For the members of the Board of Directors who participate on Advisory Committees are entitled to individual monthly
remuneration equivalent to 100% of the individual monthly remuneration of the Board of Directors members. Statutory
directors who participate on Advisory Committees are not entitled to any compensation.
Salary and
Pro-labore
Bonus
Profit sharing
Grant of
options
Total
73.4%
58.7%
100.0%
100.0%
0.00%
3.2%
0.00%
0.00%
26.6%
0.00%
0.00%
0.00%
0.00%
11.9%
0.00%
0.00%
0.00%
26.3%
0.00%
0.00%
100.0%
100.0%
100.0%
100.0%
Direct and
indirect benefits
Bonus
Profit sharing
Grant of
options
Total
100.00%
62.73%
100.00%
0.00%
4.16%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
33.11%
0.00%
100.00%
100.00%
100.00%
Fiscal Council
100.00%
0.00%
0.00%
0.00%
0.00%
100.00%
Board of Directors
Executiv e Officers
Including taxes.
Board of Directors
Executiv e Officers
Human Resources Committee
Fiscal Council
Salary and
Pro-labore
Direct and
indirect benefits
Bonus
Profit sharing
Grant of
options
Total
100.00%
92.79%
100.00%
100.00%
0.00%
7.21%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
100.00%
100.00%
100.00%
100.00%
Including taxes.
(iii) Method for calculating and adjusting each of the elements in the compensation packages:
The fixed portion of compensation paid to statutory directors and non-statutory directors is determined based on market
standards, and readjusted annually at regular levels to account for the loss in currency value or for merit by performance.
In terms of the profit-sharing program granted to statutory directors and non-statutory directors, and to bonus, payed to
the members of the Board of Directors, this plan is based on two financial indicators, EBITDA and cash flow. If the
financial targets are accomplished, a percentage between 2.18% of each will be distributed to Management and
employees, and whose portion will be defined in an increasing manner in accordance with their hierarchical level in the
Company and results obtained by their respective business segments. i.e. in a proportion of 70% from financial indicators
results and 30% from the achievement of defined targets. In 2016, the Company will not distribute any amount related to
the results of 2015.
Regarding the profit sharing program previously adopted by the Company until 2015, in 2013 the Company distributed R$
20.1 million for the results of 2012 and in 2014 the Company distributed R$ 18.7 million for the results of 2013. In 2015,
the Company did not distribute any amount related to the results of 2014.
Regarding the to the stock option plan to purchase or subscribe shares, granted to the statutory directors and nonstatutory directors, the number of options granted is defined by the Board of Directos, based on performance and results.
For the Board of Directors of the Company (and the Advisory Committees), the remuneration is discretionary determined
by the general meeting with no relation with the remuneration policy applicable to officers and other employees of the
Company and therefore there is no goal at the policy or remuneration practice of this body. Members of the Fiscal Council
are entitled to remuneration equivalent to 10% of the average remuneration of the statutory board, corresponding to the
minimum set by law. In this way, their remuneration is not correlated to the remuneration policy applicable to officers and
other employees of the Company and therefore there is no aim of policy or practice of remuneration for that body. So,
there is no method of calculation and adjustment of each element of remuneration.
(iv) Reasons for the composition of remuneration:
For the statutory directors and non-statutory directors, the policy aims in the remuneration of professionals based on the
responsibilities inherent in their job positions, market practices and the Companys level of competiveness.
For the Board of Directors, the Advisory Committee and the Fiscal Council, the remuneration paid by the Company is
fixed, in a discretionary amount determined by the general meeting, in case of Board of Directors (and consequently the
Advisory Committees), and according to the law, in case of Fiscal Council. The remuneration of the members of these
bodies has no relation with the remuneration policy applicable to officers and other employees of the Company and
therefore there is no goal at the policy or remuneration practice of this body.
For the statutory directors and non-statutory directors and the members of the Board of Directors, the variable portion is
justified by the Companys focus on results and the target of aligning management interests with those of the
shareholders of Company.
c.
Main performance indicators that are taken into consideration when determining each element of
the compensation package
The main financial indicators to determine the variable portion of the remuneration are the EBITDA and the cash flow.
The variable portion of the remunerations of the managers is determined from the achievement of financial indicators and
the results obtained by their respective business segments.
d.
How the compensation package is structured to reflect the development of the performance
indicators
The remuneration consists of a significant variable portion, represented by profit-sharing of the Companys results, and
the values to be distributed are directly proportionate to the Companys financial indicators and targets of the area,
calculated annually in accordance with the formula described in item (c) above.
e.
How the compensation policy is aligned with the Companys short-, medium- and long-term
interests
The remuneration monthly paid to statutory directors and non-statutory directors is in line with the short-term interests of
the Company to attract and retain qualified professionals. The profit-sharing and stock options plan are aligned with the
medium-to-long-term interests of the Company to motivate management to carry out the Companys business, stimulating
an entrepreneurial and results-orientated culture, to the extent that both shareholders and directors benefit from
improvements in the results and increases in the price of the shares.
For the Board of Directors of the Company (and consequently the Advisory Committees), the remuneration is fixed in
discretionary amount determined by the general meeting with no relation with the remuneration policy applicable to
officers and other employees of the Company, and therefore there is no goal at the policy or remuneration practice of this
body.
For the Board of Directors, the bonus, which is based on profit-sharing, being also directly proportional to the financial
indicators (EBITDA and cash flow), is in line with the Companys mid and long term best interest of stimulating an
entrepreneurial and results orientated culture.
f.
Existence of compensation supported by subsidiaries, and direct or indirect affiliates or holding
companies
Not applicable. There is not any remuneration supported by subsidiaries, and direct or indirect affiliates or holding
companies.
g.
Existence of any compensation or benefits connected to the occurrence of a given corporate event,
such as the sale of the Companys controlling interest
Not applicable. There is no remuneration or benefits connected to the occurrence of a given corporate event, such as the
sale of the Companys controlling interest.
13.2 With respect to compensation acknowledged in the results of the last 3 accounting reference
periods and the estimated compensation for the current accounting reference period for the Executive
Board, the Statutory Board and the Fiscal Council:
Estimated for Current Fiscal Year (2016)
Number of members
Board of Directors
Board of Executive
Officers
Fiscal Council
Total
6.00
3.83
3.00
12.83
6.00
3.83
3.00
12.83
1.382.076,00
3.553.374,00
291.321,00
5.226.771,00
321,226
321,226
Number of
remunerated
members
A nnual fixed
compe nsation
Salaries or prolabore fees
Direct and indirect
benefits
Compensation for
participation in
Committees
Others
Variable
Compensation
Bonus
340,000
340,000
304.415,00
1.350.282,00
58.264,00
1.712.961,00
0
1.200.000,00
0
906,106
1,513,889
2.106.106,00
1,513,889
0
200.000,00
0
344,320
0
544.320,00
Employme nt
cessation be nefits
Stock -based
compe nsation
Total Compensation
5,175,631
5,175,631
3.426.491,00
13.164.829,00
Profit sharing
Compensation for
participation in
meetings
Comissions
Others
Post-employ ment
benefits
349.585,00
16.940.906,00
(1) Value based on annual a mort ization of all existing plans, at fair value. For the granting of 2016 we are considering the total
expenditure of the plan.
Stock option plan in 2016: total expenditure of the plan: R$ 2,520.0, being in 2016 recognize d: R$ 240.0 thousand.
Fiscal Year Ended December 31, 2015
Board of
Executive
Board of Directors
Officers
Fiscal Council
Number of members
Number of remunerated
members
A nnual fixed
compe nsation
Salaries or pro-labore
fees
Direct and indirect
benefits
Compensation for
participation in
Committees
Others
Variable
Compensation
Bonus
Profit sharing
Compensation for
participation in meetings
Comissions
Others
Post-employ ment
benefits
Employme nt cessa tion
benefits
Stock -based
compe nsation
Total Compensation
Observations
Total
6.50
3.92
3.00
13.42
6.50
3.92
3.00
13.42
1,219,051
6,091,936
286,735
7,597,723
874,584
4,457,665
238,946
5,571,195
439,394
439,394
132,573
132,573
211,894
1,194,877
47,789
1,454,561
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3,382,000
3,382,000
1,219,051
9,473,936
286,735
10,979,723
The total number of members of each body was calculated according to
the annual average of members of each body computed monthly, with
two decimal points. More information on item 13.6, below.
(1) Value based on annua l a mortization of all existing plans, at fair value.
Fiscal Year Ended December 31, 2014
Board of
Executive
Board of Directors
Officers
Fiscal Council
Number of members
Number of remunerated
members
A nnual fixed
Total
6.67
15.67
6.67
15.67
1,351,779
7,210,760
279,553
8,842,092
compe nsation
Salaries or pro-labore
fees
Direct and indirect
benefits
Compensation for
participation in
Committees
Others
1,031,559
4,715,612
232,961
448,315
448,315
112,707
207,513
5,980,132
112,707
2,046,833
46,592
2,300,938
Variable
Compensation
Bonus
Profit sharing
Compensation for
participation in meetings
Comissions
Others
Post-employ ment
benefits
Employme nt cessa tion
benefits
Stock -based
compe nsation
Total Compensation
Observations
3,570,000
3,570,000
1,351,779
10,780,760
279,553
12,412,092
The total number of members of each body was calculated according to
the annual average of members of each body computed monthly, with
two decimal points. More information on item 13.6, below.
(1) Value based on annua l a mortization of all existing plans, at fair value.
Fiscal Year Ended December 31, 2013
Number of members
Number of remunerated
members
A nnual fixed
compe nsation
Salaries or pro-labore
fees
Direct and indirect
benefits
Compensation for
participation in
Committees
Others
Variable
Compensation
Bonus
Profit sharing
Compensation for
participation in meetings
Comissions
Others
Post-employ ment
benefits
Employme nt cessa tion
benefits
Stock -based
compe nsation
Total Compensation
Observations
Board of Directors
Board of
Executive
Officers
Fiscal Council
Total
6.08
5.17
3.00
14.25
6.08
5.17
3.00
14.25
893,619
4,360,016
323,744
323,743
164,423
164,423
211,608
1,658,550
41,458
1,911,616
383,066
-
1,224,640
383,066
1,224,640
76,613
76,613
2,694,144
2,694,144
5,460,923
1,729,329
10,261,094
248,746
12,239,169
The total number of members of each body was calculated according to
the annual average of members of each body computed monthly, with
two decimal points. More information on item 13.6, below.
(1) Value based on annua l a mortization of all existing plans, at fair value.
13.3 With respect to variable compensation in the last 3 accounting reference periods and compensation
estimated for the current accounting reference period for the Board of Directors, the Board of Executive
Officers and the Fiscal Council:
Estimated for Current Fiscal Year (2016)
Board of Directors
Board of Executive
Fiscal Council
Total
Officers
(in R$ thousand, except for number of members)
Number of members
7.00
3.83
3.00
13.83
Number of remunerated
7.00
3.83
3.00
13.83
members
Bonus
Minimum amount estimated by
compensation plan
Maximum amount estimated by
compensation plan
A mount estimated by the
compensation plan if preestablished goals are met
Profit sharing
Minimum amount estimated by
compensation plan
Maximum amount estimated by
compensation plan
A mount estimated by the
compensation plan if preestablished goals are met
0
-
954,235
1,250,427
954,235
-
1,513,889
1,513,889
Board of Executive
Officers
Fiscal Council
Total
Number of members
6.50
Number of remunerated
6.50
3.92
3.00
13.42
members
Bonus
Minimum amount estimated by
compensation plan
Maximum amount estimated by
compensation plan
A mount estimated by the
compensation plan if preestablished goals are met
Value effectiv ely recognized in
results of the fiscal y ear
Profit sharing
Minimum amount estimated by
compensation plan
Maximum amount estimated by
compensation plan
A mount estimated by the
compensation plan if preestablished goals are met
Value effectiv ely recognized in
results of the fiscal y ear
13.42
Board of Executive
Officers
Fiscal Council
Total
Number of members
Number of remunerated
members
Bonus
Minimum amount estimated by
compensation plan
Maximum amount estimated by
compensation plan
A mount estimated by the
compensation plan if preestablished goals are met
Value effectiv ely recognized in
results of the fiscal y ear
Profit sharing
Minimum amount estimated by
compensation plan
Maximum amount estimated by
compensation plan
6.67
15.67
6.67
15.67
0 (Negative Eva)
0 (Negative Eva)
0 (Negative Eva)
0 (Negative Eva)
Board of Executive
Officers
Fiscal Council
Total
6.08
5.17
14.25
6.67
15.67
25% of Eva
25% of Eva
383.0
383.0
25% of Eva
25% of Eva
1,224.6
1,224.6
Number of members
Number of remunerated
members
Bonus
Minimum amount estimated by
compensation plan
Maximum amount estimated by
compensation plan
A mount estimated by the
compensation plan if preestablished goals are met
Value effectiv ely recognized in
results of the fiscal y ear
Profit sharing
Minimum amount estimated by
compensation plan
Maximum amount estimated by
compensation plan
A mount estimated by the
compensation plan if preestablished goals are met
Value effectiv ely recognized in
results of the fiscal y ear
13.4 With respect to the stock-based compensation plan for the Executive Board and the Board of
Executive Officers, which was in force in the last accounting reference period and which is estimated for
the current accounting reference period:
In 2016, the Board of Directors shall approve a stock options plan to the Company 's management, under the Plan in
2016 , once it is approved by the shareholders at the General Meeting .
The Stock Options Plan is managed by our Board of Directors, which considers the contribution of each beneficiary to
achieving the targets designed to create added value, the development potential of each, and the essential nature of their
jobs among other characteristics considered strategically relevant.
The Board of Directors elected as beneficiaries of the 2010 Stock Options Plan (i) for the 1/2010 Program, all the directors
(or executives with similar roles) of the Company, and Company managers who have held their positions in 2009 for more
than 6 (six) months; (ii) for the 1/2011 Program, all the directors (or executives with similar roles) of the Company, and
Company managers who have held their positions in 2010 for more than 6 (six) months; (iii) for the 1/2012 Program, all
the directors (or executives with similar roles) of the Company, and Company managers who have held their positions in
2011 for more than 6 (six) months; (iv) for the 1/2013 Program, all the directors (or executives with similar roles) of the
Company, and Company managers who have held their positions in 2012 for more than 6 (six) months; and (v) for the
1/2014 Program, all the directors (or executives with similar roles) of the Company, and Company managers who have
held their positions in 2013 for more than 6 (six) months. There were no stock options granted in 2015.
b. Major Plan Objectives
The Plan has as objective, allow the Companys managers or employees or those in any of its subsidiaries, subject to
determined conditions, to acquire shares in the Company, for the purpose of: (i) align the interests of the Companys
shareholders with those of its managers and employees or other entities it controls; (ii) mitigate agency conflicts; (iii)
increase the generation of sustainable results; and (iv) reinforce the orientation of long-term in taking decisions by
managers and employees of the Company.
c.
As part of the 1/2014 Program, 71,852 options have been granted that will be converted into ordinary shares in the
Company. Up to December 31st, 2015, no options have been exercised.
The plan 2016 disposesThe granted stock options according to the Plan may confer rights of purchase on a number of
shares that do not exceed 1,700,000 of shares from the Companys capital stock throughout the whole term of the Plan,
computing in this calculation all options already granted under the Plan, exercised or not, except those that have been
extinct and not exercised, provided that the total number of issued shares or expected to be issued under the Plan is
always within the limit of the Company's authorized capital.
g. Maximum number of shares to be granted
Each option granted under the Company's plans entitles its beneficiary the right to acquire or subscribe one (1) common
share, nominative, book entry and with no par value representing the Company's share capital. Thus, the maximum
number of options to be granted by the Company's plans is the maximum number of shares covered by the Company's
plans, as described in the previous section
h. Conditions for acquiring the shares
To receive the stock options in the 1/2010 Program, each beneficiary had to use at least 33% of the variable component
of their compensation associated with the Companys Profit-Sharing Program, net of taxes, which were received related to
the 2009 financial year, to acquire shares issued by the Company.
To receive the stock options in the 1/2011 Program, each beneficiary had to use at least 33% of the variable component
of their compensation associated with the Companys Profit-Sharing Program, net of taxes, which were received related to
the 2010 financial year, to acquire shares issued by the Company.
To receive the stock options in the 1/2012 Program, each beneficiary will have to use at least 33% of the variable
component of their compensation associated with the Companys Profit-Sharing Program, net of taxes, which were
received related to the 2011 financial year, to acquire shares issued by the Company.
To receive the stock options in the 1/2013 Program, each beneficiary will have to use at least 33% of the variable
component of their compensation associated with the Companys Profit-Sharing Program, net of taxes, which were
received related to the 2012 financial year, to acquire shares issued by the Company.
To receive the stock options in the 1/2014 Program, each beneficiary will have to use at least 33% of the variable
component of their compensation associated with the Companys Profit-Sharing Program, net of taxes, which were
received related to the 2013 financial year, to acquire shares issued by the Company.
Additionally, the Board of Directors approved grants within the 1/2011, 1/2012, 1/2013 and 1/2014 Programs,
independent of the investment in the Company's shares to certain employees of the Company, due to its performance in
the exercise of their jobs.
For the 2016 Plan, at any time it deems appropriate during its term, the Board of Directors shall determine, at its
discretion, the beneficiaries of which are granted stock options under the Plan 2016, the number of shares that may be
acquired with the exercise of each option, the conditions for payment of the exercise price, the terms and conditions of
exercise of each option and any other conditions relating to such options, always observing the limit of the authorized
capital and the parameters established in the 2016 Plan.
i.
by the Brazilian Institute of Geography and Statistics (IBGE), deducting the value of dividends and interest on equity per
share paid by the Company as from the stock option date.
Regarding the 1/2011 Program, the exercise price of the options will be the average share price acquired according to
brokerage invoice sent by the beneficiary to the Board of Directors or Human Resources Committee of the Company (R$
19.28), monetarily adjusted by the inflation according to the IPCA or by another index determined by the Board of
Directors or committee, according to the case, from the date of conclusion of the stock option agreement until the date
the option is exercised, deducting the value of dividends and interest on equity per share paid by the Company as from
the stock option date.
Regarding the 1/2012 Basic Program, the exercise price of the options will be the average share price acquired according
to brokerage invoice sent by the beneficiary to the Board of Directors or Human Resources Committee of the Company
(R$ 5.86), monetarily adjusted by the inflation according to the IPCA or by another index determined by the Board of
Directors or committee, according to the case, from the date of conclusion of the stock option agreement until the date
the option is exercised, deducting the value of dividends and interest on equity per share paid by the Company as from
the stock option date.
Regarding the 1/2012 Discricionary Program, the exercise price of the options will be the average share price on the
BM&FBOVESPA in the year of 2011 (R$19.22), weighted by the trading volume, monetarily adjusted by the inflation
according to the IPCA or by another index determined by the Board of Directors or committee, according to the case,
from the date of conclusion of the stock option agreement until the date the option is exercised, deducting the value of
dividends and interest on equity per share paid by the Company as from the stock option date.
Regarding the 1/2013 Basic Program, the exercise price of the options will be equal to the book value of shares on
December 31st of the fiscal year of the Company immediately preceding the stock option date (R$ 6.80), monetarily
adjusted by the inflation according to the IPCA or by another index determined by the Board of Directors or committee
created for this purpose, according to the case, from the date of conclusion of the stock option agreement until the date
the option is exercised, deducting the value of dividends and interest on equity per share paid by the Company as from
the stock option date.
Regarding the 1/2013 Discricionary Program, the exercise price of the options will be the average share price on the
BM&FBOVESPA in the year of 2012 (R$26.16), weighted by the trading volume, monetarily adjusted by the inflation
according to the IPCA or by another index determined by the Board of Directors or committee created for this purpose,
according to the case, from the date of conclusion of the stock option agreement until the date the option is exercised,
deducting the value of dividends and interest on equity per share paid by the Company as from the stock option date.
Regarding the 1/2014 Basic Program, the exercise price of the options will be equal to the book value of shares on
December 31st of the fiscal year of the Company immediately preceding the stock option date (R$ 7.98), monetarily
adjusted by the inflation according to the IPCA or by another index determined by the Board of Directors or committee
created for this purpose, according to the case, from the date of conclusion of the stock option agreement until the date
the option is exercised, deducting the value of dividends and interest on equity per share paid by the Company as from
the stock option date.
Regarding the 1/2014 Discricionary Program, the exercise price of the options will be the average share price on the
BM&FBOVESPA in the year of 2013 (R$30.94), weighted by the trading volume, monetarily adjusted by the inflation
according to the IPCA or by another index determined by the Board of Directors or committee created for this purpose,
according to the case, from the date of conclusion of the stock option agreement until the date the option is exercised,
deducting the value of dividends and interest on equity per share paid by the Company as from the stock option date.
Regarding the 2016 Plan, the exercise price of options granted under the Plan is R$ 2.63 (two reais and sixty three cents),
based on value of the Company's stock issuance approved by the Board of Directors in February 5, 2016. The exercise
price of the options will be restated according to the IPCA (Broad consumer price index), disclosed by the Brazilian
Institute of Geography and Statistics (IBGE), or by another index determined by the Board of Directors or Committee
(according to the case), deducting the value of dividends and interest on equity per share paid by the Company from the
stock option date. The Investor Relations area of the Company will calculate the updated exercise price of the options.
j.
be exercised, in full or in part, provided that they observe the time limits, not under 12 (twelve) months, determined by
the Board of Directors, and the other terms and conditions contained in the respective Option Contracts.
k. Form of liquidation/settlement
The options granted under the Company's Plans give their holders the right to subscribe and/or purchase shares
representing the Companys capital, against the payment of the respective issue or acquisition price or, as the case may
be, in an amount corresponding to the exercise price of each option. With the purpose to satisfy the exercise of stock
options granted under the Companys Plans, the Company may, at the discretion of the Board of Directors: (i) issue new
shares within the limits of the authorized capital; and/or (ii) divest and/or use shares held in Treasury.
The shares resulting from the exercising of purchase options will be integrated and/or acquired by their respective
beneficiaries in cash, in current national currency.
l.
m. criteria and events that, when verified, will lead to the suspension, alteration or extinction of the plan
The stock option rights granted under the terms of the Plan will automatically all be cancelled in the following cases: (i)
on the complete and full exercising of the same; (ii) after the option term has expired; (iii) through the mutual rescission
of the stock option; (iv) if the Company is dissolved, liquidated or files for bankruptcy; (v) if the beneficiary fails to
observe the trading restriction rules described in item l above; or (vi) trading restriction rules described in item n
below.
