Individual and Consolidate Financial Statements under BR GAAP for the Six-Month
Periods Ended June 30, 2013 and 2012, and Independent Auditors*Report
Banco Pine S.A.
PricewaterhouseCoopers Auditores Independentes
(A free translation of the original in Portuguese)
Independent Auditor’s Report
To the Board of Directors and Stockholders
Banco Pine S.A.
We have audited the accompanying financial statements of Banco Pine S.A. (the “Tnstitution”) standing
alone, which comprise the balance sheet as at June 30, 2013 and the statements of operations, changes
in equity and cash flows for the six-month period then ended, as well as the accompanying
consolidated financial statements of Banco Pine S.A. and its subsidiaries (“Consolidated”), which
comprise the consolidated balance sheet as at June 30, 2013, and the consolidated statements of
operations, changes in equity and cash flows for the six-month period then ended, and a summary of
significant accounting policies and other explanatory information.
Management’s responsibility for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate
by the Brazilian Central Bank (BACEN), and for such internal control as management determines is
necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Brazilian and International Standards on Auditing. Those
standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In makingthose risk assessments, the auditor considers internal control relevant to the
Institution’s preparation and fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Institution’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Banco Pine S.A.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of
Banco Pine S.A. standing alone and of Banco Pine S.A. and its subsidiaries as at J une 30, 2013, and the
Institution’s financial performance and cash flows, as well as the consolidated financial performance
and cash flows, for the six-month period then ended, in accordance with accounting practices adopted
in Brazil, applicable to institutions authorized to operate by the Brazilian Central Bank (BACEN).
Other matters
Statements of value added
We have also audited the Institution’s and the consolidated statements of value added for the six-
month period ended J une 30, 2013, prepared under management’s responsibility, the presentation of
which is required by Brazilian corporate legislation for listed companies. These statements were
subjected to the same audit procedures described above and, in our opinion, are fairly presented, in all
material respects, in relation to the financial statements taken as a whole.
Sáo Paulo, August 12, 2013
PricewaterhouseCoopers
Auditores Independentes
CRC 2SP000160/0-5
Edison Arisa Pereira
Contador CRC 18P127241/ 0-0
PINE
BANCO PINE S/A
Corporate Taxpayer”s ID (CNPJ) 62.144.175/0001-20 – Publicly-held Company
Company Registry (NIRE) 35300525515
SUMMARY OF THE AUDIT COMMITTEE REPORT
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2013
The Audit Committee of Banco Pine S/A and its subsidiaries is a statutory body
subordinated to the Board of Directors, implemented in compliance with the regulations
of the Central Bank of Brazil (Bacen) and the Brazilian Securities and Exchange
Commission (CVM).
In accordance with the Bylaws of Banco Pine S/A and its Internal Regulations
(available on the website www.pine.com/ri), it is the responsibility of the Committee to
ensure (1) the quality and integrity of financial statements, (ii) compliance with legal and
regulatory requirements, (iii) the performance, independence and quality of the work of
independent auditors, (iv) the performance, independence and quality of work of
Internal Audit, and (v) the quality and effectiveness of the internal control and risk
management systems.
Management is responsible for the preparation of the financial statements of Banco Pine
S/A and Banco Pine S/A and its subsidiaries – (“Consolidated”) in accordance with
Brazilian accounting practices applicable to institutions whose operations are authorized
by Bacen. Management is also responsible for (i) establishing procedures that ensure the
quality of information and processes used in the preparation of the financial statements,
(ii) managing Pine Conglomerate”s operation risks, and (iii) supervising internal control
and compliance activities.
The independent audit firm is responsible for examining the financial statements and
issuing a report on their adequacy, in all material respects, in accordance with Brazilian
accounting practices applicable to institutions whose operations are authorized by
Bacen, as per the Brazilian Corporate Law and the rules set forth by the National
Monetary Council (CMN) and the Bacen.
Internal audit”s activities focus on the assessment of the efficiency and effectiveness of
the internal control and risk management systems, as well as on the compliance of
processes with Management’s rules and procedures.
Activities of the Committee in the 1% Half of 2013
The Committee held 11 meetings with Banco Pine S/A and its subsidiaries (Pine
Conglomerate) core areas, including business, credit, internal control and compliance,
risk management, operations, controllership, accounting and information technology
areas.
The Audit Committee’s 2013 Work Plan consisted of analyzing the structures,
Operations, processes and systems inherent to Pine Conglomerate”s business.
PINE
Special meetings were held with the independent audit firm and the Internal Audit to
discuss the annual plan and its implementation, as well as to monitor actions established
by Management concerning audit’s findings.
As a result of these meetings, the Committee had the opportunity to give the Board of
Directors suggestions to improve controls and risk management, in addition to
monitoring their effective implementation within the established terms.
Internal Control System
According to schedule and work plan for the period ended on June 30, 2013, the
Committee was informed on Pine Conglomerate?s control and information processes,
methods and system, and then assessed their quality and the managers” commitment
with their monitoring and improvement.
All Organization”s main activities, including those exercised by other companies (key
third parties), were analyzed. Thus, related risks were identified, and controls were used
to reduce them at an adequate management level. Such mapping, risks and controls are
recorded in an electronic data system acquired from a renowned and specialized
consulting firm.
Based on information collected during the meetings, the Committee considers that the
internal control systems are consistent with Pine Conglomerate”s size and operation
complexity, which contributes to business efficiency, adequacy of financial reporting
and compliance with standards and regulations applicable to its transactions.
Consolidated Risk Management
Pine Conglomerate?s Risk Management is conducted on a consolidated basis by the
Chief Risk Officer, comprising the main risks regulated by Bacen, namely Credit Risk,
Market Risk, Liquidity Risk and Operational Risk.
At work meetings with the Risk Management unit, the Committee was informed on the
processes, method, systems and main reports used to manage Market, Liquidity, Credit
and Operational Risks, including the activities of a specific risk committee.
Independent Audit
The Committee and the Independent Audit – PricewaterhouseCoopers (PwC) – held
meetings to approve the Quarterly Financial Information (ITR) and the Half-Year
Financial Statement. These meetings also discussed the Audit Annual Plan, and the
compliance with Audit”s Independence Policy was verified.
Recommendations from reports on internal controls were presented and discussed in the
Committee, which, jointly with the Internal Audit and respective areas, established
action plans to put them into practice. No weaknesses concerning the compliance with
the law, regulations and internal rules that may jeopardize the Organization’s business
were found. The Committee considers that the independent auditor’s planning and
works are consistent with Pine Conglomerate”s size and operation complexity.
Internal Audit
PINE
The Committee approved the Internal Audit structure and its Annual Plan-which
comprise all Organizations operations, risks and processes-, monitoring the
implementation of the Plan at its meetings. The permanent attendance of the Internal
Audit at the Committee”s meetings enables the necessary support to activities and
compliance with requirements.
The Internal Audit is also responsible for meeting the regulatory agencies”
requirements, presenting and discussing these agencies” reports and requirements at
meetings with the Committee.
Consolidated Financial Statements
The Committee assessed the processes for preparation of financial information, parent
company and consolidated statements of financial position, financial reports and notes
to the financial statements. It discussed with PwC and the Organization’s officers the
relevant practices used in the preparation of the financial statements in accordance with
Brazilian accounting practices applicable to institutions whose operations are authorized
by Bacen.
Conclusion
After due consideration of its responsibilities and inherent limitations deriving from the
scope of its works, the Audit Committee recommends that the Board of Directors
approve the financial statements of Banco Pine S/A and Banco Pine S/A and its
subsidiaries – Consolidated for the six-month period ended June 30, 2013.
Sáo Paulo, August 12, 2013
Maurízio Mauro
Chairman of the Audit Committee
Independent Member of the Board of Directors
William Pereira Pinto
Specialist Member
Tadeu Machado Zica
Member Representing Non-controlling Shareholder
EN PINE
MANAGEMENT REPORT
PINE – 1H13
Dear Shareholders,
PINE”s Management, in accordance with the law, presents the material facts and relevant events of the year thus far for your appreciation.
This report includes the Individual and Consolidated Financial Statements for the six month period ended J une 30, 2013.
1. MESSAGE FROM THE MANAGEMENT
Dear shareholders, investors, clients, and analysts,
The first half of 2013 has been an important period for PINE. Our adequate capital structure with BIS ratio of 17.0% low leverage and liquid
balance sheet, allowed PINE to absorb the demand for credit in the period. We have a robust coverage of the loan portfolio, diversified
funding, and liquid balance sheet with cash equivalent to 44%of time deposits.
In this first half, the Central Bank of Brazil approved the capital increase made by Proparco in the Bank. On April 25, DEG disbursed the first
transaction of the PINE-DEG partnership, totaling US$16 million with an eight-year term for a company in the autoparts industry, and we also
conducted our first transaction through our New York broker dealer, with a volume of US$250 million for a company in the sugar and ethanol
industry in the state of Sáo Paulo.
The economic scenario for 2013 remains with poor visibility, with important challenges in Brazil related to the economic activity. We remain
aligned with our strategy of offering clients an increasingly wider range of products, while serving the corporate market with tailor-made
services, building loyalty, and diversifying our income sources.
We are constantly working to build a better bank for our clients, shareholders, employees, and investors. We remain optimistic about our
business and vigilant regarding the domestic and international economic scenarios.
2. PERIOD HIGHLIGHTS
Total Loan Portfolio * Total Funding Shareholders’ Equity
1t> 2.0%
– 19.6%
7,642 o 6,972 7,111 1,259
1,053
r T 1 1 HA
Jun-12 Jun-13 J un-12 Jun-13 Jun-12 Jun-13
Fee Income Net Income ROAE
-3.2% -8.7% 450 bps
=> > =
Sa
62 60 07 18.6%
84 14.1%
1412 1413 1412 1413 1412 1413
1 Includes Letters of Credit to be used, Bank Guarantees, Credit Securities to be Received and Private Securities (bonds, CRIs, eurobonds and fund shares)
PINE
3. CORPORATE PROFILE
PINE (BM6:FBovespa: PINE4) is a wholesale Bank focused on establishing long-term relationships with its clients. Its strategy is based on
knowing its clients well and understanding their business and potential in order to build customized solutions and alternatives. This strategy
requires product diversity, highly qualified human capital, and efficient and agile risk management, which are areas that the Bank is
consistently evolving.
PINE has a broad client relationship network in various industries, such as sugar and ethanol, infrastructure, electric and renewable energy,
agriculture, and others. The bank offers Credit, including Working Capital, Onlending lines from BNDES and Multilateral Organizations, Trade
Finance, Bank Guarantees, as well as hedging products (Fixed Income, Currencies, and Commodities), Capital Markets, Financial Advisory
Services and Project 6: Structured Finance.
4. PERFORMANCE
Result Highlights
Total assets amounted to R$10,457 million in June 30, 2013, and net income reached R$84 million in the first half of 2013. Shareholders’
Equity was R$1,259 million, growing 19.6%YoY.
1413 1H12 2%
Earnings and Profitability
Net Income (R$ millions) 84 92 -8.1%
Annualized ROAE 14.1% 18.6% -450 bps
Balance Sheet (R$ millions)
Total assets 10,457 10,038 4.2%
Loan Portfolio * 8,994 7,642 17.7%
Total deposits ? 3,581 3,831 -6.5%
Funding 7,111 6,972 2.0%
Shareholders’ equity 1,259 1,053 19.6%
Credit portfolio quality
Non performing loans – 90 days 0.6% 0.2% 40 bps
Credit coverage 3.4% 3.7% -30 bps
Performance
BIS ratio 17.0% 15.9% 110 bps
Earnings per share – 3 (R$) 0.76 0.93 -18.4%
Book value per share – 3 (RS) 11.35 10.65 6.6%
includes Letters of Credit to be used, Bank Guarantees, Credit Securities to be Received and Private Securities
(bonds, CRIs, eurobonds and fund shares)
2 Includes Agribusiness and Real Estate Letters of Credit.
3 lt considers 10,842,313 stocks for 2013 and 98,852,774 stocks for 2012
Balance Sheet Highlights
Loan Portfolio
Total expanded loan portfolio reached R$8,994 million in June 30, 2013, increasing 7.0% Q0Q and 17.7% YoY. The working capital portfolio
combined with Negotiable Instruments Receivable and Private Securities portfolio, that have similar characteristics, increased 6.6% YoY. The
average maturity of the loan portfolio continues in 15 months.
The highlight in the quarter was the 27.3%increase in Trade Finance operations, arising from import transactions for various industries, and
12.2% in Bank Guarantee operations, especially with clients from the electric and renewable energy sector. The absorption of this growth is
possible thanks to PINE’s high capitalization and relatively low leverage.
PINE
2013
Meatpacking Financial
Institutions
2% Other
| 7%
Construction__ 2%
Material
2%
Food Industry
3%
Beverages and
Tobacco
3%
Telecom Construction
2% 12%
Vehicles and Parts
2%
Sugar and Ethanol
14%
Chemicals
4%
Electric and
Forelgn Trade Renewable Energy
11%
Metallurgy
5%
Infrastructure
7%
Transportation and_/ SPecializes Services A aricutture
Logistics 1% 7%
5%
Loan Portfolio Quality
The Loan Portfolio Coverage Index was 3.4%in J une 2013.
FICC
FICC (Fixed Income, Commodities and Currencies) business provides risk management products and hedging solutions on interest rates,
currencies, and commodities to help clients manage the risks on their balance sheets. The key markets in this business line are Fixed
Income, Currencies, and Commodities. PINE offers to its clients the main derivative instruments, which include non-deliverable forwards
(NDFs), options-based structures and swaps.
PINE Investimentos
PINE Investimentos, the Bank’s Investment Banking unit, works closely with its clients to offer customized and unique solutions in the Capital
Markets, Financial Advisory, and Project 6: Structured Finance areas.
In 1H13, PINE Investimentos led and structured more than R$1.1 billion in fixed income transactions.
Funding
Total funding stood at R$7,111 million in J une 2013, increasing 7.9% Q0Q and 2.0% YoY. The balance of time deposits, including Agribusiness
Credit Notes (LCA) and Real Estate Credit Notes (LCI), reached R$3,452 million in the quarter, increasing 5.1% Q0Q. The average weighted
term of deposits was 10 months, while the average term of funding transactions was 16 months.
Asset and Liability Management
In accordance with PINE’s asset and liability management, funding sources are aligned in terms of maturity and cost with their respective
credit transactions. While the weighted average maturity of the loan portfolio is 15 months, the funding period is 16 months, which ensures
a comfortable situation for the Bank. This positive liquidity gap has been maintained for over 3 years
Capital Adequacy Ratio (BIS
In the quarter, the capital adequacy ratio (BIS) reached 17.0% well above the minimum rate required by the Brazilian regulation (11%.
5. ORIGINATION NETWORK
Headquartered in Sáo Paulo, SP, with a presence in Brazil’s major cities and business capitals, Belo Horizonte, Blumenau, Campinas, Cuiabá,
Curitiba, Fortaleza, Porto Alegre, Recife, Ribeiráo Preto, Rio de Janeiro, and Sáo José do Rio Preto. PINE’s origination network is further
complemented by its location in the Cayman Islands, which aims to increase the supply of produts and services by acting in the international
market, and a subsidiary in New York, which has its activities focused on the Capital Markets and Research. PINE’s business strategy does not
depend on an extensive branch network, since the team is organized regionally and the Bank constantly monitors and visits ¡its clients. This
leads to substantial benefits in ¡ts fixed-cost structure.
6. HUMAN RESOURCES
PINE’s employees are ¡ts main asset. Therefore, the objective of the Human Resources department ¡is to attract, retain and develop the best
professionals, while maintaining a high-performance work environment focused on results and based on meritocracy. PINE had 397
employees by the end of J une 2013.
PINE
7. CORPORATE GOVERNANCE
PINE has active corporate governance policies, given its permanent commitment to shareholders and other stakeholders. Besides integrating
Level 2 of Corporate Governance of BM8.FBovespa, some of PINE’s practices include:
Two independent members and one external member to the Board of Directors
100%tag-along rights for all shares, including preferred shares
Adoption of arbitration procedures for rapid settlement of disputes
Quarterly disclosure of earnings in two accounting standards: BR GAAP and IFRS
Compensation and Audit committees, which report directly to the Board of Directors
8. INVESTOR RELATIONS
PINE makes information available to shareholders via its corporate website (www. pine.com/ ir), electronic bulletins, and quarterly reports,
as well as through its Investor Relations department (tel: 455-11-3372-5343, e-mail: irepine.com).
9. RATINGS
STANDARD – FitchRatings Moodys.com RISKbank:
¿POOR’S ana
E e Long Term BB+ BB+ Ba2
ly Short Term B B
530
pl E Long Term BB+ BB+ Ba2
m Short Term B B
T Long Term brAA AA-(bra) Al.br
E 10.68
E Short Term Fl+bra) Br-1
10. PINE STOCK (PINE4)
During the 1H13, PINE, in accordance with ¡its buyback program and pursuant to the Central Bank Resolution 3,921, repurchased 617,400 of
its own shares, which are currently held in treasury. Therefore, at the end of the quarter, the total amount held in treasury was 1,296, 149
shares.
As of J une 30″, 2013
Common Preferred Total a
Controling Shareholder 58,444,889 15,410,863 73,855,752 66.6%
Management . 6,035,158 6,035,158 5.4%
Free Float – 29,655,254 29,655,254 26.8%
Individual s -. 3,071,445 3,071,445 2.8%
Local Institutional Investors -. 11,638,078 11,638,078 10.5%
Foreign Investors -. 8,053,059 8,053,059 7.3%
DEG -. 5,005,067 5,005,067 4.5%
Proparco -. 1,887,605 1,887,605 1.7%
Subtotal 58,444,889 51,101,275 109,546, 164 98.8%
Treasury – 1,296,149 1,296,149 1.2%
Total 58,444,889 52,397,424 110,842,313 10.0%
11. PROFIT SHARING – INTEREST ON OWN CAPITAL AND DIVIDENDS
During the first half of 2013, PINE paid total of R$60 million as proceeds, which corresponds to a gross amount per share of R$0.55. Of this
total, R$31 million represents interest on own capital and R$29 million, dividends. Since 2008, PINE distributes dividends/ interest own on
capital in a quarterly basis.
12. EXTERNAL AUDITORS
In compliance with CVM Instruction 381, of J anuary 14, 2003, Pine reports that did not hire from the independent audiors any other services
than those related to the audit works for the period from ] anuary to J une, 2013. PINE adopts the procedure of limiting the services rendered
by its independent auditors so as to ensure the auditor’s independence and objectivity pursuant to Brazilian and international standards.
