REFERENCE FORM 2019
INVESTOR RELATIONS CONTACTS:
ri@wilsonsons.com.br
+55 21 2126-4271
Engage with us:
wilsonsons.com.br/ir
Instagram.com/WilsonSons
Twitter.com/WilsonSonsBR
YouTube.com/WilsonSonsIR
Identification of people responsible for the content of the form | |||
Chief Executive Officer's / Investor Relations Officer's Statement | |||
or former controlling shareholders, or investors of the issuer or of its subsidiaries: |
party, differentiating between labor, tax, civil and other matters. | ||
Other relevant contingencies not covered by previous items:: |
issuer's securities are held in custody, if different from the country of origin, identifying: | ||
2 |
in these countries and how that affects the issuer's business | ||
Significant changes in the way the issuer's business is conducted |
Describe the non-current assets relevant to the development of issuer's activities, indicating in particular: | ||
3 |
Describe the rules, policies and practices relating to general meetings, indicating: | ||
Rules, policies and practices related to the Board of Directors: |
- Inform the existence of a marital relationship, civil union or even familial relationship up to the second degree: 139
- Inform the subordination relations, service rendering or control maintained over the past 3 fiscal years,
Agreements, including insurance policies, for payment or reimbursement of managers' expenses |
4 |
13.7 Regarding the options exercised and shares delivered related to the share-based compensation of the Board of
- Maximum, minimum and average compensation of the Board of Directors, Executive Board and Fiscal Council 163
- Describe agreements, insurance policies or other instruments that structure mechanisms of compensation or indemnity for managers in case of removal from office or retirement, including financial consequences to the issuer 164
- Regarding the past three fiscal years, provide the percentage of total compensation of each body, recognized in the issuer's results, for members of the Board of Directors, Executive Board of Executive Board and fiscal council who are direct or indirect related persons of the controlling shareholders, as defined in the applicable accounting rules
165 - Compensation of officers and members of the Fiscal Council, grouped by body, received for any reason other
party, governing the exercise of voting rights or transfer of shares issued by the issuer, state: | ||
Indicate significant changes in the holdings of control group members and issuer managers | ||
5 |
Prepare a table containing the following information about the capital: | ||
In respect to splits, combinations and stock dividends, inform in table form: | ||
Classes and types of securities admitted to trading on foreign markets, including | ||
and kind, indicating the quantity, value and total weighted average price to purchase the following: | ||
19.3 Provide any other information which the issuer deems relevant | ||
publicly is collected, processed and reported accurately and timely |
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1 Responsible for the content of the form
1.0 Identification of people responsible for the content of the form
Name of representative responsible for the form's content:
Fernando Fleury Salek (sole Legal Representative in Brazil for Wilson Sons Limited)
Representative's position in the Company:
CFO of the Brazilian subsidiaries and Investor Relations
The representatives above hereby certify that:
a. he has reviewed this Reference Form;
b. all statements contained in the Form comply with the provisions in Brazilian Securities and Exchange Commission (CVM) Instruction 480, in particular with articles 14 to 19, and;
c. all the information contained herein is a true, accurate and complete account of the economic and financial position of the issuer and the risks inherent to its activities.
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1.1 Chief-Executive Officer's Statement
Name of representative responsible for the form's content:
Augusto Cezar Tavares Baião
Representative's position in the Company:
CEO of Operations in Brazil
The representatives above hereby certify that:
a. he has reviewed this Reference Form;
b. all statements contained in the Form comply with the provisions in Brazilian Securities and Exchange Commission (CVM) Instruction 480, in particular with articles 14 to 19, and;
c. all the information contained herein is a true, accurate and complete account of the economic and financial position of the issuer and the risks inherent to its activities.
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1.2 Investor Relations Officer's statement
Name of representative responsible for the form's content:
Fernando Fleury Salek (sole Legal Representative in Brazil for Wilson Sons Limited)
Representative's position in the Company:
CFO of the Brazilian subsidiaries and Investor Relations
The representatives above hereby certify that:
a. he has reviewed this Reference Form;
b. all statements contained in the Form comply with the provisions in Brazilian Securities and Exchange Commission (CVM) Instruction 480, in particular with articles 14 to 19, and;
c. all the information contained herein is a true, accurate and complete account of the economic and financial position of the issuer and the risks inherent to its activities.
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1.3 Chief Executive Officer's / Investor Relations Officer's Statement
Name of representative responsible for the form's content:
Augusto Cezar Tavares Baião
Fernando Fleury Salek (sole Legal Representative in Brazil for Wilson Sons Limited)
Representative's position in the Company:
CEO of Operations in Brazil
CFO of the Brazilian subsidiaries and Investor Relations
The representatives above hereby certify that:
a. he has reviewed this Reference Form;
b. all statements contained in the Form comply with the provisions in Brazilian Securities and Exchange Commission (CVM) Instruction 480, in particular with articles 14 to 19, and;
c. all the information contained herein is a true, accurate and complete account of the economic and financial position of the issuer and the risks inherent to its activities.
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2 Auditors
2.1 In relation to auditors, indicate:
31.12.2018 | 31.12.2017 | 31.12.2016 | |||||||||||||||||
a) | Company | Ernst | & | Young | Auditores | Ernst | & | Young | Auditores | KPMG Auditores Independentes | |||||||||
name | and | Independentes - 4715 | Independentes - 4715 | - 4189 | |||||||||||||||
CVM Code | |||||||||||||||||||
b) | Name: | Fernando | Alberto | Name: Paulo José Machado | Name: Marcelo Luiz Ferreira | ||||||||||||||
Responsible | Schwartz de Magalhães | CPF: 014.319648-08 | CPF: 013.623.017-28 | ||||||||||||||||
individuals, | CPF: 054.835.508-89 | Phone.: +55 (21) 3263-7104 | Phone: +55 (21) 3515-9428 | ||||||||||||||||
Individual | Phone.: +55 (21) 3263-7104 | Fax: +55 (21) 3263-7000 | Fax: +55 (21) 3515-9000 | ||||||||||||||||
Taxpayer | Fax: +55 (21) 3263-7000 | Email: | Email: mlferreira@kpmg.com.br | ||||||||||||||||
(CPF/MF) | Email: | paulo.j.machado@br.ey.com | Website: www.kpmg.com/br | ||||||||||||||||
number | and | fernando.magalhaes@br.ey.com | Website: www.ey.com/br | Address: Av. Almirante Barroso, | |||||||||||||||
contact details | Website: www.ey.com/br | Address: | Praia | de | Botafogo. | 52 / 4º andar - Centro - Rio de | |||||||||||||
Address: | Praia | de | Botafogo. | 370, 8º andar - Botafogo - Rio | Janeiro - RJ - Brasil - CEP: | ||||||||||||||
370, 8º andar - Botafogo - Rio | de Janeiro - RJ - Brasil - CEP: | 20031-000 | |||||||||||||||||
de Janeiro - RJ - Brasil - CEP: | 22250-040 | ||||||||||||||||||
22250-040 | |||||||||||||||||||
c) | Service | 16 January 2018 | 24 August 2016 | 12 April 2016 | |||||||||||||||
Engagement | |||||||||||||||||||
Date | |||||||||||||||||||
d) | Description | Audit | of | annual | financial | Audit | of | annual | financial | Audit | of | annual | financial | ||||||
of | services | statements and special review of | statements and special review of | statements and special review of | |||||||||||||||
engaged | the condensed | and | interim | the condensed | and | interim | the condensed and | interim | |||||||||||
financial statements | prepared in | financial statements | prepared in | financial statements | prepared in | ||||||||||||||
accordance | with | international | accordance | with | international | accordance | with | international | |||||||||||
financial | reporting | standards | financial | reporting | standards | financial | reporting | standards | |||||||||||
(IFRS) | and audited | annual | (IFRS) | and audited | annual | (IFRS) | and | audited | annual | ||||||||||
financial statements | prepared in | financial statements | prepared in | financial statements | prepared in | ||||||||||||||
accordance | with | accounting | accordance | with | accounting | accordance | with | accounting | |||||||||||
practices adopted in Brazil. | practices adopted in Brazil. | practices adopted in Brazil. | |||||||||||||||||
e) | Not Applicable | Exchanging Independent Audit | Not Applicable | ||||||||||||||||
Replacement | |||||||||||||||||||
of auditor | |||||||||||||||||||
f) Grounds for | Not Applicable | Mandatory | rotation | established | Not Applicable | ||||||||||||||
replacement | by CVM Instruction 308/99 | ||||||||||||||||||
g) | Reason of | Not Applicable | Not Applicable | Not Applicable | |||||||||||||||
auditor | |||||||||||||||||||
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2.2 Inform the total amount of remuneration paid to independent auditors in the last fiscal year, itemizing the fees for audit services and those related to any other services provided.
The remuneration of the auditors in respect to most recent fiscal year end December 31, 2018, corresponds to the amount of R$ 1,675 million and relates only to the audit services rendered, as set out in section 2.1.d. above.
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2.3 Provide other information that the issuer may deem relevant:
There is no other relevant information.
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3 Selected financial information
3.1 Based on the consolidated financial statements, the table below contains the accounting information:
The information below is for the consolidated Group:
In R$ | 31.12.2018 | 31.12.2017 | 31.12.2016 |
a) Net Shareholder Equity | 1,999,841,000.00 | 1,811,617,000.00 | 1,683,286,000.00 |
b) Total Assets | 3,682,087,000.00 | 3,449,522,000.00 | 3,379,128,000.00 |
c) Net Revenue | 1,677,470,000.00 | 1,584,142,000.00 | 1,585,363,000.00 |
d) Gross income (*) | 381,022,000.00 | 366,912,000.00 | 351,914,000.00 |
e) Net income | 165,540,000.00 | 234,097,000.00 | 293,282,000.00 |
f) Number of shares, excluding treasury | 71,243,660 | 71,219,900 | 71,144,000 |
g) Share book value (Unit in BRL) | 28.070000 | 25.440000 | 23.660000 |
h) Basic Earnings per share (Unit in BRL) (**) | 220.680000 | 323.450000 | 411.210000 |
i) Diluted Earnings per share (Unit in BRL) (**) | 212.460000 | 311.300000 | 395.520000 |
j) Other financial information selected by the issuer | Not Applicable | Not Applicable | Not Applicable |
(*) Equal to operating income
(**) Net income per share attributable to the owners of the Company
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3.2 Non-accounting information:
EBITDA
The Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") presented is used by us to measure our performance. EBITDA equals net earnings before: (i) income taxes and social contributions, (ii) net financial expenses,
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depreciation and amortization costs and (iv) gain on sale of investments; and (V) share of results of joint ventures. EBITDA is not a measurement under the accounting principles adopted in Brazil, nor should it be considered in isolation or as an alternative to net income as a measure of operating performance or as an alternative to operating cash flows, or as a measure of liquidity. Other companies may calculate EBITDA in a different way than us. In our business, we use EBITDA as a measure of operating performance. As interest expenses, taxes, depreciation and amortization are not considered in its calculation, EBITDA is an indicator of our overall economic performance, which is not affected by fluctuations in interest rates, changes in tax burden or levels of depreciation and amortization. Therefore, we believe that EBITDA serves as a significant tool to periodically compare our operating performance and may serves as a basis for administrative decisions. We believe that EBITDA provides a better understanding not only of our financial performance, but also our capacity to meet our liability obligations and obtain funding for our capital expenditures and working capital. EBITDA, however, has limitations that preclude its use as a measure of our profitability, as it does not take into account certain costs of our business, which could affect, significantly, our profits, such as financial expenses, taxes, depreciation, capital expenditures, and other related charges. The results of Wilson Sons' participation (50%) on JV Wilson Sons
Ultratug Offshore (WSUT) are not include.
Reconciliation of EBITDA (US$) | 2018 | 2017 | 2016 |
Net Income | 46,248,000.00 | 72,772,000.00 | 85,104,000.00 |
Share of results of joint ventures | 4,062,000.00 | (3,366,000.00) | (8,073,000.00) |
Income tax and social contribution | 26,433,000.00 | 36,056,000.00 | 36,836,000.00 |
Gain on sale of investments | 0.00 | 0.00 | 0.00 |
Net financial income | 27,698,000.00 | 9,413,000.00 | (12,260,000.00) |
Depreciation and amortization | 56,175,000.00 | 57,480,000.00 | 52,584,000.00 |
EBITDA | 160,616,000.00 | 172,355,000.00 | 154,191,000.00 |
Reconciliation of EBITDA (R$) | 2018 | 2017 | 2016 |
Net Income | 164,540,000.00 | 234,097,000.00 | 293,282,000.00 |
Share of results of joint ventures | 15,150,000.00 | (10,584,000.00) | (26,510,000.00) |
Income tax and social contribution | 100,032,000.00 | 114,068,000.00 | 128,894,000.00 |
Gain on sale of investments | 0.00 | 0.00 | 0.00 |
Net financial income | 101,300,000.00 | 29,331,000.00 | (43,752,000.00) |
Depreciation and amortization | 204,844,000.00 | 183,542,000.00 | 182,298,000.00 |
EBITDA | 585,866,000.00 | 550,454,000.00 | 534,212,000.00 |
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3.3 Subsequent events
Dividend Payment
Wilson Sons Limited announced that the Board of Directors of the Company in Board Meeting held on April 25, 2019 declared the payment of a distribution in the amount of USD 0.54 per share (R$ 2.127330000 per share) in total of US$38,471,576.40 (R$ 151,558,775.22) to shareholders registered up to April 25, 2019.
The payment was made to owners of Brazilian Depositary Receipts ("BDRs") of the Company on May 8, 2019.
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3.4 Policy for allocation of the income
Retained earnings
After the allocation set out in clause 15.3 of the Bylaws, the Board of Directors may set aside from excess earnings of the Company the value it deems proper as a reserve to be used to meet contingencies or for offsetting dividends or any other purpose.
Dividend Policy
At the board of the 20th and 21st of March 2016 the Board of Directors approved a new dividend policy of an amount of approximately 50% of the Company's Net Profit, provided that:
- The dividend policy will not compromise the policy for growth of the Company whether it be, through acquisition of other companies, or by reason of development of new business; and
- The Board of Directors considers that the payment of such dividend would be in the interests of the Company and in compliance with the laws to which the Company is subject."