The options granted under the 2016 Plan extinguish automatically, ceasing all its full effects in the following cases: (i)
through its full exercise; (ii) after the expiry of the period of validity of the option; (iii) by means of the end of the stock
option agreement; (iv) if the Company is dissolved, liquidated or is bankrupt; (v) in the cases of the item "n" below; or
(vi) in other events contemplated in stock option agreement.
n. effects generated by the Company`s Board and Committee Manager`s departure upon his/her rights as
provided by the stock-based compensation plan
If at any time during the validity of the Stock Options 2010 Plan , the beneficiary resigns voluntarily from the Company or
leave their management role: (a) the rights not exercised in accordance with the respective Option Contract on the date
they leave the Company will automatically all be cancelled, with no need for any prior warning or notification, and with no
right to any indemnity; and (b) the rights already exercised in accordance with the respective Option Contract on the date
they leave the Company may be exercised within a period of 30 days from the same date, after which all rights will
automatically all be cancelled, with no need for any prior warning or notification, and with no right to any indemnity;
If at any time during the validity of the Stock Options 2016 Plan , the beneficiary resigns voluntarily from the Company or
leave their management role: (i) the rights not exercised in accordance with the respective Option Contract on the date
they leave the Company will automatically all be cancelled, with no need for any prior warning or notification, and with no
right to any indemnity, (1) the still not exercisable rights, (2) 50% (fifty per cent) of the already exercisable rights, in both
cases, in accordance with the respective contract, on the day they leave the Company; and (ii) On the date they leave the
Company may be exercised within a period of 30 days from the same date, the balance of 50% (fifty per cent) of the
exercisable rights in accordance with respective Option contract, on the date they leave the company. After this period, all
rights will automatically all be cancelled, with no need for any prior warning or notification, and with no right to any
indemnity;
In other cases of dismissal, if, at any time during the term of the Company's Plans, the beneficiary:
(i)
leaves the Company as a result of being fired for just cause, or failure to fulfill their duties adequately as a
manager, all the right (exercised and not exercised) in accordance with the respective Option Contract on the date they
leave the Company will automatically all be cancelled, with no need for any prior warning or notification, and with no right
to any indemnity;
(ii)
leaves the Company as a result of being fired with no just cause, or failure to fulfill their duties adequately as a
manager: (i) the rights not exercised in accordance with the respective Option Contract on the date they leave the
Company will automatically all be cancelled, with no need for any prior warning or notification, and with no right to any
indemnity; except if the Board decides to anticipate the grace period term for some or all of these rights, and the
beneficiary leaves the Company within a period of up to 12 (twelve) months after the change in share control in the
Company all the unexercised rights in accordance with the respective Option Contract on the date they leave the
Company may be exercised within a period of 30 days from the same date, after which all rights will automatically all be
cancelled, with no need for any prior warning or notification, and with no right to any indemnity, will have their grace
period anticipated; and (ii) the rights already exercised in accordance with the respective Option Contract on the date
they leave the Company may be exercised within a period of 30 days from the same date, after which all rights will
automatically all be cancelled, with no need for any prior warning or notification, and with no right to any indemnity;
(iii)
on retiring from the Company: (i) the rights not exercised in accordance with the respective Option Contract on
the date they leave the Company will automatically all be cancelled, with no need for any prior warning or notification,
and with no right to any indemnity, except if the Board decides to anticipate the grace period term for some or all of
these rights; and (ii) the rights already exercised in accordance with the Options Contract on the date of leaving the
Company will have their grace period anticipated, allowing the Beneficiary to exercise the respective stock option, as long
as this is within a period of 12 (twelve) months from the date of retirement, after which all the remaining rights will
automatically all be cancelled, with no need for any prior warning or notification, and with no right to any indemnity;
(iv)
leaving the Company due to death or permanent disability: (i) the rights not exercised in accordance with the
respective Option Contract on the date they leave the Company will automatically all be cancelled, with no need for any
prior warning or notification, and with no right to any indemnity, except if the Board decides to anticipate the grace period
term for some or all of these rights; and (ii) the rights already exercised in accordance with the Options Contract, on the
date of passing away, can be exercised by the Beneficiarys legal successors, as long as this is done within a period of 12
(twelve) months from the aforementioned date, after which all the remaining rights will automatically all be cancelled,
with no need for any prior warning or notification, and with no right to any indemnity.
Despite the disposed above, the Board or Committee (according to the case) can, at their exclusive criteria, whenever
they deem that social interests are better met by this approach, chose not to abide by the rules stipulated above, and
treat a determined Beneficiary in a differentiated and individual manner.
13.5 With respect to stock-based compensation, as acknowledged in the past three accounting reference
periods and as estimated for the current accounting reference period, for Executive Board and the Board of
Executive Officers.
The tables below show the impact of those stock option plans on the compensation of our statutory directors in the years
2013, 2014 and 2015 and the estimated impact for 2016. The Companys Board of Directors does not have stock based
compensation.
Stock Option Plan
2013
2014
2015
2016
5.17
6.00
3.92
3.83
5.17
6.00
3.00
3.00
05/31/2010
05/31/2010
05/31/2010
05/31/2010
134,678
3,769
10,628
05/31/2016
05/31/2016
05/31/2016
05/31/2016
400,267
534,574
534,574
534,574
R$ 12.63
R$ 13.01
R$ 12.86
R$ 13.44
0.11%
0.43%
0.00%
0.00%
Program 1/2010
Number of Members of the Board of
Executiv e Officers
Number of remunerated Members of the
Board of Executiv e Officers
Grant Date
Number of granted options
Number of non-redeemable options
1. Total amount of redeemable options less the total amount of redeemable options exercised at the end of the period for
the fiscal years ended and total amount of redeemable options at end of period less the total amount of redeemable
options exercised in years previous to the current year.
2. 2014 and 2015 considers the balance of options granted to the new directors elected , minus the balance of the
options of the Directors who resigned , as stated on the resigning terms available on the Company headquarters and on
the minutes of the Board of Directors meeting.
3. Dilution of outstanding options based on the total shares of the Company's capital at the end of fiscal year, except for
the current year that considers the total shares of the Company's capital at beginning of year. At the end of fiscal year
2013, the amount of shares were 127.385.996, and at the end of fiscal year 2014 and 2015, the total number of shares
was equal to 128.057.925.
4. Fair value of R$ 6,57 per option. Assumptions available in item 13.9(b).
2013
2014
2015
2016
5.17
6.00
3.92
3.83
5.17
6.00
3.00
3.00
04/16/2011
196,023
65,742
04/16/2011
143,442
170,385
04/16/2011
86,888
04/16/2011
86,888
25% by y ear,
from the y ear
after the date of
the Grant
04/16/2017
04/16/2017
04/16/2017
04/16/2017
130,281
169,080
169,080
169,080
R$ 20.60
R$ 21.50
R$ 23.02
R$ 25.27
R$ 20.82
R$ 22.20
Program 1/2011
Number of Members of the Board of
Executiv e Officers
Number of remunerated Members of the
Board of Executiv e Officers
Grant Date
Number of granted options
Number of non-redeemable options
Number of redeemable options
period
4
0.21%
0.38%
0.07%
0.07%
1. Total amount of redeemable options less the total amount of redeemable options exercised at the end of the period for
the fiscal years ended and total amount of redeemable options at end of period less the total amount of redeemable
options exercised in years previous to the current year.
2. 2014 and 2015 considers the balance of options granted to the new directors elected , minus the balance of the
options of the Directors who resigned , as stated on the resigning terms available on the Company headquarters and on
the minutes of the Board of Directors meeting.
3. Dilution of outstanding options based on the total shares of the Company's capital at the end of fiscal year, except for
the current year that considers the total shares of the Company's capital at beginning of year. At the end of fiscal year
2013, the amount of shares were 127.385.996, and at the end of fiscal year 2014 and 2015, the total number of shares
was equal to 128.057.925.
4. Fair value of R$ 6,57 per option. Assumptions available in item 13.9(b).
Program 1/2012 - Basic
Number of Members of the Board of Executiv e
Officers
Number of remunerated Members of the Board of
Executiv e Officers
Grant Date
Number of granted options
Number of non-redeemable options
Number of redeemable options
Deadline for options to become redeemable
Deadline for redeeming options
2013
2014
2015
2016
5.17
6.00
3.92
3.83
5.17
6.00
3.00
3.00
06/30/2012
28,847
-
06/30/2012
06/30/2012
25,190
-
3,927
3,927
06/30/2012
7,854
25% by y ear,
from the y ear
after the date of
the Grant
25% by y ear,
from the y ear
after the date of
the Grant
25% by y ear,
from the y ear
after the date of
the Grant
25% by y ear,
from the y ear
after the date of
the Grant
06/30/2018
06/30/2018
06/30/2018
06/30/2018
9,615
22,210
22,210
22,210
R$ 5.74
R$ 5.75
R$ 6.03
R$ 6.67
R$ 5.82
R$ 5.93
0.02%
0.04%
0.01%
0.01%
1. Total amount of redeemable options less the total amount of redeemable options exercised at the end of the period for
the fiscal years ended and total amount of redeemable options at end of period less the total amount of redeemable
options exercised in years previous to the current year.
2. 2014 and 2015 considers the balance of options granted to the new directors elected , minus the balance of the
options of the Directors who resigned , as stated on the resigning terms available on the Company headquarters and on
the minutes of the Board of Directors meeting.
3. Dilution of outstanding options based on the total shares of the Company's capital at the end of fiscal year, except for
the current year that considers the total shares of the Company's capital at beginning of year. At the end of fiscal year
2013, the amount of shares were 127.385.996, and at the end of fiscal year 2014 and 2015, the total number of shares
was equal to 128.057.925.
4. Fair value of R$ 6,57 per option. Assumptions available in item 13.9(b).
Program 1/2012 - Basic
2013
2014
2015
2016
5.17
6.00
3.92
3.83
5.17
6.00
2.00
2.00
06/30/2012
164,000
91,500
06/30/2012
06/30/2012
145,500
31,500
31,000
55,750
06/30/2012
86,750
Grant
Grant
06/30/2018
06/30/2018
06/30/2018
06/30/2018
17,000
39,000
39,000
39,000
R$ 19.57
R$ 20.37
R$ 21.79
R$ 23.90
R$ 20.60
R$ 21.03
0.14%
0.23%
0.07%
0.07%
1. Total amount of redeemable options less the total amount of redeemable options exercised at the end of the period for
the fiscal years ended and total amount of redeemable options at end of period less the total amount of redeemable
options exercised in years previous to the current year.
2. 2014 and 2015 considers the balance of options granted to the new directors elected , minus the balance of the
options of the Directors who resigned , as stated on the resigning terms available on the Company headquarters and on
the minutes of the Board of Directors meeting.
3. Dilution of outstanding options based on the total shares of the Company's capital at the end of fiscal year, except for
the current year that considers the total shares of the Company's capital at beginning of year. At the end of fiscal year
2013, the amount of shares were 127.385.996, and at the end of fiscal year 2014 and 2015, the total number of shares
was equal to 128.057.925.
4. Fair value of R$ 6,57 per option. Assumptions available in item 13.9(b).
2013
2014
2015
2016
5.17
6.00
3.92
3.83
5.17
6.00
2.00
2.00
04/30/2013
105,770
105,770
-
04/30/2013
104,153
-
04/30/2013
16,660
8,329
04/30/2013
8,331
16,658
04/30/2019
04/30/2019
04/30/2019
04/30/2019
34,717
34,717
34,717
R$ 6.72
R$ 7.04
R$ 7.75
R$ 6.95
0.11%
0.02%
0.02%
R$ 2,620.981
0.08%
1. Total amount of redeemable options less the total amount of redeemable options exercised at the end of the period for
the fiscal years ended and total amount of redeemable options at end of period less the total amount of redeemable
options exercised in years previous to the current year.
2013
2014
2015
2016
5.17
6.00
3.92
3.83
Officers
Number of remunerated Members of the
Board of Executiv e Officers
Grant Date
5.17
6.00
2.00
2.00
04/30/2013
105,000
105,000
-
04/30/2013
157,500
52,500
04/30/2013
9,376
9,374
04/30/2013
4,689
14,061
04/30/2019
04/30/2019
04/30/2019
04/30/2019
R$ 26.78
R$ 28.67
R$ 31.39
0.16%
0.01%
R$ 1,251.600
0.08%
0.01%
2. 2014 and 2015 considers the balance of options granted to the new directors elected , minus the balance of the
options of the Directors who resigned , as stated on the resigning terms available on the Company headquarters and on
the minutes of the Board of Directors meeting.
3. Dilution of outstanding options based on the total shares of the Company's capital at the end of fiscal year, except for
the current year that considers the total shares of the Company's capital at beginning of year. At the end of fiscal year
2013, the amount of shares were 127.385.996, and at the end of fiscal year 2014 and 2015, the total number of shares
was equal to 128.057.925.
4. Fair value of R$ 6,57 per option. Assumptions available in item 13.9(b).
1. Total amount of redeemable options less the total amount of redeemable options exercised at the end of the period for
the fiscal years ended and total amount of redeemable options at end of period less the total amount of redeemable
options exercised in years previous to the current year.
2. 2014 and 2015 considers the balance of options granted to the new directors elected , minus the balance of the
options of the Directors who resigned , as stated on the resigning terms available on the Company headquarters and on
the minutes of the Board of Directors meeting.
3. Dilution of outstanding options based on the total shares of the Company's capital at the end of fiscal year, except for
the current year that considers the total shares of the Company's capital at beginning of year. At the end of fiscal year
2013, the amount of shares were 127.385.996, and at the end of fiscal year 2014 and 2015, the total number of shares
was equal to 128.057.925.
4. Fair value of R$ 6,57 per option. Assumptions available in item 13.9(b).
Program 1/2014 - Basic
Number of Members of the Board of Executiv e
Officers
Number of remunerated Members of the
Board of Executiv e Officers
Grant Date
Number of granted options
Number of non-redeemable options
20142
2015
2016
6.00
3.92
3.83
6.00
2.00
2.00
04/30/2014
101.852
101.852
04/30/2014
25.650
8.550
04/30/2014
17.100
17.100
04/30/2020
04/30/2020
04/30/2020
R$ 8.17
R$ 8.95
R$ 2.299.818
0.08%
0.03%
0.03%
1. Total amount of redeemable options less the total amount of redeemable options exercised at the end of the period for
the fiscal years ended and total amount of redeemable options at end of period less the total amount of redeemable
options exercised in years previous to the current year.
2. 2014 and 2015 considers the balance of options granted to the new directors elected , minus the balance of the
options of the Directors who resigned , as stated on the resigning terms available on the Company headquarters and on
the minutes of the Board of Directors meeting.
3. Dilution of outstanding options based on the total shares of the Company's capital at the end of fiscal year, except for
the current year that considers the total shares of the Company's capital at beginning of year. At the end of fiscal year
2013, the amount of shares were 127.385.996, and at the end of fiscal year 2014 and 2015, the total number of shares
was equal to 128.057.925.
4. Fair value of R$ 6,57 per option. Assumptions available in item 13.9(b).
13.6 With respect to outstanding options for the Board of Directors and the Board of Executive Officers at
the closing of the last accounting reference period
Program
1/2011
Program
1/2012 Basic
Program
1/2012 Discretionary
Program
1/2013 Basic
Program
1/2013 Discretionar
y
Program
1/2014
Basic
ber of members
2,5
ber of members
2,5
3,927
31,000
16,660
9,376
25,650
86,613
3.927 opes se
31.000 opes
8.329 opes se
4.687 opes
8.550 opes
Total
unered
-Outsta nding
ons
ber of shares
me redeemable
dline for
tornam
se tornam
tornam
se tornam
se tornam
exercv eis a
exercv eis a
exercv eis a
exercv eis a
exercv eis a
cada ano at
cada ano at
cada ano at
cada ano at
cada ano at
2016
2016
2017
2017
2018
05/31/2016
04/16/2017
05/31/2018
05/31/2018
04/30/2019
04/30/2019
04/30/2020
R$ 0
R$ 3,088
R$ 4,625
R$ 11,289
R$ 855
R$ 14,876
R$ 37,734
86,888
3,927
55,750
8,329
9,374
8,550
172,818
05/31/2016
04/16/2017
05/31/2018
05/31/2018
04/30/2019
04/30/2019
04/30/2020
R$ 23.02
R$ 6.03
R$ 21.79
R$ 7.04
R$ 28.67
R$ 8.17
R$ 4.99
R$ 11.796
R$ 3.088
R$ 8.317
R$ 5.644
R$ 855
R$ 4.959
R$ 34.659
R$ 0
R$ 11.796
R$ 6.177
R$ 12.942
R$ 16.932
R$ 1.711
R$ 19.835
R$ 69.393
eming options
v alue of options
standing
ons
ber
dline for
eming options
ghted av erage
cise price
v alue of options
Board of Directors
Board of Directors has no stock-based compensation.
13.7 With respect to exercised options for the Board of Directors and the Board of Executive Officers at the
closing of the last accounting reference period
Program
1/2010
Program
1/2011
Program
1/2012 Basic
Program 1/2012
- Discretionary
Program
1/2013 Basic
Program 1/2013
- Discretionary
Program
1/2014
Basic
5,17
5,17
5,06
5,17
5,17
5,06
134,307
38,799
12,595
22,000
34,717
242,418
R$ 13.44
R$ 22.20
R$ 5.93
R$ 21.03
R$ 6.95
R$ 26.78
R$ 5.96
-R$ 18,920
R$
458,959
R$
1,444,516
Number of
members
Number of
members
remunered
Exercised
options
Number of shares
Weighted av erage
exercise price
Total v alue of the
difference betw een
the exercise v alue
and market v alue of
shares related t o
options e xerci sed 1
Shares Granted
N umber of granted
shares
P ondered av erage
price of acq uisitio n
134,307
38,799
12,595
22,000
34,717
242,418
R$ 13.44
R$ 22.20
R$ 5.93
R$ 21.03
R$ 6.95
R$ 26.78
R$ 5.96
-R$ 18,920
R$
458,959
R$
1,444,516
shares related t o
options e xerci sed 1
1.
Average market price, pondered by volume, in the last trading day of the fiscal year, equals R$ 20.17 at the end of 2014.
Number of members
Number of members remunered
Program
1/2010
Program
1/2011
Program
1/2012 Basic
Program
1/2012 Discretionary
Total
5.17
5.17
5.17
5.17
5.17
5.17
5.17
5.17
5.17
5.17
149,549
R$ 12.86
88,815
R$ 20.82
9,615
R$ 5.82
17,000
R$ 20.06
264,979
R$ 15.73
R$
2,703,846
R$
898,808
R$
241,529
R$ 184,960
R$
4,029,143
Exercised options
Number of shares
Weighted av erage exercise price
Total v alue of the difference betw een the exercise
v alue and market v alue of shares related to options
exerci sed 1
Shares Granted
N umber of granted share s
P ondered av erage price of acquis ition
Total v alue of the difference betw een the exercise
v alue and market v alue of shares related to options
exerci sed 1
149.549
R$ 12.86
88.815
R$ 20.82
9.615
R$ 5.82
17.000
R$ 20.06
264.979
R$ 15.73
R$
2,703,846
R$
898,808
R$
241,529
R$ 184,960
R$
4,029,143
1 Average market price, pondered by volume, in the last trading day of the fiscal year, equals R$ 30.94 at the end of
2012.
Board of Directors
Board of Directors has no stock-based compensation.
13.8 Summary of relevant information aiming at a broader understanding of data presented under items
13.5 through 13.7 above, as well as an explanation of the pricing method used for stock and option values
a. Pricing model
The programs granted from 2010 onwards were classified as equity instruments, which the weighted average fair value of
options is determined using the Black-Scholes valuation model using as premises: (a) weighted average share price, (b)
exercise price, (c) expected volatility, (d) dividend yield, (e) expected option life and (f) annual risk-free interest rate. The
equity portion is priced only at the grant date and the fair value is not measured again on every reporting date. The
portions of equity and debt are appropriated plan by plan, taking into consideration the respective lock up periods (period
in which shares are blocked for trading), based on management's best estimate as to their end dates.