The Management
(A free translation of the original in Portuguese)
PINE
BANCO PINE S.A. AND SUBSIDIARIES
BALANCE SHEETS AT JUNE 30, 2013 AND 2012
(In thousands of reais)
ASSETS LN 2013
CURRENT ASSETS 7.279.058 7.261.885 7.248.817 7.295.486
Cash 4. 119.988 12.118 120.026 12.123
Short-term interbank investments 5. 668.724 364.874 669.124 365.694
Open market investments 479.171 110.610 479.571 111.430
Interbank deposits 96.523 106.046 96.523 106.046
Foreign currency investments 93.030 148.218 93.030 148.218
Marketable securities and derivative financial instruments 2.332.987 3.207.939 2.293.677 3.232.488
Own portfolio 6. a) 960.217 1.577.110 920.907 1.601.659
Subject to repurchase agreements 6. a) 1.058.161 1.270.080 1.058.161 1.270.080
Derivative financial instruments 6. b) 182.867 232.184 182.867 232.184
Subject to guarantees 6. a) 131.742 128.565 131.742 128.565
Interbank accounts 794 1.374 794 1.374
Unsettled payments and receipts 27 132 27 132
Restricted deposits:
Brazilian Central Bank 767 1.242 767 1.242
Loan operations 7. 2.532.720 2.406.322 2.537.396 2.406.219
Loan operations – private sector 2.630.878 2.524.836 2.635.554 2.524.836
Loan operations – public sector 3.402 5.845 3.402 5.845
Allowance for loan losses (101.560) (124.359) (101.560) (124.462)
Other receivables 1.447.498 1.209.602 1.451.421 1.217.932
Foreign exchange portfolio 8. 1.109.295 914.340 1.109.295 914.340
Income receivable 22.480 12.644 22.480 12.788
Negotiation and intermediation of securities 87.682 89.576 87.682 89.576
Sundry 9. 236.720 198.031 240.643 206.217
Allowance for other loan losses (8.679) (4.989) (8.679) (4.989)
Other assets 176.347 59.656 176.379 59.656
Non-operating assets 172.551 55.932 172.551 55.932
Prepaid expenses 3.796 3.724 3.828 3.724
LONG-TERM RECEIVABLES 3.051.188 2.579.585 3.114.089 2.733.908
Interbank investments 5. . 205.720 – 205.720
Interbank deposits – 205.720 – 205.720
Marketable securities and derivative financial instruments 715.939 438.610 683.607 353.742
Own portfolio 6. a) 432.330 183.416 399.998 98.548
Derivative financial instruments 6. b) 283.609 255.194 283.609 255.194
Loan operations 7. 1.856.056 1.598.825 1.947.613 1.835.381
Loan operations – private sector 1.948.029 1.677.186 2.039.586 1.913.742
Loan operations – public sector – 625 – 625
Allowance for loan losses (91.973) (78.986) (91.973) (78.986)
Other receivables 468.818 326.837 472.494 329.472
Income receivable 28.361 24.655 28.361 24.655
Deposits in guarantee 16. (b) (c) 202.961 189.946 204.724 191.540
Sundry 9. 237.806 112.401 239.719 113.442
Allowance for other loan losses (310) (165) (310) (165)
Other assets 10.375 9.593 10.375 9.593
Prepaid expenses 10.375 9.593 10.375 9.593
PERMANENT ASSETS 200.637 148.526 94.349 8.518
investments 171.986 140.038 65.695 –
Investments in local subsidiaries 10.a) 171.986 140.038 – –
Other investments – – 65.695 –
Property and equipment in use 11.a) 27.013 6.183 27.016 6.185
Facilities, furniture and equipment in use 13.738 13.068 13.738 13.068
Other fixed assets in use 29.008 4.470 29.011 4.473
Accumulated depreciation (15.733) (11.355) (15.733) (11.356)
Intangible assets 11.b) 1.638 2.305 1.638 2.333
Expenses for acquisition and development of software 9.468 9.254 9.533 9.720
Accumulated amortization (7.830) (6.949) (7.895) (7.387)
TOTAL ASSETS 10.530.883 9.989.996 10.457.255 10.037.912
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
BALANCE SHEETS AT JUNE 30, 2013 AND 2012
(In thousands of reais)
PINE
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Deposits
Demand deposits
Interbank deposits
Time deposits
Funds obtained in the open market
Own portfolio
Third-party portfolio
Unrestricted portfolio
Funds from acceptance and issuance of securities
Real estate letters of credit
Agribusiness letters of credit
Financial bills
Securities issued abroad
Interbank accounts
Unsettled payments and receipts
Correspondent banks
Interdepartmental accounts
Third-party funds in transit
Borrowings and onlendings
Foreign borrowings
Local onlendings – official institutions
Foreign onlendings
Derivative Financial Instruments
financial instruments
Collection and payment of taxes and similar
Foreign exchange portfolio
Social and statutory payables
Tax and social security contributions
Negotiation and intermediation of securities
Subordinated debt
Sundry
Other
LONG-TERM LIABILITIES
Deposits
Interbank deposits
Time deposits
Funds obtained in the open market
Third-party portfolio
Funds from acceptance and issuance of securities
Real estate letters of credit
Agribusiness letters of credit
Financial bills
Securities issued abroad
Borrowings and onlendings
Local borrowings – other institutions
Foreign borrowings
Local onlendings – official institutions
Foreign onlendings
Derivative financial instruments
Derivative financial instruments
Other liabilities
Tax and social security contributions
Subordinated debt
Sundry
Provision for contingent liabilities
Other
DEFERRED INCOME
EQUITY
Capital
Local residents
Foreign residents
Capital reserves
Revenue reserves
Proposed additional dividend
Carrying value adjustments
Treasury shares
TOTAL LIABILITIES AND EQUITY
LG
12.
13.
18.
14.
17.
15. a)
15. b)
19.
15. c)
12.
13.
18.
17.
15. b)
19.
15. c)
16. c)
20.
6.142.167
2.100.877
19.138
108.546
1.973.193
1.200.301
1.054.870
145.431
717.538
24.525
303.515
346.152
43.346
274
274
16.552
16.552
1.313.373
1.089.580
223.793
226.048
226.048
567.204
530
480.187
6.824
8.872
26.696
13.305
30.790
30.790
3.069.677
1.315.700
6.651
1.309.049
45.008
45.008
512.556
5.070
11.822
291.991
203.673
704.778
66.468
638.310
47.784
47.784
443.851
90.938
328.197
24.716
15.574
9.142
60.497
1.258.542
967.259
846.416
120.843
10.215
291.408
20.819
(14.886)
(16.273)
10.530.883
5.757.148
1.903.396
32.991
161.314
1.709.091
1.263.053
1.263.053
575.027
13.870
385.531
5.227
170.399
3.174
725
2.449
26.639
26.639
1.658.970
1.302.753
338.805
17.412
126.780
126.780
200.109
1.698
73.077
8.544
25.735
25.363
12.212
53.480
53.480
3.132.783
1.637.846
45.587
1.592.259
443.929
5.544
23.482
323.025
91.878
534.750
474.129
60.621
60.898
60.898
455.360
85.301
331.035
39.024
29.564
9.460
47.255
1.052.810
796.048
729.698
66.350
14.032
231.809
14.189
(1.711)
(1.557)
9.989.996
2013
6.135.683
2.065.203
18.811
108.546
1.937.846
1.200.301
841.470
213.400
145.431
717.355
24.525
303.332
346.152
43.346
274
274
16.552
16.552
1.313.373
1.089.580
223.793
226.048
226.048
596.577
530
480.187
6.824
11.185
41.844
13.305
42.702
42.702
3.002.533
1.171.189
1.614
1.169.575
45.008
45.008
512.556
5.070
11.822
291.991
203.673
776.581
71.803
66.468
638.310
47.784
47.784
449.415
91.541
328.197
29.677
15.606
14.071
60.497
1.258.542
967.259
846.416
120.843
10.215
291.408
20.819
(14.886)
(16.273)
10.457.255
5.723.934
1.864.446
32.708
148.506
1.683.232
1.263.053
1.263.053
575.027
13.870
385.531
5.227
170.399
3.174
725
2.449
26.639
26.639
1.658.970
1.302.753
338.805
17.412
126.780
126.780
205.845
1.698
73.077
8.544
30.899
25.363
12.212
54.052
54.052
3.210.254
1.537.805
45.552
1.492.253
443.929
5.544
23.482
323.025
91.878
711.761
177.011
474.129
60.621
60.898
60.898
455.861
85.802
331.035
39.024
29.564
9.460
50.914
1.052.810
796.048
729.698
66.350
14.032
231.809
14.189
(1.711)
(1.557)
10.037.912
The accompanying notes are an integral part of these financial statements.
(A free translation of the original in Portuguese) AR PINE
BANCO PINE S.A. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, except net income per share)
Consolidated
INCOME FROM FINANCIAL INTERMEDIATION 560.466 704.469 573.992 719.495
Loan operations 21.a) 242.431 274.775 250.454 295.735
Marketable securities 21.b) 123.433 284.626 128.936 278.692
Derivative financial instruments 110.595 30.156 110.595 30.156
Foreign exchange transactions 84.007 114.912 84.007 114.912
EXPENSES FOR FINANCIAL INTERMEDIATION (430.252) (498.210) (432.104) (504.745)
Funds obtained in the market 21.0) (295.906) (363.890) (293.614) (357.977)
Borrowings and onlendings 21.d) (91.939) (93.862) (96.083) (106.207)
Allowance for loan losses (42.407) (40.458) (42.407) (40.561)
GROSS PROFIT FROM FINANCIAL INTERMEDIATION 130.214 206.259 141.888 214.750
OPERATING INCOME (EXPENSE) (29.740) (68.170) (36.946) (70.159)
Income from services rendered 21.e) 41.976 24.406 58.640 59.502
Income from bank charges 1.211 2.313 1.211 2.313
Personnel expenses 21.) (42.260) (42.793) (43.992) (44.315)
Other administrative expenses 21.9) (44.035) (42.342) (44.852) (43.518)
Tax expenses 21.h) (5.695) (4.972) (7.413) (8.193)
Equity in the results of investees 13.618 25.517 – –
Other operating income 21.i) 16.140 37.881 15.205 32.350
Other operating expenses 21.) (10.695) (68.180) (15.745) (68.298)
OPERATING PROFIT 100.474 138.089 104.942 144.591
NON-OPERATING RESULTS 21.k) 5.026 4.326 5.026 4.318
INCOME BEFORE INCOME TAXES AND
PROFIT SHARING 105.500 142.415 109.968 148.909
INCOME TAX AND SOCIAL CONTRIBUTION 22. (7.468) (21.359) (11.211) (27.106)
Provision for current income tax (7.864) (306) (10.471) (4.234)
Provision for current social contribution (4.915) (184) (5.986) (2.031)
Deferred income tax and social contribution 5.311 (20.869) 5.246 (20.841)
PROFIT SHARING (13.816) (28.986) (14.541) (29.733)
NET INCOME 84.216 92.070 84.216 92.070
NUMBER OF OUTSTANDING SHARES 109.546.164 98.852.774 109.546.164 98.852.774
NET INCOME PER SHARE — IN REAIS 0,76877 0,93139 0,76877 0,93139
The accompanying notes are an integral part of these financial statements.
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
STATEMENTS OF VALUE ADDED FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais)
PINE
Revenues
Financial intermediation
Services rendered
Bank charges
Provision for loan losses
Other
Expenses for financial intermediation
Goods and services acquired from third parties
Materials, electricity and other
Third-party services
Other
Gross value added
Depreciation and amortization
Net value added produced by the institution
Value added transferred from others
Equity in the results of investees
Total value added to be distributed
Distribution of value added
Personnel
Salaries
Benefits, training
Social charges
Profit sharing
Taxes, charges and contributions
Federal
State
Municipal
Income tax and social contribution
Remuneration of third-party capital
Rents and leased assets
Remuneration of own capital
Interest on own capital/dividends
Retained earnings
571.718
560.466
41.976
1.211
(42.407)
10.472
387.845
36.012
306
25.854
9.852
147.861
3.048
144.813
13.618
13.618
158.431
158.431
56.076
28.670
4.308
9.282
13.816
13.163
3.497
6
2.192
7.468
4.976
4.976
84.216
60.000
24.216
664.755
704.469
24.406
2.313
(40.458)
(25.975)
457.752
34.906
283
26.297
8.326
172.097
1.898
170.199
25.517
25.517
195.716
195.716
71.778
29.102
4.027
9.663
28.986
26.331
3.035
(1)
1.948
21.359
5.537
5.537
92.070
40.000
52.070
595.922
573.992
58.640
1.211
(42.407)
4.486
389.697
36.768
309
26.394
10.065
169.457
3.048
166.409
166.409
166.409
58.533
29.846
4.483
9.663
14.541
18.624
4.376
5
3.032
11.211
5.036
5.036
84.216
60.000
24.216
[eE IE
2012
709.119
719.495
59.502
2.313
(40.561)
(31.630)
464.184
35.929
288
27.186
8.455
209.006
1.948
207.058
207.058
207.058
74.048
30.176
4.109
10.030
29.733
35.299
4.498
(1)
3.706
27.106
5.641
5.641
92.070
40.000
52.070
The accompanying notes are an integral part of these financial statements.
(A free translation of the original in Portuguese)
BANCO PINE S.A.
STATEMENTS OF CHANGES IN EQUITY
(In thousands of reais, except dividends and interest on own capital per share)
AS MS
Capital Fiscal incentive Other capital TO EA O
increase EAS ES Legal UTN adjustments OS Ññ ETS
At December 31, 2011 422.606 373.439 713 13.319 15.582 164.157 (1.461) – 26.726 – 1.015.081
Capital increase (Note 20) 373.442 (373.439) – – – – – – – – 3
Acquisition of treasury shares – – – – – – – (1.557) – – (1.557)
Carrying value adjustments – – – – – – (250) – – – (250)
Net income – – – – – – – – 92.070 92.070
Appropriations (Note 20): – –
Legal reserve – – – – 4.603 – – – – (4.603) –
Statutory reserve – – – – – 47.467 – – – (47.467) –
Approval/payment of proposed additional dividend – – – – – – – – (12.537) – (12.537)
Dividends (R$0.1011 per share) – – – – – – – – – (9.992) (9.992)
Interest on own capital (R$0,3036 per share) – – – – – – – (30.008) (30.008)
At June 30, 2012 796.048 – 713 13.319 20.185 211.624 (1.711) (1.557) 14.189 – 1.052.810
At December 31, 2012 935.683 – 14.032 (2.347) 24.954 242.238 (423) (12.750) 18.559 – 1.219.946
Capital increase (Note 20) – 31.576 – – – – – – – – 31.576
Other capital reserves – (1.470) (1.470)
Acquisition/Sale of treasury shares – – – – – – – (3.523) – – (3.523)
Carrying value adjustments – – – – – – (14.464) – – – (14.464)
Net income – – – – – – – – 84.216 84.216
Appropriations (Note 20): –
Legal reserve – – – – 4.211 – – – – (4.211) –
Statutory reserve – – – – – 20.005 – – – (20.005) –
Approval/payment of proposed additional dividend – – – – – – – – 2.260 – 2.260
Prepaid dividends (R$0.2675 per share) – – – – – – – – – (29.304) (29.304)
Interest on own capital (R$0.2802 per share) – – – – – – – – – (30.696) (30.696)
At June 30, 2013 935.683 31.576 14.032 (3.817) 29.165 262.243 (14.887) (16.273) 20.819 – 1.258.541
The accompanying notes are an integral part of these financial statements.
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS (DIRECT METHOD) FOR THE SIX-MONTH PERIODS ENDED MARCH 30, 2013 AND 2012
(In thousands of reais)
PINE
OPERATING ACTIVITIES
Adjusted net income
Net income for the six-month period
Allowance for loan losses
Deferred taxes
Depreciation and amortization
Provision for contingencies
Equity in the results of investee
Profit (loss) on sale of property and equipment/investment
Adjustments to fair value of other investments
Changes in assets and lial jes
(Increase) decrease in short-term interbank investments
(Increase) decrease in marketable securities
(Increase) decrease in loan operations
(Increase) decrease in other receivables
(Increase) decrease in other assets
(Increase) decrease in interbank and interdepartmental accounts
(Increase) decrease in derivative financial instruments
Increase (decrease) in deposits
Increase (decrease) in purchase and sale commitments
Increase (decrease) in funds from acceptance and issuance of securities
Increase (decrease) in borrowings and onlendings
)
)
Increase (decrease) in other liabilities
Increase (decrease) in deferred income
Net cash provided by (used in) operating acti
INVESTING ACTIVITIES
Acquisition/sale of property and equipment in use
Investments in intangible assets
Capital increase in subsidiaries
Net cash used in investing activities
FINANCING ACTIVITIES
Capital increase
Other capital reserves
Sale/acquisition of treasury shares
Interest on own capital and dividends paid
Net cash used in financing activities
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the beginning of the six-month period
Cash and cash equivalents at the end of the six-month period
Note
104.028
84.216
42.407
(5.311)
3.048
(6.704)
(13.618)
(10)
195.042
3.776
1.366.442
(417.200)
(690.418)
4.454
(4.995)
44.296
(59.161)
(587.352)
(61.969)
161.440
431.304
4.425
299.070
(652)
(18)
(505)
(1.175)
31.576
(1.470)
(8.523)
(55.686)
(29.103)
268.792
4. 423.396
4. 692.188
133.113
92.070
40.458
20.869
1.898
2.350
(25.517)
985
(130.078)
(41.451)
1.727.880
(107.713)
(477.989)
1.534
32.329
(92.766)
(61.570)
(1.927.363)
363.860
320.855
135.468
(3.152)
3.035
(981)
(437)
(1.418)
3
(1.557)
(51.112)
(52.666)
(51.049)
321.996
270.947
30/06/2013
117.741
84.216
42.407
(5.246)
3.048
(6.674)
(10)
(10.695)
239.956
3.776
1.398.236
(363.416)
(692.186)
4.422
(4.995)
44.296
(82.604)
(587.352)
(62.152)
114.508
462.998
4.425
357.697
(653)
(18)
(55.000)
(55.671)
31.576
(1.470)
(8.523)
(55.686)
(29.103)
272.923
430.399
703.322
[UE IE)
30/06/2012
158.765
92.070
40.561
20.841
1.948
2.350
995
(172.738)
(41.453)
1.705.554
(51.099)
(484.412)
1.534
32.329
(92.766)
(81.278)
(1.927.363)
363.860
269.574
135.259
(2.477)
(13.973)
(915)
(441)
(1.356)
3
(1.567)
(51.112)
(52.666)
(67.995)
339.767
271.772
The accompanying notes are an integral part of these financial statements.
(A free translation of the original in Portuguese)
PIN
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
1. Operations
Banco Pine S.A. (the “Institution” or “Banco Pine”) is authorized to operate commercial, credit and financing and foreign exchange portfolios.
The Institutior’s operations are conducted in the context of a group of institutions which act jointly, and certain transactions involve the co-participation or intermediation of other
members of the Pine Financial Group. The benefits from the intercompany services and the costs for the operating and administrative structures are absorbed, either jointly or
individually, by these companies as is most practicable and reasonable in the circumstances.
2. PRESENTATION OF FINANCIAL STATEMENTS
This presentation consists of the financial statements of Banco Pine, which include those of its Grand Cayman Branch and Pine Securities (Individual) and the consolidated
financial statements of Banco Pine and Subsidiaries (Consolidated)
The financial statements are presented in reais (RS), which is the Institution’s functional currency and that of its foreign branch and subsidiary. Unless otherwise indicated, the
financial information expressed in reais was rounded to the nearest thousand.
In compliance with Resolution 505/06, of the Brazilian Securities Commission (CVM), the Individual and Consolidated Financial Statements, as at August 08, 2013, were
authorized for issue on June 30, 2012, by the Institution’s Board of Directors, among other matters.
The consolidated financial statements consider the transactions of Banco Pine S.A. including its branch and subsidiary abroad, its direct and indirect subsidiaries and the special
purpose entity presented below:
2013
TO
Business activity Total assets Capital Equity 155)
Foreign Branches and Subsidiaries
Grand Cayman Branch Branch abroad 514.516 6.647 84.521 (4.627)
Pine Securities USA LLC (3) Subsidiary abroad 10.958 11.078 10.223 350
Subsidiaries
Pine Investimentos Distribuidora de Títulos e Valores Mobiliários Ltda. Securities dealer 254.167 13.385 39.194 1.120
Pine Comercializadora de Energia Elétrica Ltda (4) Consulting 82.838 77.400 82.114 1.685
Pine Corretora de Seguros Ltda. (1) Insurance broker 239 500 237 4
Pine Assessoria e Consultoria Ltda. (1) Consulting 35.972 500 35.575 66
Pine Assessoria em Comercializagáo de Energía (4) Consulting 47.211 60 47 (6)
Pine Planejamento e Servigos Ltda (2) Consulting 15.558 10 14.862 10.744
Special Purpose Entities (SPEs)
Pine Crédito Privado Fundo de Investimento em Direitos Creditórios Financeiros (a) Receivables 107.178 80.875 107.141 6112
FIP Rio Corporate – Fundo de Investimento em Participagdes (b) (5) Private equity 87.126 42.000 71.936 29.936
IRE VI! Desenvolvimento Imobiliário S/A (c) (6) “sPE’ 44.105 33.896 32.668 (916)
2012
TO
Business activity Total assets Capital Equity (155)
Foreign Branches and Subsidiaries
Grand Cayman Branch Branch abroad 461.437 6.064 76.891 (12.945)
Subsidiaries
Pine Investimentos Distribuidora de Títulos e Valores Mobiliários Ltda. Securities dealer 39.743 13.385 36.330 4.031
Pine Comercializadora de Energia Elétrica Ltda (3) Consulting 10 10 10 –
Pine Corretora de Seguros Ltda. (1) Insurance broker 2.825 1 1.229 1.216
Pine Assessoria e Consultoria Ltda. (1) Consulting 26.733 1 21.708 20.095
Pine Assessoria em Comercializagáo de Energia (3) Consulting 81.335 77.400 80.771 176
Special Purpose Entities (SPEs)
Pine Crédito Privado Fundo de Investimento em Direitos Creditórios Financeiros (a) Receivables
investment
fund (FIDC) 262.055 207.636 261.878 22.337
“Pine Assessoria e Consultoria Lida and Pine Coretora de Seguros Lida. were consituted on December 12, 2011. Capital is R$500, comprising 500 shares, ful subscribed and paid up in local currency in December 2012.