Dividends
The Board of Directors may, in accordance with article 15 of the Bylaws, and according to the Bermuda companies act, declare that a dividend is paid to shareholders in proportion to the number of shares held by them from the Company's resources and that the shareholders from time to time decide to make available for payment as dividends in accordance with Articles 15.2 and 15.3 of the Bylaws, and such dividend may be paid entirely in cash or party in kind, in which case the Board of Directors may determine the value for distribution of any assets in kind. No unpaid dividend shall accrue interest against the Company.
In accordance with Article 15.2 of the Bylaws, a value of at least 25% of adjusted net earnings (as defined in the Bylaws) for the current year will be declared by the Board as a dividend to be paid to shareholders in one or more installments before the annual general shareholder meeting immediately thereafter, except that the dividend shall be binding unless the Board finds that the payment of this dividend is not in the interest of the Company, in which case the value of dividends not distributed in this manner shall be recorded in a special earnings reserve account designated "Retained Dividends " and, if not offset against future losses, shall be paid as soon as the Board considers this payment in the interest of the Company.
Brazilian law allows dividends not to be distributed in case of incompatibility with the economic situation. The rules of the Bylaws differ from Brazilian law, to the extent that it allows the Board to determine that no dividend be distributed if it considers that it is against the interests of the Company. Notwithstanding that the Brazilian Corporations Law ("S.A.") gives the same permission, the provisions of Article 15.2 of the Bylaws are broad, which is why the criteria for distribution of dividends is more discretionary in comparison to companies subject to jurisdiction in Brazil.
In accordance with Article 15.3 of the Bylaws, at each annual general meeting, shareholders shall allocate:
- An amount equal to 5% of net earnings from the current fiscal year before allocation of dividends, which will be credited in a retained earnings account designated "Legal Reserve" until that account reaches 20% of paid-up capital;
- The amounts they may consider appropriate will be allocated as a reserve to be used to meet contingencies, designated "Contingency Reserve", observing that, however, with the approval of the Board, all or a portion of amounts allocated to the Contingency Reserve may be reverted in the fiscal year in which the reasons for such allocation cease to exist or upon the occurrence of the anticipated contingency for which the reserve was set aside (in each case, the occurrence of such event shall be determined to have occurred by the Board, in its sole discretion), provided that even in the latter case, the value of the effective contingency does not exceed the amount reserved for it; and
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- After the mandatory allocations to the Legal Reserve and the Contingency Reserve, the amount available for payment as a dividend at the discretion of the Board, but subject to Article 15.2 of the Bylaws.
The Board of Directors may from time to time based on our interim financial statements, declare and pay other dividends and / or make other distributions (cash or in kind) to shareholders in proportion to the number of shares held by them, which shall be offset against any future value that the shareholders may from time to time decide to make available for distribution. No distribution shall accrue interest against the Company.
In accordance with article 16 of the Bylaws, after the allocation set out in Article 15.3, investors may reserve from excess profits of the Company, the value that the Company may determine proper as a reserve to be used to meet contingencies or for offsetting dividends or for any other purpose.
The owners of Brazilian Depositary Receipts, shares certificates of deposit, ("BDRs"), shall have the right to receive dividends in the same manner as holders of Shares, subject to deduction of fees paid to the Custodian and the Depositary, costs of currency conversion and taxes, if any. Moreover, the dividends of the holders are subject to currency exposure, as these are declared in United States Dollars and sent to Brazil by an exchange transaction through the Brazilian Central Bank, in accordance with the custody agreement.
In accordance with Article 17.3 of the Bylaws, any dividends or other amounts payable with respect to an a share that has not been claimed for three years from the payment maturity date thereof, if the Board so decides, will lose the rights thereof and will no longer be owed by the Company.
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3.5 Distributions of dividends and retained earnings
In R$K | 31-12-2018 | 31-12-2017 | 31-12-2016 |
a) Net earnings adjusted for purposes of dividend distribution | 164,540 | 234,097 | 293,282 |
b) Dividends distributed | 151,559 | 126,549 | 117,681 |
c) Percentage of dividends in relation to adjusted net earnings | 92% | 52% | 40% |
d) Dividends distributed by class and type of shares / BDR | Not | Not | Not |
Applicable | Applicable | Applicable | |
e) Date of dividend payment | 08-05-2019 | 09-05-2018 | 09-05-2017 |
f) Rate of return in relation to equity | 8% | 13% | 17% |
g) Retained earnings | 12,981 | 107,548 | 175,601 |
h) Date of approval of the retention | 25-04-2019 | 26-04-2018 | 27-04-2017 |
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3.6 Dividends declared on account of retained earnings and reserves
Period | 31.12.2018 | 31.12.2017 | 31.12.2016 |
Retained earnings | Not applicable | Not applicable | Not applicable |
Reserves set aside | R$ 2,037.99 | R$ 5,598.99 | Not applicable |
Legal reserve
The amount equivalente to 5% of the Company's annual net income is allocated and classificed in a specific account denominated "profit reserves" limited to 20% of the paid-in capital of the Company. The Company recognized, in 2018 and 2017, US$ 1k (R$ 2k) and US$ 2k (R$ 6k), respectively, of profit reserve and reached the limit of 20% of paid-in capital.
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3.7 Level of Indebtedness
Fiscal Year | Total Amount of Debt of any kind | Ratio Type | Debt Ratio |
31-12-2018 | 1,682,246,000.00 | Indebtedness Ratio | 0.841190 |
31-12-2017 | 1,637,905,000.00 | Indebtedness Ratio | 0.904112 |
31-12-2016 | 1,695,842,000.00 | Indebtedness Ratio | 1.007459 |
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3.8 Obligations
Fiscal Year 2018
Type of | Type of | Others | Less than 1 | Over 5 | ||||
Guarantees or | 1 to 3 years | 3 to 5 years | Total | |||||
obligation | guarantee | year | years | |||||
Privileges | ||||||||
Financing | Secured | 180,022,738 | 134,737,270 | 124,374,516 | 471,222,459 | 910,356,982 | ||
Financing | Unsecured | 53,456,481 | 94,575,920 | 72,628,826 | 60,142,479 | 280,803,706 | ||
Total (R$) | 233,479,218 | 229,313,189 | 197,003,342 | 531,364,938 | 1,191,160,688 | |||
Fiscal Year 2017 | ||||||||
Type of | Type of | Others | Less than 1 | Over 5 | ||||
Guarantees or | 1 to 3 years | 3 to 5 years | Total | |||||
obligation | guarantee | year | years | |||||
Privileges | ||||||||
Financing | Secured | 131,120,273 | 203,563,931 | 107,278,989 | 437,029,500 | 878,992,694 | ||
Financing | Unsecured | 51,256,607 | 90,261,174 | 82,448,420 | 74,281,473 | 298,247,674 | ||
Total (R$) | 182,376,881 | 293,825,105 | 189,727,408 | 511,310,973 | 1,177,240,368 | |||
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3.9 Other significant information
Preparation basis
The consolidated financial statements were prepared in US Dollars, which is the currency of the primary economic environment in which the Group operates. Entities with a functional currency other than US Dollars were consolidated in accordance to the accounting policies described below. All financial statements presented in dollar were rounded to the nearest thousands, except when stated otherwise.
The consolidated financial statements have been prepared on the historical cost basis except for the derivatives which are measured by the fair value, as explained in the accounting policies.
As permitted by IAS 21 - The Effects of Changes in Foreign Exchange Rates, the Company also presents consolidated financial statements considering the Brazilian Real (R$) as presentation currency. The following procedures have been applied:
- Assets and liabilities for each statement of financial position have been translated at the closing exchange rate at the end of each period presented in these consolidated financial statements;
- Income and expenses for each statement of comprehensive income or separate income statement presented have been translated at average rate for the period; and
- All resulting exchange differences have been recognized as foreign currency translation in other comprehensive income.
In relation to item 3.5.H-Retained Earnings:
Approval date of the retention: We are a company incorporated in Bermuda, therefore, are governed by the laws of that country. Thus, the retention and distribution of earnings, are governed by the laws of Bermuda, especially by the Companies Act 1981 of Bermuda (the "Companies Act"), which differs from the Brazilian Corporation Law, Regulation of the Brazilian Securities and Exchange Commission and New Market (Novo Mercado). Therefore, the consolidated financial statements of the Company continue to show a balance in the accrued profits.
In relation to item 3.5.D-Dividend Distribution:
The following are the amounts actually paid per share / BDR:
08.05.2018 | 09.05.2017 | 09.05.2016 | |
Dividends (in R$) | 2.127330000 | 1.776870000 | 1.767250000 |
In addition, as mentioned in item 3.4 of the reference form, payments of dividends are subject to currency exposure, since they are declared in US dollars and remitted to Brazil through an exchange transaction via the Brazilian Central Bank.
In relation to item 3.8. Secured, Floating and Unsecured Debt:
At December 31, 2018, the Group had available US$116.2 million (R$450.1 million) of undrawn borrowing facilities.
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4 Risk Factors
4.1. Describe risk factors that may influence investment decisions, especially those related
to:
- the issuer
- If we fail to obtain funds necessary for investments in capital goods, we may be unable to comply with industry standards and continue expanding our activities.
To finance capital investments, we intend to use internally generated funds, borrow or seek funds through the sale of debt or equity securities. Our ability to access capital markets for future offerings may be limited by our financial situation at the time, as well as by unfavorable market conditions resulting from, among other factors, general economic conditions and uncertainties and contingencies beyond our control. In addition, we received a significant portion of our funding for operations and towing vessel construction from Banco Nacional de Desenvolvimento Econômico e Social (BNDES), under the maritime financing program at conditions that we believe are more favourable compared to other funding sources. If our competitors obtain a higher percentage of that funding or if such funding is unavailable or if interest rates for this funding increase to market levels, our financing costs will be much higher. If we are unable to obtain the resources for investment in future capital goods, our ability to implement our growth strategy may be limited and have a significant adverse effect on our business.
- Our operations are subject to operational hazards and unforeseen interruptions for which we may not be adequately insured, and accidents at sea or in ground facilities may adversely affect our operations.
Our vessels and some equipment used in port terminals and logistics operations are at risk of suffering damage or loss due to events such as mechanical failure, grounding, fire, explosions and collisions, maritime disasters and human error. All these risks can result in death or injury to persons, property damage, environmental damage, delays or re-routing. We contract insurance against most risks of accidents involved with our business. However, there may be risks against which insurance is not adequately contracted. In addition, we may not be able to acquire adequate insurance coverage on commercially reasonable rates in the future and there is no guarantee that any specific claim will be paid. Changes in insurance markets may make it more difficult to obtain certain types of insurance by the Company. Moreover, the insurance value that may be available may be significantly more expensive than the existing coverage. Moreover, even if insurance coverage is adequate to cover our losses, it is possible that conditions will not exist to obtain a replacement vessel or replacement equipment in a timely fashion in case of loss.
- Delays or cost overruns in building new vessels or in scheduled maintenance of our vessels or related to our ability to successfully improve the fleet of maritime vessels and tugs could impair our financial condition and operating results.
Each of our vessels undergoes scheduled and potentially unscheduled maintenance at the shipyard.
Moreover, the construction of new vessels and reconstruction of existing ones may be subject to the risks of delay or additional costs caused by one or more of the following items:
- quality or unforeseen engineering problems;
- work stoppages;
- unforeseen cost increases;
- delays in receiving materials or equipment required; and
- inability to obtain permits, approvals or certifications required upon completion of work.
Delays and significant additional costs can substantially increase the contractual obligations foreseen by us, which would have a negative effect on our revenues, our ability to borrow and operating results. Also, delays would result in the removal of vessels operating for extended periods, and therefore the loss of revenue, which could have a material adverse effect on our financial condition and operating results.
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(iv) The entry of new competitors could reduce our market share.
In the future, we may face competition from new entrants, including from multinationals in the businesses in which we operate. The opening or acquisition of businesses in Brazil may represent significant financial investment to large multinational competitors with easy access to capital and who decide to start operations in one or more of the segments in which we operate. Our sector is sensitive to price discounts and cannot assure potential investors that the existing or new competitors will not offer lower prices than ours, better services than ours, or increase efforts to take away market share from us and from other industry participants.
Moreover, consolidation in the maritime shipping segment or verticalization of operations by shipping customers could cause a loss of business. Companies with significant shipping operations could decide to perform certain functions internally that we currently offer to them rather than continue using our services. The decision for any of our major customers to verticalize their operations may adversely affect the use of our services, which will affect operating results.
(v) We may not be able to successfully implement our growth strategy.
Our ability to successfully implement our growth strategy is subject to many risks, including supply and demand for services, macroeconomic factors, factors in the industry as a whole, national and international trade policies, and other factors. The growth of national and international trade in Brazil, on which our activities depend, relies in part the continued availability and capacity of the Brazilian government to invest in transportation and port infrastructure throughout the country. If we are unable to fully implement our growth strategy, or if the government reduces or stops investment in maintenance and/or expansion in infrastructure in Brazil, our business in the country and, consequently, our financial position and operating results could be adversely affected.
(vi) The loss of important personnel can reduce operational efficiency and adversely affect our operating results.
We depend on the continued service of our key employees, loss of which could result in inefficiencies in our operations, loss of business opportunities or loss of one or more customers. The members of top management have an average track record of approximately 15 years with the company, together with prior experience in the industry, and the loss of one or more members of management may affect us negatively. In addition, our capacity to operate our vessels, equipment and our port terminals and shipyards and provide logistics solutions and provide maritime agency services depends on our ability to attract and retain qualified personnel with experience and skill. If we are unable to identify and develop qualified staff when necessary, our activities may be disrupted.
- Unfavorable decisions in judicial or administrative proceedings may cause adverse effects to the Company's business, its financial condition, and its operational results.
The Company is a defendant in judicial proceedings, the results of which may not be ensured as favorable or may not be dismissed. For more information regarding the Company's administrative or judicial proceedings, see section 4.3 hereof.