The table below shows the data and assumptions of our pricing model:
1 st Grant (05/31/2010)
2 nd Grant (07/05/2010)
R$11.50
R$11.95
31%
1,461
1.52%
6.60%
R$3.86
R$11.50
R$14.10
31%
1,461
1.28%
6.37%
R$5.49
R$11.65
R$20.55
34.92%
1,247
1.71%
6.08%
R$10.49
R$11.59
R$20.55
34.92%
1,282
1.71%
6.08%
R$10.56
R$12.22
R$17.55
38.68%
882
1.06%
4.81%
R$7.27
R$12.16
R$17.55
38.68%
917
1.06%
4.83%
R$7.37
R$12.63
R$33.43
35.92%
516
0.70%
1.04%
R$20.69
R$12.57
R$33.43
35.92%
551
0.70%
1.08%
R$20.75
R$13.01
R$33.00
33.86%
182
0.64%
R$13.01
R$33.00
33.86%
186
0.64%
3.06%
R$20.08
3.12%
R$20.09
R$13.70
R$9.55
36.00%
548
0.54%
5.47%
R$13.70
R$9.55
36.00%
552
0.54%
5.47%
R$15.30
R$2.66
43.65%
183
0.00%
4.18%
R$15.30
R$2.66
43.65%
187
0.00%
4.26%
R$0.20
R$0.21
1 st Grant (04/16/2010)
Grant Date
Exercise price
Weighted av erage share price
Expected v olatility 1
Expected option life (day s)
Div idend y ield
Risk -free interest rate
Fair value per share
A t the end of 2011
Exercise price
Weighted av erage share price
Expected v olatility 1
Expected option life (day s)
Div idend y ield
Risk -free interest rate
Fair value per share
A t the end of 2012
Exercise price
Weighted av erage share price
Expected v olatility 1
Expected option life (day s)
Div idend y ield
Risk -free interest rate
Fair value per share
A t the end of 2013
Exercise price
Weighted av erage share price
Expected v olatility 1
Expected option life (day s)
Div idend y ield
Risk -free interest rate
A t the end of 2014
Exercise price
Weighted av erage share price
Expected v olatility 1
Expected option life (day s)
Div idend y ield
Risk -free interest rate
Fair value per share
A t the end of 2015
Exercise price
Weighted av erage share price
Expected v olatility 1
Expected option life (day s)
Div idend y ield
Risk -free interest rate
Fair value per share
1
R$19.28
R$21.08
35.79%
1,461
1.73%
6.53%
R$6.57
R$19.77
R$17.55
38.68%
1,202
1.06%
4.94%
R$4.70
R$20.60
R$33.43
35.92%
836
0.70%
1.70%
R$14.36
R$21.50
R$33.00
33.86%
471
0.64%
3.77%
R$22.72
R$9.55
36.00%
106
0.54%
2.25%
R$0,00
R$23.02
R$2.66
43.65%
0
0.00%
6.05%
R$0.12
Measured by the historical behav ior of the v alue of the stock of the Company
1/2012
Basic (06/30/2012)
1/2012
Discretionary (06/30/2012)
R$5.86
R$27.10
37.41%
1,461
0.87%
R$19.22
R$27.10
37.41%
1,461
0.87%
3.92%
R$21.20
3.92%
R$12.18
R$5.74
R$33.43
35.92%
1,277
0.70%
2.15%
R$27.30
R$19.57
R$33.43
35.92%
1,277
0.70%
2.15%
R$16.14
R$5.75
R$33.00
33.86%
882
0.64%
4.84%
R$20.37
R$33.00
33.86%
882
0.64%
4.84%
R$5.95
R$9.55
36.00%
517
0.54%
5.30%
R$4.11
R$21.51
R$9.55
36.00%
517
0.54%
5.30%
R$0.10
R$6.03
R$2.66
43.65%
152
0.00%
3.33%
R$0.63
R$21.79
R$2.66
43.65%
152
0.00%
3.33%
R$0.10
1/2013
Basic (04/30/2013)
1/2013
Discretionary (04/30/2013)
R$6.81
R$31.72
35.34%
1,461
0.82%
3.37%
R$24.78
R$26.16
R$31.72
35.34%
1,461
0.82%
3.37%
R$11.92
R$6.72
R$33.00
33.86%
1,216
0.64%
5.48%
R$26.78
R$33.00
33.86%
1,216
0.64%
5.48%
R$6.95
R$9.55
36.00%
851
0.54%
5.72%
R$3.84
R$28.31
R$9.55
36.00%
851
0.54%
5.72%
R$0.12
R$7.04
R$2.66
43.65%
486
0.00%
6.05%
R$0.63
R$28.67
R$2.66
43.65%
486
0.00%
6.05%
R$0.08
1/2014
Basic (04/30/2013)
1/2014
Discretionary (04/30/2013)
R$7.98
R$28.12
33.45%
1,461
0.75%
12.47%
R$30.94
R$28.12
35.34%
1,461
0.75%
12.47%
Measured by the historical behav ior of the v alue of the stock of the Company
Measured by the historical behav ior of the v alue of the stock of the Company
R$22.58
R$11.16
R$8.06
R$9.55
36.00%
1,216
0.54%
6.02%
R$3.72
R$31.83
R$9.55
36.00%
1,216
0.54%
6.02%
R$0.26
R$8.17
R$2.66
43.65%
851
0.00%
6.74%
R$0.56
R$35.25
R$2.66
43.65%
851
0.00%
6.74%
R$0.06
c. Method used and assumed premises to incorporate the effects from expected early exercise
There was no early exercise.
13.9 Number of stocks or direct or indirect stock holdings, either in Brazil or overseas, and other
securities that might be converted into stock or quotas, issued by the Company, direct or indirect affiliates,
subsidiaries or companies under common control, by members of the Executive Board, of the Board of
Executive Officers or the Fiscal Board, grouped per board or committee, on the closing date of the last
accounting reference period:
The table below indicates the number of our shares held directly by our administrators and the percentage that their
direct individual contributions represent of the total number of shares issued by our Company, in the last fiscal year,
December 31st, 2015.
On December 31st, 2015
Board of Directors
Board of Executiv e Officers
Fiscal Council
Number of shares
(%)
14,713,692
56,233
0
11,49%
0.04%
0%
13.10 Private Pension Funds in force granted to members of the Board of Directors and the Board of
Executive Officers
The Company does not sponsor or pay private pension funds for the members of the Board of Executive Officers and
members of the Fiscal Council.
13.11 Administrators Average Compensation
Compensation
2013
2014
2015
6.08
6.08
334,510
248,544
284,429
6.67
6.67
350,098
257,612
202,665
6.50
6.50
238,632
132,573
187,546
5.17
5.17
3,843,450
1,066,639
1,984,738
6.00
6.00
4,027,230
1,147,781
1,796,793
3.92
3.92
2,438,413
2,438,413
2,416,820
3
3
82,915
82,915
82,915
3
3
93,184
93,184
93,184
3
3
95,578
95,578
95,578
Number of members
Number of members remunerated
Highest indiv idual compensation v alue
Lowest indiv id ual compensation v alue
Av erage indiv id ual compensation v alue
Board of Executive Officers
Number of members
Number of members remunerated
Highest indiv idual compensation v alue
Lowest indiv id ual compensation v alue
Av erage indiv id ual compensation v alue
Board of Fiscal Council
Number of members
Number of members remunerated
Highest indiv idual compensation v alue
Lowest indiv id ual compensation v alue
Av erage indiv id ual compensation v alue
_______________________________________________
(1)
(2)
The E xecutive Officer occupied the position for the 12 months of the year.
Compensation paid for the E xecutive Officers who occupied the position for the 12 months of the year.
13.12 Contract agreements, insurance policies or other instruments that might underlie the compensation
or indemnity mechanisms applicable to managers in the occurrence of dismissal or retirement
Not applicable. The Company has no contract agreements, insurance policies or other instruments that might underlie the
compensation or indemnity mechanisms applicable to managers in the occurrence of dismissal or retirement.
13.13 With respect to the last three accounting reference periods, disclose the percent age of total
compensation for each board or committee as acknowledged in the Company results and which applies to
members of the Executive Board, of the Board of Executive Officers or the Fiscal Board, that are somehow
connected to direct or indirect affiliates, in compliance with the accounting rules that govern this matter.
Year ended on December 31
Board or Committee
Board of Directors
Board of Executiv e Officers
Fiscal Council
2013
14%
84%
2%
2014
11%
87%
2%
2015
11%
86%
3%
13.14 With respect to the last three accounting reference periods, disclose the amounts as acknowledged
in the Company results for compensation paid to members of the Executive Board, of the Board of
Executive Officers or the Fiscal Board, grouped by board or committee, for any purpose other than the
function they perform, such as commissions, consulting or advisory services.
Not Applicable. There were no compensation of the Board of Directors, Executive Officers and Fiscal Council members
recognized in the results of the Company in the fiscal years ended in 2013, 2014 and 2015, grouped by board or
committee, for any purpose other than the function they perform, such as commissions, consulting or advisory services.
13.15 In the last 3 fiscal years, indicate the amounts recognized in the result of direct or indirect
companies under common control and subsidiaries of the issuer, related compensation of Executive
Officers and Fiscal Council members of Company members, grouped by body, specifying why these
amounts were assigned to these individuals
Not Applicable. There were no compensation of Executive Officers and Fiscal Council members recognized in the results of
controlling companies, direct or indirect, of companies under common control of subsidiaries of the Company in the fiscal
years ended in 2013, 2014 and 2015.
13.16 Other relevant information
The number of members of the Management Board, Fiscal Council and Board of Executive Officers of the Company
specified in this Section 13 have been calculated in line with the requirements of Ofcio-Circular/CVM/SEP / No. 002/2015,
as detailed in the following spreadsheet for each fiscal year:
Board of Directors
7
7
7
7
7
7
7
7
7
7
7
7
84
7.00
Board of Directors
7
7
7
7
7
7
6
6
6
6
6
6
78
6.5
Number of members of
Board of Executive
Officers
3
3
4
4
4
4
4
4
4
4
4
4
46
3.83
Number of members of
Board of Executive
Officers
5
4
4
5
4
4
4
4
4
3
3
3
47
3.92
Number of members of
Board of
Board of Directors
Executive Officers
6
6
6
6
7
7
7
7
6
6
6
6
6
6
6
6
Fiscal Council
3
3
3
3
3
3
3
3
3
3
3
3
36
3.00
Fiscal Council
3
3
3
3
3
3
3
3
3
3
3
3
36
3
Fiscal Council
3
3
3
3
3
3
3
3
September
October
Nov ember
December
Total
Number of Members (Total
divided by the number of
months)
7
7
7
7
80
6.67
6
6
6
6
72
6
3
3
3
3
36
3
Number of members of
Board of
Board of Directors
Executive Officers
Fiscal Council
7
6
6
6
6
6
6
6
6
6
6
6
73
5
5
5
5
5
5
5
5
5
5
5
7
62
3
3
3
3
3
3
3
3
3
3
3
3
36
6.08
5.17
2013
2014
2015
604
838
43
238
239
423
-
492
844
357
371
622
227
2.092
220
2.076
217
1.567
The conclusion of the sale of the Industrial Services business unit was on November 30, 2013.
In December 31, 2013, 2014 e 2015, all employees were allocated in Brazil. The table below
indicates the location of the employees of the Company, considering the business units and
departments to which they belong, as indicated below:
2015
States
Construction Operations
Alagoas
Amazonas
Bahia
Distrito Federal
Espirito Santo
Fortaleza
Gois
Maranho
Mato Grosso
Mato Grosso do Sul
Minas Gerais
Para
Paran
Pernambuco
Rio de Janeiro
Rio Grande do Norte
Rio Grande do Sul
Santa Catarina
So Paulo
Sergipe
Total
2
18
28
6
16
2
12
7
50
67
12
48
6
19
2
20
4
7
13
68
6
24
12
19
27
122
15
28
144
175
357
622
Rental
Corporate
Total
2
3
17
5
9
14
6
12
5
6
42
12
14
25
62
4
12
4
113
4
1
1
7
8
2
5
1
2
1
1
9
3
2
8
124
1
8
1
31
1
3
13
92
108
29
83
15
45
6
15
95
31
42
73
376
5
63
5
463
5
371
217
1567
2014
Em ployees
S t a tes
Heavy Construction
And Real State - Heavy Construction Re al State Operations Rental Corporate Total
Shared
Alagoas
Amazonas
Bahia
Cear
Distrito
Federal
Espirito
Santo
Goiais
Maranho
Mato
Grosso
Mato
Grosso do
Sul
Minas
Gerais
Par
Paran
Pernambuco
Rio de
Janeiro
Rio Grande
do Norte
Rio Grande
do Sul
Santa
Catarina
0
0
2
4
3
0
0
0
13
28
11
55
27
108
11
12
68
19
116
25
16
104
161
10
16
13
41
20
11
18
12
43
13
15
33
15
11
43
36
113
0
0
3
13
21
43
0
0
3
17
19
14
52
17
11
53
22
111
33
29
149
61
108
386
21
32
17
77
21
0
So Paulo
Sergipe
Total
43
118
62
240
199
79
719
238
2013
States
239
844
492
220
2076
Em ployees
Industrial
Amazonas
Bahia
Cear
Distrito
Federal
Espr ito
Santo
Gois
Maranho
Mato
Grosso
Mato
Grosso do
Sul
Minas
Gerais
Par
Paran
P ern a m buc
o
Rio de
Janeiro
Rio Grande
do Sul
Santa
Catarina
So Paulo
Sergipe
Total
Heavy
Construction
31
26
Services
-
Real State
26
51
44
Rental
7
26
14
Corporate Total
33
6
114
1
85
75
87
174
26
13
41
28
28
1
8
10
36
39
24
29
16
54
39
10
119
24
40
26
14
50
56
54
43
28
129
113
119
77
162
471
60
26
89
261
604
211
838
114
2
423
29
227
615
2
2.092
The conclusion of the sale of the Industrial Services business unit w as on November 30, 2013
b. the number of outsourced employees (total, by groups based on activity and by geographic
location)
The Company has outsourced certain activities which are not directly related to its core business, such as
janitorial services, security, transport, meal preparation, and IT support, among others. In addition, the Company
signs short-term employment contracts in accordance with the fluctuation in demand for their services. In
December 31, 2013, 2014 and 2015, the Company had, respectively, 241, 247 and 199 outsourced workers, as
detailed below:
2015
States
Alagoas
Amazonas
Bahia
Distrito Federal
Espirito Santo
Fortaleza
Goias
Maranho
Janitorial
Services
Security
Transport
Catering
IT Support
Total
1
1
3
2
2
3
2
2
4
4
2
4
2
6
4
4
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
5
5
5
7
4
9
6
6
Mato Grosso
Mato Grosso do Sul
Minas Gerais
Para
Paran
Pernambuco
Rio de Janeiro
Rio Grande do
Norte
Rio Grande do Sul
Santa Catarina
So Paulo
Sergipe
1
1
6
3
2
4
15
0
4
11
9
2
7
7
0
0
1
0
0
0
3
0
0
0
0
0
0
4
0
0
0
0
0
0
0
1
5
18
12
4
11
29
1
5
1
14
1
1
12
0
32
2
0
0
0
1
0
0
0
0
2
0
0
0
0
0
0
2
17
1
49
3
Total
70
117
199
2014
Janitorial
Services
States
Alagoas
Amazonas
Bahia
Distrito Federal
Espirito Santo
Fortaleza
Goias
Maranho
Mato Grosso
Mato Grosso
do Sul
Minas Gerais
Par
Paran
Pernambuco
Rio de Janeiro
Rio Grande do
Norte
Rio Grande do
Sul
Santa Catar ina
So Paulo
Sergipe
Total
Security
Transport
Catering
IT Support
Total
1
2
3
4
3
3
2
2
1
1
8
2
7
2
10
4
4
4
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
1
0
1
0
2
10
5
12
5
14
6
7
5
1
5
3
2
4
17
4
12
8
4
2
14
0
2
0
0
0
7
0
0
0
0
0
4
0
1
0
0
1
9
5
20
11
6
7
51
4
1
21
1
10
0
30
4
0
0
3
0
0
0
2
0
0
0
3
0
14
1
59
5
81
131
12
17
247
2013
States
Rio de Janeiro
So Paulo
Minas Gerais
Espr ito Santo
Bahia
Cear
Pernambuco
Paran
Rio Grande do Sul
Distrito Federal
Gois
Par
Manaus
Mato Grosso
Rio Grande do
Norte
Janitorial
Services
17
19
5
3
4
3
4
1
4
5
2
2
2
1
2
Security
11
15
12
2
8
8
7
2
15
6
2
6
8
2
3
Transport
4
2
2
-
Catering
4
-
IT Support
24
3
1
1
2
1
2
1
1
1
-
Total
60
39
18
6
14
12
15
4
20
12
4
8
10
3
5
Sergipe
Maranho
Total
2
76
4
4
115
1
38
4
7
241
14.2 Comments about any relevant change that occurred with regard to the figures in the item 14.1" above
In 2014 and 2015, the decrease of the Company's workforce is mainly related to centralization of Real Estate and
Heavy Construction maintenance operations, as well as the flattening of the organizational structure and the elimination of
administrative and managerial positions for greater synergy between these two units business.
In 2013, the reduction in the Companys workforce is mainly related to the sale of the Industrial Services business
unit.
14.3 Description of Company employee remuneration policies
a. Salary and variable remuneration policy
The Company believes one of its key competitive advantages is the quality of its skilled labor. The
Company has developed, over the years, a human resources development culture based on achievement,
employee participation and transparency. The Company also has profit sharing programs and offer
opportunities for professional development. The Company believes this culture promotes the loyalty,
engagement and enthusiasm of the employees, which leads to a historically low rate of substitution of
skilled labor (turnover) and increases our ability to provide quality services to our customers.
The Companys compensation policy includes the payment of salaries consistent with those in the
market. Additionally, the Company offers the Profit Sharing Program to all its employees.
b.
Benefits Policy
As a standard policy, the Company offers its employees the following benefits and facilities, which may
change due to contracts executed with its clients:
health insurance with coverage for hospital stays: employees contribute part of the cost of this benefit
(15% to 35%, according to their salary);
group life insurance fully funded by the Company;
dental care fully funded by the employees opting in for this benefit;
essential food baskets partially funded by the Company (50%) for employees who receive up to six
times the minimum wage, and that have not missed a workday or arrived late in the month. Each of these
employees receives one food basket per month. In 2015 the Company distributed 17,768 food baskets to
our employees, of which 1,387 were in December.
meal allowance: 10% to 20% of the cost of the benefit is discounted from the employee's paycheck;
loans to employees under the "Desafogo" Project: the funds should be allocated to specific purposes
and cannot exceed one nominal salary of the employee, limited to the amount of 6 minimum wages;
pharmacy benefit agreement;
lending of a car to the executives, who must bear all maintenance costs of the vehicle (except for
insurance and IPVA property tax); and
stock option plan (only for our directors and executives).
c.
Characteristics of compensation plans based on stock options of non-administrator
employees
[atualizar com novo plano]
The Company has one stock option plan that benefits their employees, Plan of stock options
2010, previously granted purchase options remaining.
Plano f Stock Options 2010
At the Extraordinary General Shareholders meeting held on February 8, 2010, the Stock Option
Plan for Shares Issued by the Company was approved called Plano de Opes de Compra de Aes
2010 (Stock Option Plan - 2010), with amendments approved by the Board of Directors Meeting held on
May 31, 2010 and by the Extraordinary General Shareholders meeting held on April 20, 2012. The Board
of Directors approved (i) on March 11th, 2010, the Companys Program 1/2010 Stock Options Plan (1/2010
Program); (ii) on March 25th, 2011, the Program 1/2011 Stock Options Plan (1/2011 Program); (iii) on
May 30th 2012, the Program 1/2012 Stock Options Plan (1/2012 Program); and (iv) on March 25th 2013,
the Program 1/2013 Stock Options Plan (1/2013 Program).
a.
Groups of beneficiaries
The 2010 Stock Options Plan is managed by the Companys Board of Directors, which considers
the contribution of each beneficiary to achieving the targets designed to create added value, the
development potential of each, and the essential nature of their jobs among other characteristics
considered strategically relevant, elected as beneficiaries of the 2010 Stock Options Plan (i) for the 1/2010
Program, all the directors (or executives with similar roles) of the Company, and Company managers who
have held their positions in 2009 for more than 6 (six) months; (ii) for the 1/2011 Program, all the directors
(or executives with similar roles) of the Company, and Company managers who have held their positions in
2010 for more than 6 (six) months; (iii) for the 1/2012 Program, all the directors (or executives with similar
roles) of the Company, and Company managers who have held their positions in 2011 for more than 6 (six)
months; and (iv) for the 1/2013 Program, all the directors (or executives with similar roles) of the Company,
and 170 Company managers who have held their positions in 2012 for more than 6 (six) months.
b. Conditions for the exercise
To receive the stock options in the 1/2010 Program, each beneficiary must use at least of 33% of
the variable portion of their compensation under the Company's Profit Sharing Program, net of taxes, which
were received related to the 2009 financial year, to acquire shares issued by the Company.
To receive the stock options in the 1/2011 Program, each beneficiary must use at least of 33% of
the variable portion of their compensation under the Company's Profit Sharing Program, which were
received related to the 2010 financial year, to acquire shares issued by the Company.
To receive the stock options in the 1/2012 Program, each beneficiary must use at least of 33% of
the variable portion of their compensation under the Company's Profit Sharing Program, which were
received related to the 2011 financial year, to acquire shares issued by the Company.
To receive the stock options in the 1/2013 Program, each beneficiary must use at least of 33% of
the variable portion of their compensation under the Company's Profit Sharing Program, which were
received related to the 2011 financial year, to acquire shares issued by the Company.
To receive the stock options in the 1/2014 Program, each beneficiary must use at least of 33% of
the variable portion of their compensation under the Company's Profit Sharing Program, which were
received related to the 2013 financial year, to acquire shares issued by the Company.
Additionally, the Board of directors approved grants within the 1/2010, 1/2011, 1/2012, 1/2013 and
1/2014 Programs, independent of the investment in the Companys shares to certain employees of the
Company, due to its performance in the exercise of their jobs.
For as long as the exercise price is not fully paid, the shares acquired through the exercise of the
option under the Plan cannot be sold to third parties, except upon prior authorization from the Board of
Directors, in which case the sale proceeds will be mainly used to settle the beneficiary's debt with the
Company.
Pursuant to the respective Option Agreement, each beneficiary is prohibited to trade their acquired
shares for a period of 5 years, respecting the following rules:
(i)
After one year as of the execution of the respective Option Agreement, beneficiaries are
free to trade up to 25% of their acquired shares;
(ii)
After one year as of the term defined in item i, beneficiaries are free to trade another
25% of their acquired shares;
(iii)
After one year as of the term defined in item ii, the beneficiary is free to trade another
25% of the acquired shares; and
(iv) After one year as of the term defined in item iii, each beneficiary is free to trade the remainder
of their acquired shares;
c. Exercise price
Until April 20, 2012, the price of the ordinary shares to be acquired by the beneficiaries, by
exercising their option rights were determined by the Companys Board of Directors or committee based
exclusively on the average share price on the BM&FBOVESPA, weighted by the trading volume in the
month or the two months prior to the granting of the stock option, monetarily adjusted by the inflation index
IPCA (ndice de Preos ao Consumidor Amplo), and deducting the value of dividends and interest on
equity per share paid by the Company as from the stock option date. On April 20, 2012, according to the
resolution of the General Meeting held on that date, the criterion for fixing the exercise price of the options
that have as a counterpart the acquisition of shares by its beneficiary was changed and was defined as the
equity value of the 171 shares on the last day of the subsequent fiscal year. This change does not affect
the options granted prior to that General Meeting and the new criterion does not apply to options granted
that have no counterpart of the acquisition of shares by the beneficiary, which continues to be applied the
criterion of market price, described above.
For the 1/2010 Program, the exercise price of the options will be based on the value of the shares
issued at the Companys Initial Public Offering (R$11.50), monetarily adjusted by the inflation according to
the IPCA, deducting the value of dividends and interest on equity per share paid by the Company as from
the stock option date.
For the 1/2011 Program, the exercise price of the options will be (i) the average share price
acquired according to brokerage invoice sent by the beneficiary to the Board of Directors or Human
Resources Committee of the Company (R$ 19.28), (ii) monetarily adjusted by the inflation according to the
IPCA, disclosed by the Brazilian Institute of Geography and Statistics (IBGE), or by another index
determined by the Board of Directors or committee, according to the case, from the date of conclusion of
the stock option agreement until the date the option is exercised, (iii) deducting the value of dividends and
interest on equity per share paid by the Company as from the stock option date.
For the 1/2012 Program, regarding the Basic Grant, the exercise price of the options will be the
amount of the shares net worth in December 31 of the fiscal year immediately after the stock option date
of the Company (R$5.86), monetarily adjusted by the inflation according to the IPCA, or by another index
determined by the Board of Directors or committee, according to the case, from the date of conclusion of
the stock option agreement until the date the option is exercised, deducting the value of dividends and
interest on equity per share paid by the Company as from the stock option date.