1 Pine Planejamento e Servigos Ltda, was constituted on June 26, 2012. Capitalis R$10, comprising 10,000 shares of R$1 each, ful subscribed and paid up in local currency and distributed as follows between the partners: Pine Comercializadora de Energía
Elétrica with 0.01% and the Institution with 99.89%.
(8) Pine Securiies USA LLC was consttuted in October 2012. Capialis R$10,000.
(4) Pine Comercializadora de Energía Elética Ltda. holds 90% of Pine Assessoria em Comercializacáo de Energía.
(5) FIP Rio Corporate was constituted on April 18, 2013 and on May 15, 2013, the Insttuion paid in 42,000 shares.
(6) On May 16, 2013, through FIP Rio Corporate, the Institution acquired 100% of the shares of IRE VIl Desenvolvimento Imobiláio Ltda.
a) Pine Crédito Privado
Since the control over receivables assigned to this receivables investment fund (FIDC) still lies with the Institution (receipt, transfer and collection) and, in essence, the Institution is
responsible for providing the guarantees to the FIDC’s investors as regards expected receivables and yield, management decided to consolidate the FIDC, as provided for in
CVM Circular 01/07.
In accordance with Article 5 of CVM Instruction 408/04, we present below the information on Pine Crédito Privado, considered in preparing the consolidated financial statements:
i) Name, nature, purpose and activities of the FIDC.
Pine Crédito Privado Fundo de Investimento em Direitos Creditórios Financeiros, managed by Citibank Distribuidora de Títulos e Valores Mobiliários S/A., was constituted as a
closed fund on December 7, 2010. Distribution commenced on March 28, 2011. The Fund offered 207,000 senior shares at the unit value of RS1. The distribution period ended on
April 6, 2011. The Fund will terminate its activities in up to 180 days from the date on which the Senior Shares outstanding are redeemed in full (54 months subsequent to the
Fund’s distribution date).
The purpose of the Fund is to increase shareholder value, exclusively through the acquisition of financial segment Credit Rights, on business loans (working capital), originated
and assigned by Pine, which meet the Qualifying Criteria, as well as the portfolio composition and diversification indices established in the Regulation. As an additional activity, the
Fund will also make investments in Other Assets.
ii) Investment in the equity and results of the FIDC
In accordance with Article 24, section XV, of CVM Instruction 356, as amended by CVM Instruction 393, and Chapter 21 of the Fund Regulation, 69% of the Fund’s equity will
comprise senior shares and 31% will comprise subordinated shares. This ratio will be determined daily and shall be made available for consultation monthly by the Fund’s
shareholders.
Página 7
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
) Nature of the Institution’s involvement with the FIDC and type of exposure to loss, if any, arising from this involvement.
Verification of whether the credit rights meet the assignment terms is, pursuant to the assignment agreement, the sole responsibility of the assignor (Banco Pine), without limiting
the assignee’s (Fund) right, either directly or through third parties, to also conduct such verification
Non-compliance with any obligation originating from the credit rights and other active components of the Fund’s portfolio, is attributed to the subordinated shares up to the limit
corresponding to the sum of their total value. Once this total has been exceeded, the default of credit rights held by the Fund is attributed to the senior shares. The subordinated
shares do not have a profitability target, however, they may benefit from any surplus yield generated by the credit right portfolio,
In the event the percentage of subordinated shares falls below 31% of the Fund’s equity, the Institution shall have five business days to recoup this minimum ratio, through the
subscription of new subordinated shares, and if this does not occur, the management entity shall call an Evaluation Event under the terms of the Fund regulations. In the event
the subordinated shares comprise more than 31% of the Fund’s Equity, the management entity may partially amortize the subordinated shares in the amount necessary to
rebalance this ratio.
iv) Amount and nature of the receivables, payables, income and expenses between the Institution and the FIDC, assets transferred by the Institution and rights of
use over the FIDC assets.
No loans were assigned to the FIDC for the six-month periods ended June 30, 2013 and 2012
Additionally, on account of its investment in subordinated shares in this Fund, at June 30, 2012, the Institution recognized a loss of R$1,039 (June 30, 2012 – income of R$9,992)
in the “marketable securities” account.
‘s and equity of the FIDC at June 30, 2013 and 2012:
v) Total assets,
2013
2012
Current assets 424 1.052. Current liabilities 35 177
Cash 24 5 Otherliabilties 35 177
Shortterm interbank investments 400 820
Other receivables – 227
Long-term receivables 106.753 261.003
Marketable securities 12.442 24.550
Loan operations 94311 236.453 Equity 107.142 261.878
Total assets 107.477 262.055 – Total liabilities and equity 107.477 262.055
vi) Guarantees, sureties, mortgages or other collateral pledged in favor of the FIDC.
Banco Pine has provided no guarantee, surety, mortgage or other colateral in favor of the FIDC or its investors.
vii) Identification of the principal beneficiary or group of principal beneficiaries of the FIDC’s activities.
Banco Pine is the sole holder of all the subordinated shares of this Fund. The senior shares are held by different qualified investors.
b) FIP Rio Corporate
Since it has institution sole shareholder is the FIP and this is a Private Equity Fund, the management decided to consolidate the FIP, pursuant to resolution 2723 of May 31, 2000
the Central Bank of Brazil.
¡) Name, nature, purpose and activities of the FIP.
FIP Rio Corporate, administered by BNY Mellon Financial Services Distributor Securities SA was set up in the form of condominium on April 18, 2013. The Fund offered 100,000
shares with a par value of £ 1. The closing date for the distribution is 30 months from the date of the first payment of quotas, which was on May 15, 2013. The Fund will terminate
their activities five years from the date of the first payment of shares, which may be extended, upon proposal by the Manager and at the General Meeting of Shareholders.
The purpose of the Fund is to shareholders invested capital appreciation over the long term by investing in shares of the Company’s, whose exclusive purpose is the development
and economic exploitation, through leasing and sale of real estate enterprise.
li) Total assets, ‘s and equity of the FIP at June 30, 2013 and 2013:
Current assets 87.126 Current liabilties 15.190
Cash 1 Otherliabilities. 15.190
Shortterm interbank investments 87.125
Equity 71.936
Total assets 87.126 – Total liabilities and equity 87.126
c) IRE VII Desenvolvimento Imobiliário S/A
Since it has control over the SPE’s activities, the Institution’s management decided to consolidate IRE VIl Desenvolvimento Imobiliário S/A, in accordance with the provisions of
CVM Instruction 408/04.
i) Name, nature, purpose and activities of the SPE
IRE VIII Desenvolvimento Imobiliário S/A was constituted as a corporation on December 9, 2010. lts main activities include the management, purchase, sale and rental of
properties owned by itself or by third parties; real estate development and investment in other companies as a partner or shareholder.
ii) Investment in the equity and results of the SPE
On May 16, 2013, through FIP Rio Corporate, the Institution acquired 100% of the shares of IRE VII Desenvolvimento Imobiliário Ltda.
and equity of the SPE at June 30, 2013 and 2012:
v) Total assets,
Current assets 12.682 Current liabilities 11.437
Cash 14. Taxand social security contributions 10
Short-term interbank investments 12.471. Otherliabilties 11.427
Other receivables 197
Permanet Assets 31.423 Equity 32.668
Property 31.423
Total assets 44.105. Total llabilities and equity 44.105
3. SIGNIFICANT ACCOUNTING PRACTICES
The financial statements of Banco Pine are prepared and presented in accordance with the accounting practices adopted in Brazil applicable to institutions authorized to operate
by the Brazilian Central Bank (BACEN) and to corporations and by the Brazilian Securities Commission (CVM), where applicable.
Página 8
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
The standards issued by the Brazilian Accounting Pronouncements Committee (CPC) related to the process of convergence with international accounting standards, approved by
CVM, but not yet ratified by BACEN, were not adopted in the consolidated balance sheets. The standards approved by CVM which did not conflict with the rules of the National
Monetary Council (CMN) and BACEN and those which had been ratified by BACEN were adopted for the disclosure purposes of these financial statements.
We present below the main accounting practices used:
a) Consolidation
The balances and the results of the transactions between Banco Pine and its subsidiaries Pine Investimentos, Pine Comercializadora, Pine Corretora, Pine Assessoria and Pine
Assessoria em Comercializagáo de Energia and Pine Planejamento were eliminated in the consolidated statements. For FIDC consolidation purposes, the balance of the loan
assignment receivables portfolio was included in the Institution’s loan operations portfolio, with a corresponding entry of the senior shares in the “Borrowings and onlendings –
local”, account, net of investments in investment fund shares, comprising the shares held of this Fund
b) Determination of the results of operations
Revenues and expenses are recorded on the accrual basis of accounting, which establishes that revenues and expenses should be included in the determination of the results for
the periods in which they occur, simultaneously when correlated, irrespective of their receipt or payment.
Financial revenue and expenses are prorated, based substantially on the exponential method.
Transactions with floating rates or those indexed to foreign currencies are adjusted up to the balance sheet date.
€) Cash and cash equivalents
Cash and cash equivalents comprise cash in local and foreign currencies, short-term financial investments and time deposits, with maturities at the original investment date equal
to or less than 90 days and which present an immaterial risk of change in fair value. These are used by the Institution to manage its short-term commitments.
d) Short-term interbank investments
Short-term interbank investments are presented at cost plus related eamings up to the balance sheet dates.
Página 9
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
€) Marketable securities
In accordance with BACEN Circular 3068, the Institution’s securities are classified in the following categories: “trading securities”, “available-for-sale securities” and “held-to-
maturity securities”
Trading securities are those acquired to be traded on a frequent and active basis. These securities are presented at cost plus related eamings up to the balance sheet dates and
adjusted based on fair value with the adjustments recorded in the corresponding revenue or expense account in results for the period.
The securities classified as available for sale are those for which Management has no intention to hold to maturity or which were not acquired to be traded on a frequent and active
basis. These securities are recorded at cost plus related eamings up to the balance sheet dates and are adjusted to market value against the “Carrying value adjustments”
account in equity, net of tax effects.
The securities classified as held to maturity are those which management acquires with the intention and financial ability to hold in its portfolio to maturity. These securities are
recorded at cost plus related eamings. Premium and discount, where applicable, are appropriated to results based on the term of the individual securities.
Trading securities are presented in current assets, irrespective of their maturities.
f) Derivative financial instruments
In accordance with BACEN Circular 3082/02 and Letter-Circular 3026/02, the derivative financial instruments related to transactions with options, forward transactions, futures and
swaps are recorded in compliance with the following criteria:
Options: premiums paid or received are recorded in assets or liabilities, respectively, until the options are effectively exercised and recorded as a decrease or increase in
the cost of the asset or right, based on the effective exercise of the option, or as revenue or expense in the case of non-exercise;
Futures: daily adjustments are recorded in an asset or liability account and appropriated daily as revenue or expense;
Swaps: differences receivable or payable are recorded in an asset or liability account, respectively, and appropriated as revenue or expense on a pro rata basis up to the
balance sheet date;
Forward contracts: recorded at the contract closing amount, less the difference between this amount and the spot price of the asset or right, recognizing the revenue and
expense over the term of the contract up to the balance sheet date.
The derivative financial instruments are measured at fair value, with the corresponding gains or losses recorded as follows:
Derivative financial instruments which do not qualify as hedges, as revenue or expense in results for the period
Financial instruments which meet hedging criteria are classified either as fair value or cash flow hedges.
Fair value hedges are designed to ofíset risks arising from the exposure to fluctuations in the market value of the hedged item. The instruments and hedged items are adjusted to
fair value and recorded in a profit or loss account.
9) Loan operations and allowance for loan losses
The loan operations are classified, as regards risk level, based on criteria which consider current economic conditions, past experience and the specific risks related to the
transactions, the borrowers and the guarantors, in compliance with the parameters established by CMN Resolution 2682/99, which require the periodic analysis of the portfolio and
its classification into nine levels (from “AA” to “H”).
Income from loan operations past due for more than 60 days, regardless of the risk level, is only recognized as revenue on the date itis effectively received.
H-rated operations (allowance recorded at 100%) remain at this level for six months, and are subsequently written off against the existing allowance and controlled over a five-
year period in memorandum accounts and are no longer presented in the balance sheet.
Renegotiated loans are held at the same level at which they were originally classified at the time of the renegotiation.
Renegotiated loans which had already been written off as losses and which were recorded in memorandum accounts, are H rated, and any gains arising from the renegotiation
are only recognized when actually received.
The allowance for loan losses meets the minimum requirement established by the aforementioned Resolution, as described in Note 7.
As established by BACEN Resolution 3533/08, financial assets are written off when the contractual rights to the cash flow of the financial asset expire or when the financial asset
is sold or transferred.
The sale or transfer of a financial asset is currently classified as:
a transaction with substantial transfer of risks and rewards: the assignor substantially transfers all the risks and rewards related to the financial asset which is the object of the
transaction.
h) Prepaid expenses
These are controlled by contract and accounted for in the prepaid expenses account. The expenses are appropriated to results for the period based on the corresponding contract
term and recorded in the “Other administrative expenses” account.
¡) Other current assets and long-term receivables
These are stated at cost, including, where applicable, related accrued income and monetary variations, less the corresponding provisions for loss or adjustments to realizable
value.
]) Permanent assets
These assets are stated at cost and consider the following:
Investments in subsidiaries are accounted for using the equity method
. Property and equipment items correspond to rights in tangible assets which are used in the Institution’s business activities, or exercised for this purpose, including those arising
from transactions which transfer the risks, benefits and control of assets to the entity.
Depreciation of property and equipment is computed and recorded on the straight-line method at annual rates which consider the economic useful lives of the assets
Intangible assets correspond to the rights acquired in non-physical assets which are used in the Institution’s business or which are exercised for this purpose. The intangible
assets with identifiable useful lives are generally amortized on the straight-line method over the estimated period of economic benefit
Página 10
(A free translation of the original in Portuguese) a
CS
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
k) Impairment of non-financial assets
An impairment loss is recognized if the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. A cash generating unit is the smallest identifiable
group of assets that generates cash flows that are largely independent of the cash flows from other assets or groups of assets. Impairment losses are recognized in results for the
period. The non-financial asset amounts, except for deferred tax assets are tested, at least, annually to determine whether there is any indication of impairment.
1) Purchase and sale commitments
The purchase (sale) of financial assets based on a fixed price resale (repurchase) contract is recorded in the consolidated balance sheet as financing granted (received), based
on the nature of the debtor (creditor), in the “Funds obtained in the open market” account
m) Current and long-term liabilities
These are stated at known or estimated amounts including, where applicable, acerued charges and monetary or exchange variations up to the balance sheet dates.
n) Contingent assets and lial
les and legal obligations
The recognition, measurement and disclosure of contingent assets and liabilities, and legal obligations (tax and social security) are based on the criteria defined in Resolution
3823/09, and Letter Circular 3429/10, which approved CPC Technical Pronouncement 25, as follows:
Contingent assets: are not recorded in the financial statements, except when there is evidence which assures a high degree of confidence that they will be realized,
generally through a final and unappealable court decision.
Contingent liabilities: the reserve for contingencies is determined based on the probability of an unfavorable sentence or outcome of the related litigation, as well as the
probable period of the loss. The necessary reserve is calculated based on an analysis of each process and the opinion of the legal advisors. Reserves are recorded for processes
in which the possibility of loss is deemed probable. The reserves may be changed in the future, based on the progress of each suit; When the probability of loss is deemed
possible, no provision is recorded and the related suits are merely disclosed;
Legal obligations (tax and social security): these comprise administrative proceedings or lawsuits related to tax and social security obligations, the legality or constitutionality of
which is being contested, whose amounts, regardless of the related probability of success, are recorded at the full amount in dispute and adjusted in accordance with the
legislation in force.
0) Provision for income tax and social contribution
The provisions for income tax and social contribution are recorded at the following statutory rates: income tax – 15%, plus a 10% surcharge on taxable income exceeding R$ 120
(for the half year), and social contribution – 15%. Further, deferred tax assets are recorded on temporary differences based on the assumption that the future taxable income
generated by the Institution will be sufficient to offset these assets.
In accordance with Provisional Measure (MP) 449/08, subsequently enacted into Law 11941/09, the changes in the criteria used to recognize revenue, costs and expenses
computed in determining net income, introduced by Law 11638/07 and by Articles 36 and 37 of the MP, may be ignored for purposes of calculating the taxable income if
companies elect to use the Transitional Tax System (RTT). In this case, for tax purposes, the accounting methods and criteria in force at December 31, 2007 wi be followed.
p) Profit sharing
Banco Pine has its own profit sharing program (PPLR) ratified by the Bank Employees Trade Union.
The general assumptions of this program are: (a) business unit performance; (b) establishment of a fund for distribution across the organization; and (c) assessment of the skills
and the meeting of targets in the supporting areas. The related expenses were recognized in the “Profit sharing” account”.
a) Use of estimates
The preparation of financial statements requires Management to make estimates and assumptions, to the best of its judgment, that affect the reported amounts of certain assets,
liabilities, revenues and expenses and other transactions, such as the fair value of assets and derivatives and the allowance for loan losses, the establishing of the period for
realizing deferred tax assets, property and equipment depreciation rates, amortization of deferred charges and reserves for contingences and others. Actual results may differ
from these estimates.
r) Net income per share
This is calculated based on the number of outstanding shares paid up at the date of the financial statements.
4. CASH AND CASH EQUIVALENTS
Consolidated
qn
Cash 12123
Short-term interbank investments(1) 572.200 258.829 572.601 259.649
Total cash and cash equivalents 692.188 270.947 692.627 271.772
(1) These are transactions wilh maturites at the original investment date equal o or less than 90 days.
Página 11
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
FR PIN
5. APLICACÓES INTERFINANCEIRAS DE LIQUIDEZ
Interbank investments at June 30, 2013 and 2012, are comprised as follows:
REA
Security/Maturity MELO LS From 3 to 5 years From 5to 15 years
Investments in purchase and sale agreements
‘Own portfolio position
Financial
Treasury
Bills (LFT)
– – 16.001 – –
National
Treasury
Bills (LTN)
– – 39.800 – –
Federal
Treasury
Notes
(NTN) – – – 79.787 1.773
Subtotal – – 55.801 79.787 1.773
“Third-party portfolio position
LTN – – 46.913 – –
Subtotal – – 46.913 – .