(viii) Flaws in information security (cyber attack) may adversely impact our operations and reputation.
Although the Company has a strong cyber security program which comprises a special infrastructure with segregated networks, a cyber attack could damage to the Company's image, financial and/or operational impact, even if temporarily, hindering the execution of critical business processes.
- your direct or indirect controller or control group
- Our bylaws contain provisions that may discourage the acquisition of Company control and hinder or delay operations which might be of interest to investors.
Our bylaws contain provisions that prevent the concentration of our shares or BDRs in the hands of a small group of investors, without the consent of our Board of Directors, in order to promote a more diffuse shareholder base. In accordance with article 72 of our bylaws, if at any time the person who is not part of the Ocean Wilson Holding Limited ("OWHL") group, which includes the Controlling shareholder and its affiliates, acquires a position in shares or share
26
backed certificates, which, when combined with any other shares or share backed certificates held by that person (or any associate of that person), resulting, when taken together, in the right to exercise 20% or more of the votes that may be cast in a resolution proposed at a Company general meeting of shareholders, such person or such associate (or, upon prior approval of the Board of Directors, any one or more but not all of them) shall be required, within 60 days of that acquisition, jointly and severally (if there is more than one party), to make a public offering to acquire all outstanding shares and share backed certificates outstanding that are not property of that person or any of its associates for a price payable in cash within 20 days of the offer being accepted (or over a longer period and on such terms as may be required to comply with any applicable laws, rules or regulations, including the requirements of any relevant investment or stock exchange) for at least the Minimum Price applicable to that offer, as defined by our Board of Directors as described in our Bylaws. This provision, among others provided in our bylaws, may have the effect of obstructing or impeding the acquisition of our Company and may discourage, delay or prevent or impede a merger or acquisition of our company, including in respect to transactions in which the investor could receive a premium over the market value of their stock or BDRs.
- your shareholders
(i) Bermuda's laws differ from laws in force in Brazil and may offer less protection to shareholders.
Our shareholders may have more difficulty protecting their interests than shareholders of companies incorporated in Brazil. As a Bermuda company, we are governed by the Companies Act. The Companies Act differs in some significant respects from the laws applicable to Brazilian companies and their shareholders, in the following respects: provisions in respect to directors with shareholdings, buyouts, mergers and acquisitions, takeovers, shareholder lawsuits, and indemnification of directors.
According to the laws of Bermuda, directors and officers of a company owe, in general, fiduciary duties to the company and not to individual shareholders. In general, class actions and liability claims are not available to shareholders under the laws of Bermuda. However, it is expected that courts in Bermuda will enable a shareholder initiate an action on behalf of a company to cure injury to the company where the act is supposedly beyond the company's corporate power or is illegal or would result in violation of the memorandum of association or the bylaws of the company. Furthermore, consideration would be given by a Bermuda court to allow the action of shareholders with respect to acts which allegedly constitute fraud against the minority shareholders or, for example, in respect to an act requiring the approval of a greater percentage of the company's shareholders than the percentage normally required to approve it. The Companies Act imposes an obligation on directors to act honestly and in good faith in furtherance of the best interests of the company and to exercise care and skill that a reasonably prudent person would exercise under similar circumstances. The directors of a company in Bermuda have a duty to avoid conflicts of interest.
Moreover, our Bylaws contain a broad waiver by shareholders to any claim or right of action, both individually and on our behalf, against any of the directors. The waiver applies to any action taken by a director or the failure of this director to fulfil his obligations, except with respect to any matter involving fraud or dishonesty by the director. This waiver limits the right of shareholders to bring claims against the directors of the Company, unless the act or omission involves fraud or dishonesty.
Our Bylaws also indemnify our directors with respect to their acts and omissions related to management of the Company, except with respect to fraud or dishonesty on their part. The indemnification provided in our bylaws does not exclude other rights of indemnification to which a director may be entitled, provided that such rights do not extend to fraud or dishonesty committed by them.
- your subsidiaries and affiliates
Risks relating to subsidiaries and affiliates are they same as those in respect to the issuer.
- your suppliers
(i) An increase in the price of fuel or electricity may adversely affect our activities and our operating results.
27
The cost of fuel used to move our vessels and the cost of fuel and electricity to operate port terminals are significant components of our operating expenses. Energy prices can be affected by economic and political factors. In the past, we were able to pass a portion of those increases to customers. However, because of the competitive nature of the segment, there is no guarantee that we will be able to pass on any current or future increases in energy prices. If energy prices continue rising and we cannot pass on increases to customers, our business and our operating results may be adversely affected.
- your customers
- We depend partially on the oil and gas industry. Changes in the level of spending on exploration and production and prices of the oil and gas industry and perceptions about future prices of oil and gas could substantially reduce demand for our services.
Revenues from the oil and natural gas maritime platform unit, a growing segment of our business in general, are generated mainly by oil companies that engage in exploration and extraction at sea, far from the Brazilian coast. Changes in the level of spending on exploration and production and oil and gas industry prices and perceptions about future prices of oil and gas as well as any reduction in the activity of maritime exploration, could harm demand for our marine support services and may reduce our revenues and negatively affect cash flow. If market conditions decline in the market areas in which we operate, we may be required to assess the recoverability of our long-term assets, which would result in total or partial write-off of our vessels, which could be substantial in individual or joint terms.
- The loss of key customers or default of these customers could negatively affect our financial condition or operating results.
We generate revenue by servicing a concentrated key customers operating in the national and international trade segment. Some of our customers may be highly leveraged and subject to their own operating risks and regulatory requirements. Consequently, the default of a major customer or the loss of that customer may have a negative impact on our results.
- the economic sectors in which the issuer operates
- The segments in which we operate are highly competitive. If our competitors are able to offer services to our customers at more affordable prices, we have to reduce our rates, which will cause a reduction in revenue.
Competition in the towage, offshore, port terminals, logistics and agency segments in which we operate essentially involves factors such as price, service, safety records and reputation, in addition to quality and availability of customer services. Any reduction of the rates offered by our competitors in any of these segments may cause us to reduce our rates, in addition to negatively impacting the use of our services, which will negatively affect operating income.
(ii) We depend, in general, on international trade, and specifically on the international maritime shipping industry.
Demand for our services depends largely on the levels of trade, and specifically the state of the maritime shipping industry. Cyclical downturns may negatively affect our operating results, because during economic downturns or periods of decline in ocean freight price negotiations, ocean carriers may have their volume reduced. We cannot predict if or when cyclical declines in global trade volume will occur.
- the regulation of sectors in which the issuer operates
- Our investments in capital goods and other costs necessary to maintain our operations may increase due to changes in sector regulation or environmental or safety standards, equipment or customer requirements.
We operate in an industry that requires significant capital investment. Changes in regulation, safety or equipment standards, as well as compliance with requirements imposed by regulation of the maritime industry and customer requirements or because of competition may require that additional expenses are incurred. We may be forced to incur significant expenses surrounding changes or inclusion of new equipment in order to comply with requirements from
28
environmental and governmental authorities. In addition, we may be forced to take our vessels out of operation or shutdown other facilities for greater periods, which may result in loss of corresponding revenue to make these changes or include such equipment.
- Our port terminal concessions may be cancelled before expiration upon the occurrence of certain events, for which we may not receive adequate compensation commensurate with the value of our assets or lost profits.
We operate port terminals in the states of Rio Grande do Sul and Bahia under concessions for the term of 25 years obtained from port authorities. The concessions are subject to early termination upon the occurrence of certain events, including operation in violation of the laws and regulations and failure to comply with our obligations under the lease agreement (including providing inefficient services or failure to remedy a problem in case we have had the opportunity to do so) or default in payment of amounts owed by the Company under the leases. Furthermore, in accordance with the terms of the concession, the Company must comply with certain operational targets and take steps to move a minimum number of containers per year. Failure to comply with the terms of those concessions, could lead to fines and contract termination.
If concessions are terminated in advance for any of the above reasons, we will no longer have the right to operate and manage our port terminals and our operations in such terminals will be terminated. Following termination, all fixed assets subject of the concession, together with any investment, will revert to the port authorities. While our concessions establish that we have the right to receive cash payment that reflects the unamortized value of the assets leased by us, there is no guarantee that this value, if any, will be sufficient to indemnify us for the value of these assets or lost profits.
- If we lose the tax benefits we have, our business, financial condition and operating income would be harmed significantly.
If we lose the tax benefit obtained as a result of activity encouraged in the region from the Northeast Development Agency (ADENE), our business, financial condition and operating results could be harmed significantly.
Through this tax benefit, we currently enjoy a 75% reduction in income tax at Tecon Salvador, in respect of earnings from the encouraged activity in the ADENE area.
- to foreign countries where the issuer operates
- Government regulation affect our operations and may increase the cost of doing business, restrict our operations and result in operational delays.
Our operations are subject to Brazilian laws and regulations governing: the employment relationship, health and worker safety, occupational health, employment, waste disposal, environmental protection, imports, exports, taxes and other issues.
It is possible that future changes in laws, regulations and applicable agreements or changes in enforcement or regulatory interpretation could result in changes in legal requirements or pursuant to existing contracts and licenses applicable to us, which could have a significant negative impact on the business, operating results or our financial situation.
When required, obtaining necessary permits and licenses can mean a lengthy and complex process and there is no guarantee that any necessary permit will be obtained on acceptable terms, in a timely manner or at any point. The costs and delays associated with obtaining permits and licenses necessary for compliance with these permits, licenses and applicable laws and regulations could interrupt or significantly delay or even restrict some of our operations.
Failure to comply with applicable laws, regulations, permits or licenses, even if inadvertent, could result in the interruption or termination of certain operations, or in fines, penalties or other significant obligations that could have a significant adverse effect on our business, our operating results or our financial situation.
- Exchange controls and restrictions on remittances abroad may adversely affect our ability to receive distributions from companies in our portfolio.
29
Brazilian law stipulates that, whenever there is a significant imbalance in Brazil's balance of payments or a major possibility that this imbalance exists, the Brazilian government may impose temporary restrictions on remittances to investors not resident in Brazil of the proceeds from their investments in Brazil (as imposed for approximately six months in 1989 and early 1990) and on conversion of Brazilian currency into foreign currencies. Such restrictions may prevent us from receiving distributions from companies that make up our portfolio or convert these distributions into U.S. dollars and remit them abroad. The imposition of such restrictions may also have a significant adverse effect on the market price of our shares and BDRs.
(iii) Under Brazilian law, we are considered a foreign company subject to foreign law.
We are a company incorporated in Bermuda and, therefore, are governed by the laws of that country. Thus, the increase of share capital and the rights and obligations of shareholders, including voting rights, preemptive rights, dividend distributions, attendance at general shareholders meetings and election of board members, among other acts, are governed by the laws of Bermuda, the Companies Act, which differs in many respects, from the Brazilian Corporation Law, the Brazilian Securities and Exchange (CVM) rules and regulations of the New Market (Novo Mercado).
- social and environmental matters
- we are subject to various environmental laws and regulations that may become more stringent in the future and result in greater obligations and capital investments.
Our operations are subject to extensive federal, state, and municipal environment projection laws. Compliance with this legislation is supervised by government bodies and agencies, which may impose administrative penalties for any breach of these standards. Such sanctions may include, among others, the imposition of fines, revocation of licenses and even the temporary or permanent suspension of our activities. The adoption of more stringent environmental laws and regulations may force us to invest more capital in this area and, consequently, change the allocation of previously planned investments. Such changes could have a material adverse effect on our financial condition and results.
Moreover, if we do not observe the law on environmental protection, such as the lack of environmental permits required for our projects and activities, we may be subject to criminal penalties without the prejudice of the obligation to repair the damage that may have been caused. Criminal sanctions may include, among others, the arrest of those responsible, as well as the loss or restriction of tax incentives and the cancellation and suspension of credit lines from official credit establishments, and prohibition from government contracting, which may have a negative impact on our revenues or even derail our ability to raise funds in the financial markets.
Delays or refusals by environmental licensing agencies to issue or renew licenses, as well as our possible inability to meet the requirements established by such environmental agencies in the course of the environmental licensing process, may hinder or even prevent, as the case may be, the installation and operation of our business ventures.
Additional environmental requirements that may be imposed in the future and our inability to obtain environmental licenses will require us to incur significant additional costs and may have a material adverse effect on our business, financial condition, results, and market value of our shares.
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4.2. Describe, quantitatively and qualitatively, the main market risks to which the issuer is exposed, including currency and interest rate risks.
Currency
The operating cash flows are subject to fluctuations in the currency because they are partly denominated in Reais, partly in US Dollars and partly in Euro, with the proportions varying according to the characteristics of each businesses.
Cash flows from investments in fixed assets are also denominated mostly in Reais and US Dollars. Such investments are subject to currency variations in the time period between the setting of the purchase price of goods or contracting of services with suppliers and effective payment for these goods and services.
The cash of the Company is invested partly in Reais (41% - 31.12.2018) and partly in US dollars (59% - 31.12.2018).
The Company has debt pegged to both US Dollars (95% - 31.12.2018) and Reais (5% - 31.12.2018).
Interest Rates
As at 12/31/2018 the company has 76.7% of its debt bound to pre-established rates. The portion total debt related to financing using the proceeds from the Merchant Marine Fund (FMM) is equivalent to 77.1%.
Other existing loans are post‐fixed and correspond to 23.3%. The exposure to variable rates is distributed as follows:
- TJLP (Long Term Interest Rate) for financing in Brazilian Reais through lines of credit: (i) Finame for machinery and equipment in Port and Logistics Operations; (ii) BNDES Finem for investment projects in Port Operations. (iii) Merchant Marine Fund (FMM) for vessel financing;
- DI (Interbank Deposit) for the financing in Brazilian Reais for equipment in Port and Logistics Operations;
- 6‐months Libor (London Interbank Offered Rate) for financing in U.S. Dollar for Port Operations.
Investments pegged to Brazilian Reais are post‐fixed and follow the daily fluctuation of the DI (Interbank Deposit) rate in the case of private securities and/or Selic‐Over rate in the case of public securities (41%). The company invests in exchange funds (5%).