For the 1/2012 Program, regarding the Discretionary Grant, the exercise price of the options will be the average, weighed by the trading volume, of the ordinary shares of the
Company in BM&FBOVESPA, during the fiscal year of 2011 (R$19.22), monetarily adjusted by the inflation according to the IPCA, or by another index determined by the Board of
Directors or committee, according to the case, from the date of conclusion of the stock option agreement until the date the option is exercised, deducting the value of dividends and
interest on equity per share paid by the Company as from the stock option date.
For the 1/2013 Program, regarding the Basic Grant, the exercise price of the options will be the amount of the shares net worth in December 31 of the fiscal year immediately
after the stock option date of the Company (R$6.81), monetarily adjusted by the inflation according to the IPCA, or by another index determined by the Board of Directors or committee,
according to the case, from the date of conclusion of the stock option agreement until the date the option is exercised, deducting the value of dividends and interest on equity per share
paid by the Company as from the stock option date.
For the 1/2013 Program, regarding the Discretionary Grant, the exercise price of the options will be the average, weighed by the trading volume, of the ordinary shares of the
Company in BM&FBOVESPA, during the fiscal year of 2011 (R$26.16), monetarily adjusted by the inflation according to the IPCA, or by another index determined by the Board of
Directors or committee, according to the case, from the date of conclusion of the stock option agreement until the date the option is exercised, deducting the value of dividends and
interest on equity per share paid by the Company as from the stock option date.
For the 1/2014 Program, regarding the Basic Grant, the exercise price of the options will be the amount of the shares net worth in December 31 of the fiscal year immediately
after the stock option date of the Company (R$7.98), monetarily adjusted by the inflation according to the IPCA, or by another index determined by the Board of Directors or committee,
according to the case, from the date of conclusion of the stock option agreement until the date the option is exercised, 172 deducting the value of dividends and interest on equity per
share paid by the Company as from the stock option date.
For the 1/2014 Program, regarding the Discretionary Grant, the exercise price of the options will be the average, weighed by the trading volume, of the ordinary shares of the
Company in BM&FBOVESPA, during the fiscal year of 2013 (R$30.94), monetarily adjusted by the inflation according to the IPCA, or by another index determined by the Board of
Directors or committee, according to the case, from the date of conclusion of the stock option agreement until the date the option is exercised, deducting the value of dividends and
interest on equity per share paid by the Company as from the stock option date.
The options granted under this plan will be subject to vesting periods of up to 72 months for the conversion of options into shares.
d. Numbers of shares in the plain
In the 2010/1 Program: Up to 1,475,234 common shares issued by the Company, which 795,345 designated to non-administrators employees. By December, 31, 2014,
834,320 shares were exercised (options of non-administrators employees).
In the 2011/1 Program: Up to 1,184,229 common shares issued by the Company, which 648,741 designated to non-administrators employees. By December, 31, 2014,
427,886 shares were exercised (options of non-administrators employees).
In the 2012/1 Program: Up to 1,257,467 common shares issued by the Company, which 930,410 designated to non-administrators employees. By December, 31, 2014,
338,295 shares were exercised (options of non-administrators employees).
In the 2013/1 Program: Up to 768,335 common shares issued by the Company, which 473,087 designated to non-administrators employees. By December, 31, 2014, 56,338
shares were exercised (options of non-administrators employees).
In the 2014/1 Program: Up to 259,909 common shares issued by the Company, which 158,057 designated to non-administrators employees. By December, 31, 2014, no
shares were exercised.
14.4 Description of the relationships between the Company and trade unions
At December 31, 2015, approximately 0.3% of the Companys employees were represented by a trade union, especially the Civil Construction Trade Union and the Commerce
Union. The Company has agreements with each trade union, and renegotiates them every year. The Company maintains a good relationship with the main trade unions its employees
are represented by.
14.5
15.1 / 15.2
Controling Group
4/19/2016
Individual
098.921.337-49
Argentinian
Y es
4/19/2016
Individual
289.858.347-20
Brazilian
Y es
Participates
in
Controlling
shareholder
shareholder
agreement
Y es
20.703.976
Y es
7.151.672
4/19/2016
Individual
042.695.577-37
Brazilian
Y es
Y es
2.971.857
1.70%
1.70%
Antonia Kjellerup
4/19/2016
Individual
073.165.257-62
Brazilian
Y es
Y es
2.971.857
1.70%
1.70%
4/19/2016
Individual
127.276.837-66
Brazilian
Y es
Y es
3.060.357
1.70%
1.70%
4/19/2016
Individual
124.175.657-06
Brazilian
Y es
Y es
1.337
0.00%
0.00%
14.740.333/000161
Spanish
Y es
Y es
23.676.659
13.50%
American
No
No
6.710.804
5.24%
Brazilian
No
No
7.705.300
6.02%
Brazilian
No
No
7.038.900
5.50%
No
No
2.278.422
1.30%
No
No
NAME
Date of last
amendment
Type of
Person
4/19/2016
Entity
4/19/2016
Entity
Fama Investimentos
4/19/2016
Entity
BTG Pactual WM
4/19/2016
Entity
Shares in Treasury
Fundo de Investimento
em Participaes Axxon
Brazil Private Equity Fund
II
Other
4/19/2016
Entity
7/20/2016
Entity
Total
CNPJ/CPF
00.156.956/000187
60.451.242/000123
13.958.904/000176
Nationality
Brazilian
UF
Quantity
of
common
shares
%
Capital
Stock
11.8%
11.8%
4.10%
4.10%
13.50%
5.24%
6.02 %
5.50%
1.30%
7.00%
12.294.063
7.00%
No
No
79.021.243
175.586.447
40.47%
100%
40.47%
15.3
1000
61
230
Shares in Circulation
Shares in circulation corresponding to all shares of the issuer with the exception of the controlling ownership, people linked to it, the issuer's management and treasury shares.
113.498.262
% Of shares outstanding
15.4
64.1%
Controlling
shareholders
34.5%
Axxon
7.0%
BTG Pactual
WM
5.5%
5,50%
BRANDES
FAMA
Others
5.24%
6.02%
40.47%
15.5
Shareholders Agreements
I. 2014 Agreement
On February 28, 2014, a Shareholders Agreement was signed concerning the Company, without changing its control group, to regulate the relationship
between the Companys controlling shareholders, as indicated in item 8.1(a) of this Reference Form ("2014 Agreement"). The 2014 Agreement provides for, among
other provisions and as detailed below, clauses related to (i) exercise of voting rights and control; (ii) appointment of directors; and (iii) transfer of shares and
preferential rights for acquiring them.
The 2014 Agreement was amended on May 5, 2014 due to Francisca Kjellerup Nachts adhesion to said instrument. The main characteristics of the 2014
Agreement are described below.
a.
Parties
Andres Cristian Nacht, Jytte Kjellerup Nacht, Tomas Richard Nacht, Antonia Kjellerup Nacht, Pedro Kaj Kjellerup Nacht e Francisca Kjellerup
Nacht (em conjunto, "Famlia Nacht");
d.
b.
c.
Term: 3 anos
The vote of the parties in general meetings will be made by shareholder Andres Cristian Nacht, except in case any other signatory of the
2014 Agreement requests the adoption of the preliminary meeting procedure, in which case the decision will be made by majority vote
within the control block, subject to veto rights in specific matters:
mergers, spin-offs, acquisitions, and any other corporate reorganization transaction involving the Company;
reduction of the Companys mandatory dividends, in order to make it less than 25% of the net profit calculated in accordance with Act 6.404/76;
increase or decrease of the Companys capital stock, except for capital increases under the Board of Directors authority;
cancelation of registration as a publicly held company and discontinuation of Novo Mercados differentiated practices of corporate governance;
approval of valuation reports submitted for the approval of the Companys general meeting;
amendment of the minimum or maximum number of members of the Board of Directors, as provided for in the Companys Bylaws, or
amendment of the matters under the Board of Directors authority;
e.
amendment of the provisions in the Companys Bylaws relating to the distribution of income, establishment of reserves and retention of earnings;
amendments to Chapter VII of the Companys Bylaws; and
liquidation and dissolution of the Company, cessation of its condition of liquidation, and approval of the accounts of liquidators.
The 2014 Agreement does not bind the vote of members of the Board of Directors or other Company bodies.
Description of clauses related to appointment of directors or members of committees established in the Companys Bylaws
In the absence of a motion for holding a preliminary meeting, Andres Cristian Nacht shall appoint all members of the Companys Board of
Directors that the control block has the right to elect.
Should a preliminary meeting be requested in order to appoint the members of the Companys Board of Directors:
of the total number of members of the Board of Directors that the Parties, together, have the right to elect at the Companys general meeting,
each Party may elect a number of members proportional to their interest in the Companys capital stock (disregarding shares held by shareholders who
are not parties to the 2014 Agreement);
in the event a fractional number is found when determining the number of directors to be appointed by each Party pursuant to the item above,
fractions equal to or higher than 0.5 will be rounded up to 1.0;
regardless of the rounding provided for in the item above, the member of the control block with the highest interest will have the right to appoint
the majority of the members of the Board of Directors that the control block are allowed elect.
Whenever the Parties, or the members of the Board of Directors appointed by them, are allowed to appoint the Chairperson of the Companys Board of
Directors, such appointment will be carried out by Andres Cristian Nacht.
The rules described above apply, mutatis mutandis, to the appointment of members of the Audit Committee.
The 2014 Agreement does not contain provisions relating to the appointment of members of the executive board.
f.
Description of the clauses related to transfer of shares and preferential rights for acquiring them
The 2014 Agreement establishes, as a general rule, that the Parties shares may not be disposed of (lock-up) during its term.
As an exception to the general rule of lock-up, each party may release from the 2014 Agreement, during its term, up to 10% of their shares for purposes of disposition
("Released Shares").
In case of disposition of Released Shares, non-selling shareholder shall have right of first offer, which will allow them to acquire the Released Shares at the price
offered by the selling shareholder. 177
If non-selling shareholders do not acquire the Released Shares through the exercise of the preferential rights, the selling shareholder may sell them on the stock
market at a price not lower than that offered to the non-selling shareholders.
g.
g. Description of the clauses that restrict or bind the voting rights of members of the Board of Directors
There are no provisions relating to the restriction or binding of the vote of directors.
II. 2016 Agreement
On April 7, 2016, a new shareholders agreement was signed concerning the Company, to regulate the relationship between the Companys controlling
shareholders and the shareholder Fundo de Investimento em Participaes Axxon Brazil Private Equity Fund II ("2016 Agreement"). The 2016 Agreement provides
for, among other provisions and as detailed below, clauses relating to (i) exercise of voting rights and control; (ii) appointment of directors and committee members; (iii)
transfer of shares and preferential rights for acquiring them; and (iv) restriction or binding of voting rights of members of the Board of Directors. The main
characteristics of the 2016 Agreement are described below.
a.
Parties
Andres Cristian Nacht, Jytte Kjellerup Nacht, Tomas Richard Nacht, Antonia Kjellerup Nacht, Pedro Kaj Kjellerup Nacht, Snow Petrel S.L. e
Francisca Kjellerup Nacht (collectively, "Controlling Shareholders");
Fundo de Investimento em Participaes Axxon Brazil Private Equity Fund II ("Axxon" and, collectively with the Controlling Shareholders,
"Shareholders" or "Parties"); and
b.
c.
Term: From the execution date of the 2016 Agreement until the Date of Acquisition of Political Rights (defined in item "d" below) and, after this
period, for 8 years. Note that the 2016 Agreement shall automatically terminate if Axxon does not become the holder of shares representing at least 7%
of the Companys capital stock by the 5th August, 2016 (120 days from the execution of the 2016 Agreement).
d.
If Axxon, within 120 days from the execution date of the 2016 Agreement, becomes the holder of shares representing at least 7% of the Companys
capital stock, Axxon will acquire rights relating to (i) Qualified Matters Under the Meetings Authority and Qualified Matters Under the Boards Authority
(defined below), and (ii) appointment of members of the Board of Directors and advisory committees to the Board of Directors (as detailed in item "e"
below) ("Date of Acquisition of Political Rights").
Preli mi nary Meeti ng
The Shareholders or members of the Board of Directors appointed by the Shareholders shall vote together in general meetings and in
meetings of the Board of Directors. For this purpose, the Shareholders shall meet prior to: (i) each general meeting of the Company; (ii)
each meeting of the Board of Directors voting on Qualified Matters Under the Boards Authority (defined below); (iii) any meeting of the
Board of Directors, regardless of the matter to be voted, if requested by any of the Shareholders; and (iv) each general meeting, meeting
of the Board of Directors,meeting of executive board, or meeting of shareholders of Companys subsidiaries that have Qualified Matters
Under the Meetings Authority or Qualified Matters Under the Boards Authority (defined below) among the matters to be decided
("Preliminary Meeting").
The resolutions of the Preliminary Meetings shall be made by majority vote, except in cases of Qualified Matters Under the Boards
Authority and Qualified Matters Under the Boards Authority (defined below), whose approval requires the favorable vote of the
representative of Axxon and of the Controlling Shareholders. Even if Axxon holds, directly or indirectly, interest higher than 15% of the
Companys capital stock, Axxons votes in the Preliminary Meetings shall be limited to those to which it would be entitled with 15% of the
capital stock.
The resolutions passed at Preliminary Meetings shall bind the Parties and the members of the Board of Directors appointed by them, who shall follow the
voting instructions received, pursuant to Article 118 of Act 6.404/76 ("Stock Corporations Act"), even if the Shareholders (or the shareholders who
appointed them, in the case of members of the Board of Directors) (i) dissented from the resolution passed at the Preliminary Meeting; (ii) abstained in
relation to the resolution passed; or (iii) did not attend the Preliminary Meeting.
Q ualified Matters Under the Meeti ngs A uthority
The favorable vote of the Shareholders in the Companys general meetings regarding the matters listed below shall require the prior
approval of Controlling Shareholders and Axxon in a Preliminary Meeting ("Qualified Matters Under the Meetings Authority"):
amendments to the Companys bylaws and/or bylaws or articles of incorporation of any subsidiary of the Company on the following matters: (i)
corporate purpose; (ii) list of matters under the Board of Directors authority; and (iii) list of matters under the general meetings or shareholders
meetings authority, to the extent that they affect the Qualified Matters Under the Meetings Authority or the Qualified Matters Under the Boards
Authority (as defined below);
any corporate reorganization, including mergers, acquisitions, spin-offs, or transformation involving the Company or its subsidiaries, except for
transactions made exclusively between the Company and its wholly owned subsidiaries (or companies that have 99% of their capital held by the
Company);
reduction of the capital stock of the Company or of a subsidiary of the Company, except if carried out exclusively for the absorption of losses;
creation of new classes of shares or modification of the current rights and preferential rights of shares issued by the Company or a subsidiary of
the Company;
issuance of any security that grants its holder the right to subscribe or acquire new shares or securities (i) convertible into shares with or without
voting rights in the Company or a subsidiary of the Company; or (ii) exchangeable for shares of the Company or its subsidiaries, except for public
offerings for the issuance of shares of the Company or a subsidiary of the Company and in the scope of any plans involving options to purchase shares
issued by the Company or a subsidiary of the Company;
approval of plans involving options to purchase shares issued by the Company or a subsidiary of the Company;
conversion of the Company into a closely held corporation or its exit from the Novo Mercado segment of BM&FBOVESPA;
participation of the Company in groups of companies, in accordance with Article 265 of the Stock Corporations Act; and
application for bankruptcy, court-supervised or out-of-court reorganization of the Company or of a Subsidiary, as well as liquidation and
dissolution, or cessation of its condition of liquidation.
Q ualified Matters Under the B oar ds A uthority
The favorable vote of representatives appointed by the Shareholders in meetings of the Board of Directors regarding the matters listed
below require the prior approval of Controlling Shareholders and Axxon in a Preliminary Meeting ("Qualified Matters Under the Boards
Authority"):
granting any type of encumbrance on any asset (including rights) of the Company or of of its subsidiaries as guarantee of any indebtedness,
provided that (i) it is not provided for in the Companys annual budgets; and (ii) in an amount exceeding 3 times the adjusted EBITDA of the Company
for the current budgeted year, in any case, except for the creation of encumbrances to finance the acquisition of any asset, provided that the
encumbrance is created solely over the asset acquired;
execution, by the Company or any of its subsidiaries, of contracts with (i) any party related to the Shareholders; (ii) members of the Board of
Directors; or (iii) officers of the Company, except, with respect to the Companys directors, through contracts exclusively related to stock-based
compensation plans or employment contracts for directors under usual market conditions and consistent with the past practices of the Company;
contracting of any new indebtedness or changes in conditions, restructuring, agreements or advance payments of any indebtedness of the
Company and/or its subsidiaries (i) not provided for in the annual budget; and (ii) in an amount exceeding 3 times the Companys Adjusted EBITDA for
the current budgeted year;eleio ou destituio do Diretor Administrativo Financeiro e de Relaes com Investidores;
approval of the Companys annual budget if (i) the disposition of lease equipment is provided for, outside the normal course of business, whose
net value exceeds 10% of the Companys fixed assets; or (ii) the sale of assets represents a net loss, in the aggregate, exceeding 10% of the
Companys Adjusted EBITDA of the immediately preceding year;
sale, exchange, or any other form of disposition to third parties of any relevant assets owned by the Company or its subsidiaries (i) if total sales
or net loss have reached the ceiling approved in the annual budget; and (ii) whose total aggregate value (a) is equal to or greater than BRL
5,000,000.00; or (b) represents a net loss of BRL 1,000,000.00;
during the lock-up period (as described in item "f" below), any investment in any company (i) that conducts, at the time of investment, the same
activity conducted by any investee of funds managed by The Axxon Group Private Equity Assessoria Ltda., or its controlling members, direct or indirect,
or companies under common control; and (ii) (a) whose activities are not included in items (a) to (g) of Article 2 of the Companys bylaws; or (b) that do
not operate the business practiced by the Company; or
approval or modification of the Companys annual budget, if, in the 12 months preceding the annual budget being prepared, a negative
difference of more than 20% has been verified between the projected Adjusted EBITDA and the actual Adjusted EBITDA.
e.
Description of clauses related to appointment of directors or members of committees established in the Companys Bylaws
The Controlling Shareholders and Axxon may appoint a number of members of the Board of Directors proportional to their percentage in
the total number of shares bound by the 2016 Agreement, provided that: (i) while Axxon is the holder of shares representing at least 13%
of the Companys capital stock, Axxon shall have the right to appoint and elect at least one member of the Board of Directors; and (ii) to
the extent that the Controlling Shareholders are holder of shares of the Companys capital stock representing at least 50% of the shares
plus one share (i.e. the majority of shares that make up the block bound by the 2016 Agreement), the Controlling Shareholders shall have
the right to appoint and elect at least the same number of members of the Board of Directors that Axxon elects, plus one member.
The chairperson of the Board of Directors shall be appointed by the Controlling Shareholders.
The Controlling Shareholders and Axxon undertake to conduct a Preliminary Meeting to determine the names to be appointed at the
Companys general meeting to elect the members of the Board of Directors.
The Companys executive board will be composed of qualified and experienced professionals, who have all the necessary qualifications
for the positions held by them. The members of the executive board shall be appointed by the Board of Directors, by majority vote, and the
CEO will be heard before the choice of the other officers.
While Axxon is the holder of shares representing at least 13% of the Companys capital stock, Axxon will have the right to appoint and
elect one representative for any existing committee or any committee that may be created to advise the Board of Directors.
f.
Description of the clauses related to transfer of shares and preferential rights for acquiring them
The 2016 Agreement has clauses on the transfer of shares and preferential rights for acquiring them, such as lock-up, right of first offer,
right of first refusal, tag along rights and drag along rights, as described below.
Lock -up
As a general rule, the shares of the Parties may not be sold (lock-up) during (i) the period between the execution date of the 2016 Agreement and the
Date of Acquisition of Political Rights, and, after this period, (ii) for a period of 30 months.
If Axxon, after 6 months from the Date of Acquisition of Political Rights, has not become the holder of at least 13% of the Companys capital stock, the
percentage of shares subject to lock-up will be reduced to up to: (i) 10% of the Companys capital stock between the 7th month and the 12th month from
the Date of Acquisition of Political Rights; and (ii) 5% of the capital stock between the 13th month and the 24th month from the Date of Acquisition of
Political Rights. After the 24th month from the Date of Acquisition of Political Rights, Axxon may sell its shares without complying with the lock-up.
After the end of the lock-up, Axxon will be entitled to sell at BM&FBOVESPA, every 12 months from the Date of Acquisition of Political Rights, 2% of the
shares owned by Axxon, without the restrictions of right of first offer and right of first refusal, detailed below.
As an exception to the general rule of lock-up, the following are considered permissible:
the sale, at BM&FBOVESPA, of up to 10% of the shares of the Controlling Shareholders existing at the execution date of the 2016 Agreement;
the sale of Axxon shares exceeding 15% of the Companys capital stock, without the need to observe the right of first offer and the right of first
refusal, described below;
the sale of shares (i) between the Controlling Shareholders and their controlling members/shareholders and/or affiliates, or, in the case of
individuals, their heirs and successors, provided that the acquirer executes the 2016 Agreement, through an instrument of adhesion, without any
restrictions; or (ii) between the Shareholders without the need to observe the tag along rights, described below; and
the sale of shares between Axxon and other investment vehicles managed by The Axxon Group Private Equity Assessoria Ltda., its direct or
indirect controlling members/shareholders or companies under common control, provided that the acquirer executes the 2016 Agreement, through an
instrument of adhesion, without any restrictions.
If Axxon intends to dispose of all or part of its shares it must always grant the Controlling Shareholders the right of first offer for the acquisition of such
shares, in accordance with the terms and procedures provided for in the 2016 Agreement.
Ri ght of Firs t Refus al
If Axxon intends to sell all or part of its shares to one or more third parties (i) that are competitors of the Company or an investment fund holding interest
equal to or higher than 10% of the capital of and/or controls or has the right to appoint directors in a competitor of the Company ("Competitor"); or (ii) in
the scope of a Public Offer for Acquisition of Shares, Axxon shall grant the Controlling Shareholders the right of first refusal for acquisition of all the shares
to be sold by Axxon (i) at the same price and conditions offered by the Competitor, or (ii) in the case of a Public Offer for Acquisition of Shares, offering
the shares at the same price offered in the Public Offer with a 5% discount, adjusted by the variation of the DI Rate, in accordance with the terms and
procedures provided for in the 2016 Agreement.
If the Controlling Shareholders receive an offer from one or more third parties for the sale of at least 41% of the shares held by them on the execution date
of the 2016 Agreement in a transaction outside the stock exchange environment, Axxon will have the right to sell, to the third party, the same proportion of
the shares held by Axxon, at the same price and under the same terms and conditions provided for in the offer made by the third party, in accordance with
the terms and procedures provided for in the 2016 Agreement.