Investment in sales
NIN – – – 24.556 130.315
Subtotal – – – 24.556 130.315
Total investments in purchase and sale
commitment – . 102.714 104.343 132.088
Interbank deposits
Own portfolio
Floating
rate CDI – 7.539 – – –
Rural CDI
25.550 101 – – –
Subtotal 25.550 7.640 – . –
Subject to guarantees
Floating
rate CDI 20.482 42.851 – – –
Subtotal 20.482 42.851 – . –
Total interbank
deposits 46.032 50.491 . . –
Foreign currency investments
Foreign currency investments 93.030 – – –
Total foreign currency investments 93.030 – – . –
Total interbank
Investments 139.062 50.491 102.714 104.343 132.088
RETA
Security/Maturity MICELTO TS TES
Investments in purchase and sale commitments
“Own portfolio position
Financial
Treasury
Bills (LFT)
– – 16.001 – –
National
Treasury
Bills (LTN)
400 – 39.800 – –
Federal
Treasury
Notes
(NTN) – – – 79.787 1.773
Subtotal
400 – 55.801 79.787 1.773
“Third-party portfolio position
LTN – – 46.913 – –
Subtotal
– – 46.913 . –
Investment in sales
NTN – – – 24.556 130.315
Subtotal
– . . 24.556 130.315
Total investments in purchase and sale
commitments 400 . 102.714 104.343 132.088
Interbank deposits
Own portfolio
Floating
rate CDI – 7.539 – – –
Rural CDI
25.550 101 – – –
Subtotal 25.550 7.640 – . –
Subject to guarantees
Floating
rate CDI 20.482 42.851 – – –
Subtotal 20.482 42.851 – – –
Total interbank
deposits 46.032 50.491 . . –
Foreign currency investments
Foreign currency investments 93.030 – – –
Total foreign currency investments 93.030 – – – –
Total interbank
Investments 139.462 50.491 102.714 104.343 132.088
Página 12
140.026
140.026
140.026
140.026
140.026
140.026
140.026
140.026
16.001
39.800
221.586
277.387
46.913
46.913
154.871
154.871
479.171
7.539
25.651
33.190
163.333
163.333
96.523
93.030
93.030
668.724
16.001
40.200
221.586
277.187
46.913
46.913
154.871
154.871
479.571
7.539
25.651
33.190
163.333
163.333
96.523
93.030
93.030
669.124
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
FR PIN
E
Security/Maturity MITO TS TS
Investments in purchase and sale commitments
“Own portfolio position
LIN 67.007 – –
NTN 43.603 – –
Subtotal
110.510 “ –
Total investments in purchase and sale
‘commitments 110.510 “ –
Interbank deposits
“Own portfolio
Floating
rate CDI – 313 –
Rural CO!
2.039 16.914 –
Subtotal 2.039 17.227 .
Subject to guarantees
Floating
rate CDI 12.255 74.525 205.720
Subtotal 12.255 74.525 205.720
Total interbank
deposits 14.294 91.752 205.720
Foreign currency investments
Foreign currency investments 148.218 – –
Total foreign currency investments 148.218 “ –
Total interbank
investments 273.122 91.752 205.720
EAT MIGO TS
67.007
43.603
110.610
110.610
313
18.953
19.266
292.500
292.500
311.766
148.218
148.218
570.594
Investments in purchase and sale commitments
“Own portfolio position
LIN 67.827 – –
NTN 43.603 – –
Subtotal
111.430 “ –
Total investments in purchase and sale
commitments 111.430 “ –
Interbank deposits
“Own portfolio
Floating
rate CDI – 313 –
Rural CO!
2.039 16.914 –
Subtotal 2.039 17.227 .
Subject to guarantees
Floating
rate CDI 12.255 74.525 205.720
Subtotal 12.255 74.525 205.720
Total interbank
deposits 14.294 91.752 205.720
Foreign currency investments
Foreign currency investments 148.218 – –
Total foreign currency investments 148.218 “ –
Total interbank
investments 273.942 91.752 205.720
6. MARKETABLE SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS
a) Marketable securities
The securities portfolio at June 30, 2013 and 2012 was comprised as follows:
Nan
E EEES
67.827
43.603
111.430
111.430
313
18.953
19.266
292.500
292.500
311.766
148.218
148.218
571.414
MEA
TN, MELO LS E LEO Aa)
Available-fo!
“Own porto
National
Treasury
Bills (LTN)
– 183.907 – – – 183.907
Federal
Treasury
Notes
(NTN) – – 119.950 145.561 48.920 314.431
Debentures – – 20.420 – 65.147 85.567
Recelvables investment fund
Shares – – 32.332 – – 32.332
Certificates of Real Estate Receivables (CRI) – 15.085 – – – 15.085
Total available-for-sale
securities – 198.992 172.702 145.561 114.067 631.322
Trading securities(1):
Own portfolio:
LTN 447.887 3.208 3.015 – – 454.110
NIN – 8.150 11.942 5.825 19.951 45.868
Debentures 1.287 – 7.413 2.017 – 10.717
Investment fund shares(2) 171.572 – – – – 171.572
Private equity fund shares 53.912 – – – – 53.912
Eurobonds s7 62 21.133 3.794 – 25.046
Subtotal
674.715 11.420 43.503 11.636 19.951 761.225
Página 13
184.788
333.788
90.354
32.332
15.000
656.262
454.131
46.689
10.667
168.119
53.912
24.721
758.239
(A free translation of the original in Portuguese)
FR PIN
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
Subject to repurchase
commitments:
LIN 249.999 450.624 40.239 – – 740.862 742.140
NTN – – 98.502 3.612 – 102.114 102.228
Debentures 96.639 – 50.135 68.411 – 215.185 212.923
Subtotal 346.638 450.624 188.876 72.023 – 1.058.161 1.057.291
Subject to
guarantees:
LIN – 67.756 – – – 67.756 67.268
NTN – – – 15.066 48.920 63.986 68.333
Subtotal – 67.756 – 15.066 48.920 131.742 135.601
Total trading
securities 1.021.353 529.800 232.379 98.725 68.871 1.951.128 1.951.131
Total securities 1.021.353 728.192 405.081 244.286 182.938 2.582.450 2.607.393
AATOan
E EEES
Security/Maturity MELO O RES
Available-fo!
‘Ovn portfolio:
LTN – 183.907 – – – 183.907 184.788
NTN – – 119.950 145.561 48.920 314.431 333.788
Debentures – – 20.420 – 65.147 85.567 90.354
Certificates of Real Estate Receivables (CRI) – 15.085 – – – 15.085 15.000
Total available-for-sale
securities – 198.992 140.370 145.561 114.067 598.990 623.930
Trading securities(1
Own portfoli
LTN 447.887 3.208 3.015 – – 454.110 454.131
LET 12.442 – – – – 12.442 12.442
NTN 8.150 – 11.942 5.825 19.951 45.868 46.689
Debentures 1.287 – 7.413 2.017 – 10.717 10.667
Investment fund shares(2) 173.732 – – – – 173.732 170.279
Eurobonds 57 62 21.133 3.794 – 25.046 24.721
Subtotal
643.555 3.270 43.503 11.636 19.951 721.915 718.929
Subject to repurchase
commitments:
LTN 249.999 450.624 40.239 – – 740.862 742.140
NTN – – 98.502 3.612 – 102.114 102.228
Debentures 96.639 – 50.135 68.411 – 215.185 212.923
Subtotal 346.638
450.624 188.876 72.023 – 1.058.161 1.057.291
Subject to
guarantees:
LIN – 67.756 – – – 67.756 67.268
NTN – – – 15.066 48.920 163.986 68.333
Subtotal
– 67.756 – 15.066 48.920 131.742 135.601
Total trading
securities 990.193 521.650 232.379 98,725 68.871 1.911.818 1.911.821
Total securities 990.193 720.642 372.749 244.286 182.938 2.510.808 2.535.751
CA]
E EEES
TN, MELO LS E LEO RES
LTN – – – – – – –
NTN – – 46.329 36.048 – 82.377 83.141
Receivables investment fund –
shares – – – 84.868 – 84.868 84.868
Investment fund shares(2) 593.790 – – – – 599.790 593.790
Certificates of Real Estate Receivables (CRI) – – 16.171 – – 16.171 16.171
Subtotal
593.790 – 62.500 120.916 – 777.206 777.970
Subject to repurchase
‘commitments:
NTN 152.561 – – – – 152.561 154.794
Subtotal
152.561 – – – – 152.561 154.794
Total available-for-sale
securities 746.351 – 62.500 120.916 – 929.767 932.764
Trading securities(1
¡Own portfolio:
LIN 339.741 274.474 € – 198.264,00 – – 812.479 799.614
NTN – – 60.640 83.277 21.088 165.005 161.271
Debentures – – 4.886 – – 4.886 4.886
Eurobonds – – – – 950 950 950
Subtotal
339.741 274.474 263.790 83.277 22.038 983.320 966.721
Página 14
(A free translation of the original in Portuguese)
PIN
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
Subject to repurchase
commitments:
LTN 776.951 – – – – 776.951 761.710
NIN 301.166 – – – – 301.166 297.926
Debentures 39.402 – – – – 39.402 39.402
Subtotal 1.117.519 – – – – 1.117.519 1.099.038
Subject to
guarantees:
LTN – 128.565 – – – 128.565 127.016
Subtotal – 128.565 – – 128.565 127.016
Total trading
securities 1.457.260 403.039 263.790 83.277 22.038 2.229.404 2.192.775
Total securities 2.203.611 403.039 326.290 204.193 22.038 3.159.171 3.125.539
an
From3to 12 From1to3
EAN] MIELRTO TS O ME
Available-for-sale securities:
– – 46.329 36.048 – 82.377 83.141
Investment fund shares(2) 593.790 – – – – 593.790 593.790
Certificates of Real Estate Receivables (CRI) – – 16.171 – – 16.171 16.171
Subtotal
593.790 – 62.500 36.048 – 692.338 693.102
Subject to repurchase
commitments:
NTN 152.561 – – – – 152.561 154.794
Subtotal
152.561 – – – – 152.561 154.794
Total available-for-sale
securitles 746.351 – 62.500 36.048 – 844.899 847.896
Trading securities(1
¡Own portfolio:
LIN 339.741 274.474 € – 198.264,00 – – 812.479 799.614
NIN – – 60.640 83.277 21.088 165.005 161.271
LFT – – – – 24.549 24.549 24.549
Debentures – – 4.886 – – 4.886 4.886
Eurobonds – – – – 950 950 950
Subtotal
339.741 274.474 263.790 83.277 46.587 1.007.869 991.270
Subject to repurchase
commitments:
LTN 776.951 – – – – 776.951 761.710
NTN 301.166 – – – – 301.166 297.926
Debentures 39.402 – – – – 39.402 39.402
Subtotal 1.117.519
– . “ . 1.117.519 1.099.038
Subject to
guarantees:
LTN – 128.565 – – – 128.565 127.016
Subtotal
– 128.565 – – – 128.565 127.016
Total trading
securities 1.457.260 403.039 263.790 83.277 46.587 2.253.953 2.217.324
Total securities 2.203.611 403.039 326.290 119.325 46.587 3.098.852 3.065.220
(1) Securities classified in the “Trading” category are stated based on their maturit dates.
(2) The shares are composed of R $ 171,572 in the Individual and R$ 173,732 in the Consolidated (R$ 596,285 in the Individual and Consolidated on June 30, 2012, vith the establishment of a valuation allowance of fund shares multimarket investment of R$
2.495), being: (1) RS 78,876 in Individual and Consolidated (R$ 515.414 in the Individual and Consolidated on June 30, 2012) Pine CM Fund Multimarket Private Credit, (1) RS 92,896 in Individual and Consolidated (R$ 80,871 the Individual and Consolidated
on June 30, 2012) Pine RB Capital Fund Multimarket Private Credit (on June 30, 2012 the quotas were composed by FICFI Mulimarket Credit Private Investment Abroad), and (1) R$ 2,160 in consolidated FIP Rio Corporate – Investment Fund Participation
“The assets comprsing funds are, most), debentures, promissory notes and certificates of receivables totaing R$ 548,942 (note 7a)
At June 30, 2013 and 2012, there were no securities classified as “held to maturity”.
As established in Article 5 of BACEN Circular 3068/08, securities may only be reclassified on the date of the half yearly balance sheet. At June 30, 2013 and 2012, no securities
were reclassified.
The market values of the securities recorded in the “available for sale” and “trading” categories were determined based on the prices and rates practiced at June 30, 2013 and
2012, disclosed by the Brazilian Association of Financial and Capital Market Institutions (ANBIMA), BM8FBovespa S.A. – – Bolsa de Valores, Mercadorias e Futuros, by the
investment fund managers and by the international information agencies. The mark-to-market adjustment of the securities recorded in the “available for sale” category generated
a loss of R$24,940 on an Individual and Consolidated basis (June 30, 2012 – loss of R$2,997 on both an Individual and Consolidated basis), affecting the equity of the Institution
by R$14,964 on an Individual and Consolidated basis (June 30, 2012 – R$1,711 on an Individual and Consolidated basis), net of tax effects. The mark-to-market adjustment of the
securities recorded in the “trading” category resulted in a loss adjustment of R$ 71,939 on an Individual and Consolidated basis (June 30, 2011 – gain adjustment of R$36,629 in
both the Individual and Consolidated) in results.
b) Derivative financial instruments
i) Utilization policy
The growing level of company sophistication in a global market prompted an increase in the demand for derivative financial instruments to manage balance sheet exposure to
market risks, arising mainly from fluctuating interest and foreign exchange rates, the price of commodities and other asset prices. As a result, Banco Pine offers its customers
alternatives for mitigating market risks through appropriate instruments, as well as to meet its own needs for managing these risks.
Página 15
(A free translation of the original in Portuguese)
FR PIN
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
li) Management
The management of portfolio risks is controlled using techniques which include the following: VaR, sensitivity, liquidity risk and stress scenarios. Based on this information, the
necessary derivative financial instruments are contracted by the treasury department, pursuant to Management’s previously defined market and liquidity risk policy. Derivative
transactions carried out by Banco Pine with customers are neutralized to eliminate market risks.
The sale of derivative financial instruments to customers is subject to prior credit limit approval. The credit limit approval process also considers potential stress scenarios.
Knowing the customer, their operating sector and their risk appetite profile, as well as being able to provide information on the risks involved in the transaction and in the terms
and conditions negotiated, ensures that the relationship between the parties is transparent and permits the Institution to offer customers the products which are most appropriate
to their specific needs.
The majority of the derivative contracts negotiated by the Institution with customers in Brazil, comprise swaps, fonward transactions, options and futures registered at
BM8FBovespa or CETIP S.A. – Balcáo Organizado de Ativos e Derivativos. The derivative contracts traded abroad comprise futures, forward transactions, options and swaps
mainly registered at the Chicago, New York and London exchanges. We stress that although certain trades abroad are carried out over-the-counter (OTC), the related risks are
low in relation to the Institution’s total transactions.
The main market risk factors monitored by Banco Pine include exchange rates, local interest rate volatility (fixed, reference rate (TR), General Price Index – Market (IGP-M) long-
term interest rate (TJLP) and Extended Consumer Price Index (IPCA)), exchange coupon and commodities. The Institution adopts a conservative approach, minimizing its
exposure to risk factors and to the mismatchina of portfolio terms.
iii) Evaluation and measurement criteria, methods and assumptions used to determine fair value
The Institution uses the market reference rates disclosed principally by BMgáFBovespa, Intercontinental Exchange (ICE) and Bloomberg to determine the fair value of the
derivative financial instruments. For derivatives whose prices are not directly disclosed by the exchanges, the fair values are obtained through pricing models that use market
information, determined based on the prices disclosed for assets with the greatest liquidity. Based on these prices, the Institution extracts the interest curves and market
volatilities which are used as entry data for the models. The OTC derivatives, forward contracts and securities with low liquidity are determined in this way.
iv) Amounts recorded in balance sheet and memorandum accounts, segregated into the following categori
maturities, cost and fair values.
index, counterparty, trading market, notional values,
At June 30, 2013 and 2012, the derivative financial instrument positions are as follows:
COMER
AAA
ASSETS
¡Swap – difference receivable 49.622 255.293 304.915 67.365 239.201 306.566
Fonward contracts- receivable 69.538 26.650 96.188 128.719 17.229 145.948
Premiums on unexercised options 63.706 1.666 65.372 33.919 945 34.864
Total receivable 182.866 283.609 466.475 230.003 257.375 487.378
LIABILITIES
Swap – difference payable (62.742) (38.616) (101.358) (17.477) (69.336) (16.513)
Fonward contracts- payable (77.007) (7.673) (64.680) (68.850) (5.739) (74.589)
Premiums on written options (86.299) (1.495) (87.794) (85.631) (945) (36.576)
Total payable (226.048) (47.784) (273.832) (121.658) (66.020) (187.678)
Net amount (43.182) 235.825 192.643 108.345 191.355 299.700
v) Derivative financial instruments by index
COMER
OS Result
Swap.
Market risk
Asset position: 3.231.161 304.915 .
Interest 2.309.276 161.283 –
860.809 143.632 –
Currency
Variable income 61.076 – –
Liability position: 3.231.161 – (101.358)
Interest 2.316.492 – (36.872)
914.569 – (64.486)
Currency
Net amount – 304.915 (101.358) 114.196
Forward contracts
Asset position: 3.013.444 96.189 .
Interest 1.241.475 221 –
1.650.060 96.783 –
Currency
Commodities 121.909 185 –
Liability position: 3.013.444 – (84.680)
Interest 1.103.342 – (1.008)
1.686.694 – (83.653)
Currency
Commodities 223.408 – (19)
Net amount – 96.189 (84.680) (27.897)
Página 16
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
Options
Premium on unexercised options:
Currency
Commodities
Premiums on written options:
Currency
Commodities
Net amount
Total receivable (payable) and gain (loss)
1.200.329
560.944
639.385
1.472.961
769.723
703.238
TAE
165.372 –
23.601 –
41.771 –
– (87.794)
– (43.599)
– (44.195)
165.372 (87.794) (6.087)
466.476 (273.832) 78.212
COMETE
MA TS CE
Market risk
Asset position:
Interest
Currency
Commodities
Variable income
Liability position:
Interest
Currency
Total swaps
Forward contracts
Asset position:
Interest
Currency
Commodities
Liability position:
Interest
Currency
Commodities
Net amount
Options
Premium on unexercised options:
Currency
Commodities
Premiums on written options:
Currency
Commodities
Net amount
Total receivable (payable) and gain (loss)
vi) Derivative financial instruments – futures contracts
3.601.273
2.542.162
959.245
45.589
54,277
3.601.273
2.671.627
929.646
2.787.989
485.298
1.932.253
370.438
2.787.989
1.491.382
1.006.020
290.587
781.908
364.520
417.388
1.014.006
609.095
404.911
306.566 –
172.331 –
123.577 –
1.983 –
8,675 –
– (76.513)
– (64.687)
– (11.826)
306.566 (76.513) 102.115
145.948 –
8.076 –
124.084 –
13.788 –
– (74.589)
– (3.299)
– (65.954)
– (6.336)
145.948 (74.589) 55.126
34.864 –
16.677 –
18.187 –
– (36.576)
– (20.760)
– (15.816)
34.864 (36.576) 962
487.378 (187.678) 158.203
COMER
Interbank market:
Index
US dollar
Future exchange coupon:
Euro
Commodities
Total
E
adjustment
TAE AS
A (Payable)
3.019.181 3.340.902 6.967
1.268.241 3.322.760 (18.464)
1.750.940 18.142 25.431
230.138 177.343 –
– 86.490 –
230.138 170.853 –
3.249.319 3.518.245 6.967 32.383
COMER
Interbank market:
Index
US dollar
Commodities
Future exchange coupon:
Euro
Commodities
Total
Página 17
Daily
adjustment
TEA receivable
EE] (payable)
1.352.775 2.653.135 45.273
1.019.363 2.447.989 49.567.