Investment in Dollars partially occurs through time deposits (54%), with short-term maturity.
Price Index
Variations in price indices may affect some contracts with customers and suppliers.
Commodities
The Company does not have direct exposure to commodities, however, it has indirect exposure to variations inof iron ore and oil prices, as they affect the steel and fuel prices, respectively, which are inputs required for the construction and operation of vessels.
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4.3. Judicial, administrative or arbitral proceedings in which issuer or its subsidiaries are parties, differentiating among labour, tax, civil and other matters which: (i) are not confidential, and (ii) are relevant to the business of the issuer or its subsidiaries:
Regarding the chance of loss (letter "g") of the proceedings below, the following concepts should be considered: Probable: when the chance of one or more future events occurring is greater than the non-occurrence thereof; Possible: when the chance of one or more future events occurring is less than likely, but more than remote; Remote: when the chance of one or more future events occur is small.
- Passive processes I.I) Labor
There are no relevant non-confidential judicial, administrative or arbitration proceedings.
I.II) Tax
1)
a. court | Brazilian Federal Revenue Office | ||
b. instance | Administrative | ||
c. filing date (dd/mm/yyyy) | 11/28/2018 | ||
d. parties to the proceedings | Saveiros Camuyrano Serviços Marítimos S/A - Company's subsidiary | ||
Brazilian Federal Revenue Office | |||
e. amounts, assets, or rights involved | R$ 21,483,538.39 | ||
f. key facts | Tax assessment issued to impose fine against the alleged incorrect | ||
information in the DCTF and EFD -Contribution. | |||
g. chance of loss | Possible | ||
h. impact analysis in case of loss | Financial | ||
i. amount provisioned, if any | N/A | ||
2) | |||
a. court | Brazilian Federal Revenue Office | ||
b. instance | Administrative | ||
c. filing date (dd/mm/yyyy) | 11/28/2018 | ||
d. parties to the proceedings | Saveiros Camuyrano Serviços Marítimos S/A - Company's subsidiary | ||
Brazilian Federal Revenue Office | |||
e. amounts, assets, or rights involved | R$ 15,117,866.48 | ||
f. key facts | Tax assessment issued for the collection of CPRB. | ||
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g. chance of loss | Possible | |
h. impact analysis in case of loss | Financial | |
i. amount provisioned, if any | N/A | |
3) | ||
a. court | Brazilian Federal Revenue Office | |
b. instance | Administrative | |
c. filing date (dd/mm/yyyy) | 07/23/2015 | |
d. parties to the proceedings | Tecon Rio Grande S/A. - Company's subsidiary | |
Brazilian Federal Revenue Office | ||
e. amounts, assets, or rights involved | R$ 8,600,612.26 | |
f. key facts | Tax assessment issued against the disallowance of PIS/COFINS | |
credits. | ||
g. chance of loss | Possible | |
h. impact analysis in case of loss | Financial | |
i. amount provisioned, if any | N/A | |
4) | ||
a. court | Federal Courts of Rio de Janeiro | |
b. instance | 2nd Instance - Judicial | |
c. filing date (dd/mm/yyyy) | 11/07/2012 | |
d. parties to the proceedings | Wilson Sons Comércio e Indústria e Agencia de Navegação Ltda. - | |
Company's subsidiary | ||
Federal Government - INSS | ||
e. amounts, assets, or rights involved | R$ 25,832,786.69 | |
f. key facts | Motion to stay to Tax Enforcement to cancel social security | |
contribution on payments to Temporary Port Workers. | ||
g. chance of loss | Possible | |
h. impact analysis in case of loss | Financial | |
i. amount provisioned, if any | N/A | |
5) | ||
33
a. court | Court of Justice of São Paulo | |
b. instance | 1st Instance - Judicial | |
c. filing date (dd/mm/yyyy) | 09/30/2013 | |
d. parties to the proceedings | Sobrare Servemar Ltda. - Company's subsidiary | |
Municipality of Santos | ||
e. amounts, assets, or rights involved | R$ 11,897,787.49 | |
f. key facts | Motion to stay tax enforcement, to annul the collection of ISS on | |
maritime chartering service. | ||
g. chance of loss | Possible | |
h. impact analysis in case of loss | Financial | |
i. amount provisioned, if any | N/A | |
6) | ||
a. court | Brazilian Federal Revenue Office | |
b. instance | Administrative | |
c. filing date (dd/mm/yyyy) | 04/24/2012 | |
d. parties to the proceedings | Wilport Operadores Portuários Ltda. - Company's subsidiary | |
Federal Government | ||
e. amounts, assets, or rights involved | R$ 7,098,951.26 | |
f. key facts | Tax assessment issued for the collection of IRPJ and CSLL from | |
expenses and costs. | ||
g. chance of loss | Remote | |
h. impact analysis in case of loss | Financial | |
i. amount provisioned, if any | N/A | |
7) | ||
a. court | Federal Court of São Paulo - Santos County | |
b. instance | 1st Instance - Judicial | |
c. filing date (dd/mm/yyyy) | 12/06/2012 | |
d. parties to the proceedings | Wilson Sons Agência Marítima Ltda - Company's subsidiary | |
Federal Government | ||
e. amounts, assets, or rights involved | R$ 6,106,634.74 | |
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f. key facts | Motion to stay tax enforcement to cancel the imposition of regulatory | ||
fine (Siscomex Export). | |||
g. chance of loss | Possible | ||
h. impact analysis in case of loss | Financial | ||
i. amount provisioned, if any | N/A | ||
8) | |||
a. court | Brazilian Federal Revenue Office | ||
b. instance | Administrative | ||
c. filing date (dd/mm/yyyy) | 11/25/2015 | ||
d. parties to the proceedings | Wilson Sons Administração e Comércio - Company's subsidiary | ||
Brazilian Federal Revenue Office | |||
e. amounts, assets, or rights involved | R$ 13,266,736.94 | ||
f. key facts | Tax assessment issued for the collection of IRPJ and CSLL from | ||
expenses and costs. | |||
g. chance of loss | Remote | ||
h. impact analysis in case of loss | Financial | ||
i. amount provisioned, if any | N/A | ||
9) | |||
a. court | Brazilian Federal Revenue Office | ||
b. instance | Administrative | ||
c. filing date (dd/mm/yyyy) | 11/12/2009 | ||
d. parties to the proceedings | Wilson Sons Agência Marítima Ltda. - Company's subsidiary | ||
Brazilian Federal Revenue Office | |||
e. amounts, assets, or rights involved | R$ 7,761,710.00 | ||
f. key facts | Tax assessment issued to impose regulatory fine (Siscomex Export). | ||
g. chance of loss | Possible (R$ 265,034) | ||
h. impact analysis in case of loss | Financial | ||
i. amount provisioned, if any | N/A | ||
10) | |||
35
a. court | Brazilian Federal Revenue Office |
b. instance | Administrative |
c. filing date (dd/mm/yyyy) | 11/18/2013 |
d. parties to the proceedings | Wilson Sons Logistics Ltda. - Company's subsidiary |
Brazilian Federal Revenue Office | |
e. amounts, assets, or rights involved | R$ 13,421,208.34 |
f. key facts | Tax assessment issued for the collection of IRPJ, CSLL, PIS and |
COFINS from unproven expenses and costs. | |
g. chance of loss | Remote |
h. impact analysis in case of loss | Financial |
i. amount provisioned, if any | N/A |
11) | |
a. court | Brazilian Federal Revenue Office |
b. instance | Administrative |
c. filing date (dd/mm/yyyy) | 07/23/2015 |
d. parties to the proceedings | Tecon Rio Grande S/A. - Company's subsidiary |
Brazilian Federal Revenue Office | |
e. amounts, assets, or rights involved | R$ 56,705,060.43 |
f. key facts | Tax assessment issued for the collection of PIS and COFINS on |
foreign revenues from services provided to International Shipowners. | |
g. chance of loss | Possible |
h. impact analysis in case of loss | Financial |
i. amount provisioned, if any | N/A |
12) | |
a. court | Brazilian Federal Revenue Office |
b. instance | Administrative |
c. filing date (dd/mm/yyyy) | 07/26/2016 |
d. parties to the proceedings | Saveiros Camuyrano Serviços Marítimos S/A - Company's subsidiary |
Brazilian Federal Revenue Office | |
e. amounts, assets, or rights involved | R$ 5,832,829.66 |
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f. key facts | Tax assessment issued for the collection of the difference in the rate |
of the Work Accident Risk (RAT). | |
g. chance of loss | Possible |
h. impact analysis in case of loss | Financial |
i. amount provisioned, if any | N/A |
13) | |
a. court | Brazilian Federal Revenue Office |
b. instance | Administrative |
c. filing date (dd/mm/yyyy) | 12/27/2013 |
d. parties to the proceedings | Wilson Sons Comércio Indústria e Agência de Navegação Ltda. - |
Company's subsidiary | |
Brazilian Federal Revenue Office | |
e. amounts, assets, or rights involved | R$ 5,633,690.47 |
f. key facts | Tax assessment issued for the collection of IRPJ and CSLL from |
unproven expenses and costs. | |
g. chance of loss | Remote |
h. impact analysis in case of loss | Financial |
i. amount provisioned, if any | N/A |
14) | |
a. court | Brazilian Federal Revenue Office |
b. instance | Administrative |
c. filing date (dd/mm/yyyy) | 10/31/2007 |
d. parties to the proceedings | Wilport Operadores Portuários Ltda. - Company's subsidiary |
Brazilian Federal Revenue Office | |
e. amounts, assets, or rights involved | R$ 17,062,942.41 |
f. key facts | Tax assessment issued for the collection of IRPJ and CSLL from |
unproven expenses and costs. | |
g. chance of loss | Possible (R$ 683,429) |
h. impact analysis in case of loss | Financial |
i. amount provisioned, if any | N/A |
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15)
a. court | Brazilian Federal Revenue Office | ||
b. instance | Administrative | ||
c. filing date (dd/mm/yyyy) | 04/13/2006 | ||
d. parties to the proceedings | Sobrare Servemar Ltda. - Company's subsidiary | ||
Brazilian Federal Revenue Office | |||
e. amounts, assets, or rights involved | R$ 11,523,965.35 | ||
f. key facts | Tax assessment issued against alleged irregularities in the collection | ||
of PIS and COFINS. | |||
g. chance of loss | Remote | ||
h. impact analysis in case of loss | Financial | ||
i. amount provisioned, if any | N/A | ||
16) | |||
a. court | Brazilian Federal Revenue Office | ||
b. instance | Administrative | ||
c. filing date (dd/mm/yyyy) | 02/27/2013 | ||
d. parties to the proceedings | Wilson Sons Agência Marítima Ltda. - Company's subsidiary | ||
Brazilian Federal Revenue Office | |||
e. amounts, assets, or rights involved | R$ 6,693,743.56 | ||
f. key facts | Tax assessment issued for the collection of PIS and COFINS on | ||
foreign revenues from services provided to international shipowners | |||
and on exchange variation. | |||
g. chance of loss | Possible | ||
h. impact analysis in case of loss | Financial | ||
i. amount provisioned, if any | N/A | ||
17) | |||
a. court | Brazilian Federal Revenue Office | ||
b. instance | Administrative | ||
c. filing date (dd/mm/yyyy) | 05/05/2003 | ||
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d. parties to the proceedings | Sobrare Servemar Ltda. - Company's subsidiary |
Brazilian Federal Revenue Office | |
e. amounts, assets, or rights involved | R$ 5,769,892.18 |
f. key facts | Tax assessment issued against alleged irregularities in the collection |
of PIS and COFINS. | |
g. chance of loss | Remote |
h. impact analysis in case of loss | Financial |
i. amount provisioned, if any | N/A |
18) | |
a. court | Federal Court of Rio de Janeiro |
b. instance | 1st Instance - Judicial |
c. filing date (dd/mm/yyyy) | 12/12/2012 |
d. parties to the proceedings | Sobrare Servemar Ltda. - Company's subsidiary |
Federal Government | |
e. amounts, assets, or rights involved | R$ 7,087,382.45 |
f. key facts | Motion to stay tax enforcement to cancel IRPJ and CSLL collection |
against the disallowance on receipt of credits. | |
g. chance of loss | Possible |
h. impact analysis in case of loss | Financial |
i. amount provisioned, if any | N/A |
19) | |
a. court | Brazilian Federal Revenue Office |
b. instance | Administrative |
c. filing date (dd/mm/yyyy) | 11/23/2011 |
d. parties to the proceedings | Saveiros Camuyrano Serviços Marítimo S/A. - Company's subsidiary |
Federal Government | |
e. amounts, assets, or rights involved | R$ 6,380,142.04 |
f. key facts | Tax assessment issued for the collection of IRPJ and CSLL against |
alleged undue exclusions in Net Income. | |
g. chance of loss | Possible |
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h. impact analysis in case of loss | Financial |
i. amount provisioned, if any | N/A |
I.III) Civil | |
1) | |
a. court | Federal Court of Paulo Afonso/BA |
b. instance | Judicial |
c. filing date (dd/mm/yyyy) | 04/24/2017 |
d. parties to the proceedings | Petrucio Pereira Gomes |
Federal Government / ANTAQ / CODEBA | |
Tecon Salvador S.A. | |
e. amounts, assets, or rights involved | No financial amount determined so far. |
f. key facts | Popular Action requesting the suspension of the expansion works of |
Tecon Salvador and the effects from the second amendment to the | |
lease agreement. | |
g. chance of loss | Possible |
h. impact analysis in case of loss | Operation |
i. amount provisioned, if any | N/A |
2) | |
a. court | Federal Civil Court of the Judiciary Branch of the State of Bahia |
b. instance | Judicial |
c. filing date (dd/mm/yyyy) | 09/08/2017 |
d. parties to the proceedings | Federal Prosecution Office |
Federal Government / ANTAQ / CODEBA | |
Tecon Salvador S.A. | |
e. amounts, assets, or rights involved | No financial amount determined so far. |
f. key facts | Public Civil Action requesting the suspension of the expansion works |
of Tecon Salvador and the effects from the second amendment to the | |
lease agreement, waiting for decision of the preliminary injunction. | |
g. chance of loss | Possible |
h. impact analysis in case of loss | Operation |
i. amount provisioned, if any | N/A |
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I. IV) Others
There are no relevant non-confidential judicial, administrative or arbitration proceedings.