Dr ag Along Rights
If the Controlling Shareholders make or receive an offer from one or more third parties for the acquisition of at least 50% of their shares, the Controlling Shareholders
shall have the right to demand that Axxon sell to the third party, together with the Controlling Shareholders, all shares held by Axxon, limited to the percentage of 15%
of the Companys capital stock, under the same pricing terms and conditions they were offered, provided that the transaction results in the receipt, by Axxon, of an
amount of their updated investment equivalent to at least 2.5x the amount invested by Axxon until reaching an interest of 15% (or, if such interest has not been
reached, the interest effectively reached), and limited, in any case, to 15% of the Companys capital stock, for which the conditions, terms, and procedures provided for
in the 2016 Agreement shall be observed.
g.
Description of the clauses that restrict or bind the voting rights of members if the Board of Directors
As described in item "d" above, the favorable vote of representatives appointed by the Shareholders in the decisions of the meetings of the Companys Board of
Directors regarding Qualified Matters Under the Boards Authority require the prior approval of the Controlling Shareholders and Axxon in a Preliminary Meeting.
The resolutions passed in Preliminary Meetings shall bind the members of the Board of Directors appointed by the Parties, who shall follow the voting instruction
received regarding the matter in question, pursuant to Article 118 of the Stock Corporations Act, even if the Shareholders who appointed them (i) dissented from the
resolution passed at the Preliminary Meeting; (ii) abstained in relation to the resolution passed; or (iii) did not attend the Preliminary Meeting.
15.6 Significant Changes in the shareholdings of Members of the Control Group and directors of the Company in the last 3 financial years
Corporate rearrangements involving Nacht Participaes
The company, in December 28, 2012, was notified by Nacht Participaes S.A. about the effectiveness of its capital stock reduction, with the delivery of the totality of its previously held
shares issued by Mills to its shareholders, following the correspondence sent by Nacht Participaes in October 30, 2012, which informed of such capital reduction approval
According to that notices terms, with the effectiveness of the aforementioned capital stock reduction, Andres Cristian Nacht and his family began to hold 27,421,713 (twenty-seven
million, four hundred and twenty-one thousand, seven hundred and thirteen) shares issued by Mills, representing 21.7% of corporate capital in that time.
Still within the notices terms, neither the capital reduction nor the related transfer of the shares issued by Mills resulted in any change of Mills corporate control, which, before the
capital reduction, was formerly exercised jointly by Nacht Participaes, its shareholders and Snow Petrel S.L., and, after the capital reduction, will be exercised by Nacht Participaes
shareholders jointly with Snow Petrel S.L.. Furthermore, this operation did not change the number of shares or the value of the share capital of the Company.
Liquidation of Jeroboam Investments LLC
The Company was informed, on March 14, 2012, by Snow Petrel S.L., a company headquartered in Barcelona, Spain, at Calle Johann Sebastian Bach 20, 3rd floor, and registered
with the CNPJ/MF under n. 14.740.333/0001-61 (Snow Petrel), of the transfer of all common shares, book-entry shares, with no par value issued by Mills held by Jeroboam
Investments LLC (Jeroboam) for Snow Petrel, due to the dissolution and consequent extinction of its wholly owned subsidiary Jeroboam. Therefore, Snow Petrel came to hold
19,233,281 (nineteen million, two hundred thirty-three thousand, two hundred eighty-one) shares of Mills, representing 15.3% of its capital stock.
The dissolution of Jeroboam and the corresponding transfer of Mills's shares did not cause any change in the administrative structure or the control of the Company, since the Snow
Petrel, as well as Jeroboam to extinction, is controlled by Mr. Nicolas Nacht . Additionally, this operation did not involve change in the number of shares or the capital value of the
Company.
15.7 Describe the main corporate transactions in the group which have had a material effect to the issuer, such as takeovers, mergers, stock acquisitions, disposals and
corporate takeovers, acquisitions and disposals of important assets, indicating when to involve the issuer or any of its subsidiaries and affiliates
Sale of Industrial Services business unit
On July 10, 2013, the Company entered into an agreement for the sale of its business unit Industrial Services for R $ 102 million through the sale of its stake in Albuquerque Participaes
Ltda.
This sale was made in line with the Company's strategy to focus on businesses where their skills are able to generate greater value for its shareholders and customers. Thus, the
Company ceased to operate in the industrial services sector, in which were offered access services, industrial painting, surface treatment and thermal insulation, both in the construction
phase, as in the maintenance phase of large industrial plants.
The transaction was closed on November 30, 2013 and the Company earned income of R $ 8.3 million. The agreed sale value of R $ 102 million was received R $ 25 million in contract
signing date, in July, and the balance will be paid in installments corrected by CDI, discounting the generation of this business case for Mills between 1 June 2013 and the closing date,
which was equal to R $ 6.8 million.
Capital increases
The Company carried out capital increases within the limit of authorized capital through the issuance of common, registered shares with no par value, due to the exercise by
beneficiaries of purchase options granted pursuant to the Stock Option Program Options 01/2010 , 01/2011, 01/2012, 01/2013 and 01/2014. The dates of approvals, programs, number
of shares, the share price and the amounts of these exercises are detailed in item 17.
In compliance with the provisions of Instruction of the Securities and Exchange Commission No. 358, of January 3, 2002, as amended, that its Board of Directors approved, in a
meeting held on February 5, 2016, the completion of an increase in Company's capital stock, within the authorized capital limit, with the possibility of partial approval, through the
issuance, for private subscription of at least 40,089,472 (forty million, eighty-nine thousand, four hundred and seventy-two) and a maximum of 47,528,517 (forty-seven million, five
hundred and twenty-eight thousand, five hundred and seventeen) new common shares, at an issue price of R $ 2.63 (two reais and sixty-three cents) per share, amounting to at least
R $ 105,435,311.36 (one hundred and five million, four hundred thirty-five thousand, three hundred and eleven reais and thirty-six cents) and a maximum of R $ 124,999,999.71 (one
hundred twenty-four million, nine hundred ninety-nine thousand, nine hundred and ninety-nine reais and seventy one cents) ( "Increase Capital"). The issue price was fixed without
undue dilution for the existing shareholders of the Company, pursuant to Article 170, paragraph 1, item III, of Law No. 6404 of December 15, 1976, as amended ( "the Companies Act
by shares "), taking into account the average price (average of the weighted daily closing prices by trading volume) of the Company's shares on the BM & FBOVESPA SA - Securities,
Commodities and Futures Exchange in trading sessions between November 27, 2015 ( inclusive) and February 4, 2016 (inclusive). The price of such shares on the stock exchange is,
in the opinion of the Board, the most appropriate criteria in the current reality of the Company. The raising of funds through the capital increase aimed to (i) strengthen the Company's
capital structure, strengthening its cash to meet the medium and long-term capital needs for the development of its activities; (Ii) strengthen its liquidity levels, reducing the Company's
debt margins; and (iii) take advantage of market consolidation opportunities that may arise in the medium term. Because it was reached the maximum subscription of the Capital
Increase, it was held on April 19, 2016, the Board of Directors meeting which approved the ratification of the capital increase with the issuance of 47,528,517 ( forty-seven million, five
hundred and twenty-eight thousand, five hundred and seventeen) new common shares, totaling R $ 124,999,999.71 (one hundred twenty-four million, nine hundred ninety nine
thousand, nine hundred ninety-nine reais and seventy one cents). Due to the approval of the Capital Increase, the Company's share capital shall be R $ 688,318,462.91 (six hundred
eighty-eight million, three hundred and eighteen thousand four hundred and sixty-two reais and ninety-one cents), divided in 175,586,442 (one hundred seventy-five million, five
hundred and eighty-six thousand, four hundred and forty two) common shares.
15.8
16.1
The business and transactions with related parties of the Company are always performed by observing price and usual market conditions and they do not generate any benefit or
detriment to the Company or any other party.
Under the Companys bylaws, the Board must approve any transaction with any of the Company's shareholders.
As of December 31, 2015, the Company did not hold any consulting services contracts with members from the Board of Directors. There has not been any loans between the Company
and its administrators during the fiscal year of 2015.
16.2 Information on Transactions with Related Parties
There has not been any transactions with related parties during the last three fiscal years.
16.3 Measures Taken to Address the Conflict of Interest
The Company adopts corporate governance practices and those recommended and/or required by applicable regulations including those set out in Novo Mercado regulations. The
Board of Directors must approve the policies and make necessary arrangements for directors and shareholders to not be involved in conflict of interest situations. Additionally, pursuant
to the Companys by-laws, the Board of Directors must approve any transaction with any of the Company's shareholders.
8/15/2014
175,586,442
175,586,442
688,318,462.91
175,586,442
175,586,442
175,586,442
175,586,442
563,318,463.20
128,057,925
128,057,925
563,318,463.20
128,057,925
128,057,925
688,318,462.91
Subscribed Capital
8/15/2014
Type of Capital
688,318,462.91
Authorized Capital
2/5/2016
Type of Capital
Paid-up Capital
4/19/2016
Type of Capital
Quantity of com m on
shares (Units)
Subscribed Capital
4/19/2016
Type of Capital
Paid-up Capital
Decision
Date
Body that
decided the
increase
2/8/2013
Board of
Directors
Criteria for
determining the
issue price
Manner of Payment
2/8/2013
Board of
Directors
Criteria for
determining the
issue price
Manner of Payment
Manner of Payment
Board of
Directors
Priv ate
Subscrip
tion
600
Total shares
(units)
Preferred
(Units)
Subscription /
prev ious capital
Price Issue
600
0.00140000
Factor Price
12.49
R$ per unit
Cash
2/8/2013
37,820.00
Priv ate
Subscrip
tion
3,050
3,050
0.00700000
12.40
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less
the amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2010)
Cash
1,819,309.96
Board of
Directors
Criteria for
determining the
issue price
4/10/2013
7,494.00
Common
(Units)
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less
the amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2010)
2/8/2013
2/8/2013
(Reais)
Type of
increase
Priv ate
Subscrip
tion
88,574
88,574
0.33840000
20.54
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less
the amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2011)
Cash
4/10/2013
169,264.59
Priv ate
Subscrip
tion
Values as the stock option plan of the Company (Special Plan Top Mills).
Cash
66,903
66,903
0.03140000
2.53
R$ per unit
5/9/2013
Board of
Directors
Criteria for
determining the
issue price
Manner of Payment
5/9/2013
Board of
Directors
Criteria for
determining the
issue price
Manner of Payment
5/9/2013
2,973,204.90
Priv ate
Subscrip
tion
230,481
230,481
0.55090000
12.90
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less
the amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2010)
Cash
5/9/2013
2,919,849.05
Priv ate
Subscrip
tion
138,185
138,185
0.53810000
21.13
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less
the amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2011)
Cash
Decision
Date
5/9/2013
Body that
decided
the
increase
Board of
Directors
5/9/2013
Board of
Directors
Criteria for
determining the issue
price
Manner of Payment
5/22/2013
Board of
Directors
8/15/2013
Board of
Directors
Criteria for
determining the
issue price
Manner of Payment
8/15/2013
Board of
Directors
Date of issue
5/9/2013
Type of
increase
Priv ate
Subscrip
tion
Common
(Units)
24,372
Total shares
(units)
Preferred
(Units)
0
24,372
Subscription /
prev ious capital
0.02630000
Price Issue
Factor price
5.88
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2012)
Cash
5/9/2013
3,072,963.25
Priv ate
Subscrip
tion
153,265
153,265
0.56310000
20.05
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2012)
Cash
5/22/2013
39,555.60
Priv ate
Subscrip
tion
15,512
15,512
0.00720000
2.55
R$ per unit
101,395
101,395
0.23670000
12.81
R$ per unit
Values as the stock option plan of the Company (Special Plan Top Mills).
Cash
8/15/2013
1,298,869.95
Priv ate
Subscrip
tion
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2010)
Cash
8/15/2013
1,180,587.20
Priv ate
Subscrip
tion
55,952
55,952
0.21460000
21.10
R$ per unit
8/15/2013
Board of
Directors
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2011)
Cash
8/15/2013
41,029.52
Priv ate
Subscrip
tion
7,148
7,148
0.00740000
5.74
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2012)
Cash
Decision
Date
8/15/2013
Body that
decided
the
increase
Board of
Directors
11/1/2013
Board of
Directors
11/1/2013
Board of
Directors
11/14/2013
Board of
Directors
Criteria for
determining the
issue price
Manner of Payment
11/14/2013
Board of
Directors
Date of issue
8/15/2013
Priv ate
Subscrip
tion
Common
(Units)
29,335
Total shares
(units)
Preferred
(Units)
0
Subscription /
prev ious capital
29,335
0.10640000
Price Issue
20.00
Factor price
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2012)
Cash
11/1/2013
109,892.16
Priv ate
Subscrip
tion
5,152
5,152
0.01990000
21.33
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2011)
Cash
11/1/2013
19,117.35
Priv ate
Subscrip
tion
945
945
0.00350000
20.23
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2012)
Cash
11/14/2013
248,118.00
Priv ate
Subscrip
tion
19,086
19,086
0.01500000
13.00
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2010)
Cash
11/14/2013
368,743.40
Priv ate
Subscrip
tion
17,231
17,231
0.01400000
21.40
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2011)
11/14/2013
Conselho de
Administrao
Cash
11/14/2013
10,377.40
Priv ate
Subscrip
tion
1,780
1,780
0.00100000
5.83
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2012)
Cash
Decision
Date
11/14/2013
Body that
decided
the
increase
Board of
Directors
Manner of Payment
Manner of Payment
1/10/2014
124,155.72
Board of
Directors
27,600
0.02200000
Price Issue
Factor price
20.28
R$ per unit
Priv ate
Subscrip
tion
5,772
5,772
0.00450000
21.51
R$ per unit
Cash
4,095.36
Board of
Directors
Subscription /
prev ious capital
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2011)
1/10/2014
1/10/2014
27,600
Total shares
(units)
Preferred
(Units)
Cash
Board of
Directors
Priv ate
Subscrip
tion
Common
(Units)
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2012)
1/10/2014
1/10/2014
559,728.00
Type of
increase
Priv ate
Subscrip
tion
711
711
0.00060000
5.76
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2012)
Cash
1/10/2014
61,170.00
Priv ate
Subscrip
tion
3,000
3,000
0.00240000
20.39
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2012)
Cash
1/10/2014
Board of
Directors
Board of
Directors
1/10/2014
78.12
Priv ate
Subscrip
tion
0.00000500
13.02
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2010)
Cash
2/5/2014
658,784.62
Priv ate
Subscrip
tion
50,174
50,174
0.03940000
13.13
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2010)
Cash
Decision
Date
2/5/2014
Body that
decided
the
increase
Board of
Directors
2/5/2014
Board of
Directors
2/5/2014
Board of
Directors
Criteria for
determining the issue
price
Manner of Payment
2/5/2014
Board of
Directors
Criteria for
determining the issue
price
Date of issue
2/5/2014
Type of
increase
Priv ate
Subscrip
tion
Common
(Units)
13,825
Total shares
(units)
Preferred
(Units)
0
Subscription /
prev ious capital
13,825
0.01090000
Price Issue
Factor price
21.70
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2011)
Cash
2/5/2014
231,300.00
Priv ate
Subscrip
tion
11,250
11,250
0.00880000
20.56
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2011)
Cash
2/5/2014
52,273.80
Priv ate
Subscrip
tion
7,710
7,710
0.00610000
6.78
R$ per unit
Book v alue of the shares on December 31 of the f iscal year immediately preceding the date of grant, adjusted for inflation according to the IPCA, minus the amount of dividends and interest on equity per share
declared by the Company from the date of grant (Programme 1/2013)
Cash
2/5/2014
20,648.74
Priv ate
Subscrip
tion
3,554
3,554
0.00280000
5.81
R$ per unit
Book v alue of the shares on December 31 of the f iscal year immediately preceding the date of grant, adjusted for inflation according to the IPCA, minus the amount of dividends and interest on equity per share
declared by the Company from the date of grant (Programme 1/2012)
Manner of Payment
2/14/2014
Board of
Directors
Criteria for
determining the
issue price
Manner of Payment
2/14/2014
Board of
Directors
Cash
2/14/2014
23,951.20
Priv ate
Subscrip
tion
1,820
1,820
0.00140000
13.16
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2010)
Cash
2/14/2014
84,568.60
Priv ate
Subscrip
tion
3,890
3,890
0.00310000
21.74
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, from the execution date of the option contract, less the
amount of dividends and interest on capital own per share paid by Mills, until the exercise date (Plan 1/2011)
Cash
Decision
Date
2/14/2014
Body that
decided
the
increase
Board of
Directors
5/15/2014
Board of
Directors
Criteria for
determining the
issue price
Manner of Payment
5/15/2014
Board of
Directors
5/15/2014
Board of
Directors
Criteria for
determining the issue
price
Date of issue
2/14/2014
Type of
increase
Priv ate
Subscrip
tion
Common
(Units)
2,800
Total shares
(units)
Preferred
(Units)
Subscription /
prev ious capital
Price Issue
2,800
0.00220000
Factor Price
20.60
R$ per unit
The av erage price of the Shares Acquired restated according to the IPCA, f rom the execution date of the Option Agreement to the Option exercise date, deducting the v alue of div idends and interest on capital per
share paid by the Company from the grant date. (Plan 1/2012)
Cash
5/15/2014
3,360,053.76
Priv ate
Subscrip
tion
250,004
250,004
0.19610000
13.44
R$ per unit
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, less div idends and interest on equity per share paid by
Mills, until the exercise date (Plan 1/2010).
Cash
5/15/2014
2,117,680.20
Priv ate
Subscrip
tion
95,391
95,391
0.07480000
22.20
R$ per unit
The av erage price of the Shares Acquired restated according to the IPCA, f rom the execution date of the Option Agreement to the Option exercise date, deducting the v alue of div idends and interest on capital per
share paid by the Company from the grant date. (Plan 1/2011)
Cash
5/15/2014
147,064.00
Priv ate
Subscrip
tion
24,800
24,800
0.01950000
5.93
R$ per unit
Book v alue of the shares on December 31 of the f iscal year immediately preceding the date of grant, adjusted for inflation according to the IPCA, minus the amount of dividends and interest on equity per share
declared by the Company from the date of grant (Programme 1/2012)
Manner of Payment
5/15/2014
Board of
Directors
Cash
5/15/2014
2,135,596.50
Priv ate
Subscrip
tion
101,550
101,550
0.07970000
21.03
R$ per unit
The av erage price of the Shares Acquired restated according to the IPCA, f rom the execution date of the Option Agreement to the Option exercise date, deducting the v alue of div idends and interest on capital per
share paid by the Company from the grant date. (Plan 1/2012)
Manner of Payment
Cash
5/15/2014
Board of
Directors
Criteria for
determining the issue
price
Manner of Payment
5/15/2014
443,597.65
Priv ate
Subscrip
tion
63,827
63,827
0.05010000
6.95
R$ per unit
Book v alue of the shares on December 31 of the f iscal year immediately preceding the date of grant, adjusted for inflation according to the IPCA, minus the amount of dividends and interest on equity per share
declared by the Company from the date of grant (Programme 1/2013)
Cash
Decision
Date
8/15/2014
Body that
decided
the
increase
Board of
Directors
Criteria for
determining the
issue price
Manner of Payment
Date of issue
8/15/2014
Manner of Payment
Board of
Directors
8/15/2014
Board of
Directors
Criteria for
determining the issue
price
Manner of Payment
Board of
Directors
4,800
Total shares
(units)
Preferred
(Units)
0
Subscription /
prev ious capital
4,800
0.00370000
Price Issue
Factor Price
13.36
R$ per unit
33,901.00
Priv ate
Subscrip
tion
5,845
5,845
0.00460000
5.80
R$ per unit
Book v alue of the shares on December 31 of the f iscal year immediately preceding the date of grant, adjusted for inflation according to the IPCA, minus the amount of dividends and interest on equity per share
declared by the Company from the date of grant (Programme 1/2012)
Cash
8/15/2014
32,581.00
Priv ate
Subscrip
tion
1,550
1,550
0.00120000
21.02
R$ per unit
The av erage price of the Shares Acquired restated according to the IPCA, f rom the execution date of the Option Agreement to the Option exercise date, deducting the v alue of div idends and interest on capital per
share paid by the Company from the grant date. (Plan 1/2012)
Cash
8/15/2014
134,013.00
Priv ate
Subscrip
tion
19,650
19,650
0.01530000
6.82
R$ per unit
Book v alue of the shares on December 31 of the f iscal year immediately preceding the date of grant, adjusted for inflation according to the IPCA, minus the amount of dividends and interest on equity per share
declared by the Company from the date of grant (Programme 1/2013)
Cash
19/04/2016
05/02/2016
Priv ate
Subscrip
tion
Common
(Units)
Cash
Board of
Directors
Criteria for
determining the issue
price
8/15/2014
64,128.00
Type of
increase
The price is based on the value of the launch of Mills shares upon completion of the first public distribution, adjusted f or inflation according to the IPCA, less div idends and interest on equity per share paid by
Mills, until the exercise date (Plan 1/2010).
8/15/2014
8/15/2014
124,999,999.71
Priv ate
Subscrip
tion
47,528,571
47,528,571
37.10000000
2.63
R$ per unit
Criteria for
determining the
issue price
Manner of Payment
The Company considered the weighted average of the daily closing prices by the trading v olume in the trading sessions between November 27, 2015 (inclusive) and February 4, 2016 (inclusiv e).
Cash
At the Ordinary and Extraordinary General Meeting held on April 19, 2011, it was approved the
amendment of the caput of Article 5 of the Company's Bylaws, to adjust it to the deliberations of
the Board of Directors taken on April 14, 2010 and November 30, 2010, which approved the
increase of capital stock within the limit of authorized capital.
At the Extraordinary General Meeting held on April 20, 2012, it was approved the amendment of
the caput of Article 5 of the Company's Bylaws, to adjust it to the deliberations of the Board of
Directors taken on July 27, 2011, September 23, 2011, October 24, 2011, January 24, 2012 and
February 28, 2012, which approved the increase of capital stock within the limit of authorized
capital.