333.412 204.142 (4.252)
– 1.004 (42)
110.387 271.261 –
– 4.800 –
110.387 266.461 –
1.463.162 2.924.396 45.273 (128.047)
(A free translation of the original in Portuguese)
PIN
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(inthousande ofeais, unless onenvise stated)
vii) Derivative financial instruments by maturity
ca
DAA
nie TR O
Notional amount TS TS E EIA
Swap. 404.379 743.176 1.022.876 601.326 3.231.161
Forward contracts 1.685.715 977.706 350.023 3.013.444
Options 1.678.338 950.335 44.617 2.673.290
Futures 3.726.441 1.697.078 983.898 6.767.564
Ena
Market value
E More than 15
Notional amount Up to 3 months From 3 to 5 years _From 5 to 15 years
Swap. 500.703 982.224 958.133 316.074 3.501.273
Forward contracts 1.215.414 1.243.324 224.097 105.154 – 2.787.989
Options 906.198 864.818 24.898 – – 1.795.914
Futures 1.782.993 1.047.562 1.036.920 484.260 35.823 4.387.558
viii) Derivative financial instruments by trading market
At June 30, 2013 and 2012, the swaps, forward contracts and options, whose notional amounts are recorded in a memorandum account are comprised as follows:
COMER
EE
ACES O Futures CS O
Exchange 185.171 175.792 1.563.206 6.740.284 124.921 150.284 1.281.625 4.376.135
BM8FBOVESPA 125.300 – 873.950 6.360.083 70.300 881.875 4.005.910
Exchanges abroad 59.871 175.792 689.256 380.201 54.621 150.284 399.750 370.825
otc 3.045.990 2.837.652 1.110.084 27.280 3.476.352 2.637.705 514.289 10.823
Financial institutions 552.091 306.099 – 27.280 1.416.897 252.429 – 10.823
Companies 2.493.899 2.531.553 1.110.084 – 2.059.455 2.385.276 514.289 –
Total 3.231.161 3.013.444 2.673.290 6.767.564 3.601.273 2.787.989 1.795.914 4.387.558
ix) Amount and type of guarantee margin
The margin amounts deposited in guarantee at June 30, 2013 and 2012 are comprised as follows:
COMER
Market value
Guarantee margin – Exchange clearing house – BMC
“National Treasury BIS (LTN) 19.330 10.744
Federal Treasury Notes (NTN) 15.065 –
34.395 10.744
Subtotal
¡Guarantee margin – BMF8Bovespa
LIN 48.426 117.821
NTN 48.921 –
97.347 117.821
Subtotal
Total 131.742 128.565
Página 18
(A free translation of the original in Portuguese)
FR PIN
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
7. CREDIT PORTFOLIO, GUARANTEES PROVIDED AND SECURITIES WITH CREDIT RISK
We present below a summary of the loan operation portfolio information at June 30, 2013 and 2012:
a) By type of loan:
E)
Details 2012
Public sector 3.402 6.470 3.402 6.470
Working capital 2.439.354 2.394.356 2.535.587 2.630.911
Resolution 3844 (formerly Resolution 2770) – 10.359 – 10.359
Overdraft account 10.503 45.955 10.503 45.955
BNDES/FINAME onlending 844.157 811.184 844.157 811.184
Paycheck deductible loans 18.195 46.650 18.195 46.650
Foreign currency financing 325.108 291.229 325.108 291.229
Export financing 941.550 578.424 941.550 578.424
Direct consumer financing (CDC) – vehicles 40 276 40 276
Buyer financing (Compror) – 23.589 – 23.589
Subtotal – Loan operations 4.582.309 4.208.492 4.678.542 4.445.047
Debtors for purchase of assets(1) 126.038 46.887 126.038 46.887
Advances on foreign exchange contracts and income receivable (2) 578.678 745.717 578.678 745.717
Notes and credits receivable(1) 100.160 – 100.160 –
Credit portfolio 5.387.185 5.001.096 5.483.418 5.237.651
Loans for imports 154.639 117.176 154.639 117.176
Guarantees provided 2.806.972 1.598.910 2.806.972 1.598.910
Coobligations in loan assignments 83 18.307 83 18.307
Guarantee provided and responsibilities 2.961.694 1.734.393 2.961.694 1.734.393
Notes and credits receivable(1) 30.262 49.451 30.262 49.451
Corporate bonds (3) 518.680 620.838 518.580 620.838
Securities with credit risk 548.942 670.289 548.942 670.289
Total expanded portfolio 8.897.821 7.405.778 8.994.054 7.642.333
(1) Recorded in “Other receivablos- sundey” (Noto 9)
(2) Recorded in “Other habi” and “Foreign exchange porfi” (Note 8)
(8) Mosty debentures, promissory notes and receivables ceífictes in the funds’ portal and in Banco Pine’s poroto (Note S(a).
b) By maturity:
EA
Falling due
Amount E EAT
Up to 3 months. 1.563.510 31,17 13.948 27,86 1.677.458 31,14
From 3 to 12 months 1.647.920 30,88 36.106 72,12 1.684.026 31,26
From 1 to 3 years 1.341.428 25,13 1 0,02 1.341.439 24,90
From 3 to 5 years 546.155 10,23 – – 546.155 10,14
From 5 to 15 years 138.107 2,59 – – 138.107 2,56
Total credit portfolio 5.337.120 100,00 50.065 100,00 5.387.185 100,00
Up to 3 months 662.674 22,38 280 100,00 662.954 22,38
From 3 to 12 months 1.030.910 34,81 – – 1.030.910 34,81
From 1 to 3 years 783.414 26,45 – – 783.414 26,45
From 3 to 5 years 440.694 14,88 – – 440.694 14,88
From 5 to 15 years 43.722 1,48 – – 43.722 1,48
Total guarantees provided and responsibilities 2.961.414 100,00 280 100,00 2.961.694 100,00
Up to 3 months 98.163 17.88 – – 98.163 17,88
From 3 to 12 months 18.328 3,34 25 100,00 18.353 3,34
From 1 to 3 years 161.543 29,43 – – 161.543 29,43
From 3 to 5 years 188.303 34,30 – – 188.303 34,30
From 5 to 15 years 82.580 15,05 – – 82.580 15,05
Total securities with credit risk 548.917 100,00 25 100,00 548.942 100,00
Total expanded portfolio 8.847.451 50.370 8.897.821
RAT
Falling due
Up to 3 months. 1.563.510 30,62 13.948 27,86 1.677.458 30,59
From 3 to 12 months 1.649.755 30,36 36.106 72,12 1.685.861 30,74
From 1 to 3 years 1.435.825 26,43 1 0,02 1.435.836 26,19
From 3 to 5 years 546.155 10,05 – – 546.155 9,96
From 5 to 15 years 138.108 2,54 – – 138.108 2,52
Total credit portfolio 5.433.353 100,00 50.065 100,00 5.483.418 100,00
Up to 3 months 662.674 22,38 280 100,00 662.954 22,38
From 3 to 12 months 1.030.910 34,81 – – 1.030.910 34,81
From 1 to 3 years 783.414 26,45 – – 783.414 26,45
From 3 to 5 years 440.694 14,88 – – 440.694 14,88
From 5 to 15 years 43.722 1,48 – – 43.722 1,48
Total guarantees provided and responsibilities 2.961.414 100,00 280 100,00 2.961.694 100,00
Página 19
(A free translation of the original in Portuguese)
FR PIN
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
Up to 3 months 98.163 17,88 – – 98.163 17,88
From 3 to 12 months 18.328 3,34 25 100,00 18.353 3,34
From 1 to 3 years 161.543, 29.43 – – 161.543, 29,43
From 3 to 5 years 188.303 34,30 – – 188.303 34,30
From 5 to 15 years 82.580 15,05 – – 82.580 15,05
Total securities with credit risk 548.917 100,00 25 100,00 548.942 100,00
Total expanded portfolio 8.943.684 50.370 8.994.054
TJ
TEO
Up to 3 months 1.711.931 34,53 43.608 100,00 1.755.539 35,10
From 3 to 12 months 1.542.755 31,12 – – 1.542.755 30,85
From 1 to 3 years 1.233.057 24,87 – – 1.233.057 24,66
From 3 to 5 years 369.788 7.46 – – 369.788 7,39
From 5 to 15 years 99.957. 2,02 – – 99.957 2,00
Total credit portfolio 4.957.488 100,00 43.608 100,00 5.001.096 100,00
Up to 3 months 352.561 21,26 76.070 100,00 428.631 24,71
From 3 to 12 months 578.256 34,87 – – 578.256 33,34
From 1 to 3 years 184.747 11,14 – – 184.747 10,65
From 3 to 5 years 502.591 30,31 – – 502.591 28,98
From 5 to 15 years 40.168 2.42 – – 40.168 2,32
Total guarantees provided and responsibilities 1.658.323 100,00 76.070 100,00 1.734.393 100,00
Up to 3 months 13.982 2,09 – – 13.982 2.09
From 3 to 12 months 220.939 32,96 – – 220.939 32,96
From 1 to 3 years 123.239 18,39 – – 123.239 18,39
From 3 to 5 years 290.986 43,41 – – 290.986 43,41
From 5 to 15 years 21.143 3,15 – – 21.143 3,15
Total securities with credit risk 670.289 100,00 – – 670.289 100,00
Total expanded portfolio 7.286.100 119.678 7.405.778
RE
TEO RETO
Up to 3 months 1.711.931 32,96 43.608 100,00 1.755.539 33,52
From 3 to 12 months 1.542.755 29,70 – – 1.542.755 29,46
From 1 to 3 years 1.469.612 28,29 – – 1.469.612 28,06
From 3 to 5 years 369.788 7,12 – – 369.788 7,06
From 5 to 15 years 99.957 1,92 – – 99.957 1,91
Total credit portfolio 5.194.043 100,00 43.608 100,00 5.237.651 100,00
Up to 3 months 352.561 21,26 76.070 100,00 428.631 24,71
From 3 to 12 months 578.256 34,87 – – 578.256 33,34
From 1 to 3 years 184.747 11,14 – – 184.747 10,65
From 3 to 5 years 502.591 30,31 – – 502.591 28,98
From 5 to 15 years 40.168 2.42 – – 40.168 2,32
Total guarantees provided and responsibilities 1.658.323 100,00 76.070 100,00 1.734.393 100,00
Up to 3 months 13.982 2,09 – – 13.982 2,09
From 3 to 12 months 220.939 32,96 – – 220.939 32,96
From 1 to 3 years 123.239 18,39 – – 123.239 18,39
From 3 to 5 years 290.986 43,41 – – 290.986 43,41
From 5 to 15 years 21.143 3,15 – – 21.143 3,15
Total securities with credit risk 670.289 100,00 – – 670.289 100,00
Total expanded portfolio 7.522.655 119.678 7.642.333
Página 20
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
FR PIN
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
c) By business activity:
‘Sugar and ethanol
Civil construction
Electric and renewable energy
Building and engineering – Infrastructure
Agriculture
Specialized services
Metal products
Transportation and logistics
Foreign trade
Chemical and petrochemical
Vehicles and parts
Telecommunications
Beverages and tobacco
Foodstufís
Construction material and decor
Meat processing
Financial institution
Steel products
Mining
Retail trade
Individuals
Paper and pulp
Plastic and rubber
Medical services
Wholesale trade
Textiles and clothing
Information technology
Water and sanitation
Mechanics
Pharmaceuticals and cosmeticos
Electroelectronios
Leather and footwear
Communications and printing
Teaching institution
Total expanded portfolio
RE
EE 2012
1.281.232 1.364.824 1.296.102 1.401.287
1.064.605 736.784 1.074.270 758.767
997.492 561.329 997.492 569.013
608.012 454.421 618.110 496.294
588.380 623.455 606.702 652.838
503.896 412.567 507.930 427.225
456.704 226.225 461.745 232.530
423.052 391.424 428.479 399.958
373.042 408.367 373.042 408.367
318.765 252.280 318.765 252.280
314.277 285.312 314.277 294.512
284.174 137.734 293.736 142.492
276.287 257.278 278.808 270.042
224.514 214.095 233.320 228.183
222.306 78.218 222.306 93.888
156.737 168.317 156,737 168.317
129.488 215.326 135.540 224.842
98.710 6.422 98.710 6.422
96.487 99.659 96.487 99.659
72.846 35.468 72.846 35.468
68.151 53.618 68.151 53.618
64.809 75.692 64.809 75.692
45.080 40.433 45.080 40.433
37.243 27.742 37.243 27.742
36.755 12.282 36.755 12.283
32.595 77.718 34.431 81.393
34.219 24.119 34.219 24.119
32.888 10.461 32.887 10.461
19.249 34.359 19.249 34.359
18.510 56.950 18.510 56.950
13.830 18.133 13.830 18.133
3.486 9.331 3.486 9.331
24.550 – 24.550
10.885 – 10.885
8.897.821 7.405.778 8.994.054 7.642.333
d) Credit portfolio by risk level and allowance, in accordance with Resolution 2682/99:
Falling due
ES
grormooo>z
886.562
1.573.508
2.035.981
516.863
164.410
38.804
24.560
48.735
47.597
5.337.120
Falling due
ETT
LE Falling due
886.662 – 982.894 – 982.894 –
1.573.508 7.867 1.573.508 – 1.573.508 7.867
2.035.992 20.360 2.035.981 1 2.035.992 20.360
519.045 15.571 516.863 2.182 519.045 15.571
176.648 17.565 164.410 12.238 176.648 17.665
38.857 11.658 38.804 53 38.857 11.658
24.641 12.320 24.560 81 24.641 12.320
49.172 34.421 48.736 437 49.173 34.421
82.660 82.660 47.597 35.063 82.660 82.660
5.387.185 202.522 5.433.353 50.065 5.483.418 202.522
1.158.725
1.135.276
1.919.699
553.057
46.318
39.932
7.543
40.043
56.895
4.957.488
687
17.987
8.623
375
102
2.031
13.803
43.608
Individual
“Allowance (1) Falling due
1.158.725 – 1.158.725 – 1.158.725 –
1.135.276 5.676 1.371.831 – 1.371.831 5.779
1.920.386 45.904 1.919.699 687 1.920.386 45.904
571.044 35.360 553.057 17.987 571.044 35.360
54.941 5.494 46.318 8.623 54.941 5.494
40.307 12.093 39.932 375 40.307 12.093
7.545 3.822 7.543 102 7.545 3.822
42.074 29.452 40.043 2.031 42.074 29.452
70.698 70.698 56.895 13.803 70.698 70.698
5.001.096 208.499 5.194.043 43.608 5.237.651 208.602
(1) At June 30, 2012, an additional provision was recorded in the amount of R$44,929, of which R$26,700 is B rated and R$18,229 is C rated.
e) By concentration level:
Largest borrowers.
Largest borrower
2nd to 10th
11th to 20th
21st to 50th
51stto 10th
Other borrowers
Total expanded portfolio
EJ EE
EA ENE
ra ná
EA PACTO TN PACTO EA
209.904 2,83 232.566 2,59 209.904 2,75
1.148.997 15,51 1.428.355 15,88 1.148,97 15,03
782.857 10,57 1.018.394 11,32 782.866 10,24
1.648.101 22,25 1.775.771 19,74 1.648.108 21,57
1.458.560 19,69 1.627.333 18,09 1.458.618 19,09
2.157.359 29,13 2.911.635 32,38 2.393.840 31,32
7.405.778 100,00 8.994.054 100,00 7.642.333 100,00
Página 21
(A free translation of the original in Portuguese) A
M4 P
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
f) Banco Pine’s total expanded credit portfolio concentration by activity sector:
NE RITA
2012
Agricultural 72.661 67.685 2 106.036
Housing 25.231 35.625 25.231 35.625
Manufacturing 1.964.030 2.060.926 1.992.748 2.117.221
Commercial 251.379 150.188 255.735 175.827
Financial intermediation 138.197 44.857 144.248 54.372
Other services 6.196.160 4.923.094 6.234.947 5.029.849
Individuals 250.163 123.403 250.163 123.403
Total expanded portfolio 8.897.821 7.405.778 8.994.054 7.642.333
9) Change in the allowances for loan losses and other loan losses, in accordance with Resolution 2682/99:
ET
Details EE 2012
‘Opening balance 186.652 173.070
Additions/Reversals 42.407 40.458
Amount written off (26.777) (5.056)
Exchange variation (1) 240 27
Closing balance 202.522 208.499
Consolidated
Details 2013 2012
‘Opening balance 188.254 173.070
Additions/Reversals 40.805 40.561
Amount written off (26.777) (5.056)
Exchange variation (1) 240 27
Closing balance 202.522 208.602
(1) Exchange variton on he alonance orloan osses (PDD) of tho overseas branch, ciassifed in he “Ote operating expenses” accountin e statement of operations
9) Change in the provision for loan operations assigned with coobligation:
COMER
PESO EE 2012
‘Opening balance 2 9.966
Reversal 7) (6.245)
Closing balance(1) 3.721
(1) Presented in “Other Information” (Note 28.a)
i) Credit assignments
For the period ended June 30, 2013, loans were assigned without coobligation in the amount of R$7,957 to parties not related to the Institution (June 30, 2012 – R$ 78,728).
These assignments generated a loss in relation to their face value of R$ 6,805 (June 30, 2012 – R$ 60,946), without discounting the allowance for loan losses in the amount of R$
6,758 (June 30, 2012 – R$55,651). The results of the assignments are recorded in the “Other operating income/expenses” account”. Additionally, contracts previously written off
as a loss of R$ 26,242 (June 30, 2012 — R$45,627) were assigned. These assignments generated a gain of R$ 2,910 (June 30, 2012 – R$ 913), recorded in “Loan Operations”.
i) Credit recoveries
For the six-month period ended June 30, 2013, credits previously written off as loss were recovered in an amount of R$6,540 (June 30, 2012 – R$2,755).
k) Renegotiation of contracts
At June 30, 20132, renegotiated contracts totaled R$124,767 (June 30, 2012 – R$ 18,902). The original ratings attributed to these contracts were maintained.
8. FOREIGN EXCHANGE PORTFOLIO
CERA
RC RETA
EE 2012
Exchange purchases pending settlement 705.250 817.635 – –
Rights on exchange sales 391.589 74.985 – –
Income receivable 12.549 23.902 – –
Advances in local currency received (93) (2.182) – –
Exchange sales pending settlement – – 391.768 72.879
Liabiliies for exchange purchases – – 654.548 722.013
Advances on foreign exchange contracts – – (566.129) (721.815)
Total 1.109.295 914.340 480.187 73.077
Página 22
(A free translation of the original in Portuguese)
FR PIN
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
9. OTHER RECEIVABLES – SUNDRY
a) Other receivables – Sundry
These are comprised as follows:
ETA
“Advances and salary prepayments . 1.539
Advances for payments on our behalf . 3.935
Deferred tax assets (Note 9.) z . 110.165 150.148
Debtors for purchase of assets . 126.038 18.530 46.887
Income tax available for offset (Note 16.b) 43.767 11.338 55.399
Amounts receivable from affiliates – 49 918 918
Notes and credits receivable 33.200 130.422 49.451 49.451
‘Sundry debtors – Brazil and abroad – 7.516 2.155 2.155
Total 237.806 474.526 198.031 310.432
RIE
Advances and salary prepayments
Advances for payments on our behalf
Deferred tax assets (Note 9.) z . 159.495 110.165
Debtors for purchase of assets . 126.038 18.530
Income tax available for offset (Note 16.b) 45.480 11.354
Notes and credits receivable 33.200 130.422 49.451
‘Sundry debtors – Brazil . – 11.472 11.188,
Total 240.643 239.719 480.362 206.217
b) Deferred tax assets
At June 30, 2013 and 2012, the deferred tax assets and deferred tax liabilities related to income tax and social contribution were comprised as follows:
ETA
Deferred tax assets
Allowance for
loan losses
Adjustment of available-for-sale securities
Adjustment of trading securties
Credits written off as a loss
Futures market – Law 11196
Allowance for loss on loans
assigned with co-obligation
Provision for tax risks and
úcontingent liabilties 10.419 6.251 16.670 12.078 7.246 19.324
Tax loss – 8.053 4.832 12.885
Provision for profit sharing 2.750 1.650 4.400 9.331 5.598 14.929
Provision for adjustment of loan assignments – – – 211 127 338
Provision for lawyers’ fees 2.285 1.372 3.657 2.365 1.419 3.784
Provision for equity accounting loss abroad 3.497 2.098 5.595 3.236 1.942 5.178
Provision – FIDC – – – 545 327 872
Provision for Resolution 3921 2.487 1.493 3.980 2.489 1.494 3.983
Provision for devaluation of assets 2.489 1.493 3.982 – – –
Total 99.558 59.736 159.294 93.842 56.306 150.148
Consolidated
AATPESAA
Allowance for
loan losses
Adjustment of available-for-sale securities
Adjustment of trading securties
Credits written off as a loss
Futures market – Law 11196
Allowance for loss on loans
assigned with co-obligation
Provision for tax risks and
úcontingent liabilties
Tax loss 8.053 4.832 12.885
Provision for profit sharing 2.750 1.650 4.400 9.331 5.598 14.929
Provision for adjustment of loan assignments – – – 211 127 338
Provision for lawyers’ fees 2.285 1.372 3.657 2.365 1.419 3.784
Provision for equity accounting loss abroad 3.497 2.098 5.595 3.236 1.942 5.178
Provision – FIDC – – – 545 327 872
Provision for Resolution 3921 2.487 1.493 3.980 – – –
Provision for devaluation of assets 2.489 1.493 3.982 2.489 1.494 3.983
Total 99.684 59.811 159.495 93.944 56.367 150.311
Página 23
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
ETA
AAA
Maricto-market adjustment of derivative
financial instruments
Adjustment of trading securities
Asset adjustment of judicial deposits
Futures market – Law 11196
Income from renegotiation
Adjustment of unrestricted notes 2.360 – – –
Total (Note 15.b) 37.763 22.658 60.421 46.256 27.754 74.010
Deferred tax liabilities.