- Active Processes: II.I) Label
There are no relevant non-confidential judicial, administrative or arbitration proceedings.
II.II) Tax
1)
a. court | Federal Courts - Salvador | ||
b. instance | Judicial | ||
c. filing date (dd/mm/yyyy) | 03/03/2015 | ||
d. parties to the proceedings | Tecon Salvador - Company's subsidiary | ||
Federal Government | |||
e. amounts, assets, or rights involved | R$ 5,457,211.64 | ||
f. key facts | Action for annulment of the Tax Assessment collecting II, IPI, PIS and | ||
COFINS taxes levied on misplaced goods. | |||
g. chance of loss | Possible | ||
h. impact analysis in case of loss | Financial | ||
i. amount provisioned, if any | N/A | ||
II.III) Civil
There are no relevant non-confidential judicial, administrative or arbitration proceedings.
II. IV) Others
There are no relevant non-confidential judicial, administrative or arbitration proceedings.
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4.4 Judicial, administrative or arbitration proceedings which are not subject to confidentiality and wherein the issuer or its subsidiaries are a party and wherein the opposing parties are managers or former managers, controlling or former controlling shareholders, or investors of the issuer or of its subsidiaries:
There are no proceedings relating to this item.
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4.5 Relevant confidential proceedings in which the issuer or its subsidiaries are party and which have not been disclosed in items 4.4 above 4.3 and analyze the impact in case of loss and report the amounts involved:
There are no proceedings relating to this item.
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4.6 Repetitive or connected judicial, administrative or arbitral proceedings based on similar facts and legal causes of action, which are not confidential and which together are material in which the issuer or its subsidiaries are party, differentiating between labor, tax, civil and other matters.
I) Labor
1) | |
a. court | TRT 24th Region - MS |
b. instance | Judicial |
c. filing date (dd/mm/yyyy) | 2014/2016 |
d. parties to the proceedings | Wilson Sons Logistics Ltda |
e. amounts, assets, or rights involved | R$ 14,322,000.00 |
f. key facts | 85 Labor Claims - |
Main claims: in itinerary hours - uninterrupted shift | |
g. chance of loss | Probable |
h. impact analysis in case of loss | Financial |
i. amount provisioned, if any | R$ 9,427,000.00 |
II) Tax
There are no proceedings relating to this item.
III) Cível
(i) Matter: Calculation of violation to the economic order - Antitrust
Quantity of processes: 4
1)
a. court | 4th Federal Court - TRF 1st Region - Federal District |
b. instance | Judicial |
c. filing date (dd/mm/yyyy) | 04/25/2016 |
d. parties to the proceedings | Tecon Rio Grande S/A |
Administrative Council for Economic Defense - CADE | |
e. amounts, assets, or rights involved | R$ 7,903,469.15 |
f. key facts | Action for annulment with preliminary injunction requesting the |
annulment of the fine imposed by CADE in the context of | |
administrative proceeding 08012.005422/2003-03 | |
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g. chance of loss | Possible | ||
h. impact analysis in case of loss | Financial | ||
i. amount provisioned, if any | N/A | ||
2) | |||
a. court | 4th Federal Court - TRF 1st Region - Federal District | ||
b. instance | Judicial | ||
c. filing date (dd/mm/yyyy) | 04/25/2016 | ||
d. parties to the proceedings | Tecon Salvador S/A | ||
Administrative Council for Economic Defense - CADE | |||
e. amounts, assets, or rights involved | R$ 6,250,288.43 | ||
f. key facts | Action for annulment with preliminary injunction requesting the | ||
annulment of the fine imposed by CADE in the context of | |||
administrative proceeding 08012.003824/2002-84 | |||
g. chance of loss | Possible | ||
h. impact analysis in case of loss | Financial | ||
i. amount provisioned, if any | N/A | ||
3) | |||
a. court | 2nd Federal Court - TRF 4th Region - Rio Grande/RS | ||
b. instance | Judicial | ||
c. filing date (dd/mm/yyyy) | 03/26/2009 | ||
d. parties to the proceedings | Tecon Rio Grande S/A - | ||
Federal Prosecution Office | |||
e. amounts, assets, or rights involved | R$ 687,112.39 | ||
f. key facts | Public civil action to discontinue the violation to the economic order | ||
comprising the collection of the "15-day storage tariff". | |||
g. chance of loss | Probable | ||
h. impact analysis in case of loss | Financial | ||
i. amount provisioned, if any | R$ 687,112.39 | ||
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4)
a. court | Administrative Council for Economic Defense - CADE |
b. instance | Administrative |
c. filing date (dd/mm/yyyy) | 11/24/2014 |
d. parties to the proceedings | Tecon Rio Grande S/A |
Administrative Council for Economic Defense - CADE | |
e. amounts, assets, or rights involved | R$ 6,359,059.50 |
f. key facts | Administrative Proceeding for supposed violation to the economic |
order for the collection of the "bona-fide depositary" fee. | |
g. chance of loss | Possible |
h. impact analysis in case of loss | Financial |
i. amount provisioned, if any | N/A |
(ii) Matter: Collection of container segregation and delivery services
Lawsuits challenging the collection by the Terminals of the container segregation and delivery services ("SSE"), considering the supposed double collection in relation to the "THC" (Terminal Handling Charges) charged by the Shipowners.
Number of cases: 5
Total Amount: No financial amount determined so far.
Likelihood of unfavorable outcome: Probable.
In connection with the matter, the following lawsuits were filed:
(ii.a) CONSÓRCIO EADI - SALVADOR LOGÍSTICA E DISTRIBUIÇÃO (EADI COLUMBIA) filed an Ordinary Action against TECON SALVADOR S/A, da CODEBA and National Waterway Transportation Agency (ANTAQ), requesting advanced and final decree prohibiting the first Defendant from charging the "SSE" and requesting the second and third Defendants to inspect TECON in order to prevent TECON from making the collection under discussion. The lower courts accepted the Ordinary Action and the Preliminary Injunction. TECON has filed an appeal against both decisions. The Parties entered into an agreement and settled the lawsuits, approved in 2017.
(ii.b) COMPANHIA EMPORIO DE ARMAZENS GERAIS ALFANDEGADOS filed a Preliminary Injunction and Ordinary Action against TECON SALVADOR S/A, CODEBA and ANTAQ, requesting the final decision about the possible escrow deposit of the "SSE", prohibiting the first Defendant from charging the "SSE" and requesting the second and third Defendants to inspect TECON in order to prevent TECON from making the collection under discussion. The action was not accepted. The Plaintiff has filed an appeal against this decision and is waiting for the decision.
1)
a. court | 13th Federal Court of Salvador - Judiciary Section of Bahia |
b. instance | Judicial |
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c. filing date (dd/mm/yyyy) | 08/23/2006 |
d. parties to the proceedings | Company Emporio de Armazéns Gerais Alfandegados |
Tecon Salvador S.A / CODEBA / ANTAQ | |
e. amounts, assets, or rights involved | No financial amount determined so far |
f. key facts | Preliminary Injunction and Ordinary Action challenging the collection of |
the container segregation and delivery tariff ("SSE"). | |
g. chance of loss | Probable |
h. impact analysis in case of loss | Financial |
i. amount provisioned, if any | N/A |
(ii.c) USUPORT - ASSOCIAÇÃO DE USUÁRIOS DOS TERMINAIS PORTUÁRIOS DE SALVADOR filed against the President of CODEBA, the Collective Writ of Security requesting, under collective custody, the final decision requesting the Constraining Authority to undertake the necessary provisions to prevent the collection of the "SSE". At the end of the proceeding in the first degree, the judge issued a decision, confirming the preliminary ruling and granting security. Proceeding judged by the Court that maintained the decision, subject to Appeals before the Higher Courts by TECON, which are pending decision.
1)
a. court | 16th Federal Court of Salvador - Judiciary Section of Bahia |
b. instance | Judicial |
c. filing date (dd/mm/yyyy) | 04/03/2006 |
d. parties to the proceedings | USUPORT |
Tecon Salvador S.A / CODEBA | |
e. amounts, assets, or rights involved | No financial amount determined so far |
f. key facts | Collective Writ of Security challenging the collection of the container |
segregation and delivery tariff ("SSE"). | |
g. chance of loss | Probable |
h. impact analysis in case of loss | Financial |
i. amount provisioned, if any | N/A |
.
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4.7 Other relevant contingencies not covered by previous items::
In addition to the information provided in items 4.3, 4.4, 4.5 and 4.6, we are party in numerous legal and administrative Tax, Labour, Civil and Environmental proceedings, including those mentioned in the previous items. On December 31, 2018, the provisions contained in our financial statements amounted to US$16,489,787.00 (R$63,894,627.00). We made provisions for all judicial and administrative proceedings with the probability of loss considered as probable, based on the opinion of our legal consultants. The Company and its counsellors believe that progress and appropriate legal action taken in each situation are sufficient to preserve shareholder equity, and there is no need to recognize additional provisions to those recorded on December 31, 2018.
In addition to the cases in which the Company recognised a provision, there are other tax, civil, criminal and labour cases involving the amount of US$118,541,968.00 (R$459,326,419.00), of which probability of loss was estimated by legal counsel as "possible". It also clarifies that there are proceedings whose risks are supported by insurance coverage, which is why they are not included in this Form.
We do not believe that any judicial and administrative proceedings, if decided unfavourably, would cause a material adverse effect on our financial condition or operating results or the Company's image.
The Company clarifies that it considers as criteria for materiality purposes of this Reference Form, legal actions with values over US$1.500.000,00 (R$5,000,000.00).
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4.8 In relation to the country of origin rules of the foreign issuer and the rules of the country where the foreign issuer's securities are held in custody, if different from the country of origin, identifying:
- restrictions on the exercise of political and economic rights
Direito a dividendos: As a constraint on economic rights linked to securities issued by the Company in its country of origin, under article 15.2 of the Company's Bylaws, the value of at least 25% of Adjusted Net Earnings of the Company shall be compulsory unless the Board considers that the payment of this dividend would not be in the Company's interest, in which case the value of dividends not distributed in this manner will be booked in a special earnings reserve account called "Retained Dividends " and, if not offset against future losses shall be paid as soon as the Board considers this payment in the interest of the Company.
Voting right: In accordance to the Company's bylaws, the Company's shareholders are entitled to one vote per share. The holders of BDRs are not and will not be considered holders of the Company's shares and are not entitled to the right to attend at the shareholders' general meetings. The holders of BDRs are entitled to direct the depositary to vote the number of shares represented by the respective BDRs. However, the holder of BDRs may not became aware of the meeting in advance to direct the depositary on a timely basis to exercise the voting right in relation to the shares held by the custodian.
- restrictions on the circulation and transfer of securities
The Self-Regulated Trading Market of the Luxembourg Stock Exchange - ("EuroMTF") is governed by the provisions of the Law on Market Abuse, which implements the policies of Market Abuse and the European Union which prohibits market abuse in EuroMTF. The purpose of this law is to prevent market manipulation and insider trading, both forms of market abuse. The Law on Market Abuse applies to all securities admitted (or whose application for admission has been filed) to trading on regulated markets, or admitted (or whose application for admission has been filed) to trading on the EuroMTF as well as those that have value linked to those securities. The Law on Market Abuse applies to acts occurring in Luxembourg or abroad related to securities that have applied for listing on the regulated market in Luxembourg or in a market operated in Luxembourg, as well as to acts occurring in Luxembourg related to securities listed (or whose application for listing has been filed) in a foreign regulated market. The Law on Market Abuse stipulates two offenses against insider trading and market manipulation: (i) insider trading involves trading or attempted trading while in possession of inside information related to the issuer of securities to which an investment recommendation was made, (ii) market manipulation means any transaction, order, or dissemination of information that distorts the price of a security or that could potentially have that effect.
- events of registration cancellation
The Luxembourg Stock Exchange in accordance with item 803 of its regulation, may, on its own initiative, decide on the cancellation of the listing of securities when there is strong conviction, for specific reason, that normal and consistent trading cannot be maintained. The decision to cancel the listing for trading on a market is equivalent to the simultaneous decision to cancel the listing on the official list.
Regarding the country of origin, pursuant to Article 74 of our bylaws, if investors adopt a resolution to cancel the listing of shares (or certificates of deposit backed thereby) on the Luxembourg Stock Exchange or Bovespa, we or shareholders who vote in favor of such resolution shall, within 60 days of the date on which such resolution is adopted, make a public offer to acquire all outstanding shares (including certificates of deposit backed thereby) except for shares (or certificates of deposit backed thereby) of shareholders who voted for the adoption of the resolution for a price equivalent to the Economic Value (as defined above) of such securities. This public offering, to the extent that it does not conflict with our Bylaws, shall adhere to the rules and regulations in each jurisdiction where such securities are traded or listed, and comply with the orders and regulations of the pertinent securities and exchange commissions, provided that in case the offer is made by shareholders, each shareholder will be responsible for purchasing the number of securities in proportion to their stake in our share capital at the time, excluding the shares of minority shareholders.
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- events in which the holders of securities are entitled to the preemptive right in the subscription of shares, securities backed by shares or securities convertible into shares, as well as the respective conditions to exercise this right, or events in which this right is not ensured, if applicable
According to the laws in Bermudas, item 45 (1), a Limited-liability Company, if authorized by the Shareholders' Meeting and its bylaws, may amend its regulatory provisions to change its capital.
In relation to the Company's Bylaws, if the company proposes to issue any additional shares or securities or instruments subject to exercise or exchange or convertible into shares, item 2.2 (a) states that: "each Partner is entitled to the right to subscribe, at most, the number of new securities offered by multiplying the total number of new securities offered by the fraction equivalent to the number of shares held by such shareholder, divided by the sum of the total number of outstanding shares then issued. For purposes of such subscription, each Shareholder must submit a notice in writing to the company...". Before the issuance of the new securities, the Company must notify all shareholders.