At the Extraordinary General Meeting held on February 25, 2014, it was approved the
amendment of the caput of Article 5 of the Company's Bylaws, to adjust it to the deliberations of
the Board of Directors taken on April 2, 2012, April 24, 2012, June 21, 2012, July 2, 2012,
August 9, 2012, November 12, 2012, February 8, 2013, April 10, 2013, May 9, 2013, May 22,
2013, August 15, 2013, November 1, 2013, November 14, 2013 and January 10, 2010, which
approved the increase of capital stock within the limit of authorized capital, passing the relevant
article to henceforth as the following wording:
5th Article - The capital, fully subscribed and paid, is R$553,420,638.63 (five hundred fifty-three
million, four hundred twenty thousand, six hundred thirty eight reais and sixty-three centavos),
represented by 127.395.485 (one hundred twenty-seven million, three hundred ninety-five
thousand, four hundred, eighty-five) common, nominative, inscribed and without par value
shares.
18.1 Description of the rights of each class and type of share issued
Type of shares: Common
Tag Along: 100,00%
Dividend rights: At each Ordinary Shareholder Meeting, the Board of Directors should make a
recommendation on the allocation of net income for the preceding fiscal year, which will be
subject to approval by the shareholders. The Company's Bylaws provides that an amount
equivalent to 25% of the adjusted net income for the year should be available for the payment of
dividends or interest on equity in any fiscal year. This amount represents the compulsory
dividends. If the mandatory dividend exceeds the realized portion of net income, the excess
may be allocated to an unrealized profit reserve. The calculation of net income and allocations
to reserves and the amounts available for distribution are made based on financial statements
prepared pursuant to the Brazilian Corporate Law.
Voting rights: Full
Convertibility to other class or type of share: No
Right to reimbursement of capital: Yes
Description of the reimbursement of capital: The Company's statutory provisions follow, in this
subject, the rules established in the Corporate Law Act and applicable legislation.
Restrictions regarding outstanding shares: No
Circumstances where guaranteed rights of said securities may be altered: Under the Brazilian
Corporate Law, the Bylaws, or resolutions adopted by shareholders in General Meetings can
restrict the shareholders from the following rights: (i) Right to profit sharing; (ii) Right to
participate in the distribution of any remaining assets in case of Company liquidation,
proportionately to their interest in the capital stock; (iii) Preemptive rights in the subscription of
shares, convertible debentures or subscription rights, except in certain circumstances provided
in the Brazilian Corporate Law; (iv) The right to supervise the management of corporate
businesses, as provided by the Brazilian Corporate Law; (v) The right to vote in Shareholders
General Meeting; (vi) The right to leave the Company, in the cases provided in the Brazilian
Corporate Law. Changes in rights assured by shares other than those listed above (e.g.:
change in the minimum compulsory dividend, change in the reimbursement amount, limitations
to the exercise of voting rights, etc.) may be modified by decisions made in general
shareholders meetings, by simple or qualified majority of the Company's shareholders,
depending on the nature of the matter to be resolved.
Other Relevant Characteristics: No further relevant information pertaining to this item 18.
18.2 Statutory regulations which limit the right to vote of relevant shareholders or which
cause them to hold a public offering.
According to Article 32, Chapter 7 of the Companys bylaws, the transfer of shareholding
Control of the Company, directly or indirectly, whether through a single transaction, or through
successive transactions, shall be contracted under a condition precedent or subsequent that the
acquiring party shall obligate itself to make a Public Tender Offer for the remaining shares of the
other shareholders of the Company, subject to the conditions and periods provided for in
applicable legislation and the Novo Mercado Rules, such that they are assured treatment equal
to that given to the Selling Controlling Shareholder.
Paragraph 1 The public offering referred to in this article shall also be required: (a) when there
is encumbered assignment of subscription rights or an option to acquire shares or other
securities or rights relating to securities convertible into shares, or that give the right to their
subscription or acquisition, as applicable, which comes to result in the sale of Control of the
Company, and (b) in the case of a transfer of control of company(ies) holding the Power of
Control of the Company, in which case, the Selling Controlling Shareholder shall be obliged to
declare to the BM&FBOVESPA the value assigned to the Company in such transaction and
provide supporting documentation.
18.3 Description of exceptions and suspension clauses relative to ownership or political
rights set forth in the bylaws
Not applicable, as there are no exceptions or suspension clauses relative to ownership or
political rights set forth in the Companys bylaws.
18.4 Information on the volume of trading as well as minimum and maximum values for
securities traded on the stock exchange or the over-the-counter market, in each of the
quarters in the last 3 fiscal years.
Date
ending
quarter
Securities
Type
Class
3/31/2013
Shares
Common
Stock
Exchang
e
6/30/2013
Shares
Common
Stock
Exchang
e
9/30/2013
Shares
Common
Stock
Exchang
e
12/31/2013
Shares
Common
Stock
Exchang
e
3/31/2014
Shares
Common
Stock
Exchang
e
6/30/2014
Shares
Common
Stock
Exchang
e
9/30/2014
Shares
Common
Stock
Exchang
e
12/31/2014
Shares
Common
Stock
Exchang
e
3/31/2015
Shares
Common
Stock
Exchang
e
6/30/2015
Shares
Common
Stock
Exchang
e
9/30/2015
Shares
Common
Stock
Exchang
e
12/31/2015
Shares
Common
Stock
Exchang
e
Marketpl
ace
Administrative Body
BM&FBOVESPA Bolsa de Valores,
Mercadorias e
Futuros
BM&FBOVESPA Bolsa de Valores,
Mercadorias e
Futuros
BM&FBOVESPA Bolsa de Valores,
Mercadorias e
Futuros
BM&FBOVESPA Bolsa de Valores,
Mercadorias e
Futuros
BM&FBOVESPA Bolsa de Valores,
Mercadorias e
Futuros
BM&FBOVESPA Bolsa de Valores,
Mercadorias e
Futuros
BM&FBOVESPA Bolsa de Valores,
Mercadorias e
Futuros
BM&FBOVESPA Bolsa de Valores,
Mercadorias e
Futuros
BM&FBOVESPA Bolsa de Valores,
Mercadorias e
Futuros
BM&FBOVESPA Bolsa de Valores,
Mercadorias e
Futuros
BM&FBOVESPA Bolsa de Valores,
Mercadorias e
Futuros
BM&FBOVESPA Bolsa de Valores,
Mercadorias e
Futuros
Total financial
v olume funded
(R$)
Highest
Price
(R$)
Low er
price
(R$)
Factor
Price
(R$)
664.392.189
35,00
29,81
R$ per
unit
971.831.194
35,99
27,21
R$ per
unit
890.684.261
32,00
26,28
R$ per
unit
893.622.222
33,24
28,47
R$ per
unit
963.809.173
32,85
24,49
R$ per
unit
754.418.847
29,85
24,75
R$ per
unit
795.428.358
25,68
17,9
R$ per
unit
757.968.011
9,55
8,21
R$ per
unit
385.275.761
9,41
5,26
R$ per
unit
389.790.979
9,45
6,54
R$ per
unit
244.853.913
7,36
4,5
R$ per
unit
163.451.037
5,95
2,2
R$ per
unit
Promissory notes of fourth issue, issued in a single series, already fully redeemed.
b Quantity
20 commercial notes.
c Total Amount
Issue date
Maturity Date
August 8, 2014
e Restrictions on trading
The commercial notes were the subject of public distribution with restricted pl acement efforts,
pursuant to CVM Instruction 476, under the firm commitment and, consequently, can only be traded
between qualified investors. The trading restriction period laid down in article 13 of that 90 days after
the statement expired date of issue
Not applicable. The second issue of promissory notes are not convertible into shares issued by the
company.
Convertibility
g Possibility of redemption:
The Company shall, unilaterally, and that, for the purposes of the paragraph 2, article 7, CVM
Instruction 134, the holders will have given their express prior consent, irrevocably and irreversibly, at
the moment of the subscription of the Notes in the prim ary market or acquisition in the secondary
market, as appropriate, perform, at any time, from the 31st (thirty first) day counted from the Issue
Date. In case of partial early redemption, the same will take place by lot, pursuant paragraph 4,
article 7, CVM Instruction 134, and all the steps in this process, such as license, qualification,
verification and validation of the number of Notes to be redeemed will be held outside of CETIP. The
Company shall communicate the holders, the Payment Agent and CETIP, about the redemption with
at least 2 (two) business days of the date of the event.
(ii) Assumptions and method The amount to be paid by the Company to the holder of each commercial note of the fourth issue
of calculating the redemption corresponds to the nominal value of the commercial notes plus the remuneration, calculated pro rata
temporis since the date of issue until the date of effective payment, but without payment of prize or
value
penalty, according to the terms and conditions set forth in the notes.
if debt securities, indicate
h where applicable:
(i) maturity date, including
For more information on maturity date, please refer to item 18.10 below.
conditions for acceleration
The nominal value of the promissory note will not be updated monetarily.
Over the nominal value of each note there will be remuneration interest of 100% of accumulated
variation of the DI rate plus spread 1.10% per annum from the date of issue until the date of the
effective payment of their commercial note.
(ii) interest
The remuneration shall be paid in full by the due date or the date of any anticipated payment.
In case of payment after the deadline of any amount due in respect of any obligation under the
Commercial Papers, on any and all amounts in arrears would address, without notice, notification or
judicial or extrajudicial, and subject to the Remuneration, calculated pro rata from the date of default
to the date of actual payment, (i) fines of 2% (two percent), and (ii) interest of 1% (one percent) per
month or fraction of a month, calculated pro rata from the date of default until the date of actual
payment
secured or subordinate
(v)
possible
restrictions
imposed on the issuer
The dividend distribution
The sale of certain assets
None
b Quantity
27.000
c Total amount
(i)
Issue date
(ii)
Maturity date
e Restrictions on trading
The debentures were the subject of public distribution with restricted pl acement efforts, pursuant to
CVM Instruction 476, under the firm commitment and, consequently, can only be traded between
qualified investors. The trading restriction period l aid down in article 13 of that 90 days after the
statement expired date of issue
Not applicable.
Convertibility
g Possibility of redemption:
(i) Possibility of redemption
Not applicable.
Not applicable.
For more information on maturity date, please refer to item 18.10 below.
The face value of the debentures of the first issue will not be monetarily updated.
Interest paid semi-annually will account for 112.5% of the accumulated variation of the interest rate
of CDI.
(ii) interest
The remuneration provided above shall be paid every six months from the date of issue, being the
first payment on October 18, 2011, and the last payment of the maturity date, or on the date of any
settlement.
In case of payment after the deadline of any amount due in respect of any obligation under the
Commercial Papers, on any and all amounts in arrears would address, without notice, notification
or judicial or extrajudicial, and subject to the Remuneration, calculated pro rata from the date of
default to the date of actual payment, (i) fines of 2% (two percent), and (ii) interest of 1% (one
percent) per month or fraction of a month, calculated pro rata from the date of default until the date
of actual payment.
(iii)
guarantee and, if in
the
form
of
collateral,
Not applicable. The first issue of debentures does not have collateral or surety.
description of the goods used
as collateral
(iv)
in the absence of a
guarantee, if the credit is The Debentures will be unsecured, in accordance with Article 58, caput of the Law No. 6,404/76.
secured or subordinate
(v)
possible restrictions
imposed on the issuer
the dividend distribution
the sale of certain asset s
None
Identification of securities
Quantity
27.000
Total Amount
Issue date
Maturity Date
Restrictions on trading
e
Yes. The debentures were subject of public distribution with restricted pl acement efforts,
pursuant to CVM Instruction 476, under the firm commitment to the placement of 20,000
debentures, and under the best-efforts placement in relation to the remaining debentures. The
debentures can only be traded between qualified investors and after a 90 days period from the
date of subscription or purchase according to the articles 13 and 15 of CVM Instruction 476, and
compliance by the Company of its obligations under Article 17 of CVM Instruction 476.
Convertibility
Not applicable.
Possibility of redemption:
Not applicable.
Not applicable.
of calculating the
redemption value
(i)
Conditions for
acceleration
(ii)
Interest
For more information on maturity date, please refer to item 18.10 below.
Not applicable. The second issue of debentures does not have collateral or surety.
The Debentures will be unsecured, in accordance with Article 58, caput of the Law No. 6,404/76.
For more information on the fiduciary agent, please refer to item 18.10 below.
During deliberations of the General Meetings of first series debenture holders and General
Meetings of second series debenture holders, for each outstanding Debenture one vote will be
granted, permitting the establishment of proxy, whether Debenture holder or not. Except for the
provisions below, (i) all deliberations to be taken in the General Meeting of debenture holders
will depend on approval of debenture holders of the first series representing at least 75% of
outstanding First Series Debentures; and (ii) all deliberations to be taken in the General Meeting
of debenture holders will depend on approval of debenture holders of the second series
representing at least 75% of outstanding Second Series Debentures.
Not included in the quorum above are: (i) quorums expressly provided for in other clauses of the
deed of issue; and (ii) changes, which should be approved by debenture holders of the first
series representing at least 90% of outstanding first series debentures and by debenture holders
of the second series representing at least 90% of outstanding second series debentures, (a) of
the provisions of this cl ause; (b) of the quorums for approval provided for in the Deed of issue;
(c) the remuneration, except for changes re sulting from extinction, limitation and / or nondisclosure of the DI rate or IPCA, as provided in Clause of the Deed of issuance; (d) any dates
for payment of any amounts provided for in the Deed of issuance; (e) of the term of the
Debentures; (f) of the type of Debentures; (g) creation of a repricing event; (h) the provisions
relating to optional early redemption; (i) the provisions rel ating to early amortization (j) of any
Event of Default.
Other relevant
characteristics
None.
Identification of
securities
Quantity
Total Amount
Issue date
Maturity Date
Restrictions on trading
e
f
g
Convertibility
Possibility of
redemption:
Assumptions and
method of calculating
the redemption value
Yes. The debentures were subject of public distribution with restricted pl acement efforts, pursuant to
CVM Instruction 476, under the firm commitment to the placement of 20,000 debentures, and under
the best-efforts placement in relation to the remaining debentures. The debentures can only be
traded between qualified investors and after a 90 days period from the date of subscription or
purchase according to the articles 13 and 15 of CVM Instruction 476, and compliance by the
Company of its obligations under Article 17 of CVM Instruction 476.
Not applicable.
Yes
The Company may, at its sole discretion, make, at any time, optional early redemption offer, total or
partial, of the outstanding Debentures, with the consequent cancellation of such Debentures, which
will be sent to all Bondholders, without distinction, assured equal conditions to all Bondholders to
accept the early redemption of the Debentures held by them, through an Optional Early Redemption
Offer. The amount to be paid in respect of each Debenture indicated by their respective holders into
joining the Optional Early Redemption Offer will be equal to the outstanding balance of the Par
Value, plus (a) Remuneration, calculated pro rata from the date issuance or payment date
immediately preceding Compensation, as appropriate, until the date of actual payment; and (b) if
applicable, the redemption premium to be offered to the Bondholders, at the sole discretion of the
Company, which cannot be negative redemption.
if debt securities,
indicate where
applicable:
Conditions for
acceleration
For more information on maturity date, please refer to item 18.10 below.
(ii) interest
I. Monetary Adjustment: The nominal value of the debentures of the third issue will not be monetarily
updated.
II. Compensatory Interest: on the outstanding balance of the Nominal Value of the Debentures
outstanding focus interest corresponding to 108.75% (one hundred and seventy-eight point five
percent) of the accumulated variation of average daily DI - Interbank Deposits one day, calculated
and published daily by CETIP in the daily bulletin on its website (http:// www.cetip.com.br)
calculated exponentially and cumulatively pro rata by days elapsed from the Issue Date or payment
date immediately preceding Compensation form as the case until the date of actual payment.
Without prejudice to the payments related to early redemption of the Debentures and / or early
maturity of obligations on the Debentures, the remuneration will be payable semiannually from the
Issue Date, on the 30th of May and November of each year, with the first payment on November 30,
The Debentures will be unsecured, in accordance with Article 58, caput of the Law No. 6,404/76.
For more information on the fiduciary agent, please refer to item 18.10 below.
During deliberations of the General Meetings of debenture holders, for each outstanding Debenture
one vote will be granted, permitting the establishment of proxy, whether Debenture holder or not.
Except for the provisions below, (i) all deliberations to be taken in the General Meeting of debenture
holders will depend on approval of debenture holders of the first series representing at least 75% of
outstanding First Series Debentures; and (ii) all deliberations to be taken in the General Meeting of
debenture holders will depend on approval of debenture holders of the second series representing
at least 75% of outstanding Second Series Debentures.
Not included in the quorum above are: (i) quorums expressly provided for in other cl auses of the
deed of issue; and (ii) changes, which should be approved by debenture holders representing at
least 90% of outstanding debentures, (a) of the provisions of this cl ause; (b) of the quorums for
approval provided for in the Deed of issue; (c) the remuneration, except for changes resulting from
extinction, limitation and / or non-disclosure of the DI rate or IPCA, as provided in Clause of the
Deed of issuance; (d) any dates for payment of any amounts provided for in the Deed of issuance;
(e) of the term of the Debentures; (f) of the type of Debentures; (g) cre ation of a repricing event; (h)
the provisions relating to optional early redemption; (i) the provisions relating to early amortization (j)
of any Event of Default.
Not applicable. The third issue of debentures does not have collateral or surety.
Other relevant
characteristics
None
18.6 Description of the Brazilian markets where the company's securities are admitted for
trading
Shares
The Companys common shares are traded at the BM&FBOVESPA.
Commercial Paper
The Companys first, second, third and fourth issuance of commercial paper, described in table
18.5 of this Reference Form, were registered for trading in the secondary market, through
CETIP21 - Ttulos e Valores Mobilirios, managed and operated by CETIP, trading being
settled through CETIP and electronic custody of the commercial paper by CETIP. The second
issue of commercial papers were already fully redeemed on November 30, 2012. The third
issue of commercial papers were already fully redeemed on December 3, 2012. The fourth
issuance of commercial paper was fully redeemed in June 20, 2014.
Debentures
The debentures issued by the Company, first, second and third issuance, described at table
18.5 of this Reference Form, were registered for trading in the secondary market and electronic
custody SND Mdulo Nacional de Debntures, managed and operated by CETIP.
18.7 Description of the securities admitted to trading in foreign markets
a. Country
United States of America.
b. Market
The ADRs of Mills are traded in the over-the-counter market (OTC) under CUSIP 60114T103,
ISIN BRMILSACNOR2 and ticker MILTY.
c. Administrative entity for the market in which securities are listed for trading
OTC (Over-The-Counter)
d. Date of listing for trading
Trading on OTC started on December 18, 2013.
e. Trading segment, if any
The ADRs of Mills are traded in the over-the-counter (OTC) market in the OTC Pink Current
Information segment.
f. Date of first listing on trading segment
On October 29, 2013, the Board of Directors approved the decision to establish the Sponsored
Level 1 American Depositary Receipt Program (Level I ADR Program), having Mills shares as
underlying assets.
The Level I ADR Program was approved by the Brazilian Securities and Exchange Commission
(CVM) on December 9, 2013 and by the U.S. Securities and Exchange Commission (SEC) on
December 11, 2013, with start of trading on December 18, 2013.
g. Percentage of trading volume overseas when compared to the total trading volume
for each class and type of security last year
There were no ADR trading in 2013. During 2014, 68,500 Mills ADRs were issued and 68,500
Mills ADRs were cancelled, according to total volume of trades of 68,500 ADRs.
h.
i.
Depositary bank, if any
JPMorgan Chase Bank
j.
18.9 Description of the public offerings made by the Company or by third parties,
including controlling companies and subsidiaries, relating to the Companys securities
Public offerings of distribution of commercial promissory notes and debentures, with restricted
placement efforts
Promissory notes of first, second, third and fourth issue and the debentures of the first, second
and third issue were subject of public offerings, with restricted efforts of placement, in
accordance with CVM Instruction No. 476, of January 16, 2009, intended exclusively for
qualified investors. The first issue of commercial papers were already fully redeemed on April
28, 2011. The second issue of commercial papers were already fully redeemed on November
30, 2012. The third issue of commercial papers were already fully redeemed on December 3,
2012. The third issue of commercial papers were already fully redeemed on June 20, 2014. All
relevant characteristics of these securities are described in section 18.5 of this Reference Form.
[18.10 If the issuer has made a public offering of securities, indicate: (a) how the
proceeds from the offering were used; (b) if there were relevant differences between the
effective use of resources and the proposals disclosed in the prospectus of distribution;
(c) if there were deviations, reasons for such deviations]
18.11 Description of takeover bids made by Company for shares issued by third parties
Not applicable, as the Company did not make takeover bids for shares issued by third parties.
18.12 Other information which the Company deems relevant
Promissory notes of the first issue, issued in a single series, now fully redeemed
a Identification of securities Forth issuance of commercial papers in a single series, now fully redeemed.
b Quantidade
20 Commercial Notes
c Total amount
Issue Date
Maturity Date
August 8, 2014
e Restrictions on trading
The commercial notes were the subject of public distribution with restricted pl acement
efforts, pursuant to CVM Instruction 476, under the firm commitment and, consequently,
can only be traded between qualified investors. The trading restriction period laid down
in article 13 of that 90 days after the statement expired date of issue.
Not applicable. The fourth issue of promissory notes are not convertible into shares
issued by the company.
Convertibility
g Possibility of redemption:
(i)
Possibility
redemption
The Company shall, unilaterally, and that, for the purposes of the paragraph 2, article 7,
CVM Instruction 134, the holders will have given their express prior consent, irrevocably
and irreversibly, at the moment of the subscription of the Notes in the primary market or
acquisition in the secondary market, as appropriate, perform, at any time, from the 31st
of (thirty first) day counted from the Issue Date. In case of partial early redemption, the
same will take place by lot, pursuant paragraph 4, article 7, CVM Instruction 134, and all
the steps in this process, such as license, qualification, verification and validation of the
number of Notes to be redeemed will be held outside of CETIP. The Comp any shall
communicate the holders, the Payment Agent and CETIP, about the redemption with at
least 2 (two) business days of the date of the event.
(ii) Assumptions and The amount to be paid by the Company to the holder of each commercial note of the
method of calculating the fourth issue corre sponds to the nominal value of the commercial notes plus the
remuneration, calculated pro rata temporis since the date of issue until the date of
redemption value
effective payment, but without payment of prize or penalty, according to the terms and
(ii) interest
of
certain
See accelerated maturity conditions described above.
of
new
for The amendment of any rights conferred by each note issuance depends on commercial
relevant
None.
Identification of securities
Quantity
27.000
Total amount
Restrictions on trading
Yes. The debentures were the subject of public distribution with restricted pl acement efforts,
pursuant to CVM Instruction 476, under the firm commitment and, consequently, can only be
traded between qualified investors. The trading restriction period laid down in article 13 of that 90
days after the statement expired date of issue
Convertibility
Not applicable.
Possibility of redemption
Not applicable.