Maricto-market adjustment of denvative
financial instruments
Adjustment of trading securities
Asset adjustment of judicial deposits
Futures market – Law 11196
Income from renegotiation
Adjustment of unrestricted notes
Total (Note 15.b)
Changes in deferred tax assets and deferred tax liabilities
DATAN ENT
AAA 2013, 2012 EE 2012
‘Opening balance 143.052 141.870 143.316 142.001
Amount recorded 55.679 72.598 55.706 72.777
Amount reversed (39.437) (64.320) (39.527) (64.467)
Closing balance 159.294 150.148 159.495 150.311
CEET RIE
Deferred tax liabilities 2013, 2012 EE 2012
‘Opening balance 51.656 46.517 51.685 46.540
Amount recorded 33.301 68.734 33.309 68.885
Amount reversed (24.536) (41.241) (24.542) (41.387)
Closing balance 60.421 74.010 160.452 74.038
Projected realization of deferred tax assets and deferred tax liabilities
Individual Consolidated
Deferred tax assets
Up to 1 year 52.322 31.393 83.715 52.322 31.393 183.715
From 1 to 2 years 11.869 7.121 18.990 11.869 7.121 18.990
From 2 to 3 years 9.544 5.787 15.431 9.544 5.787 15.431
From 3 to 4 years 8.323 4,994 13.317 8.323 4.994 13.317
From 4 to 5 years 2.244 1.346 3.590 2.244 1.346 3.590
From 5 to 10 years 15.156 9.095 24.251 15.282 9.170 24.452
Total 99.558 59.736 159.294 99.684 59.811 159.495
Up to 1 year 3.117 1.870 4.987 3117 1.870 4.987
From 1 to 2 years 6.455 3.873 10.328 6.455 3.873 10.328
From 2 to 3 years 7.404 4.442 11.846 7.404 4.442 11.346
From 3 to 4 years 11.105 6.563 17.768 11.105 6.663 17.768
From 4 to 5 years 1.548 929 2.477 1.548 929 2.477
From 5 to 10 years 8.134 4.881 13.015 8.153 4.893 13.046
Total 37.763 22.658 60.421 37.782 22.670 160.452
10. INVESTMENTS
a) Investments in associated and subsidiary companies
uu TO AS Pine ua
Planejamento (2) Comercial.(3)_ Investimentos__ Energia Eletr. (3) Assessoria(1) RESTA)
Holding – % 99,990 10,00 99,9998 99,999 99,998 999998
Number of shares held 10.000 10.000 892.298.000 77.399.000 500.000 500.000
Capital 10 60 13.385 77.400 500 500
Equity 14.862 47 39.194. 82.114 35.575 237
Netincome for the six-month period 10.744 (6) 1.120 1.685 66 4 13.613
Investment amount 14.861 5 39.194 82.114 35.575 297 171.986
Equity in the results of investee 10.744 (mM 1.120 1.685 66 4 13.618
Página 24
(A free translation of the original in Portuguese)
PIN
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
SS TS O 1
Investimentos Assessoria(1) Corretora(1) Total
Energia Eletr. (3)
Holding – % 99,998 100,00 99,998 99,998
Number of shares held 892.298 77.400 500 500
Capital 113.385 77.400 1 1
Equity 36.330 80.771 21.708 1.229
Net income for the six-month period – 4.031 176 20.095 € 1.215,00 25.517
Investment amount – 36.330 80.771 21.708 1.229 140.038
– 4.031 176 20.095 1.215 25.517
Equity in the results of investee
(1) Pine Assessoria e Consultoria Lida. and Pine Corretora de Seguros Ltda. were consítuted on December 12, 2011. Their capital is RS500, comprsing 500 shares, fuly subscribed and paid up in local currency in December 2012.
(2) Pine Planejamento e Servigos Ltda. was constiuted on June 26, 2012. Capital is RS10, comprising 10,000 shares of R$1 each, fuly subscribed and paid up in local currency and distributed as follows between the partners: Pine Comercializadora de
Energia Elética víth a stake of 0.01% and ne Insttuion víth a 99.99% stake.
(8) Pine Comercializadora de Energía Elética Ltda. holds 80% of Pine Assessoria em Comercializagáo de Energía,
b) Other Investiments
“ne institution has the value of R$ 65,695 which corresponds to investment in land for development of real estate projects that are registered at IRE VII Desenvolvimento Imobilário.
11. PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS
a) Property and equipment in use
EE
O Tn Accumulated
LOTA CAN LOT
Facilities z (8.875) (9.875)
Fumiture and equipment in use (1.592) (1.592)
Communications system (793) (793)
Data processing system (906) (906)
Security system (20)
Aircraft (2.007)
Transport system (540)
Total (15.733) (15.733)
EE]
PA Annual Net
CATAS EAN amount CAN
Facilities. . (7:984) (7.984)
Fumiture and equipment in use (1.340) (1.340)
Communications system (685) (685)
Data processing system (835) (835)
Security system (18) (18)
Transport system 20 2.132 (493) 1.639 2.133 (494) 1.639
Total 17.538 (11.355) 6.183 17.541 (11.356) 6.185
b) Intangible assets
ENE
PA Annual Net Annual
EAT ETA amount amortization
Expense for acquisition and
development of software € 10,00 9.468 (7.830) 1.638 9.533 (7.895) 1.638
Total 9.468 (7.830) 1.638 9.533 (7.895) 1.638
ENT
PA Annual Net TT
ETA EEN ETA
Expense for acquisition and
development of software € 10,00 9.254 (6.949) 2.305 9.720 (7.387) 2.333
Total 9.254 (6.949) 2.305 9.720 (7.387) 2.333
12. DEPOSITS
a) Analysis by maturity:
CEMENTO
a NT O Time
deposite deposite PES deposits. deposite
No stated maturity 19.138 – – 18.811 – –
Up to 30 days – 415.872 46.620 – 415.872 46.620
From 31 to 60 days – 194.896 18.842 – 182.607 18.842
From 61 to 90 days – 423.754 40.750 – 423.754 40.750
From 91 to 180 days – 459.725 1.215 – 457.542 1.215
From 181 to 360 days – 478.946 1.119 – 458.071 1.119
More than 360 days – 1.309.049 6.651 – 1.169.575 1.614
Total 19.138 3.282.242 115.197 18.811 3.107.421 110.160.
Página 25
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
FR PIN
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
No stated maturity
Up to 30 days
From 31 to 60 days
From 61 to 90 days
From 91 to 180 days
From 181 to 360 days
More than 360 days
Total
b) Analysis by market segment:
Manufacturing, commercial and
services
Related companies
Individuals
Financial institutions and
investment funds
Total
Manufacturing, commercial and
services
Related companies
Individuals
Financial institutions and
Investment funds
Total
13. FUNDS OBTAINED IN THE OPEN MARKET
‘Ovwn portfolio
National Treasury Bills (LTN)
Federal Treasury Notes (NTN)
Debentures
Subtotal
Third-party portfolio
LIN
Debentures
Subtotal
Unrestricted portfolio
LIN
NTN
Subtotal
Funds obtained in the open market
14. INTERBANK ACCOUNTS – LOCAL CORRESPONDENTS
Individual
Demand ua Interbank EAT Time
PATAS AS CASO PoTEO AS
– – 32.708 –
232.420 2.082 – 232.420
262.931 56.243 – 262.931
218.011 10.401 – 218.011
365.546 $53.959 – 360.252
630.183 38.529 – 609.618
1.592.259 45.587 – 1.492.253
3.301.350 206.901 32.708 3.175.485
O
paTE
18.261
327
550
19.138
Demand
32.549
283
159
32.991
ENT
Interbank Time
deposits LO POTS
952.925 – 18.261 952.925
162.532 5.037 – –
17.366 – 550 17.366
2.149.419 110.160 – 2.137.130
3.282.242 115.197 18.811 3.107.421
CEET
Time Interbank
CTS CESTO
EAT
PETOO
1.129.028 – 32.549 1.129.028
125.866 12.843 – –
36.206 – 159 36.207
2.010.250 194.058 – 2.010.250
3.301.350 206.901 32.708 3.175.485
739.690 773.637 739.690
101.780 450.048 101.780
213.400 39.368 –
1.054.870 1.263.053 841.470
45.008 – 45.008
213.400
45.008 – 258.408
145.431 –
145.431
145.431 – 145.431
1.245.309 1.263.053 1.245.309
ETA
Interbank
LSO
2.082
56.243
10.401
41.151
38.629
45.552
194.058
EEE
Interbank
ree
110.160
110.160
RETA
Interbank
CORSO
194.058
194.058
Consolidated
Ea
773.637
450.048
39.368
1.263.053
1.263.053
These comprise amounts received in advance related to installments of loan operations assigned with coobligation to be transferred to the assignees on the corresponding due
dates, recorded at the present value of the obligation on the base date, in the amount of R$274 at June 30, 2013 (June 30, 2012 – R$174 in the Individual and Consolidated).
15. OTHER LIABILITIES
a) Collection and payment of taxes and similar:
At June 30, 2013, this balance consists of the tax on financial transactions (IOF) payable in the amount of R$530 (June 30, 2012 – R$ 1,698).
b) Tax and social security contributions
“Taxes and contributions on
third-party services
Taxes and contributions on salaries
Taxes and contributions on income
Service tax (ISS)
Withholding income tax (IRF)
Social Integration Program (PIS) and Social Contribution on Revenues (COFINS) payabl:
Provision for deferred income tax (IR) and social contribution (CS) (Note 09)
Provision for tax risks (Note 16 .b e c)
Total
4.987
8.872
ENT
– 116 126 –
– 2.213 2.313 –
– – 2.079 –
– 237 262 –
– 1.130 1.198 –
– 189 221 –
55.434 60.421 4.987 55.465
35.504 35.504 – 36.076
90.938 99.810 11.186 91.541
Página 26
Consolidated
126
2.313
2.079
262
1.198
221
60.452
36.076
102.727
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
CEET ETA
Taxes and contributions on
third-party services 140 – 140 141 – 141
Taxes and contributions on salaries 2.067 – 2.067 2.142 – 2.142
Income tax – – – 2.640 – 2.640
Social contribution – – – 1.323 – 1.323
ISS 286 – 286 832 – 832
IRF 308 – 308 469 – 469
IRRF – on interest on own capital 759 – 759 759 – 759
PIS and COFINS payable 229 – 229 647 – 647
Provision for IR and CS (Note 09) 21.946 52.064 74.010 21.946 52.092 74.038
Provision for tax risks (Note 16.b and c) – 33.237 33.237 – 33.710 33.710
Total 25.735 85.301 111.036 30.899 85.802 116.701
c) Sundry
ETA
Provision for personnel expenses
Cashiers checks
Provision for contingent
liabilties- civil (Note 16.0)
Provision for contingent
liabilies – labor (Note 16.0)
Provision – FIDC
Other administrative expenses
‘Sundry debtors – Brazil and abroad
Total
ETA
Provision for personnel expenses
Cashier’s checks
Provision for contingent
liabilities- civil (Note 16.d)
Provision for contingent
liabilies – labor (Note 16.0) – 5.432 5.432 – 5.432 5.432
Provision for losses – assignment
with coobligation (Note 28.) – 3.721 3.721 – 3.721 3.721
Provision – FIDC – 2.180 2.180 – 2.180 2.180
Other administrative expenses 2.662 9.460 12.122 2.772 9.460 12.232
‘Sundry creditors – local 2.331 – 2.331 2.488 – 2.488
Total 53.480 39.024 92.504 54.052 39.024 93.076
16. CONTINGENT ASSETS AND LIABILITIES AND LEGAL OBLIGATIONS – TAX AND SOCIAL SECURITY CONTRIBUTIONS
a) Contingent assets
There were no contingent assets at June 30, 2013 and 2012.
b) Legal obligations – taxes and social security
These are legal and administrative processes related to tax and social security obligations. The main processes are as follows:
PIS: R$34,421 – Individual – R$34,985 – Consolidated (June 30, 2012 – R$29,138 – Individual – R$29,603 – Consolidated) the Institution and Pine Investimentos filed legal
proceedings designed to suspend the provisions of Article 3, paragraph 1, of Law 9718/1998, which changed the calculation base of PIS and COFINS so that they are levied on
all corporate revenues. Prior to this rule, suspended in innumerous recent decisions by the Federal Supreme Court, only revenues derived from services rendered and the sale of
merchandise were liable to this tax. The injunction filed by Banco Pine received a partially favorable ruling and the appeal lodged by the Federal Government was dismissed.
Currently awaiting judgment of the admissibility of the Special and Extraordinary Appeals filed by the Federal Govermment.
‘COFINS: In November 2005, the Federal Supreme Court (STF) judged as unconstitutional paragraph 1 of Article 3, of Law 9718/98, which introduced the new calculation base for
COFINS determination purposes from February 1999, broadening the concept of revenue. Accordingly, the calculation base of COFINS was decreased and gave rise to the
unquestionable right to recover the amount of overpaid tax. The injunction filed against the Federal Government by the Institution claiming the right to ofíset the refund of the
incorrectly paid amount of COFINS against other current taxes was successful.
Based on the decision of May 21, 2010 which rejected the two extraordinary appeals lodged by the Federal Government, an interlocutory appeal for writ of certiorari on
extraordinary appeal was filed. Upon referral to the Federal Supreme Court, the Chief Justice referred the case records to the Court of origin, on the grounds of Article 543-B of
the Code of Civil Procedures, considering the analysis of the General Repercussion already issued through Special Appeal RE 585235.Subsequently, on May 18, 2011, the
interlocutory appeal was dismissed and the Federal Government filed petitions seeking clarification of the decision, claiming that a material error had occurred in respect of the
aforementioned RE and indicating that RE 609096 was correct. The petitions for clarification were dismissed. Further, as a result of this sentence, a special appeal was lodged for
the same purpose. The Deputy Chief Judge of the Regional Federal Court of the 3rd Region received the special appeal as a request for reconsideration and upheld the appealed
sentence. Notified of this decision, the Federal Government lodged no further appeal. The final and unappealable sentence was handed down on October 21, 2011 and certified
on November 8, 2011.
Supported by the opinion of its legal advisors and responsible attorneys, according to whom the case is settled at the STF with no possibility of any further appeal by the National
Treasury, the Institution reversed the corresponding provision for contingencies, for the period from May 2005 to October 2011, considering that it no longer consists of a legal
obligation and that no loss is probable, and recognized a net revenue in the total amount of R$150,510 in the Individual and R$ 151,357 in the Consolidated, for 2011, which was
recorded in the “Other operating income” account and in the “Tax expenses” account.
Página 27
(A free translation of the original in Portuguese)
FR PIN
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
In this respect, the Institution will file a request for proof of claim at the Brazilian Federal Revenue authority (RFB), regarding COFINS which was overpaid during the period from
June 2000 to April 2005, in the historical amount of R$15,679 in the Individual and R$ 15,872 on a Consolidated basis, which adjusted for inflation, based on the variation in the
SELIC rate up to September 30, 2013, totaled R$ 34,023 (June 30, 2012 – R$ 33,910) in the Individual and R$ 34,459 (June 30, 2012 – R$ 34,330) on a Consolidated basis.
Based on the final and unappealable sentence and the administrative procedure filed at the RFB, a corresponding tax credit was recognized in “Other receivables – Tax
recoverable”, as a counter entry to the “Other operating income” account.
The amounts of the legal obligations and respective judicial deposits are presented as follows:
Individual RAT
DENT NTE Provision NTEAroTaa
Social integration program (PIS) 34.421 29.138 34.394 29.447 34.985 29.603 34.954. 29.899
Social contribution on revenues(COFINS) – – 164.108 156.134 – – 165.033 157.011
Total 34.421 29.138 198.502 185.581 34.985 29.603 199.987 186.910
RAT
NET
Tax contingencies 1.083 4.099 2.144 2.039 1.091 4.107 2.422 2.304
Labor contingencies 2.409 5.432 553 518 2.441 5.432 553 518
Civil contingencies 13.165 18.231 1.762 1.808 13.165 18.231 1.762 1.808
Total 16.657 27.762 4.459 4.365 16.697 27.770 4.737 4.630
d) Activity in liability provisions
Individual
‘Opening balance
Amount recorded (reversed)
Adjustments
Closing balance
Consolidated
‘Opening balance 42.591 4.565 18.298 65.554
Amount recorded (reversed) (7.660) (2.369) (6.702) (15.731) 3.039 (2.021) 1.698 2.716
Adjustments 1.145 145 569 1.859 1.097 329 508 1.934
Closing balance 36.076 2.441 13.165 51.682 33.710 5.432 18.231 57.373
€) We present below the main suits and proceedings for which loss is considered possible:
Labor: At June 30, 2013, the Institution had no labor claims classified as possible.
Civil: At June 30, 2013, the Institution had no civil claims classified as possible (June 30, 2012 – R$1,824).
17. BORROWINGS AND ONLENDINGS
E
0 OE From 3 to From 5 to
ET ETS pS AS
Local onlendings – official institutions 169.157 129.059 EX
Foreign borrowing transactions 549.072 66.468 1.156.048
Total 595.144 718.229 337.585 171.666 195.527 2.018.151
RA
a OE From 3 to OS
ET TO pl
Local borrowings – other institutions(1) – 71.803 – 71.803
Local onlendings – official institutions 54.636 169.157 337.585 171.666 129.059 862.103
Foreign borrowing transactions 540.508 549.072 – – 66.468 1.156.048
Total 595.144 718.229 409.388 171.566 195.527 2.089.954
EA
(Y ET From 1 to ET ES
ET 12 months O ES Ea
Local onlendings – official institutions – 338.805 136.703 812.934
Operagóes de Foreign onlending transactions do exterior 7.163 10.249 60.621 78.033
Foreign borrowing transactions 429.349 873.404 – 1.302.753
Total 436.512 1.222.458 251.986 197.324 85.440 2.193.720
Página 28
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
ETA]
1×3 EN EE ET E
E PO ES OO 15 years
Local borrowings – other insttutions(1) – – – 177.011 – 177.01
Local onlendings – official institutions – 338.805 251.986 136.703 85.440 812.934
Foreign onlending transactions 7.163 10.249 – 60.621 – 78.033
Foreign borrowing transactions 429.349 873.404 – – – 1.302.753
Total 436.512 1.222.458 251.986 374.335 85.440 2.370.731
(1) At June 30, 2013, senior shares ofhe FIDC amounted to RS71,803 (June 30, 2012 – R$177,011).