- other matters of investor interest
Not applicable.
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5. Risk management and internal controls
5.1 Regarding risks listed in item 4.1, state:
- if the issuer has a formal policy of risk management, highlighting, if so, the body which approved it and the date of its approval, and, if not, the reasons why the issuer has not adopted a policy
Wilson Sons understands that the management of risks is essential for the Company's healthy maintenance and, therefore, the achievement of its strategic and statutory purposes. In view of this, the Company developed its Integrated Risk Management Policy, which defines the process established based on the worldwide methodology COSO-ERM (Committee of Sponsoring Organizations of the Treadway Commission), as well as on the guidelines relating to the Corporate Risk Management, provided by the Brazilian Institute of Corporate Governance.
The concepts, guidelines, and responsibilities to ensure the Wilson Sons' excellence in the Integrated Risk Management are established in the Policy, which was approved by the Executive Committee on 25 September 2017, and was also approved by the Board of Directors on 13 March 2019.
- objectives and strategies of the risk management policy, if any, including: i. risks against which protection is sought
The Company seeks protection for all risks that could impact its strategic purposes, as described in item 4.1 of this Form. The risks managed by the Company are divided into categories, the main ones being as follows:
Strategic risks
The Company's operation in several business sector implies a number of strategic risks, created by the strategic and investment decisions naturally arising from developments in the political, industrial and market scenarios.
Financial risks
The financial risks include: market risks, mainly related to the changes in foreign exchange and interest rates on the Company's cash flows; credit risks, related to customers and suppliers; and liquidity risks, related to the available capital and short-term investments.
Operating risks
Some of the business areas are subject to work conditions that represent risks to the employees' physical integrity. Therefore, the majority of the operating risks refers to work environment and security. In addition, the Company is exposed to operating risks arising from suppliers, IT, and business processes.
Regulatory / Legal risks
The Wilson Sons' operations are developed in several locations in Brazil, each one being regulated by its own legislation. Accordingly, the Company is naturally exposed to a number of legal, tax and other risks related to external rules, which may change according to the rules issued by the governmental authorities of each region.
ii. instruments used for protection
The Integrated Risk Management Policy defines in its scope a set of concepts, guidelines and responsibilities to ensure the Wilson Sons' excellence in the Integrated Risk Management. The purpose is to ensure that the potential adverse impacts and opportunities are formally managed, by incorporating the risk view to the strategic decision-making process, in conformity with the best market practices.
Wilson Sons adopts an approach based on the Three-Line Protection model, as follows:
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- First line - business areas - responsible for ensuring the efficiency/effectiveness of processes and controls in relation to the business risks, by controlling the risk mitigation and retention, in accordance with the Integrated Risk Management Policy.
- Second line - supporting areas - responsible for providing the first line with tools and methodology, and monitoring the performance of the first line and its own processes. Wilson Sons is supported, among others, by the Integrated Risk Management area, which is responsible for disseminating the risk management culture, providing methodology and managing the Integrated Risk Management process, in order to develop, support and align, on a periodical basis, the performance of the process throughout the Company, including the identification, evaluation, classification, response, monitoring and report of risks. In addition, WS counts on the Internal Controls area, which is responsible for improving the security of controls for purposes of performance of the strategic and governance goals. The Information Security area assures the confidentiality, integrity, availability and authenticity of the information from the corporate systems related to the businesses.
- Third line - The third protection line is supported by the Internal Audit Area, which is organized based on an independent structure and is responsible for the independent evaluation and report of the activities performed by the first two lines, contributing to their improvement.
The Risk Committee monitors the adoption of the Policy and defines the necessary guidelines for the decision-making process on the main risks of the Company, by monitoring the mapped exposures, instruments subject to risk prevention and reduction of the related impacts, as well as the action plans for improvements.
Wilson Sons maintains an insurance portfolio to cover the risks inherent to its operations that could lead to personal and/or material damages, whether incurred by the Company itself and/or third parties under its responsibility, including the environment. These policies also guarantee the continuity of the Company's operations. The policies, such as Port Operator Liability, Property, Environmental Liability, Hull & Machinery, Protection & Indemnity (P&I), Builder's Risk and Naval Repair Liability, are contracted with world-class insurers and renewed annually.
Wilson Sons manages, on a strategic and responsible manner, the Security, Environment and Health (SMS) areas, as the Company understand the importance of this practice in the sustainable business development. The group further consolidated the strategic view of the SMS area in Wilson Sons, by incorporating the care for security of people, environment and community in relation to the Group's corporate values.
Currently, the promotion of the SMS culture comprises a group of over 100 dedicated professionals, in addition to several management tools, such as policies, procedures, informative campaigns, review of processes and audits. The SMS guidelines are based on the concepts of continuous improvement, relationship with stakeholders, treatment of emergencies, risk management, training, legal compliance, leadership and responsibility.
Certifications:
For Wilson Sons, certifications are important instruments in the improvement of processes and quality management, and demonstrate to the market the high level of corporate governance practiced by the company. As a result, all businesses have been granted the ISO 9001 certification, which establish requirements for quality management.
In addition to ISO 9001, there are other certifications granted to certain business units or separately, either by nature of the activity that has a specific standard or the process development stage where the unit or business division is. Wilson Son Ultratug Offshore is ISM (International Safety Management) code certified, and ISPS (International Ship and Port Facility Security) code certified. These codes represent an international standard in the management and establishment of rules that make ships and ports facilities safer, in accordance with the International Convention for the Safety of Life at Sea ("SOLAS") and with the International Convention for the Prevention of Pollution from Ships ("MARPOL").
In environmental management, Brasco Niterói and Tecon Salvador have been certified with ISO 14.001 confirming that their environmental management systems meet the requirements that aim to minimise the environmental impacts of their processes, products and services.
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Tecon Rio Grande is certified with ISO 14.001 and OHSAS 18.001, as is Brasco, attesting to the Company's best practices in occupational health and work safety management. The maintenance of certification is another important step in the Company's search for excellence in Health, Safety and the Environment (HSE). Tecon Salvador has aditionaly been recommended for the ISO 45.001 certification, which also focuses on best practices in occupational health and work safety.
iii. organizational structure of risk management
The Company's organizational structure, considering the Integrated Risk Management structure, is composed of the following:
- The Board of Directors empowered to manage our business and thus this is the body responsible for making decisions, formulating general guidelines and strategy of our business, including guidelines for long‐term investments.
- Executive Committee, as the ultimate corporate management body, clearly determines the risk appetite, implements the Risk Committee and defines the guidelines, resources and goals to ensure the proper operation of the integrated risk management, the role of the Risk Committee in the risk management and the Policy to direct the process as a whole.
- Risk Committee resolves on the strategies and models applied in the Integrated Risk Management, the portfolio and the relevant risk assessments; gives priority to the resources for purposes of response to the risks; reports the risks to the several stakeholders; monitors the adoption of the Policy and the compliance with the standards related to the Integrated Risk Management.
- Executive Boards, responsible for the proper and efficient maintenance of the risk matrix, including the validation
and priority of the business risks and respective response measures.
In addition to the abovementioned structures, Wilson Sons is supported by the Integrated Risk Management, Governance and Internal Audit, which, based on a multidisciplinary approach, seek to, under their respective attributions, coordinate and oversight the identification, evaluation, classification, response, monitoring and report of risks, carried out by the business areas.
- suitability of operating structure and internal controls to verify the effectiveness of the policy adopted
The Integrated Risk Management is under the responsibility of all Wilson Sons' managers and is being implemented throughout the Group. The Company understands that its operating and internal control structure is adequate for the verification of the effectiveness of the Policy adopted and may be confirmed by the Internal Audit, in the context of its attributions, acting independently from the management areas.
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5.2 Regarding market risks reported in item 4.2, state:
- if the issuer has a formalized market risk management policy, pointing out, if so, the body which approved it and the date of its approval, and if not, the reasons why the issuer has not adopted a policy.
Wilson Sons Group adopted a formal policy that addresses the risk management in general, named Integrated Risk Policy Management. This Policy includes, among others, the financial risks, divided in market, credit and liquidity risks. This document consolidated other policies directed to the risk management and was published in October 2017 by the Risk Committee and approved by the Executive Committee.
This Policy established the Risk Owner function, which is responsible for the identification, evaluation, response, monitoring and report of the risks inherent to its risk category. The Risk Owner must also implement and report the action plans and controls, involved in the operations under its management, in accordance with the resolutions undertaken in conjunction with the Integrated Risk Management Area, Internal Audit and Senior Management (Executive Committee, Risk Committee and Board of Directors).
Specifically with respect to the market risks, the Risk Owner is the Treasury and Investors Relation Manager.
- objectives and strategies of the market risk management policy, if any, including:
i. risks against which protection is sought
The Company seeks protection against market risks that can bring major impacts to its businesses, primarily in respect to currency and interest rates. The effects of volatility of these two variables on cash flows and future results of the Company are managed on an ongoing basis. Additionally, the fluctuation in price indices and commodities are also monitored on an ad hoc basis.
Similarly, the liquidity and credit risks are monitored continuously, in order to ensure the Company's ability to comply with its future obligations and provide the resources to meet its strategic purposes.
ii. equity protection strategy (hedge)
Overall, nullification of currency risk on cash flows is sought through the marrying of assets (receivables) with liabilities (payments). The goal is to have the surplus operating cash flows in the same currency as is required to service the debt of each transaction.
The cash flows of the investments in fixed assets are also denominated in different currencies and are monitored in order to align the terms and currencies of the sources of the resources.
iii. instruments used for equity protection (hedge)
Under current Policy, the following instruments may be used for equity protection:
- Foreign Exchange Investment Funds;
- Bank depository certificates (CDBs), with swap for dollar;
- Public Foreign Exchange Securities; and
- Export Notes.
Derivative financial instruments (non cash) may also be used. Such as:
- Swap contracts;
- Forward currency contracts.
-
Purchase of stock option contracts.
iv. parameters used in the management of these risks
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The parameter used is Cash Flow at Risk ("CFaR") methodology, when there is a wish in observing the maximum possible losses of cash. The CFaR measures, for a future date, the maximum deviation expected from the projected results. The Company verifies the CFaR on an annual basis for a 12-month period or on demand, in the event of change in the cash flow structure of the Group's businesses.
Using this metric allows the monitoring of global market risk exposure considering the diversification among different business units.
v. please indicate if the issuer operates financial instruments for purposes other than equity protection (hedge). if so, what these purposes are.
Currently the Company does not operate financial instrument with purposes other than equity protection (hedge). Please see items 5.2 b and 5.2 c.
vi. organizational structure for the control of risk management
As described in item 5.2 a., the Treasury and Investor Relations Management is responsible for the market risk management on a continuous and unified basis.
This Management reports directly to the CFO of the Brazilian subsidiary and Investor Relations of Wilson Sons Group.
In addition, the Risk Committee is responsible for the strategies and models applied in the Integrated Risk Management, portfolio and evaluations of relevant risks; definition of the resources for risk response; report of the risks to several stakeholders; monitoring of the performance of the Risk Policy and compliance with the rules related to the integrated risk management.
The market risk management is governed by the policy approved by the Committee, which provides for the main purposes of the market risk management, including: identification, mitigation and control of the exposure to the risk factors, as well as report of the market risk management activities to the Executive Committee of the Brazilian subsidiary. The natural hedge and financial instrument operations may be suggested to reduce exports and alignment within the risk limits.
c. suitability of operating structure and internal controls to verify the effectiveness of the policy adopted
The internal verification and control structure is composed of the Internal Control and Audit areas, which must report to the Governance and Audit Management.
Internal Controls - Evaluates the adequacy, efficiency and effectiveness of the control environment for the Company's processes, based on the business risk definitions, aiming to comply with laws and regulations, as well as contribute to the resolution of control deficiencies.
Internal Audit - Evaluates the compliance level of normatives (Policies and Procedures), and independently assesses the risk management process, effectiveness of controls and evidences of implementation of the action plan, contributing, when applicable, to the improvement of the process through recommendations.
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5.3 Regarding controls adopted by the issuer to ensure that financial statements are reliably prepared, state:
a. principal internal control practices and degree of efficiency of such controls, indicating possible imperfections, and measures adopted to correct them
See item 5.3.c.
b. organizational structures involved
See item 5.3.c.
c. whether and how the efficiency of internal controls is supervised by the management of the issuer, indicating the position of those responsible for this monitoring
The Company is supported by the Governance and Audit area, which operates through four operational lines: Internal Audit, Internal Controls, Information Security Audit and Compliance.
The Internal Audit independently analysis the integrity, adequacy and efficiency of the Group's internal controls and physical, accounting, financial and operational information, acting in a way that protects organizational value by providing assessment, counsel and expertise about risk-based objectives.
The Information Security Audit identifies the risks and effects on businesses related to the information security with respect to the unauthorized access to the Group's corporate and business systems, analyzing the operation of the controls and whether the regulations, instructions and policies are being properly complied. In addition, it seeks to establish the actions for the consolidation of the information security culture consolidation.
The Internal Control area operates in the sense of improving security in the control environment for the achievement of the strategic and governance goals. This area is responsible for ensuring the implementation of the actions recommended by the Internal and External Audits, supporting the design of the controls for risk mitigation, as well as controlling, on a centralized basis, the company's corporate policies and procedures.
Finally, the Compliance establishes the actions that support the Integrity Program and ensures the consolidation of the ethics/anticorruption culture, by addressing the eventual cases.
The Governance and Audit area is adequate to the Company's type of activity and volume of transactions, as well as to ensure the prevention and/or detection of eventual frauds and errors.
d. deficiencies and recommendations on internal controls present in the detailed report, prepared and sent to the issuer by the Independent auditor, under the terms of the regulations issued by CVM, that deal with the registration and exercising of the activity of independent auditing
The Company's external auditors, during execution of its audit of financial statements for the years ended December 31, 2018 and 2017, identified and recommended some points for improvement on the internal controls, in which the Company believes are not significant and/or impact the financial statements.
e. officers' comments on the deficiencies indicated in the detailed report prepared by the independent auditor, and on the corrective measures adopted
The Officers, on behalf of the Company, agree with the report on the Internal Controls issued by the external audit and understand that the issues addressed are not significant and/or would impact the financial statements.