(i) Assumptions
and
method of calculating the Not applicable.
redemption value
h
(i) Conditions
acceleration
Deed of Issue are maintained, in the occurrence of any of the events summarized below: I.
Default by non-payment of the Nominal Value, of Remuneration, premium, or any other amounts
owed to the debenture holders; V. assignment or pledge any form of transfer or promise of
transfer to third parties in whole or in part by the Company, any of its obligations under the Deed,
without the prior consent in writing of Debenture Holders representing at least 75% of the
outstanding; VI. invalidity, unenforceability or invalidity of the deed and / or the Distribution
Agreement, is not remedied within 10 days from the date of the respective event; VII. (a)
for bankruptcy of the Company, and /or any of its subsidiary or controlling Company; (b) voluntary
bankruptcy application made by the Company and / or any of its subsidiary or controlling
Company; (c) bankruptcy filing by the Company, and /or any of its subsidiary or controlling
Company, formulated by others, not elided within legal; (d) petition for judici al or extrajudicial
recovery of the Company and /or any of its subsidiary or controlling Company, regardless of
approval of the request; or (e) liquidation, dissolution or extinction of the Company, and /or any of
its subsidiary or controlling Company, unless the liquidation, dissolution and / or extinction during
the course of a corporate transaction which does not constitute an Event of Default; VIII. changing
the company into a limited liability company, pursuant to articles 220 to 222 of Law No.
6,404/76;IX. approval of incorporation, merger or split of the company or sale, by the company, of
all or substantially all of its assets or its mining properties, with some exceptions: (a) if the
transaction has been approved in advance by the Debenture Holders representing at least 75% of
the outstanding Debentures; or (b) if the Debenture Holders that wish to do so, be assured that,
during the minimum period of six months from the d ate of publication of the minutes of corporate
acts in the transaction, the redemption of the Debentures held by them, by paying the outstanding
balance of the Nominal Value, plus Remuneration, calculated pro rata from the Issue Date or the
date of payment of compensation immediately preceding, whichever is applicable until the date of
actual payments; or (c) by the incorporation of the Company (so that the Company is the
remaining entity), of any Subsidiary; or (d) if the operation is carried out solely between
Subsidiaries; X. capital reduction, except if previously approved by Debenture Holders
representing at least 75% of the outstanding Debentures, pursuant to Article 174, paragraph 3, of
Law No. 6,404/76; XI. change or transfer of control (as defined under Article 116 of Law No.
6,404/76), direct or indirect, of the Company, from any Controlling Company and / or any
Subsidiary, except if previously approved by Debenture Holders representing at least 75% of the
outstanding Debentures; XV. early maturity of any financial obligation of the Company and / or
any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$
5,000,000.00 or its equivalent in other currencies, and/or occurrence of any event or default of any
obligation which, after the expiration of any period provided in their document, or in other cases,
within 10 days from the date of their default, give rise to the declaration of acceleration any
financial obligation of the Company and / or any Subsidiary, which amount, individual or
aggregate, is equal to or greater than R$ 5,000,000.00 or its equivalent in other currencies.
The face value of the debentures of the first issue will not be monetarily updated.
Interest paid semi-annually will account for 112.5% of the accumulated variation of the interest
rate of CDI.
(iii)
interest
The remuneration provided above shall be paid every six months from the date of issue, being the
first payment on October 18, 2011, and the last payment of the maturity date, or on the date of
any settlement.
In case of payment after the deadline of any amount due in respect of any obligation under the
Commercial Papers, on any and all amounts in arrears would address, without notice, notification
or judicial or extrajudicial, and subject to the Remuneration, calculated pro rata from the date of
default to the date of actual payment, (i) fines of 2% (two percent), and (ii) interest of 1% (one
percent) per month or fraction of a month, calculated pro rata from the date of default until the
date of actual payment
to the months of operation of the fiduciary agent, based on the value specified in item i, readjusted
as the paragraph iii; and (vi) plus, where lives in your payment, regardless of notice, judicial or
extrajudicial notification or notification, on the values arrears, (a) fine 2 moratorium; and (b)
interest on arrears of 1 month, calculated pro rata temporis since the date of default until the
payment date.
Reimbursement of expenses: the Trustee shall be repaid by the company for all reasonable costs
incurred that have proven to protect the rights and interests of the debenture holders or to perform
their claims within 30 (thirty) days from the delivery of the evidenti ary documents accordingly,
provided that, where possible, the costs have been approved in advance by the company, which
shall be deemed to be approved if the company does not appear within 2 (two) working days from
the date of receipt of their request by fiduci ary agent.
Obligations: The fiduciary agent, as provided for in the deed of issue, will have the functions laid
down in the law and in accordance with the rules and regulations of the Securities and Exchange
Commission, and use of any action to protect rights or defend interests of the debenture holders.
Replacement: In case of absence, temporary impediments, renunci ation, intervention, judicial or
extrajudicial settlement, bankruptcy, or any other case of vacancy in the fiduciary agent, the
following rules shall apply: (i) is provided to debenture holders, after the closing of the offer of the
debentures of the first issue, proceed with the repl acement of the trustee and the indication of his
replacement, general meeting of debenture holders especi ally convened for this purpose; (ii) if the
Trustee is unable to continue to perform their duties by supervening circumstances to the deed of
issue, shall immediately communicate the fact to debenture holders, requesting his replacement
and convene a general meeting of debenture holders for this purpose; (iii) if the fiduciary agent,
renounces functions, should remain in the exercise of their duties unti l a replacement is indicated
by the institution and approved by general meeting of debenture holders, and assume their
functions effectively; (iv) shall be performed, within the maximum period of 30 (thirty) days from
the date of the event that determine, general meeting of debenture holders, for choosing the new
fiduciary agent; (v) replacement, on a permanent basis, the fiduciary agent (a) shall be subject to
prior notification to the CVM and its manifestation on the attendance to the requirements provided
for in article 9 of CVM Instruction No. 28, November 23, 1983, as amended, and (b) shall be
subject to the addition to the deed of issue; payments to the trustee repl aced shall be effected in
accordance with the proportionality to the period of effective service delivery; (vi) the trustee will
be entitled to the same salary replacement perceived by the previous, if (a) the company has not
agreed with the new value of the remuneration of the trustee proposed by general meeting of
debenture holders, or (b) the general meeting of debenture holders does not act on the matter;
(vii) the fiduciary agent should substitute, immedi ately after his appointment, communicate it to the
company and to debenture holders; and (viii) shall apply to cases of substitution of Trustee the
norms and precepts from the Securities and Exchange Commission.
During deliberations of the General Meetings of debenture holders for each of the series, for each
outstanding Debenture one vote will be granted, permitting the establishment of proxy, whether
Debenture holder or not. Except for the provisions below, all deliberations to be taken in the
General Meeting of debenture holders will depend on approval of debenture holders representing
at least 75% of outstanding Debentures.
i
relevant
None.
Identification of securities
Quantity
27.000
Total amount
15 de agosto de 2012
Restrictions on trading
Yes. The debentures were subject of public distribution with restricted pl acement efforts, pursuant
to CVM Instruction 476, under the firm commitment to the pl acement of 20,000 debentures, and
under the best-efforts placement in relation to the remaining debentures. The debentures can
only be traded between qualified investors and after a 90 days period from the date of
subscription or purchase according to the articles 13 and 15 of CVM Instruction 476, and
compliance by the Company of its obligations under Article 17 of CVM Instruction 476.
Convertibility
Not applicable.
Possibility of redemption
Not applicable.
(i) Assumptions
and
method of calculating the Not applicable.
redemption value
h
(i) Conditions
acceleration
The obligations may be declared mature in advance, on the terms and conditions set forth in the
Deed of Issue, in the occurrence of any of the events summarized below: I. Default by the
Company of any financial obligation on the Debentures, due under the Deed of Issue, at the date
of payment provided for in the Deed of Issue; II. Default by the Company of any non-financial
obligation on the Debentures foreseen in the Deed of Issue (a) that is not properly solved within
specific remedy; or (b) not having specific term remediation, if it is not properly solved within 15
days from the date of such default, being the period provided in this subsection does not apply to
obligations to which it has a deadline stipulated or specific cure for which the period of cure h as
been expressly excluded; III. judici al questioning by the Company for any controlling company,
for directly or indirectly (controlling as defined in article 116 of the Corporate Law) of the Company
(Controlling), and / or controlled company (controlled as defined in article 116 of the Corporate
Law) by the Company (Controlled), of the Issue of Deed; IV. judici al questioning by any person
not mentioned in section III above, the Issue of Deed, suspended or not remedied within 15 d ays
from the date on which the Company becomes aware of the judging of such legal challenge; V.
assignment or pledge any form of transfer or promise of transfer to third parties in whole or in part
by the Company, any of its obligations under the Deed, without the prior consent in writing of
Debenture Holders representing at least 75% of the outstanding; VI. invalidity, unenforceability or
invalidity of the Deed and/or the Distribution Agreement, is not remedied within 15 days from the
date of the respective event; VII. (a) bankruptcy of the Company, and/or any of its subsidiary or
controlling Company; (b) voluntary bankruptcy application made by the Company and / or any of
its subsidiary or controlling Company; (c) bankruptcy filing by the Company, and/or any of its
subsidiary or controlling Company, formulated by others, not suppressed within the legal
deadline; (d) petition for judici al or extrajudicial recovery of the Company and /or any of its
subsidiary or controlling Company, regardless of approval of the request; or (e) liquidation,
dissolution or extinction of the Company, and/or any of its subsidiary or controlling Company,
unless the liquidation, dissolution and/or extinction during the course of a corporate transaction
which does not constitute an Event of Default, pursuant to section IX below; VIII. changing the
company into a limited liability company, pursuant to articles 220 to 222 of Law No. 6,404/76; IX.
approval of incorporation, merger or split of the company or sale, by the company, of all or
substantially all of its assets or its mining properties, wi th some exceptions: (a) if the transaction
has been approved in advance by the Debenture Holders representing at least 75% of the
outstanding Debentures; or (b) if the Debenture Holders th at wish to do so, be assured that,
during the minimum period of 6 months from the date of publication of the minutes of corporate
acts in the transaction, the redemption of the Debentures held by them, by paying the outstanding
balance of the Nominal Value, plus Remuneration, calculated pro rata from the Issue Date or the
date of payment of compensation immediately preceding, whichever is applicable until the date of
actual payments; or (c) by the incorporation of the Company (so that the Company is the
remaining entity), of any Subsidiary; or (d) if the operation is carried out solely between
Fiduciary agent within 10 days from the date of receipt by the Fiduciary agent, the information
referred to the Deed of Issue based on the Consolidated Financial Statements of the Company
for each quarter of the calendar year, from and including the Consolidated Financial Statements
of the Company on December 31, 2012: (a) the financial index due to the quotient of dividing Net
Debt (as defined in the Issue Deed) to EBITDA (as defined in the Issue Deed), which must be
less than or equal to 3 and (b) the financial index due to the quotient of dividing EBITDA by Net
Financial Expenses (as defined in the Issue Deed), which should be equal or higher than 2.
(ii) interest
the
fiduciary
indicating the key terms of Compensation: The performance of duties and tasks assigned to compete in accordance with the
the contract
law and its deed of issue, the fiduciary agent, or the institution which will repl ace him in that
capacity, shall receive a remuneration: (i) R$3,500.00 per year, due from the company, being the
first installment of remuneration payable on the fifth business day following the date of celebration
of the deed of issue, and the remaining, on the same day of subsequent years, until the maturity
of the issue, or as long as the fiduciary agent is representing the debentures holders interests;(ii)
monetary adjustment yearly from the date of payment of the first annual instalment by the change
in the general price index-market, published by Fundao Getlio Vargas, or by any other that
eventually is replaced, calculated pro rata temporis, if necessary; (iii) plus the sales tax of any
kind TAXES, contributing to the Social Integration Program PIS, Social contribution on net
income CSLL, contributing to the financing of Social Security COFINS and any other taxes
that may relate to the remuneration payable to the trustee, except for tax on income and proceeds
of Any Nature go under existing rates for the dates of each payment; (iv) due to maturity,
redemption or cancellation of debentures, and even after its maturity, redemption or cancellation
in the event of actions of the trustee in charge of any defaults on debentures not remedied by the
Company, in cases where the remuneration payable to the fiduciary agent shall be calculated in
proportion to the months of operation of the fiduciary agent, based on the value specified in item i,
readjusted as the paragraph ii above; (v) plus, in cases of delay in payment, regardless of notice,
judicial or extrajudicial notification, on the delinquent amounts, without prejudice to monetary
restatement, (a) interest for late payment of 1% per month, calculated pro rata temporis since the
date of default until the date of actual payment; (b) moratorium fine of 2%, non-compensatory and
rigid; (c) restatement by IGPM variation, calculated pro rata from the date of default until the date
of actual payment; and (vi) realized upon deposit held in the current account to be specified in
writing by the Fiduci ary Agent to the Company, serving the receipt as settlement of payment.
Reimbursement of expenses: the Fiduciary Agent shall be refunded by the company for all
reasonable costs incurred that have proven to protect the rights and interests of the debenture
holders or to perform their cl aims within 30 days from the delivery of the evidenti ary documents
accordingly, provided that, where possible, the costs have been approved in advance by the
company, which shall be considered approved if the company does not appear within 2 working
days from the date of receipt of their request by the Fiduciary Agent.
Obligations: The Fiduciary Agent, as provided for in the deed of issue, will h ave its duties
established in the law and in accordance with the rules and regulations of the Securities and
Exchange Commission of Brazil (CVM), and use of any action to protect rights or defend interests
of the debenture holders.
Replacement: In case of absence, temporary impediments, renunci ation, intervention, judicial or
extrajudicial settlement, bankruptcy, or any other case of vacancy in the fiduciary agent, the
following rules shall apply: (i) is provided to debenture holders, after the closing of the offer, to
proceed with the replacement of the fiduciary agent and the indication of its replacement at
general meeting of debenture holders e speci ally convened for this purpose; (ii) if the fiduci ary
agent is unable to continue to perform its duties by supervening circumstances to the deed of
issue, shall immediately communicate the fact to debenture holders, requesting its replacement
and convene a general meeting of debenture holders for this purpose; (iii) if the fiduciary agent,
renounces its functions, should remain in the exercise of its duties until another institution is
indicated by the Company for its replacement and approved by general meeting of debenture
holders, and assume their functions effectively; (iv) shall be performed, within the maximum
period of 30 days from the date of the event that determine, general meeting of debenture
holders, for choosing the new fiduciary agent, that may be called by the fiduciary agent to be
replaced, by the Company, by debenture holders of the first series representing at least 10% of
the debentures of the first series in circul ation, or for debenture holders of the second series
representing at least 10% of the second series ' debentures in circulation, or by CVM; in the event
of convocation notice do not occur within 15 days before the expiration of the time limit here
predicted, it will be up to the Company making it, being sure that the CVM may appoint interim
replacement pending consummating the process of choosing the new trustee; (v) replacement, on
a permanent basis, of the fiduciary agent (a) shall be subject to prior notice to the CVM and its
manifestation on the attendance to the requirements provided for in article 9 of CVM Instruction
No. 28, November 23, 1983, as amended, and (b) shall be subject to the addition to the deed of
issue; (vi) payments to the fiduci ary agent replaced shall be effected in accordance with the
proportionality to the period of effective service delivery; (vii) the fiduci ary agent will be entitled to
the same compensation of the perceived by the previous, if (a) the company has not agreed with
the new value of the remuneration of the fiduci ary agent proposed by general meeting of the
debenture holders, referred to in item iv above, or (b) the general meeting of debenture holders
referred to in item iv above does not act on the matter; (vii) the fiduci ary agent should replace,
immediately after his appointment, communicate it to the company and to debenture holders; and
(viii) shall apply to cases of substitution of fiduci ary agent the norms and precepts from the
Brazilian Securities and Exchange Commission (CVM).
During deliberations of the General Meetings of first series debenture holders and General
Meetings of second series debenture holders, for each outstanding Debenture one vote will be
granted, permitting the establishment of proxy, whether Debenture holder or not. Except for the
provisions below, (i) all deliberations to be taken in the General Meeting of debenture holders will
depend on approval of debenture holders of the first series representing at least 75% of
outstanding First Series Debentures; and (ii) all deliberations to be taken in the General Meeting
of debenture holders will depend on approval of debenture holders of the second series
representing at least 75% of outstanding Second Series Debentures.
i
relevant None.
Debentures
Identification
of securities
Non-convertible
Unsecured Debentures of
third issuance single
series
Quantity
20,000
Total amount
R$ 200,000,000.00
Issue date
Maturity date
Restrictions
on trading
Convertibility
Not applicable
Possibility of
Yes
redemption
The Company may, at its
sole discretion, make, at
Assumptions
any time, optional early
and method of
redemption offer, total or
calculating the
partial, of the outstanding
redemption
Debentures,
with
the
value
consequent cancellation
of such Debentures, which
ii.
Interest
the
Debentures,
the
remuneration
will
be
payable
semiannually
from the Issue Date, on
the 30th of May and
November of each year,
with the first payment on
November 30, 2014 and
the last on the Maturity
Date.
iii.
guarantee
and, if in the
form
of
collateral,
description of
the
goods
used
as
collateral
iv.
in the
absence of a
guarantee, if
the credit is
secured
or
subordinate
v.
possible
restrictions
imposed on
the issuer
the
dividend
distribution
the
possibility of
new debt
the
issue of new
securities
vi
the
fiduciary
For more information on
agent,
the fiduciary agent, please
indicating the refer to item 18.10 below.
key terms of
the contract
During deliberations of the
General
Meetings
of
debenture holders, for
each
outstanding
Debenture one vote will
be granted, permitting the
establishment of proxy,
whether Debenture holder
Conditions for
amendment of or not. Except for the
provisions below, (i) all
the
rights
conferred by deliberations to be taken
in the General Meeting of
such
debenture holders will
securities
depend on approval of
debenture holders of the
first series representing at
least 75% of outstanding
First Series Debentures;
and (ii) all deliberations to
be taken in the General
Meeting of debenture
Identification of securities
Quantity
20.000
Total Amount
Restrictions on trading
Yes. The debentures were subject of public distribution with restricted placement
efforts, pursuant to CVM Instruction 476, under the firm commitment to the placement
of 20,000 debentures, and under the best-efforts placement in relation to the remaining
debentures. The debentures can only be traded between qualified investors and after a
90 days period from the date of subscription or purchase according to the articles 13
and 15 of CVM Instruction 476, and compliance by the Company of its obligations
under Article 17 of CVM Instruction 476.
Convertibility
Not applicable.
Possibilidade de resgate,
Como descrito no item 18.5.
indicando:
(i) hipteses de resgate e
forma de clculo do valor Como descrito no item 18.5.
de resgate
Quando
os
valores
mobilirios
forem
de
dvida, indicar, quando
aplicvel:
O prazo das Debntures ser de 5 (cinco) anos, contados da Data de Emisso,
vencendo-se, portanto, em 30 de maio de 2019.
Pagamento do Valor Nominal das Debntures e ser amortizado em 3 (trs) parcelas
anuais e sucessivas, cada uma no valor correspondente a 33,33% (trinta e trs
inteiros e trinta e trs centsimos por cento) do Valor Nominal, devidas em 30 de
maio de 2017, 30 de maio 2018 e 30 de maio 2019Podero ser declaradas
antecipadamente vencidas as obrigaes da Cia, observados os termos e condies
estabelecidos na Escritura de Emisso, na ocorrncia de quaisquer dos alguns
eventos resumidos a seguir: I. Inadimplemento, pela Companhia, de qualquer
obrigao pecuniria relativa s Debntures, devida nos termos da Escritura de
Emisso, na respectiva data de pagamento prevista na Escritura; II. inadimplemento,
pela Companhia, de qualquer obrigao no pecuniria prevista na Escritura, que
(a) no seja devidamente sanado no prazo de remediao especfico; ou (b) em no
havendo prazo de remediao especfico, no seja devidamente sanado no prazo de
15 (quinze) dias contados da data do respectivo inadimplemento, sendo que o prazo
previsto neste inciso no se aplica s obrigaes para as quais tenha sido estipulado
prazo de cura especfico ou para as quais o prazo de cura tenha sido expressamente
excludo; III. Questionamento judicial, pela Companhia, por qualquer sociedade
controladora, direta ou indireta (conforme definio de controle prevista no artigo 116
da Lei das Sociedades por Aes) da Companhia ("Controladora"), e/ou por qualquer
sociedade controlada (conforme definio de controle prevista no artigo 116 da Lei
das Sociedades por Aes) pela Companhia ("Controlada"), da Escritura de Emisso;
IV. questionamento judicial, por qualquer pessoa no mencionada no inciso III acima,
da Escritura de Emisso, no sanado ou suspenso no prazo de at 15 (quinze) dias
contados da data em que a Companhia tomar cincia do ajuizamento de tal
questionamento judicial; V. cesso, promessa de cesso ou qualquer forma de
transferncia ou promessa de transferncia a terceiros, no todo ou em parte, pela
Companhia, de qualquer de suas obrigaes nos termos da Escritura de Emisso,
sem a prvia anuncia, por escrito, de Debenturistas representando, no mnimo, 75%
(setenta e cinco por cento) das Debntures em circul ao; VI. Invalidade, nulidade ou
inexequibilidade da Escritura de Emisso e/ou do Contrato de Distribuio, no
sanada no prazo de 15 (quinze) dias contados da data do respectivo evento; VII.