18. FUNDS FROM ACCEPTANCE AND ISSUANCE OF SECURITIES
a) Funds from exchange acceptances
COMER
13 AE
ES PS
Real estate letters of credit (LCI) 17.608 J 29.595
Agribusiness letters of credit (LCA) 114.929 1 315.337
Financial bills (LF) 346.152 270.411 638.143
Total 195.505 478.687 287.303 16.669 4911 983.075
xa Bo EE LN
ES ETS 5 years
Lal 2.392 11.478 5.543 – – 19,413
LCA 243.880 141.651 23.482 – – 409.013
LE – 5.227 320.415 1.037 1.573 328.252
Total 246.272 158.356 349.440 1.037 1.573 756.678
b) Securities issued abroad
These are funds obtained through the global fixed-rate note program which, at June 30, 2013, amount to R$240,972 (June 30, 2012 – R$251,240), maturing up to 2022 and
interest of up to 8.75% per annum plus LIBOR and exchange variation, and working capital in the amount of R$6,047 (June 30, 2012 – R$11,037) maturing up to 2014.
We present below an analysis of the tranches and balances adjusted at the balance sheet dates:
COMERTE
Issuance Interest
CANA 5 2013 2012
US$ 2.0%paa. + LIBOR Jun/2014 6.047 11.037
US$ 1.85% pa. + LIBOR Nov/2014 13.328 20.272
US$ 2.2%p.a. +LIBOR Octiz013 10.458 28.632
US$ 8.7%p.a. +LIBOR Jan/2017 2.412 2201
US$ 3.0% p.a. +LIBOR Jan/2014 13.505 149.122
US$ 4.2%p.a. +LIBOR Apr/2022 55.886 51.013
CLP 6.0% pa. + Var UF Dec/2017 145.383 –
247.019 262.277
Current (43.346) (170.399)
Total long-term liabilities 203.673 91.878
The Institution is required to comply with certain financial covenants related to the maintenance of specific performance, liquidity and debt ratios tied to financing agreements in the
amount of R$10,458 (FMO-Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V.), which if not met could cause settlement to be accelerated. Further, the
Institution has lines with certain multilateral bodies (IFC – International Finance Corporation and IDB – Inter-American Development Bank) which guarantee the Institution’s loans in
the amount of US$130,000 (R$288,028 based on the US dollar ptax rate at June 30, 2013). At June 30, 2013, Banco Pine was using the amount of US$40,356 (R$89,413 based
on the US dollar ptax rate at June 30, 2013)”, and was compliant with the performance indexes.
19. SUBORDINATED DEBT
COMET
2013 2012
Fixed rate notes Public 6/1/2017 US$125,000 8.75% p.a. 290.180 264.796
Fixed rate notes Private 29/12/2016 US$15,000 9.33% p.a. – 30.314
Financial bills. Private 6/12/2021 R$45,152 141.45% of CDI 51.322 48.137
Total 341.502 343.247
20. EQUITY
a) Capital
Pursuant to the bylaws, subscribed and paid-up capital totals R$967,048 and comprises 110,842,313 (June 30, 2012 – 98,852,774) registered shares, of which 58,444,889 (June
30, 2012 – 51,886,766) are common shares and 52,397,424 (June 30, 2012 – 46,966,008) are preferred shares with no par value. The Institution is authorized to increase its
capital, without the necessity of any amendment to the bylaws, by up to a further 100,000,000 common or preferred shares, all of which shall be nominative, book-entry and with
no par value, by decision of the Board of Directors.
As deliberated at a meeting of the Board of Directors held on February 4, 2013 and ratified by the Central Bank on April 19, 2013, capital was increased by the amount of
R$31,576, through the issue of 2,211,213 nominative preferred shares, with 1,887,605 to PROPARCO – Société de Promotion et de Participation pour la Coopération
Economique and 323,608 to other shareholders, from R$935,683 to R$967,259, comprising 110,842,313 nominative shares, of which 58,444,889 are common shares and
52,397,424 are preferred shares, with no par value. The amount of the capital increase is recorded in equity in the “Capital increase” account.
Página 29
(A free translation of the original in Portuguese)
4 A PIN
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
As deliberated at the Extraordinary General Meeting held on December 22, 2011 and ratified by BACEN on February 9, 2012, approval was given for the following: a) a capital
increase from R$466,358 to R$666,358, with no new issue of shares, through the incorporation of a portion of the balance of the reserve of goodwill from the subscription of
shares, in the amount of RS 200,000; b) a further capital increase to R$796,048, through the incorporation of a portion of the balance of the legal reserve in the amount of
R$16,810 and, a portion of the balance of the statutory reserve in the amount of R$112,880, with the issue of 12,274,766 new nominative shares, of which 6,442,894 are common
shares and 5,831,872 are preferred shares, an increase in the total number of shares from 86,578,008 to 98,852,774 nominative shares, of which 51,886,766 are common shares
and 46,966,008 are preferred shares.
As deliberated at the Extraordinary General Meetings held on September 8 and October 25, 2011 and ratified by BACEN on January 6, 2012, approval was given for the following:
a) a capital increase in the amount of R$43,752 through the issue of 2,543,742 preferred shares, with 2,543,604 to the shareholder DEG – Deutsche Investitions- und
Entwicklungsgesellschaft mbH and 138 to other shareholders; b) for all of the Institution’s shareholders registered at September 8, 2011, a period of thirty days to exercise their
right of first refusal, beginning on September 9, 2011 and ending on October 10, 2011, inclusive. A number of one hundred and thirty-eight preferred shares of the Institution were
subscribed in the total amount of RS3.
b) Capital reserve
The capital reserve, pursuant to the provisions of Law 11638/07, may only be used to (i) absorb losses which are in excess of retained earnings and the revenue reserves: (i)
increase capital; (ii) cancel treasury shares; and (iv) pay dividends on preferred shares provided that they are entitled to this benefit.
c) Revenue reserve
The Institution’s revenue reserve comprises the legal and statutory reserves. The balance of the revenue reserves may not exceed the Institution’s capital, and any excess must
be capitalized or distributed as dividends. The Institution has no other revenue reserves.
Legal reserve – Pursuant to Law 11638/07 and the bylaws, the Institution must appropriate 5% of its net income for each year to the legal reserve. The legal reserve shall not
exceed 20% of the Institution’s paid-up capital. However, the Institution may choose not to appropriate a portion of its net income to the legal reserve for the year in which the
balance of this reserve plus the capital reserves, exceeds 30% ofiits capital.
Statutory reserve – Pursuant to Law 11638/07, the bylaws may constitute other reserves, provided that their purpose, the percentage of net income to be appropriated thereto and
the maximum amount to be maintained in each such reserve is specified. The appropriation of funds to these reserves should not be approved to the detriment of the mandatory
dividend. The Institution recorded a statutory reserve of 100% of its net income, in the amount of R$20.005, after the appropriation of 5% to the legal reserve of R$4,211, the
deduction of the payment of interest on own capital of R$30,696 and dividends in the amount of R$29,304, to maintain the Institution’s operating margin compatible with its asset
transactions.
d) Dividends and interest on own capital
Stockholders are entitled to a minimum dividend of 25% of annual net income, adjusted pursuant to Brazilian corporate legislation, subject to the approval of the General Meeting
of stockholders.
In accordance with the provisions of Law 9249/95, interest on own capital was acerued and declared, calculated based on the variation in the long-term interest rate (TULP) for
the period. – This interest on own capital decreased the expense for income tax and social contribution for the six-month period ended June 30, 2013 by R$18,418 (June 30, 2012
-R$12,003).
We present below the dividends and interest on own capital related to income for the six-month period
A
amount (net)
J 28/6/2013. 12/7/2013 0,1433 15.719 0,1218 13.361
Details
Interest on own capi
Interest on own capital 21/3/2013 10/4/2013 0,1389 14.977 0,1181 12.730
Dividends 28/6/2013 12/7/2013 0,1302 14.281 – –
Dividends 24/3/2013 10/4/2013 0,1393 15.023 – –
In accordance with Letter Circular 3516/11, the proposed additional dividend in excess of the minimum dividend, in the amount of R$ 20.919 (June 30, 2012 – R$14,189) is
classified in a specific equity account.
We present below the reconciliation of dividends and interest on own capital for the six-month periods ended June 30, 2013 and 2012:
Net income 84.216 82.070
Legal reserve (4.211) (4.603)
Calculation base 80.005 87.467
Interest on own capital 30.696 30.008
Withholding tax – IRRF (15%) (4.604) (4.501)
Prepaid dividends 29.304 9.992
Amount proposed 55.396 35.499
2% of calculation base 69,24% 40,59%
e) Treasury shares
At a meeting of the Board of Directors on September 16, 2011, authorization was given for the acquisition of up to 2,154,011 of the Institution’s own preferred shares to be held in
treasury for subsequent sale, as well as the payment of variable remuneration to the Institution’s statutory directors, under the terms of Resolution 3921/11, without decreasing
capital. Under this plan, 713,395 shares were repurchased in the amount of R$9,588 at an average cost of 13.44. The authorization was effective up to August 31, 2012.
At a meeting of the Board of Directors on December 6, 2012, authorization was given for the acquisition of up to 1,219,659 of the Institution’s own preferred shares to be held in
treasury for subsequent sale, as well as the payment of variable remuneration to the Institution’s statutory directors, under the terms of Resolution 3921/11, without decreasing
capital. Under this plan, 600,000 shares were repurchased in the amount of RS7,679 at an average cost of 12.80. The authorization will be effective up to December 5, 2013.
During the second half of 2012, the Institution transferred 318,555 of its own shares which were held in treasury, to the statutory directors, as variable remuneration, under the
terms of Resolution 3921/10, in the amount of R$4,517, at the average cost of R$14.18.
At June 30, 2013, 1,296,149 of the Institution’s own preferred shares were held in treasury in the amount of R$16,273 (June 30, 2012 – R$1,557). The market value of these
shares corresponded to R$15,554 (June 30, 2012 – R$ 1,591).
Página 30
(A free translation of the original in Portuguese)
FR PIN
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
f) Carrying value adjustments
OERTAT
EE 2012
Available-for-sale financial assets (24.940) (2.997)
Marketable securities (24.940) (2.997)
Other 77 87
Income tax 9.977 1.199
Total (14.886) (711)
21. STATEMENT OF OPERATIONS
a) Loan operations
RIE
EE 2012 EE 2012
Advance to depositors 203 516 203 616
Income from loans 146.289 182.957 154.536 203.917
Profit from loan assignments 990 – 990 –
Income from financing 84.883 79.462 84.659 79.462
Income from financing – foreign currency 10.066 11.740 10.066 11.740
Total 242.431 274.775 250.454 295.735
b) Results of securities transactions
Individual E
2013 2012 EE 2012
Income from (expense for) transactions with fixedincome securities (FIDC) (1.039) 9.992 – –
Income from transactions with fixed-income securities 185.964 277.452 190.431 281.704
Expense for transactions with fixedincome securities (61.492) (2.818) (61.495) (3.012)
Total 123.433 284.626 128.936 278.692
c) Funds obtained in the market
ET RT
2013, 2012 EE 2012
Expenses for interbank deposits 4149 8759 3.310 7.952
Expenses for time deposits 135.699 172.598 130.863 167.492
Expenses for purchase and sale commitments 52.917 92.968 55.700 92.968
Expense for (income from) securities issued abroad 56.563 55.080 55.563 55.080
Expenses for contribution to credit guarantee fund 8.073 9.286 8.073 9.286
Expenses for agribusiness letters of credit 11.191 14.663 11.191 14.663
Expenses for financial bills 26.820 9.934 26.820 9.934
Expenses for real estate letters of credit 494 602 494 602
Total 295.906 363.890 293.614 357.977
d) Borrowings and onlendings
Individual E
2013 2012 EE 2012
Expenses for onlendings (BNDES) 17-800 19.271 17.800 19.271
Expenses for foreign onlendings – Resolution 3844 146 2.658 146 2.658
Expenses for payables to foreign bankers 73.017 70.038 73.017 70.038
Expenses for (income from) foreign borrowings 976 1.895 976 1.895
Expenses for local loans – FIDC – – 4.144 12.345
Total 91.939 93.862 96.083 106.207
e) Income from services rendered
NE RITA
2013 2012 EE 2012
Credit facility fee 15.055 6.826 15.055 6.826
Commission for guarantees 18.160 14.270 18.160 14.270
Commission for intermediary services 8.740 2.785 25.232 36.043
Other 21 525 193 2.363
Total 41.976 24.406 58.640 59.502
f) Personnel expenses
ET RT
2013, 2012 EE 2012
Salaries 27.991 28.437 29-141 29.490
Benefits 4.172 3.713 4.341 3.794
Social charges 9.282 9.664 9.663 10.030
Directors” fees 484 425 493 433
Training 136 314 142 315
Interns 195 240 212 253
Total 42.260 42.793 43.992 44.315
Página 31
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
9) Other administrative expenses
Water, electricity and gas
Rents
Leased assets
Communications
Charitable contributions
Maintenance and repair of assets
Materials
Data processing
Promotions and public retations
Publicity and advertising
Publications
Insurance
Financial system services
“hird-party services
Surveillance and security services
Specialized technical services
Transportation
Travel
Other administrative expenses
Amortization and depreciation
Total
h) Tax expenses
Service tax (ISS)
Social contribution on revenues(COFINS)
Social integration program (PIS)
Other
Total
i) Other operating income
Recovery of charges and expenses
Indexation
Reversal of provision for credit assignment with coobligation
Reversal of provision for guarantees
Adjustment of judicial deposits
Reversal of provision for tax risks
Reversal of provision for labor risks
Reversal of provision for civil processes
Reversal of provision for FIDC
Other operating income
Total
]) Other operating expenses
Labor and civil proceedings
Indexation expense
Charges on loans assigned
Reversal/provision for transfer of assignments
Expenses for assignment (1)
Provision for FIDC
Exchange variation – investment abroad
Other operating expenses
Total
RO OO cr zo ere ect dect
k) Non-operating income (expense)
Individual
EE 2012
231 204
4.477 3.892
498 1.646
1.756 1.805
18 30
953 882
75 80
4.215 4.173
477 851
654 770
504 540
67 118
7.413 6.363
1.665 2.823
2.314 1.170
5.903 6.920
716 810
1.282 1.246
7.769 6.121
3.048 1.898
44.035 42.342
EMT
EE EP
2.038 1.336
1.631 1.069
1.584 1.299
442 1.268
5.695 4.972
Individual
EE 2012
755 181
1.410 1.943
1 6.245
– 15.178
3.813 5.406
458 –
2.129 –
4.674 –
1.602 –
1.298 8.928
16.140 37.881
EMT
EE EP
98 2.350
– 143
835 1.562
– (628)
6.811 61.462
– 2.180
– (10)
2.951 1.021
10.695 68.180
RIE
EE 2012
234 208
4.538 3.996
498 1.646
1.756 1.812
18 30
956 884
75 80
4,233 4.199
480 855
654 770
560 601
67 120
7.547 6.643
1.805 3.186
2.314 1.170
6.089 7.066
725 822
1.402 1.318
7.853 6.164
3.048 1.948
44.852 43.518
RIE
EE 2012
2.878 3.094
2.212 2.268
1714 1.555
609 1.276
7.413 8.193
RIE
EE 2012
759 176
1.438 1.978
1 6.245
– 15.178
3.836 5.438
458 –
2.129 –
4.674
1.602
308 3.335
15.205 32.350
RIE
EE Ep
128 2.350
– 160
835 1.562
– (628)
6.811 61.462
4.929 2.180
– (10)
3.042 1.122
15.745 68.298
For the six-month period ended June 30, 2013, the amount of R$5,026 in the Individual and in the Consolidated (June 30, 2012 – R$4,326 in the Individual and R$ 4,318 in the
Consolidated) corresponds mainly to the sale of assets received as payment in kind for the settlement of loan operations.
Página 32
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
22. INCOME TAX AND SOCIAL CONTRIBUTION
Reconciliation of expenses for income tax and social contribution on net income:
2013 EE
Income before income tax (IRPJ) and social contribution (CSLL)
and less profit sharing. 91.684 113.429 95.427 119.176
Interest on own capital (30.696) (30.008) (30.696) (30.008)
Income before taxes on income 60.988 83.421 64.731 89.168
Current rate 40% 40% 40% 40%
Expected expense for IRPJ and CSLL, based on current tax rate (24.395) (83.368) (25.892) (85.667)
Temporary differences (5.564) 24.529 (6.500) 24.557
Effects of income tax and social contribution on temporary differences 5.311 (20.869) 5.246 (20.841)
Other adjustments 17.397 8.349 14.935 4.845
Income tax and social contribution (7.251) (21.359) (11.211) (27.106)
Of which:
Current taxes (12.779) (490) (16.457) (6.265)
Deferred taxes 5.311 (20.869) 5.246 (20.841)
Expense recorded (7.468) (21.359) (11.211) (27.106)
23. RELATED-PARTY TRANSACTIONS
a) Management compensation
In 2012, the Institution approved the new Compensation Plan which addresses the standards and guidelines for the payment of fixed and variable compensation applicable to the
members of the Board of Directors and statutory directors and, at the discretion of the specific committee, other executive officers with important positions and functions, in
accordance with the provisions of Resolution 3921/10, of the National Monetary Council.
The new Plan has the following main objectives: (¡) alignment of the Institution’s executive compensation practices with its risk management policy; (ii) prevention of conduct that
increases risk exposure to levels above those considered prudent in the short, medium and long-term strategies adopted by the Institution; (ii) creation of an instrument designed
to attract and retain talent for the Institution’s key positions; and (iv) adaptation of the compensation policy to meet the requirements of Resolution 3921/10.
The compensation defined in the Plan takes the following into consideration: (¡) the Institution’s current and potential risks; (i) the Institution’s overall result, in particular, recurring
realized income (net book income for the period adjusted based on unrealized results and excluding the effects of controllable non-recurring events); (ii) capacity to generate
cash flows; (iv) the economic environment in which the Institution operates and its related trends; (v) long-term sustainable financial bases and adjustments to future payments,
based on the risks assumed, fluctuation in capital costs and liquidity projections; (vi) the individual performance of the Directors based on the target agreements entered into by
each director as established in the PLR and filed at the Institution’s head office; (vii) the performance of the business unit; and (vii) the relation between the Directors’ individual
performance, the business unit performance and the Institution’s overall performance.
Variable compensation is calculated as follows:
a) up to 50% of the amount established for variable compensation is paid in kind, at the same time as payment of Profit Sharing (PLR).
b) the amount corresponding to 10% of that established for variable compensation will be paid in preferred shares of the Institution at the same time as PLR payment.
c) the amount corresponding to the remaining 40% of variable compensation will be paid in preferred shares of the Institution and will be granted to the employee at the same time
as the payment of the amount in kind. The right to dispose of these shares will be on a “Deferred” basis, increasing as does the Director’s level of responsibility
The delivery of the shares related to deferred variable compensation attributable to the Directors will only occur if none of the following are verified during the applicable deferral
period: (¡) a significant decrease in realized recurring income;(i) loss in the Institution or business unit, or (ii) verification of errors in accounting and/or administrative procedures
which affect the results determined during the vesting period of the right to variable compensation.
The Institution’s Compensation Committee, which was constituted at the general meeting held on January 16, 2012, will be responsible for (i) presenting proposals to the board of
directors regarding the various forms of fixed and variable compensation, as well as benefits and the special recruitment and termination programs; (ii) monitoring the
implementation and operation of the Institution’s management compensation policy; (ii) reviewing annually the Institutior’s directors’ compensation policy, recommending
adjustments or improvements to the board of directors; (iv) recommending to the board of directors the total amount of the directors’ compensation to be submitted to the general
meeting, in accordance with Article 152 of Brazilian Corporation Law (v) evaluating future internal and external scenarios and their possible impact on the Institution’s directors’
compensation policy; (vi) analyzing the Institution’s directors’ compensation policy in relation to market practices, to identify significant differences as compared to peer companies,
proposing necessary adjustment; (vii) ensuring that the directors’ compensation policy is permanently in line with the risk management policy, the Institution’s current and
expected financial position and the provisions of this resolution; and (viii) preparing annually, within a period of ninety days as from December 31, of each year, a Compensation
Committee Report, as required by CMN Resolution 3921/10.