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5.4. In relation to the internal mechanisms and procedures of integrity adopted by the issuer to prevent, detect and rectify deviations, fraud, irregularities and unlawful acts against the public administration, national or foreign, informs:
a. if the issuer has rules, policies, procedures or practices aimed at the prevention, detection and rectification of fraud and illegal practices against public administration, identifying, if so.
i. main mechanisms and procedures of integrity adopted:
Wilson Sons has an Anti-Corruption Guide which aims to guide and establish corporate guidelines regarding the vehement fight against corruption, setting standards of behavior and ethical conduct of employees in situations that may characterize as any kind of bribery or corruption. The Company also has a Code of Ethical Conduct which reinforces the ethical principles that guide Wilson Sons' actions and the conduct of those responsible for the development of its business.
ii. the organizational structures involved:
The Anti-Corruption Guide reinforces a proactive commitment to national initiatives and international regulations aiming to prevent and fight corruption of all forms, by establishing behavioural standards for employees in situations that may involve or be characterized as bribes and/or acts of corruption.
This document outlines the duties and responsibilities of the organizational structures involved, which are:
- Board of Directors: Provide independent judgment on Anticorruption issues, define the Company's strategic steps and oversee acts by the Management and by the Executive Officers.
- Executive Committee: Approve the Anti-Corruption Guide and unequivocally support Integrity Program.
- Ethics Committee:
- Receive and refer to the appropriate investigation channel, in order to assess, independently and
autonomously, the reports received through the ethics channel;
- Periodically review and recommend any changes to the Company's Code of Ethical Conduct and Anti- Corruption Guidelines;
- Monitor Ethics and Corruption events in progress and solve conflicts not contemplated in the Code of Ethical Conduct and Anti-Corruption Guide;
- Ensure that violations are followed by applicable disciplinary actions, regardless of the hierarchical level
and guaranteeing applicable legal penalties;
- Ensure that the Board of Directors is aware of matters that may have significant impact on the organization's image.
- Compliance:
- Ensure compliance with this Guide and the application of the integrity program, and foster a culture of non-corruption;
- Create control rules for documents and information on relations with the Government; report activities to
the Executive Committee;
- Propose actions to the Executive Committee that contribute to the consolidation of a culture of ethics/anti- corruption amid the various agents that interact with the WS Group;
- Define the content and form of the training of employees to renew ethical and anticorruption concepts; o Coordinate and supervise the activities of the Ethics Committee and manage the ethics channel.
- Employees: Know and respect the concepts mentioned in this Guide, as well as report suspicious activities.
- Managers, from the Executive Committee to Supervisors: Embrace the provisions mentioned in this Guide, disseminating the commitment of zero tolerance for corruption practices among teams and applying disciplinary measures when necessary.
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- Human and Organizational Development (DHO): Coordinate and support managers in the application of disciplinary measures against employees involved in violations of this Guide, as well as including the Anti- Corruption Guide in annual Training Programs.
- Corporate Audit: Carry out audit work considering the risk posed by corruption, and in case of identification of wrongdoings, share information with the Ethics Committee. In addition, it will execute special work as requested by the Ethics Committee, in order to check the origin of the accusations or to investigate facts disclosed.
- Internal Controls: Control the validity period and revision of these norms and, whenever necessary, support the process of revision along with the area managing the process.
- Communication:
- Coordinate the institutional communication of this Guide; o Contribute to consolidate a culture of ethics.
- Legal: Provide legal support to the Ethics Committee in disciplinary decisions and sanctions.
This Guide was approved by the Executive Committee and made available on the Company's intranet to all employees, as well as made externally accessible to the market, customers, suppliers and shareholders on Wilson Sons' website (www.wilsonsons.com.br).
iii. if the issuer has a formally approved code of ethics or conduct, indicating, if so:
As can be seen in the Company's Code of Ethical Conduct, the scope includes the members of Wilson Sons' Board of Directors, directors, occupants of management positions, employees, trainees and service providers constituting an individual and collective commitment of each and every one of them to comply with and promote compliance with the Code, in all actions of the productive chain and in its relations with all the interested parties.
The employees took formal knowledge of this Code, which was widely disseminated through printed and electronic means. The noncompliance with the principles and commitments of this Code are subject to disciplinary measures in accordance with the Company's rules and current legislation. This Code will be subject to periodic reviews with transparency and stakeholder participation.
Wilson Sons has created a Ethics Conduct Committee responsible for processing complaints of ethical transgressions, preserving the anonymity of the complainant in order to avoid retaliation against the same and informing the adopted measures.
b. if the issuer has a whistleblower channel, indicating, if so:
The Company has an external Whistleblower Channel (contatoseguro.com.br/wilsonsons) through which employees and other stakeholders can report unethical situations and behavior as well as clarify doubts regarding conduct. The Ethics Committee is composed of leaders from the areas of Governance & Internal Audit, Legal and Human Resources.
The complaints are received through the external channel anonymously and then investigated and classified by an independent provider called Contato Seguro. Subsequently they are directed to the Ethics Committee, which is responsible for solution planning, investigation and deliberation regarding disciplinary sanctions. The Committee has a formal meeting every two months.
c. if the issuer adopts procedures in merger, acquisition and corporate restructuring processes aimed at identifying vulnerabilities and risk of irregular practices in the legal entities involved:
Not applicable.
d. if the issuer does not have rules, policies, procedures or practices aimed at the prevention, detection and remediation of fraud and illegal practices against public administration, to identify the reasons why the issuer has not adopted controls in this regard:
Not applicable.
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5.5 Regarding the last fiscal year, inform whether there were material changes to the main risks the issuer is exposed to or to the adopted risk management policy, also comment on any expected decrease or increase of the issuer's exposure to said risks
There are no significant changes.
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5.6 Provide other information deemed relevant
There is no other relevant information that has not been addressed previously.
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6 History of the issuer
6.1 With respect to formation of the issuer, inform:
- date
December 6, 1990.
- form
Company
- country of incorporation
Bermuda
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6.2 Inform period of duration, if applicable
Indefinitely.
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6.3 Brief History
We began operating in Brazil in 1837, in Salvador, State of Bahia, as a result of the improved commercial activities between Brazil and England arising from the opening of the Brazilian ports in 1808. During this first stage, we provided marine agency services, which was the Group's first activity in Brazil, in addition to the import and export of goods, such as charcoal and inputs, among others.
In 1862 we took another step towards our expansion, we were established in Rio de Janeiro. In the middle of 1870, we diversified significantly our businesses, including the stowage activities (load and unload of vessels) and marine towage when we began to gain experience in the current Port Terminals and Towage segments. We accelerated our geographic expansion in 1913 and installed our operations in the Rio Grande port and in the city of Porto Alegre, both in the State of Rio Grande do Sul, and subsequently in Blumenau, in the State of Santa Catarina.
In 1959 the Company was acquired by a group of investors led by the Salomon family, our current controlling shareholders. The new management modified the operational focus, by discontinuing the commercial representation of goods and directing its activities to the Brazilian trade commerce, when new units were opened alongside the Brazilian coast.
In 1993, the Port Modernization Law opened the port terminal activities and, in 1996, we were the winners of the public bidding and, therefore, we leased the operation of the container terminal in the Rio Grande port, in the State of Rio Grande do Sul - Tecon Rio Grande, beginning our operations in March 1997. Tecon Rio Grande was the first port terminal specialized in private containers by means of public bidding in Brazil, and also the first project finance in Brazil.
In 1998, we expanded our activities to the logistics segment, beginning our operations in Porto Seco de Santo André, in the State of São Paulo.
In 2000, by means of a new public bidding, we began operations in another container terminal in Salvador, State of Bahia - Tecon Salvador, one of the largest container terminals in the Northeast region in Brazil.
In the same year, we began the port terminal activities to support the petroleum industry, developing operations in several locations of the Brazilian coast through Brasco.
In 2002, we began operations in the Offshore segment, by winning the bidding process; we entered into with Petrobras long-term service agreements for the construction and operation of Platform Supply Vessel ("PSV").
In 2006, the Container Terminal of Rio Grande signed the first amendment to the lease agreement, granting the right of anticipated contract renewal for additional 25 years.
In April 2007, the Company entered into a going private process and listed its shares in São Paulo Stock Exchange - B3 (current name of BM&FBovespa - Bolsa de Valores, Mercadorias e Futuros). We placed in the market 29.7 million Brazilian Depositary Receipts ("BDRs"), traded under ticker code "WSON33".
In 2012, Tecon Salvador was expanded, with an increase of 77% of installed capacity. Wilson Sons celebrated 175 years since its inception, and Tecon Rio Grande celebrated 15 years of operation.
The completion of the expansion work of Shipyard Guarujá, in 2013, increased the Company's naval construction capacity from 4,500 tons to 10,000 tons of processed steel per year.
In 2015, the Container Terminals owned by Wilson Sons reached 1.035 million of TEU, an increase of 6.2% compared to 2014, expanding exports, coasting and transshipment.
In 2016, the Container Terminal of Salvador renewed its concession for additional 25 years; the Container Terminal of Rio Grande purchased new equipment and acquired 6 tugs from Vale for business Tags, reducing, therefore, the leasing expenses.
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In 2017, Wilson Sons completed 180 years of operations in Brazil. With new equipment, the Container Terminals reached a historical record in terms of productivity and handled containers; two financing agreements were entered into with BNDES, one for the construction of tugs and the other for repair and maintenance of the Group's vessels and, at the end of the year, new service agreements were entered into for three offshore vessels.
In 2018, the Container Terminals owned by Wilson Sons reached achieved a combined record of 1,073 million TEU handled. The Container Terminal of Salvador commenced its principal quay expansion from 377 metres to 800 metres. The Guarujá II shipyard delivered the escort tug WS Sirius to Wilson Sons' towage fleet, the largest and most powerful tugboat in Brazil.
Wilson Sons is a company headquartered in Bermudas and the Company's main activities are divided in the following sectors: port terminal operation, towage services, logistics, marine agency, marine support to oil and natural gas platforms, by means of bases and vessels, and shipyard.
The Company is one of the most traditional companies operating in this segment in Brazil, with 180 years of history. Its solid and ethical history, and the diversification of its businesses, transformed the Company in one of the largest integrated operators of marine, port and logistics services in Brazil.
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6.4 Date of registration with the CVM or indication that the registration is being requested:
April 25, 2007 under No. 08047
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6.5 Information on bankruptcy petition filed for a material amount or a judicial or extrajudicial recovery
There was no request for bankruptcy, judicial or extrajudicial recovery by the issuer, or its subsidiaries and associates.
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6.6 Other significant information
None.
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7 Issuer Activities
7.1 Summarize the activities developed by the issuer and its subsidiaries
Overview
Wilson Sons Group is one of the largest integrated providers of port, maritime and logistics services in Brazil. With a business track record of more than 180 years, the Company has an unmatched nationwide footprint offering comprehensive solutions to support domestic and international trade activities, as well as the oil and gas industry.
The Company maintains long-lasting relationships with over two thousand active clients, including shipping companies, importers and exporters, oil and gas companies as well as other participants in more diverse sectors of the economy. Established as a publicly-held company, Wilson Sons is headquartered in Bermudas. Since 2007, the Company's shares are traded on B3 (current name of BM&FBovespa - Bolsa de Valores, Mercadorias e Futuros), through Brazilian Depositary Receipts (BDRs). The Company is controlled by Ocean Wilsons Holdings Limited, a publicly-held company, whose shares are traded on the London Stock Exchange for over one hundred years.
The Wilson Sons' businesses are divided in two large operational segments: Port Services and Logistics and Marine Services.
Port & Logistics Services
This segment comprises two of Brazil's main container terminals, Tecon Rio Grande and Tecon Salvador; Brasco, the Company's oil and gas support base; and the logistics centres in Santo André (São Paulo) and Suape (Pernambuco), operating with general and bonded warehousing services.
1. Port Terminals
1.1. Rio Grande Container Terminal
Located 320 km away from the city of Porto Alegre, the capital of Rio Grande do Sul state (RS), Tecon Rio Grande was the first container terminal in Brazil privatised through a public bid in 1997. Serving the main maritime lines that connect Brazil to important markets worldwide, the terminal has a total area of 735,000 square metres, 900 metres of linear quay (with three berths), 12.8 metres (42 feet) of draft, 2,352 plugs for refrigerated containers, an 18,000-square-metre warehouse, and a total handling capacity of 1.4 million TEU per annum. The equipment is state-of-the-art, including nine STS (Ship-to-Shore) quay cranes, 22 RTG (Rubber-Tyred Gantry) yard cranes, as well as the Navis N4 operating system, a global leader in terminal management.
In September 2016 the Company commenced operating Contesc, the inland navigation terminal located at the Triunfo Petrochemical Complex (RS). Currently with two river barges, Contesc has four weekly calls connecting the Northern Region of the state directly to the Port of Rio Grande.
1.2. Salvador Container Terminal
Privatised in 2000, Tecon Salvador is located in the city of Salvador, the capital of Bahia state (BA), and 50 km away from the Camaçari Petrochemical Complex, with exclusive access to BR-324, the main federal highway linking Salvador to other Brazilian states. Serving the main maritime lines that connect Brazil to important markets worldwide, the terminal has a total area of 118,000 square metres, a principal quay with 377 metres of length and 15 metres (49 feet) of draft, a secondary quay with 240 metres of length and 12 metres (39 feet) of draft, 684 plugs for refrigerated containers, an 4,000- square-metre warehouse, and a total handling capacity of 435,000 TEU per annum. The equipment is state-of-the-art,
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including six STS (Ship-to-Shore) quay cranes, 11 RTG (Rubber-Tyred Gantry) yard cranes, as well as the Navis N4 operating system, a global leader in terminal management.