(i) vencimento, inclusive (a) decretao de falncia da Companhia, de qualquer Controladora e/ou de qualquer
as
condies
de Controlada; (b) pedido de autofalncia formulado pela Companhia, por qualquer
Controladora e/ou por qualquer Controlada; (c) pedido de falncia da Companhia, de
vencimento antecipado
qualquer Controladora e/ou de qualquer Controlada, formulado por terceiros, no
elidido no prazo legal; (d) pedido de recuperao judicial ou de recuperao
extrajudicial da Companhia, de qualquer Controladora e/ou de qualquer Controlada,
independentemente do deferimento do respectivo pedido; ou (e) liquidao,
dissoluo ou extino da Companhia, de qualquer Controladora e/ou de qualquer
Controlada, exceto se a liquidao, dissoluo e/ou extino decorrer de uma
operao societria que no constitua um Evento de Inadimplemento, nos termos do
inciso IX abaixo; VIII. transformao da forma societria da Companhia de sociedade
por aes para sociedade limitada ou outro tipo societrio, nos termos dos artigos 220
a 222 da Lei das Sociedades por Aes; IX. ciso, fuso, incorporao ou qualquer
forma de reorganizao societria envolvendo a Companhia e/ou qualquer
Controlada, exceto (a) se a operao tiver sido previ amente aprovada por
Debenturistas representando, no mnimo, 75% (setenta e cinco por cento) das
Debntures em circul ao; ou (b) se tiver sido assegurado aos Debenturistas que o
desejarem, durante o prazo mnimo de 6 (seis) meses contados da data de publicao
das atas dos atos societrios relativos operao, o resgate das Debntures de que
forem titulares, mediante o pagamento do saldo devedor do Valor Nominal, acrescido
da Remunerao, calculada pro rata temporis desde a Data de Emisso ou a data de
pagamento de Remunerao imediatamente anterior, conforme o caso, at a data do
efetivo pagamento; ou (c) pela incorporao, pela Companhia (de modo que a
Companhia seja a incorporadora), de qualquer Controlada; ou (d) se a operao for
realizada exclusivamente entre Control adas; X. reduo de capital social da
Companhia, exceto se previamente aprovada por Debenturistas representando, no
mnimo, 75% (setenta e cinco por cento) das Debntures em circul ao, conforme
disposto no artigo 174, pargrafo 3, da Lei das Sociedades por Aes; XI. mudana
ou transferncia de controle acionrio (conforme definio de controle prevista no
artigo 116 da Lei das Sociedades por Aes), direto ou indireto, da Companhia, de
qualquer Controladora e/ou de qualquer Controlada, exceto se a operao tiver sido
previamente aprovada por Debenturistas representando, no mnimo, 75% (setenta e
cinco por cento) das Debntures em circul ao; XII. alterao do objeto soci al da
Companhia e/ou de qualquer Controlada, conforme disposto em seu estatuto social ou
contrato social, conforme o caso, vigente na Data de Emisso, exceto se tal alterao
(a) tiver sido previamente aprovada por Debenturistas representando, no mnimo, 75%
(setenta e cinco por cento) das Debntures em circul ao, ou (b) no resultar em
sanado no prazo de at 10 (dez) dias contados do que ocorrer primeiro entre (a) a
data em que a Companhia tenha conhecimento da incorreo; ou (b) a data em que a
Companhia receba aviso por escrito neste sentido do Agente Fiducirio; XXIII. no
utilizao, pela Companhia, dos recursos lquidos obtidos com a Emisso estritamente
nos termos da Escritura de Emisso; XXIV. distribuio e/ou pagamento, pela
Companhia, de dividendos, juros sobre o capital prprio ou quaisquer outras
distribuies de lucros aos acionistas da Companhia, caso a Companhia esteja em
mora com qualquer de suas obrigaes estabelecidas na Escritura de Emisso,
exceto pelo pagamento do dividendo obrigatrio no superior a 25% (vinte e cinco por
cento) do lucro lquido ajustado previsto no artigo 202 da Lei das Sociedades por
Aes; e XXV. no observncia, pela Companhia, de qualquer dos ndices financeiros
abaixo (em conjunto, "ndices Financeiros"), a serem apurados pela Companhia, nos
termos da Escritura de Emisso e verificados pelo Agente Fiducirio no prazo de at
10 (dez) dias contados da data de recebimento, pelo Agente Fiducirio, das
informaes a que se refere a Escritura de Emisso tendo por base as
Demonstraes Financeiras Consolidadas da Companhia relativas a cada trimestre do
ano civil, a partir, inclusive, das Demonstraes Financeiras Consolidadas da
Companhia relativas a 31 de dezembro de 2013: (a) do ndice financeiro decorrente
do quociente da diviso da Dvida Lquida (conforme definido na Escritura de
Emisso) pelo EBITDA (conforme definido na Escritura de Emisso), que dever ser
igual ou inferior a 3 (trs); e (b) do ndice financeiro decorrente do quociente da
diviso do EBITDA pela Despesa Financeira Lquida (conforme definido na Escritura
de Emisso), que dever ser igual ou superior a 2 (dois).
(ii) juros
(iii) garantia e, se real, No aplicvel. As Debntures de terceira emisso no contam com garantia real ou
descrio do bem objeto
fidejussria.
(iv) na
ausncia
de
garantia, se o crdito As Debntures sero da espcie quirografria, nos termos do artigo 58, caput, da Lei
quirografrio
ou das Sociedades por Aes.
subordinado
(v) eventuais
rest ries
impostas ao emissor em Vide condies de vencimento antecipado descritas acima.
relao:
distribuio
dividendos
de
alienao
determinados ativos
de
contratao de novas
dvidas
emisso de novos
valores mobilirios
(vi) o agente fiducirio, Identificao: Pentgono S.A. Distribuidora de Ttulos e Valores Mobilirios.
indicando os principais
termos do contrato
Remunerao: Pelo desempenho dos deveres e atribuies que lhe competem, nos
termos da lei e da Escritura de Emisso, o Agente Fiducirio, ou a instituio que vier
a substitu-lo nessa qualidade, receber uma remunerao: (i) de R$ 3.000,00 por
ano, devida pela Companhia, sendo a primeira parcela da remunerao devida no
5 (quinto) Dia til contado da data de celebrao da Escritura de Emisso, e as
demais, no mesmo dia dos anos subsequentes, at o vencimento da Emisso, ou
enquanto o Agente Fiducirio representar os interesses dos Debenturistas; (ii)
reajustada anualmente, desde a data de pagamento da primeira parcela, pela
variao do ndice Geral de Preos Mercado, divulgado pela Fundao Getlio
Vargas ("IGPM"), ou do ndice que eventualmente o substitua, calculada pro rata
temporis, se necessrio; (iii) acrescida do Imposto Sobre Servios de Qualquer
Natureza ISSQN, a Contribuio ao Programa de Integrao Social PIS,
Contribuio Social sobre o Lucro Lquido CSLL, a Contribuio para o
Financiamento da Seguridade Social COFINS e de quaisquer outros tributos que
venham a incidir sobre a remunerao devida ao Agente Fiducirio, exceto pelo
Imposto Sobre a Renda e Proventos de Qualquer Natureza IR; (iv) devida at o
vencimento, resgate ou cancelamento das Debntures e mesmo aps o seu
vencimento, resgate ou cancelamento na hiptese de atuao do Agente Fiducirio na
cobrana de eventuais inadimplncias relativas s Debntures no sanadas pela
Companhia, casos em que a remunerao devida ao Agente Fiducirio ser calculada
proporcionalmente aos meses de atuao do Agente Fiducirio, com base no valor
indicado no inciso "i" acima, reajustado conforme o inciso "ii" acima; (v) acrescida, em
caso de mora em seu pagamento, independentemente de aviso, notificao ou
interpelao judicial ou extrajudicial, sobre os valores em atraso, sem prejuzo da
atualizao monetria, (a) juros de mora de 1% ao ms, calculados pro rata temporis
desde a data de inadimplemento at a data do efetivo pagamento; (b) multa moratria,
irredutvel e de natureza no compensatria, de 2%; (c) atualizao monetria pela
variao do IGPM, calculado pro rata temporis desde a data de inadimplemento at a
data do efetivo pagamento; e (vi) realizada mediante depsito na conta corrente a ser
indicada por escrito pelo Agente Fiducirio Companhia, servindo o comprovante do
depsito como prova de quitao do pagamento.
Reembolso de despesas: o Agente Fiducirio ser reembolsado pela Companhia por
todas as despesas que comprovadamente incorrer para proteger os direitos e
interesse s dos Debenturistas ou para realizar seus crditos, no prazo de at 30 (trinta)
dias contados da entrega dos documentos comprobatrios neste sentido, desde que
as despesa s tenham sido, sempre que possvel, previ amente aprovadas pela
Companhia, as quais sero consideradas aprovadas caso a Companhia no se
manifeste no prazo de 2 (dois) Dias teis contados da data de recebimento da
respectiva solicitao pelo Agente Fiducirio.
Obrigaes. O Agente Fiducirio, conforme previsto na Escritura de Emisso, ter as
funes estabelecidas em lei e na regulamentao da Comisso de Valores
Mobilirios, devendo usar de toda e qualquer ao para proteger direitos ou defender
interesse s dos Debenturistas.
Substituio: Em caso de ausncia, impedimentos temporrios, rennci a, interveno,
liquidao judicial ou extrajudicial, falncia, ou qualquer outro caso de vacncia do
Agente Fiducirio, aplicam-se as seguintes regras: (i) facultado aos Debenturistas,
aps o encerramento da Oferta, proceder substituio do Agente Fiducirio e
indicao de seu substituto, em assembleia geral de Debenturistas especialmente
convocada para esse fim; (ii) caso o Agente Fiducirio no possa continuar a exercer
as suas funes por circunstnci as supervenientes Escritura de Emisso, dever
comunicar imediatamente o fato aos Debenturistas, solicitando sua substituio e
convocar assembleia geral de Debenturistas para esse fim; (iii) caso o Agente
Fiducirio renuncie s suas funes, dever permanecer no exerccio de suas funes
at que uma instituio substituta seja indicada pela Companhia e aprovada pela
assembleia geral de Debenturistas e assuma efetivamente as sua s funes; (iv) sero
realizadas, dentro do prazo mximo de 30 (trinta) dias, contados do evento que a
determinar, assembleia geral de Debenturistas da Primeira Srie e assembleia geral
de Debenturistas da Segunda Srie, para a escolha do novo agente fiducirio, que
podero ser convocadas pelo prprio Agente Fiducirio a ser substitudo, pela
Companhia, por Debenturistas da Primeira Srie representando, no mnimo, 10% (dez
por cento) das Debntures em circulao,; na hiptese da convocao no ocorrer em
at 15 (quinze) dias antes do trmino do prazo aqui previsto, caber Companhia
efetu-la, sendo certo que a CVM poder nomear substituto provisrio enquanto no
se consumar o processo de escolha do novo agente fiducirio; (v) a substituio, em
carter permanente, do Agente Fiducirio (a) est sujeita comunicao prvia
CVM e sua manifestao acerca do atendimento aos requisitos previstos no
artigo 9 da Instruo CVM n. 28, de 23 de novembro de 1983, conforme alterada, e
(b) dever ser objeto de aditamento Escritura de Emisso; (vi) os pagamentos ao
Agente Fiducirio substitudo sero efetuados observando-se a proporcionalidade ao
perodo da efetiva prestao dos servios; (vii) o agente fiducirio substituto far jus
mesma remunerao percebida pelo anterior, caso (a) a Companhia no tenha
concordado com o novo valor da remunerao do agente fiducirio proposto pelas
assembleias gerais de Debenturistas a que se refere o inciso "iv" acima, ou (b) as
assembleias gerais de Debenturistas a que se refere o inciso "iv" acima no deliberem
sobre a matria; (viii) o agente fiducirio substituto dever, imedi atamente aps sua
nomeao, comunic-la Companhia e aos Debenturistas nos termos da Escritura de
Emisso; e (ix) aplicam-se s hipteses de substituio do Agente Fiducirio as
normas e preceitos emanados da Comisso de Valores Mobilirios.
Nas deliberaes das assembleias gerais de Debenturistas a cada Debnture em
circulao caber um voto, admitida a constituio de mandatrio, Debenturista ou
no. Exceto pelo disposto abaixo, todas as deliberaes a serem tomadas (i) em
assembleia geral de Debenturistas dependero de aprovao de Debenturistas
representando, no mnimo, 75% das Debntures da Primeira Srie em circulao.
No esto includos no qurum acima: (i) os quruns expressamente previstos nas
clusulas da Escritura de Emisso; e (ii) as alteraes, que somente podero ser
aprovadas por Debenturistas representando, no mnimo, 90% das Debntures, (a) das
disposies da Escritura de Emisso; (b) de qualquer dos quruns previstos na
Escritura de Emisso; (c) da Remunerao, exceto no caso de alterao decorrente
de extino, limitao e/ou no divulgao da Taxa DI ou do IPCA, conforme previsto
na Escritura de Emisso; (d) de quaisquer datas de pagamento de quaisquer valores
previstos na Escritura de Emisso; (e) do prazo de vigncia das Debntures; (f) da
espcie das Debntures; (g) da criao de evento de repactuao; (h) das disposies
relativas a resgate antecipado facultativo; (i) das disposies rel ativas a amortizaes
antecipadas facultativas; ou (j) da redao de qualquer Evento de Inadimplemento.
Outras
caractersticas
No h.
relevantes
19.1
Available
reserves and
profits
(Reais)
Type
Common
Class
Quantity
envisaged
(units)
4.000.000
Percentage in
relation to
outstanding
5.069199%
Approved
amount
purchased
(units)
2,285,300
Weighted
Average
Price
8.65
Quote
factor
R$ per
unit
%
purchased
57%
For the purposes of article 8 of CVM Instruction 10/80 the Directors determined and clarify that: (a) the Companys objective in the Repurchase Program is to
acquire shares of the Company's issuance, for treasury and subsequent cancellation or alienation, including in the context of any exercise of options under the
Company's stock option plan; (b) up to 4,000,000 common shares of the Companys issuance, all book-entry and without par value, may be acquired under the
Repurchase Program, subject to maintaining the minimum float of 25% of the shares (as required by the BM&FBov espa Nov o Mercado Listing Regulations) and
to the requirement under article 3 of CVM Instruction 10/80 that the number of shares held in treasury shall not exceed 10% of the shares in circulation in the
market; (c) the deadline f or effecting transactions in the context of the Program is 365 days as of the date hereof; (d) the number of common shares of the
Companys issuance that are in circulation in the market, as def ined by CVM Instruction 10/80, is 82,907,932 (eighty-two million, nine hundred seven thousand,
nine hundred thirty-two), according to the registry for the share deposit account on November 3, 2014, as reported by the depositary institution; and (e) the
purchases in the context of the Repurchase Program will be effected ov er the exchange at market prices, with the intermediation of any of the following brokers:
(i) Votorantim Corretora de Ttulos e Valores Mobilirios Ltda., headquartered in the City and State of So Paulo at Avenida das Naes Unidas 14171, Torre A,
14 andar, CEP 04794-000, registered with the CNPJ/MF under n. 01.170.892/0001-31; (ii) J.P. Morgan Corretora de Cmbio e Valores Mobilirios S.A.,
headquartered in the City and State of So Paulo at Avenida Brigadeiro Faria Lima 3.729, 13 andar, CEP 04538-905, registered with the CNPJ/MF under n.
32.588.139/0001-94; (iii) Bradesco S.A. Corretora de Ttulos e Valores Mobilirios, headquartered in the City and State of So Paulo at Av enida Paulista 1.450,
7 andar, CEP 01310-100, registered with the CNPJ/MF under n. 061.855.045/0001-32; (iv) BTG Pactual Corretora de Ttulos e Valores Mobilirios S.A.,
headquartered in the City and State of So Paulo at Avenida Brigadeiro Faria Lima 3.477, 14 andar, CEP 04538-133, registered with the CNPJ/MF under n.
43.815.158/0001-22; (v) Ita Corretora de Valores S.A., headquartered in the City and State of So Paulo at Avenida Brigadeiro Faria Lima 3.500, 3 andar,
parte, CEP 04538-132, registered with the CNPJ/MF under n. 61.194.353/0001-64; (v i) Credit Suisse (Brasil) S.A. CTVM, headquartered in the City and State
of So Paulo at Rua Leopoldo Couto de Magalhes Jr. 700, 12 andar, CEP 04542-000, registered with the CNPJ/MF under n. 42.584.318/0001-07; and (vii) J.
Saf ra Corretora de Valores e Cmbio Ltda., headquartered in the City and State of So Paulo at Av enida Paulista 2.100, 19 andar, CEP 01310-930, registered
with the CNPJ/MF under n. 60.783.503/0001-02.
19.2 In relation to securities held in treasury, in tabular form, segregating by type and
class, indicate: (a) the initial amount; (B) quantity purchased; (C) the weighted average
purchase price; (D) amount sold; (E) weighted average price of alienation
Fiscal year endend on December 31, 2015.
Class of stock: Common
Quantity
(Units)
1.276.300
1.009.000
(6.878)
2.278.422
Mov ement
Beginning balance
Acquisitions
Disposal
Cancellations
Ending balance
Relationship outstanding
securities
Total amount
(R$ thousand)
7.910
-
4,73
Mov ement
Beginning balance
Acquisitions
Disposal
Cancellations
Ending balance
Relationship outstanding
securities
Total amount
(R$ thousand)
11.856
11.856
1,61%
19.3.
Quantity
(Units)
-
Total amount
(R$ thousand)
-
Weighted average
price (R$)
-
Quantity
(Units)
1.009.000
(6.878)
-
Total amount
(R$ thousand)
7.910
-
Weighted average
price (R$)
7,84
-
Total amount
Weighted average
Quantity
Beginning balance
Acquisitions
Disposal
Cancellations
Ending balance
(Units)
1.276.300
1.276.300
(R$ thousand)
11.856
11.856
price (R$)
9,29
9,29
Total amount
(R$ thousand)
-
Weighted average
price (R$)
-
Quantity
(Units)
-
On November 10, 2014, the Board of Directors approved the establishment of a buyback
program of common shares issued by the Company and authorized the directors to determine
the opportunity and the number of shares to be effectively acquired under the Repurchase
Program .
The Company's objective with the buyback program was to acquire up to 4,000,000 shares
issued within a maximum of 365 (three hundred and sixty five) days to the date of approval by
the Board of Directors, to be held in treasury and subsequent disposal or cancellation, including
under the Company's stock option program, in case of exercise of such options. Until March 31,
2015, 2,285,300 shares were purchased in the amount of R $ 19,777, recorded in the capital
reserve. The minimum cost, weighted average and maximum of these shares acquired by the
first quarter of 2015 were, respectively, R $ 5.32 R $ 8.65 and R $ 11.30.
On May 21, 2015, the Board of Directors approved the sale of 5,434 Company's treasury shares
to meet the exercise of stock option beneficiaries under the Plan Granting of Share Purchase
Options (for more information on the plan, see item 13 of this Form).
On June 17, 2015 the Board of Directors approved the sale of 1,444 Company's treasury shares
to meet the exercise of stock option beneficiaries under the Stock Option Plan of the Company's
Stock Options (for more information on the plan, see item 13 of this Form).
Acquisition date
Approv ed purchased
(units)
1.276.300
1.009.000
2.285.300
Approv ed
purchased (R$
thousands)
11.856
7.910
19.777
Weighted Average
Price (R$/share)
9,29
7,84
8,65
prohibiting the trading of securities issued by the Company by Bound Persons who have
material information about the Company;
II.
prohibiting the trading of securities issued by the Company by Bound Persons who leave
board positions, for the period of six months after they leave the position or until the
material information is disclosed;
III.
prohibiting the trading of securities issued by the Company by Related Parties whenever
a purchase or sale of shares issued by the Company is in progress, or execution of any
agreement or contract for the transfer of Companys share control, existence of intention
of promoting amalgamation, total or partial spin-off, transformation or corporate
restructuring involving the Company. This restriction only applies to controlling
shareholders, direct or indirect, and administrators when the ongoing purchase or sale of
shares of the Company by the Company; and
IV.
The full version of Mills Securities Trading Policy can be obtained in the following address:
http://mills.infoinvest.com.br/static/enu/arquivos/Politica_de_Negociacao_MILL_RCA_2010_02_
08_i.pdf
The administrators and employees inquired in item above, should respond to the request of the
Investor Relations Officer immediately. If not able to meet personally or talk on telephone with
the Investor Relations Officer on the same day of the request, administrators and employees in
question should send an email with the information to the address ri@mills.com.br regarding the
information relevant to.
The disclosure of any Material information, should be simultaneously to CVM and Market
entities, and shall take place before the opening or after the closing of trading on the Stock
Exchanges, and in case of hour incompatibility with other markets, the Brazilian market trading
hours shall prevail.
If, exceptionally, it is imperative that the communication of Material information occurs during
trading hours, the Investor Relations Officer when disclosing the Material information, may
simultaneously request the Market entities in Brazil and abroad, the suspension of trading of
securities issued by the Company or related thereto, the time necessary to properly disclose
their information. The Investor Relations Officer must prove to Brazilian Market entities that the
requested suspension of trading also was accomplished in foreign Market entities.
The Company can disclose to the market expectations of future performance (guidance), for
short and long term, especially with regard to financial and operational figures of their
businesses, by decision of the board of directors, noted that such guidance shall be in
accordance with CVM regulations, paragraph 4 of article 13 of CVM Instruction No. 358/02.
In the event that disclosure of such expectations, should be subject to the following
assumptions:
(i) The anticipated dissemination of results may be accepted in the case of preliminary
information, not yet audited, clearly presented for each of the items and timeframes,
memories of the assumptions and calculations used;
(ii) The results or information prepared in accordance with foreign accounting standards
should provide a reconciliation to the Brazilian accounting practices, as well as
reconciliation with the accounting items expressed directly in the financial statements of
the Company and, therefore, obtained by the accounting principles adopted in Brazil;
(iii) If disclosures involves the preparation of projections, a comparison with the actual
results must be submitted, on the occasion of the release of Form ITR of the Company;
(iv) If the projections are discontinued, it should be informed, together with the reasons that
led to its loss of validity in the form of Material Information.
(v) to disclose full information to shareholders and investors;
(vi) to ensure prompt widespread dissemination of Material information;
(vii) to allow equity access to public information on the Company by every shareholder and
investor;
(viii)
to protect secrecy of any undisclosed Material information;
(ix) to contribute to the stabilization and fostering of the Brazilian capital market; and
(x) to strengthen the Companys good corporate governance practices.
The controlling shareholder, directors, members of the board of directors and the fiscal council,
as well as other employees and agents of the Company, shall preserve the confidentiality of the
information pertaining Material Information to which they have privileged access due to the
position they hold, until their actual release to the market and ensure that subordinates and third
parties they trust to do the same, being jointly responsible with them in case of noncompliance.
For the purpose of maintaining confidentiality referred to in item 6.1 above, the individuals
mentioned therein shall observe and ensure observance of the following, without prejudice to
the adoption of other measures that are appropriate in front of each situation:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
When confidential information needs to be disclosed to any employee of the Company or other
person holding title, function or position in the Company, its controlling shareholders,
subsidiaries or affiliates, other than a director, member of the Board of directors or the Fiscal
Council of the Company, the individual responsible for the transmission of information should
make sure that the person receiving it is aware of the Policy Disclosure of Material Information
of the Company, requiring even to sign the Policy Disclosure of Material Information before
providing access to information.
21.3 Administrators responsible for implementation, maintenance, evaluation and
supervision of the information disclosure policy
Investor Relations Officer.
21.4
The full version of Mills Policy on Disclosure of Material Information can be obtained in the
following address:
http://ir.mills.com.br/fck_temp/12_4/file/Politica%20de%20Divulga%C3%A7%C3%A3o_2016_0
3_28_i.pdf