In the six-month period ended June 30, 2013, variable remuneration was determined in the amount of R$6,545, in accordance with the criteria defined in the new plan.
A
Fixed compensation
Variable compensation
‘Shortterm benefits
Total
Short-term benefits paid to directors mainly comprise salaries and social security contributions, paid leave and sick pay, profit sharing and bonuses (when payable within twelve
months subsequent to the year-end closing) and non-monetary benefits (such as health care and free or subsidized goods or services).
Employment agreement termination
The employment agreements are valid for an indefinite period. Officers are not entitled to any financial compensation when the employment relationship is terminated either
voluntarily or due to the non-fulfilment of his/her obligations. If the employment agreement is terminated by the Institution, the officer may receive indemnification. During the six-
month period ended June 30, 2013, compensation in the amount of R$23 (June 30, 2012 – R$814) was paid to officers who left the Institution.
Página 33
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
FR PIN
b) Related parties
The related-party transactions mainly with the companies listed in Note 2, are carried out at average amounts, terms and rates practiced in the market, effective on the
corresponding dates with commutative conditions and comprise the following:
Income (expenses)
2012 EE 2012
Marketable securities 84.868 (894) 9.992
Pine Crédito Privado – FIDC: 84.868 (1.039) 9.992
IRE Vil Desenvolvimento Imobiliário Ltda – 145 –
Demand deposits 306 – –
Pine Investimentos 267 – –
Pine Comercializadora de Energia Elétrica – 7 – –
Pine Corretora 4 5 – –
Pine Assessoria 6 3 – –
Pine Assesoria em Comercializagáo de Energia 6 2 – –
Pine Planejamento Ltda 7 – – –
Directors and immediate family(1) 128 22 – –
Interbank deposits 5.037 12.844 (239) (807)
Pine Investimentos 5.037 12.844 (239) (607)
Time deposits 174.240 137.453 (6.542) (5.198)
Pine Investimentos 29.025 20.605 (994) (749)
Pine Comercializadora de Energia Elétrica 82.441 81.206 (2.976) (3.953)
Pine Corretora 228 568 (8) (33)
Pine Assessoria 35.912 23.478 (1.258) (671)
Pine Assesoria em Comercializagáo de Energia 41 8 0 –
Pine Planejamento Ltda 14.885 – (347) –
Directors and immediate family(1) 11.708 11.588 (958) (92)
(1) These amounts are not consolidated.
e) Capital ownership
The following table presents the direct investment in common and preferred shares, at June 30, 2013 and 2012, of stockholders with more than five percent of total shares and of
members of the Board of Directors and Executive Board.
2013
Common Common Preferred ETT EJ LJ
EE 07 shares(%) EAS shares (9%) shares shares(%)
Individuals 58.444.889 100,00 15.410.863 29,41 73.855.152 52,73
Board of Directors – – 3.243.868 6,19 3.243.868 2.93
Executive Officers – – 2.791.290 5,33 2.791.290 2.52
Total 58.444.889 100,00 21.446.021 40,93 79.890.910 58,18
2012
TA Common EE ETE EJ Total
50 07 shares(%) 0 shares (9%) shares shares (%)
Individuals 51.886.766 100,00 15.595.863 33,21 67.482.629 68,27
Board of Directors – – 3.007.439 6.40 3.007.439 3,04
Executive Officers – – 2.083.458 4,44 2.083.458 214
Total 51.886.766 100,00 20.686.760 44,05 72.573.526 73,42
24. COMMITMENTS, GUARANTEES AND OTHER INFORMATION
Y and guarantees 2.806.972 1.598.910
Credit assignment with coobligation 83 18.307
Letter of credit 154.639 117.176
Total 2.961.694 1.734.393
25. EMPLOYEE BENEFITS
The Institution makes monthly contributions to a private pension company for VGBL and PGBL plans, at the option of the participant, in an amount equivalent to 1% of the
employee’s gross salary, provided that the employee also contributes at least 1% of his/her gross salary, to supplement their social security benefits, as part of a defined
contribution plan, and this is the sole responsibility of the Institution as sponsor.
For the six-month period ended June 30, 2013, the amount of this contribution was R$188 (June 30, 2012 – R$162).
26. PROFIT SHARING PROGRAM
Banco Pine has a profit sharing program (PPLR) ratified by the Bank Employees’ Trade Union.
The general assumptions of this program are: (a) business unit performance; (b) establishment of a fund for distribution across the organization; and (c) assessment of the skills
and the meeting of targets in the supporting areas. The related expenses were recognized in the “Profit sharing” account”.
Página 34
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
27. RISK AND CAPITAL MANAGEMENT
a) Introduction and overview
Banco Pine is exposed to risks resulting from the use of financial instruments which are continuously measured and monitored and has an analysis structure made up of a board
of directors, a council and a committee that assess the following risks:
Credit risk
Liquidity risk
Market risk
Operational risk
Risk management framework
The Board of Directors is responsible for identifying and controlling risks; however, there are other independent areas which are also responsible for managing and monitoring
risks.
b) Credit risk
Definition
Credit risk is the exposure to loss in the case of total or partial default of customers or counterparties in fulfillimg their financial obligations with the Institution. Credit risk
management seeks to support the definition of strategies, in addition to establishing limits, including an analysis of exposure and trends, as well as the effectiveness of the credit
policy,
Credit risk management
Duties:
+ Formulate Credit Policies with all of the Institution’s units, including collateral requirements, credit assessment, risk rating and presentation of reports, legal and documentary
procedures, as well as compliance with regulatory and statutory requirements.
+ Establish the structure for approval and renewal of Credit lines. Limits are established and approved by the Credit Committee.
+ Review and assess credit risk. The Credit area evaluates all credit exposure which exceeds established limits, prior to the release of the credit lines to the customers by the
related business unit. Renewals and reviews of credit lines are subject to the same review process.
+ Limit concentration of exposure by counterparties, geographic regions and economic sectors, and by credit rating, market liquidity and country.
+ Develop and maintain the Institution’s risk classification to categorize exposure according to the degree of risk of financial loss and focus management on inherent risk… The
risk classification system is used to calculate credit exposure. The current risk classification structure includes degrees of credit risk and availability of guarantees or other tools to
mitigate credit risk.
+ Offer advice, guidance and specialized techniques to promote credit risk management best practices throughout the Institution.
Credit analysis and granting:
Assess the risks involved in transactions and the customers’ ability to settle their obligations according to the contracted terms.
Credit risk controls and management:
+ Perform preventive monitoring of active customers designed to anticipate default in the portfolio of operations involving credit risk, support decisions and commercial strategies
and provide data that permit the Credit Committee and Executive Board to monitor compliance with Banco Pine’s Strategic Planning.
Special Asset Management (Credit recovery department):
+ The Institution has a specific credit recovery area which is designed to support the areas involved in the collections process, and to identify and resolve potential risks to the
Institution, seeking agile and effective solutions to minimize possible losses, to be a source of information regarding payments which are overdue or which for some reason are no
longer certain, and to promote control over the risks which, pursuant to the policy established by the Institution, are managed by the Special Assets Area
c) Liquidity risk
Definition
Liquidity risk is associated with possible difficulties the Institution may face in meeting its obligations as they fall due, resulting from its financial liabilities.
Liquidity risk management
Liquidity risk management seeks to protect the Institution from possible market developments that generate liquidity issues. Accordingly, the Institution monitors its portfolios with
regards to maturities, volumes and the liquidity of lts assets.
Daily control is carried out through reports in which the following items are monitored:
+ Maturity mismatches between payment and receipt flows Group wide.
+ Projection of liquidity stress scenarios defined by the Asset-Liability Committee (ALCO).
This information is checked against the Institution’s cash position each day and assessed each week by ALCO.
Liquidity is managed by the Market, Liquidity and P8L Risk Oversight Board, which reports to the Risk Control Oversight Board.
Página 35
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
d) Market risk
i) Del
jon
Market risks are related to possible monetary losses due to fluctuations in variables that impact market prices and rates. Oscillations of financial variables such as the price of
input material and end products, inflation, interest rates and foreign exchange rates have the potential for causing loss in almost all companies and, therefore, represent financial
risk factors.
The Market Risk to which an institution is exposed is mainly due to three factors: a) exposure – amount exposed to risk; b) sensitivity – the impact of price fluctuations; and c)
variation – the magnitude of price variations. We stress that, among these factors, exposure and sensitivity are controllable by the Institution as part of its appetite for risk, while
variation is a market characteristic, and as a result out of the Institution’s control.
Market risks can be classified under different types, such as interest rate risk, foreign exchange risk, commodities price risk and share price risk. Each type represents the risk of
incurring losses due to oscillations in the variation in the corresponding variable.
li) Market risk management
Market risk is managed in a centralized manner by an area that ¡s independent in relation to the trading desk and is chiefly responsible for monitoring and analyzing market risk
originating in positions assumed by the Institution vis-a-vis its appetite for risk as defined by ALCO and approved by the Board of Directors.
Market risk is managed daily by the Market Risk department, which calculates the Value at Risk (VaR) and generates the Duration Gap of Primitive Risk Factor mismatches of
assets in the Institution’s portfolio.
Amounts are compared daily to the VaR limits, exposure by Primitive Risk and Stop Loss Factors established by ALCO and approved by the Institution’s Board of Directors.
For stress tests, scenarios considering bear and bull markets on the Commodities and Futures Exchange, as well as changes to the interest rate curves, are used. Scenarios
generated by ALCO may also be used
iii) Methodologies
Fair value:
The purpose of marking to market (Fair Value) is to ensure that the pricing of assets and liabilities in the Institutior’s portfolio is as transparent as possible for shareholder
protection
Value at risk (VaR):
VAR measures the worst expected loss in a horizon given by normal market conditions in a given confidence level, that is, VaR provides a measure of market risk
Market risk management uses VaR as a measure of the Group’s potential losses. For the calculations, the parameters used are the horizon of one day and a 99% confidence
interval. The calculation is based on closing market prices, taken from different sources (ANBIMA, BMáFBovespa, and the Brazilian Central Bank, among others).
The VaR analysis is performed by market, vertex and risk factors associated with the interest curve, share prices, foreign exchange and commodities. If the VAR limit is
surpassed, an evaluation of the operations will be performed and those that present more risks will be readjusted by the Treasury in order to reduce risks and seek alignment with
the maximum exposure limit. Market liquidity will be evaluated as these operations are readjusted
iv) Sensitivity analysis
Pursuant to CVM Instruction 475/08, we present below the sensitivity analysis for all transactions involving financial instruments, which expose the Institution to risks arising from
exchange and interest rate fluctuations or any other types of exposure at June 30, 2013:
Sensitivity analysis
Scenarios
OT Exposure BOTE Possible (IM Eau)
Fixed interest rate (PRE) Fixed interest rate variations 655 (7.076) (14.151)
General Market Price index (IGPM) IGPM coupon variations 229 (392) (785)
Price index (IPCA) IPCA coupon variations 441 (6.074) (12.148)
Long-term interest rate (TULP) TJLP variations (322) 1.465 2.929
US dollar coupon rate Exchange coupon variation (4.010) 846 1.692
Other currency coupon rates Exchange coupon variation 12 (18) (66)
Offshore rates (LIBOR + other Offshore) Variation in Offshore rates (68) 399 799
Currencies Change in exchange variation (69) (976) (1.953)
Total (uncorrelated sum)” (9.951) (23.269) (56.537)
Total (correlated sum)” (3.152) (11.826) (23.653)
“Uncorelated sum sum oflhe resul obiained in he worst stress scenarios for each risk factor.
‘Correlated sum: the worst result of the sum of the stress test scenarios of al of the risk factors considering the correlation between thom.
Página 36
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
Scenario comprising the variation in market factors between June 28, 2013 and July 15, 2013 (variation in the fixed rate from 9.41% to 9.21% in a 1-year curve and from
Scenario | – Probable 11.09% to 10.67% in a 4-year curve, variation in the US dollar from 2.2156 to 2.2548 and in the exchange coupon from 1.07% to 2.74% in a 1 year curve).
Scenario comprising a 25% shock to the market interest rate curve amounts (disclosed by BM8F), and to the closing prices (US dollar and equity), as in the following
Scenario Il – Possible (*)
example:
Market rate New market rate
Curve (1 year) Shock (1 year)
Fixed interest rate (PRE) 941% 25% 11,76%
General Market Price index (IGPM) 4,11% 25% 5,14%
Price index (IPCA) 3,77% 25% 4,71%
Long-term interest rate (TJLP) 4,00% 25% 5,00%
US dollar coupon rate 1,07% -25% 0,80%
Other currency coupon rate 1,34% 25% 1,68%
LIBOR – USD 0,69% -25% 0,51%
Currencies 2,2156 25% 2,7695
Scenario comprising a 50% shock to the market interest rate curve values (disclosed by BMBF), and in the closing prices (US dollar and equity), as in the following
Scenario II! – Remote (*)
example:
Market rate New market rate
Curve (1 year) Shock (1 year)
Fixed interest rate (PRE) 941% 50% 14,11%
General Market Price index (IGPM) 4,11% 50% 6,17%
Price index (IPCA) 3,77% 50% 5,65%
Long-term interest rate (TJLP) 4,00% 50% 6,00%
US dollar coupon rate 1,07% -50% 0,53%
Other currency coupon rate 1,34% 50% 2,01%
LIBOR – USD 0,69% -50% 0,34%
Currencies 2,2156 50% 3,3234
“For Soenaños Iland M, the resulto the high or low stress scenario was considered to obtain the most significant portfolio Tosses.
e) Capital management
Capital management is an important process used by the Institution to optimize the use of capital and to achieve its strategic objectives. The ongoing enhancement of credit,
market, liquidity and operational risk management and control is essential to providing stability in financial results and to improving capital allocation.
In accordance with BACEN Resolution 3988/11, capital management is defined as an ongoing process for:
Capital monitoring and control carried out by the Institution
Assessing the need for capital to face the risks to which the Institution is subject
Planning targets and capital requirements, based on the Institution’s strategic objectives
Capital policies and strategies are based on a fonward-looking approach, anticipating the need for capital as a result of possible changes in market conditions and are reviewed
periodically by the Executive Board and Board of Directors, to ensure that they are compatible with the Institution’s strategic planning.
Financial institutions are required to permanently maintain their Required Regulatory Capital (PRE) compatible with the risks of their activities. Compliance with the regulatory
capital limits is strictly followed by management and monitored daily by the Risk area
At June 30, 2013, the Institution’s Basel ratio was 16,96 % (June 30, 2012 – 15.93%), calculated based on the consolidated financial statements.
Reference equity (PR) 1.472.205 1.331.426
Tier! 1.273.506 1.054.608
Equity 1.258.542 1.052.810
Mark-to-market adjustments 14.964 1.798
Tier 198.699 276.818
Subordinated debt 213.663 278.616
Mark-to-market adjustments (14.964) (1.798)
Required Regulatory Capital (PREX1) 954.804 919.307
Credit risk 862.954 845.145
Market risk 83.542 67.871
Operational risk 8.308 6.291
Surplus PR 517.401 412.119
Basel ratio – %. 16,96% 15,93%
Banco Pine, pursuant to Circular 3477/09, reports information on a quarterly basis, related to the management of risk and required regulatory capital (PRE). The report containing
further details, structure and methodologies is available on the following website: www.pine.com/ri.
Página 37
(A free translation of the original in Portuguese)
BANCO PINE S.A. AND SUBSIDIARIES
NOTES TO THE INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012
(In thousands of reais, unless otherwise stated)
b) Equity to fixed assets ratio
In accordance with BACEN Resolution 2286/96, the equity to fixed assets ratio ¡s limited to 50.0%. At June 30, 2013, the equity to fixed assets ratio was 10,99% (June 30, 2012 –
8.43%).
28. OTHER INFORMATION
a) Provision for credit assignment with coobligation
At June 30, 2013, the Institution had no provision for losses. At June 30, 2012, the provision for losses was R$3,721 for loans assigned with coobligation in the total amount of
R$18,307. This provision is recorded in Other liabilities- sundry.
b) Insurance
The Institution’s insurance strategy is based mainly on risk concentration and materiality, and policies are contracted at amounts established by Management, considering the
nature of its business and the advice of its insurance brokers. Insurance coverage at June 30, 2013 is as follows
MI EEE LCETAETA]
Directors and Officers Liability (D80) Civil liabilty for directors and officers 20.000
Vehicles Fire, robbery and colision for 11 vehicles 2.169
Buildings, machines, furniture and fidtures Any material damage to facilties, machinery and equipment 12.000
Bankers insurance Cash 300
Airoraft insurance Aircraft-part guarantees 339.560
c) Operating lease
Banco Pine has liabilities generated by operating leases. The amounts corresponding to the commitments for leased equipment are not presented in the balance sheet, since the
related lease agreements do not include a purchase option. The cost of the lease agreements is recognized in the statement of operations in the “Administrative expenses –
leased assets” account.
AE
2012
Expense for leased assets
Machinery and equipment leasing 4,08% 2 498 458
Aircraft lease (1) – 1.188
Total 498 1.646
(1) In September 2012, his lease ended.
d) Fair value of financial instruments
In accordance with CVM Instruction 235, we present below a comparison between the carrying amounts of financial assets and liabilities measured at amounts other than fair
value and their corresponding fair values at the end of the first six-month period.
AS AAN
Assets
‘Short-term interbank investments(‘) 669.124 669.124
Loan operations (i) 4.463.275 4.476.020
Other receivables(i) 836.866 804.876
Total financial assets 5.969.265 5.950.020
Liabilities
Demand deposits (li) 18.811 18.811
Interbank deposits () 110.160 110.160
Time deposits (iv) 3.107.419 3.107.421
Funds from acceptance and issuance of securities (iv) 1.242.630 1.229.911
Borrowings and onlendings (iv) 1.216.708 2.089.954
‘Subordinated debt (iv) 341.503 341.502
Total financial liabilities 6.037.231 6.897.759
We present below the methods and assumptions used to estimate fair value:
i) The fair values of the short-term interbank investments substantially approximate their carrying amounts.
ij) The loan operations and other receivables are measured net of the allowance for loan losses. The fair value of these operations represents the discounted value of the
expected future cash flows. The expected cash flows are discounted at current market rates to determine their fair values.
ii) The estimated fair values of the demand and interbank deposits substantially approximate their carrying amounts.
¡v) The estimated fair values of the time deposits and other loans which are not quoted in an active market are based on discounted cash flows, using the interest rates for new
debts with similar maturities.
€) Disclosure of other services rendered by the independent auditors
In compliance with CVM Instruction 381, of January 14, 2003, for the period from January to June 2013, no services were contracted from the independent auditor other than
those related to the external audit. Banco Pine’s policy is to limit the services provided by its independent auditor to safeguard the auditor’s independence and objectivity, in
conformity with Brazilian and international standards.
28. Subsequent Event
On August 2, 2013, the Brazilian Central Bank ordered the extrajudicial liquidation of Banco Rural. At the reporting date of June 30, 2013, Banco Pine had outstanding operations
with companies related to Banco Rural which were not included in the liquidation. In July 2013, a portion of these operations were settled on the date they effectively became due
and the remaining balances are not deemed material within the context of Banco Pine’s operations since, at present, this exposure represents less than 0.4% of the Institution’s
expanded credit portfolio. The Institution’s management is reassessing the risk involved in these operations to ensure that the appropriate actions are taken in the future, if
necessary.
Página 38
Link al archivo en CMFChile: https://www.cmfchile.cl/sitio/aplic/serdoc/ver_sgd.php?s567=e48b25fc57e98a0fc616a42331ec9b9eVFdwQmVFMTZRVFJOUkVFelRsUlZlRTVCUFQwPQ==&secuencia=-1&t=1682366909