In October 2018 Tecon Salvador commenced the expansion of its principal quay from 377 metres to 800 metres, which will allow the simultaneous berthing of two super-post-Panamax ships. In December 2018 the Company signed a US$67.9 million financing agreement denominated in Brazilian Real with the Brazilian Economic and Social Development Bank ("BNDES") for the first stage of the expansion. This investment reflects the Company's commitment to continuous improvements in productivity and operational efficiency.
1.3. Offshore Support Bases
Pioneer in the segment of private offshore support terminals, with almost 20 years of experience, Brasco provides integrated logistics solutions to support oil exploration and production activities throughout the Brazilian coast. Widely renowned for its excellence in HSE and operational performance, the company has provided support base services to major local and international oil operators as well as oil service companies, with over 45 projects in eight different cities.
Brasco owns two private terminals strategically located within the Guanabara Bay in Rio de Janeiro (RJ), the main hub for logistics support to the Santos and Campos petroleum basins, being one in Niterói with 3 berths and another in Rio de Janeiro with 5 berths. The company also has a storage area in Guaxindiba (RJ) for drilling pipes and other equipment.
2. Logistics
Wilson Sons offers integrated door-to-door solutions to support domestic and international trade activities, operating with general and bonded warehousing, inventory management, distribution, transportation management and solutions for the foreign trade sector.
The Company has a logistics centre in Santo André, near Brazil's largest metropolitan area of São Paulo, and another one located within the Suape Industrial Port Complex (Pernambuco), offering tailor-made solutions and operational excellence.
Wilson Sons also controls Allink, a Non-Vessel-Operating Commom Carrier ("NVOCC") specialised in the transportation of consolidated containerised cargo by purchasing space on vessels from third parties.
Maritime Services
This segment consists of Wilson Sons towage fleet, the shipyards and shipping agency services. Also part of the maritime services is our 50% joint venture, Wilson Sons Ultratug Offshore ("WSUT"), offering offshore support vessels to the oil and gas industry.
1. Towage
Wilson Sons is the leader in Brazilian harbour and ocean towage services. With 76 tugboats the Company has the largest and most modern fleet in the country to meet the demand driven by trade flow as well as the oil and gas industry, operating in all major ports and terminals. Through the Tugboat Operations Centre ("COR"), vessels are monitored remotely in full time, providing greater safety and efficiency to operations.
In addition to harbour support, Wilson Sons also offers special services such as salvage assistance, firefighting, ocean towage, as well as support for the construction of oil platforms and offshore drilling rigs.
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2. Shipping Agency
Wilson Sons was established in 1837 mainly providing shipping agency services. Today, the Company is one of the largest independent agencies in the country, operating 18 branches across all major Brazilian ports, together with exclusive partners in Europe and its own office in China. It also has a strong presence in the oil and gas industry.
The shipping agency offers commercial representation for shipowners, boarding documents, equipment logistics management, scheduling of ships with regular ("liner") and non-regular ("tramp") calls, preparation of documents related to maritime transport, demurrage control (time required for container return), among others.
3. Shipyards
Located in the Port of Santos (São Paulo), Wilson Sons shipyards were designed for the construction, maintenance and repair of small to medium-sized vessels mainly used for offshore and harbour support. Widely renowned for its ability to offer customised projects with on-time delivery, the combined 39,000-square-metre shipyard complex has a steel processing capacity of 10,000 tons per year.
With more than 135 vessels delivered in the last 30 years, the Company's portfolio includes tugboats, platform supply vessels ("PSVs"), oil spill response vessel ("OSRVs"), remotely operated vehicle supply vessels ("ROVSVs"), buoy vessels, patrol boats, among others.
4. Offshore Support Vessels (Wilson Sons Ultratug Offshore JV)
Wilson Sons Ultratug Offshore ("WSUT"), a 50% joint venture between Wilson Sons and the Chilean group Ultramar, is one of the leading providers of maritime support to oil exploration and production activities in Brazil. With 23 Brazilian- flagged offshore support vessels, WSUT has one of the largest and most modern fleets in the country.
Operating in compliance with world-class safety standards, WSUT offers logistics services such as the transportation of equipment, mud and drilling pipes, cement, food, waste, among other materials, between the port terminals and offshore platforms.
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7.1-A. Indicate, if the issuer is a mixed-capital company:
- public interest that justified its creation;
Not applicable.
- performance of the issuer in compliance with public policies, including universalization goals, indicating:
- government programs implemented in the previous fiscal year, those defined for the current fiscal year, and those foreseen for the coming fiscal years, criteria adopted by the issuer to classify this action as being developed to meet the public interest indicated in letter "a"
- regarding the public policies mentioned above, investments made, costs incurred and the origin of the resources involved - cash generation, transfer of funds and financing, including sources of funding and conditions
- estimating the impacts of the above mentioned public policies on the financial performance of the issuer or declaring that there was no analysis of the financial impact of the above mentioned public policies
Not applicable.
- pricing process and rules for setting tariffs;
Not applicable.
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7.2 Information on operating segments
- products and services marketed
Port Terminals
Container Terminals - Our revenues derive from services provided to shipowners and shippers (exporters, importers and coastal shippers). The services rendered to the shipowners have different prices for: (i) full or empty container, and (ii) Operation period (weekday or weekend/holiday), while prices charged to shippers vary based on the type of service provided (such as storage containers, normal and chilled, and ancillary services).
The prices of warehousing services are pegged to the US Dollar, while revenues from Brazilian shipowners and shippers are billed in Reais. Foreign shipowners can have their prices in Reais or US Dollars.
Terminal specialized in meeting the needs of the oil exploration industry - We provide port services for vessels that serve the oil and gas business. The remuneration for the services can be accomplished through contracts that provide for a daily fee to use the base for a particular package of services in accordance with the demand of each individual client. This remuneration will be set daily in US Dollars or Reais. Contracts can be short - three to six months - or longer - more than a year - based on the development stage of customer operations - exploration or production. Services not provided pursuant to contracts are considered spot services, which are negotiated individually and charged separately, as well as the services provided to customers with an operating agreement with the company.
Towage Services
Port towage - Consists of the assistance in the docking and undocking of vessels in port terminals, monitoring the passage of bridges and port access channels;
Ocean Towage - Consists of the scheduled towing of vessels unable to navigate by themselves, for example, towing a vessel to a shipyard for repairs, or structures floating without propulsion system (such as barges or oil platforms);
Assistance to salvage - consists of support to vessels that are in an emergency situation at sea or in coastal areas, for example, ships adrift, refloating of vessels, or in danger (like fire on board); and
Special Operations - Consist of support to Offshore industry operations, such as support for rigs in drilling operations or support to oil transfer operations from platforms to shuttle tankers. In addition to support to the movement of modules in Shipyards.
Logistics
We develop and provide differentiated logistics solutions for management of supply chains for our customers and for distribution of their products. Our solutions are the integration of various logistics services, including:
Bonded warehousing - Consists of bonded warehousing services for cargo from ports and airports until the completion of the custom clearance process. To this end, we hold the concession of a Dry Port in Santo André, in São Paulo, with easy access and infrastructure for transport from the port of Santos and the airports of Guarulhos, Congonhas in Sao Paulo, and Viracopos in Campinas, three of the largest cargo airports in Brazil and Latin America, and a Dry Dock in Pernambuco, near the Suape Industrial Port Complex.
Storage - Consists of customized storage services, based on volume, among other features, deconsolidation and warehouse turnover. Our services also include the storage scaling of the operation in terms of systems, personnel and equipment. We provide these services in warehouses dedicated to only one customer, shared warehouses (where there is the storage of cargo from multiple customers), or by operations carried out at the customers' own facilities.
Distribution - consists of services to distribute products from the warehouses to the end points of distribution, by all modes of transport, which are defined in terms of product characteristics and terms of delivery, using a network of partner carriers chosen according to each logistics solution.
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Trucking - Consists of container road transportation offered at the main Brazilian ports that handle containers. The operations involve not only the transport of full containers, but also collecting the empty containers for placement of cargo in container (consolidation, in the case of export), or return of empty container after removal of the cargo container (deconsolidation for imports).
Multimodal Transportation - Consists of cargo transportation services with integrated use of various modes based on customized logistics designs for each transaction, based on information systems and quality criteria that ensures an efficient selection of both the modality and the carriers providing service.
NVOCC - Non-Vessel-Operating Common Carrier - Consists of specialized services in the transport of consolidated cargo in containers by purchasing space on vessels from third parties, or through the sale of freight to various customers and combining their loads into a single container to be transported by others.
Maritime Agency
Assistance to vessels - service range of vessels in Brazilian ports, including port call budget expenditure, hiring of port services, payments to suppliers in general, and detailing the costs incurred at the end of the call.
Commercial representation - freight sales activity on ships for export customers and interfacing with the owners;
Documentation services - handling of maritime shipping documentation, issuance of bills of lading (including the receipt of freight charges and fees payable to the shipowner), issuance of loaded / unloaded cargo manifests, and updating of government information systems (and SISCARGA siscomex), among others;
Control of containers - logistics management of the shipping containers used by exporters and importers, by controlling inventory, tracking repairs and targeting of containers loaded and unloaded;
Demurrage control - control of time to return the empty containers, after removing the importer's cargo, collecting and receiving a fine for retaining the container for longer than the time agreed upon with the owner;
Coordination of crew - transport management and arriving/departing vessel crew change lodging;
Coordination of parts - transportation logistics management of parts and equipment for the repair and maintenance of ships.
Logistics Coordination - monitoring of cargo handling between ports of loading and discharge with the purpose of guaranteeing the logistics process to customers, centralizing supplier contracting and subsequent transfer of costs involved in the operation.
Offshore
Consists of the operation of PSV vessels, which transport equipment, drilling mud, pipes, food, cement, among other materials, between the offshore platform and base of operations.
Shipyards
We have a tugboat and Offshore Support Vessels (OSV) master production line.
- segment revenue and its share in the issuer's net revenue
Financial Highlights - In million | US$ | |||||
2018 | VA (%) 2017 VA (%) 2016 | VA (%) | ||||
Net Revenues * | 460.2 | 100.0 | 496.3 | 100.0 | 457.2 | 100.0 |
Container Terminals | 183.0 | 39.8 | 187.4 | 37.8 | 148.3 | 32.4 |
Oil & Gas Support Base ("Brasco") | 20.8 | 4.5 | 15.7 | 3.2 | 19.4 | 4.3 |
Towage | 165.6 | 36.0 | 206.8 | 41.7 | 205.7 | 45.0 |
Logistics | 56.9 | 12.4 | 54.7 | 11.0 | 43.3 | 9.5 |
Shipyard | 24.0 | 5.2 | 21.2 | 4.3 | 26.4 | 5.8 |
Ship Agency | 10.0 | 2.2 | 11.3 | 2.3 | 13.9 | 3.0 |
R$ | ||||||
2018 | VA (%) 2017 VA (%) 2016 | VA (%) | ||||
1,677.5 | 100.0 | 1,584.1 | 100.0 | 1,585.4 | 100.0 | |
668.4 | 39.8 | 598.3 | 37.8 | 511.8 | 32.3 | |
75.9 | 4.5 | 50.1 | 3.2 | 68.1 | 4.3 | * |
603.4 | 36.0 | 660.0 | 41.7 | 715.6 | 45.1 | |
207.5 | 12.4 | 174.5 | 11.0 | 150.8 | 9.5 | |
85.9 | 5.1 | 67.6 | 4.3 | 90.5 | 5.7 | * |
36.3 | 2.2 | 36.1 | 2.3 | 48.4 | 3.1 |
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* Not included the Offshore Vessel Joint Venture, since its result is not consolidated to the Group (investment).
- profit or loss by segment and its share in the net income of the Company
In the disclosure of the notes, the result is presented by segment up to the level of Operating Result. Below the result by segment, with analysis up to EBITDA and EBIT levels.
Financial Highlights - In million | US$ | R$ | |||||||||||
2018 | VA (%) | 2017 | VA (%) | 2016 | VA (%) | 2018 | VA (%) | 2017 VA (%) 2016 VA (%) | |||||
EBITDA * | 160.6 | 100.0 | 172.4 | 100.0 | 154.2 | 100.0 | 585.9 | 100.0 | 550.5 | 100.0 | 534.2 | 100.0 | |
Container Terminals | 83.6 | 18.2 | 82.4 | 16.6 | 60.2 | 13.2 | 305.5 | 18.2 | 262.9 | 16.6 | 207.2 | 13.1 | |
Oil & Gas Support Base ("Brasco") | 5.1 | 1.1 | 1.2 | 0.2 | 3.3 | 0.7 | 18.1 | 1.1 | 4.0 | 0.3 | 11.9 | 0.8 | * |
Towage | 79.4 | 17.3 | 102.4 | 20.6 | 103.8 | 22.7 | 290.9 | 17.3 | 327.3 | 20.7 | 360.4 | 22.7 | |
Logistics | 7.1 | 1.6 | 1.7 | 0.3 | -2.4 | -0.5 | 26.2 | 1.6 | 5.5 | 0.3 | -7.3 | -0.5 | |
Shipyard | 2.7 | 0.6 | 2.1 | 0.4 | 4.1 | 0.9 | 9.9 | 0.6 | 6.8 | 0.4 | 13.7 | 0.9 | * |
Ship Agency | 1.2 | 0.3 | 1.3 | 0.3 | 4.5 | 1.0 | 4.7 | 0.3 | 4.1 | 0.3 | 15.3 | 1.0 | |
Corporate | -18.5 | -4.0 | -18.7 | -3.8 | -19.3 | -4.2 | -69.5 | -4.1 | -60.1 | -3.8 | -66.9 | -4.2 | |
EBIT * | 104.4 | 100.0 | 114.9 | 100.0 | 101.6 | 100.0 | 381.0 | 100.0 | 366.9 | 100.0 | 351.9 | 100.0 | |
Container Terminals | 64.1 | 13.9 | 62.4 | 12.6 | 41.7 | 9.1 | 234.6 | 14.0 | 199.1 | 12.6 | 143.0 | 9.0 | |
Oil & Gas Support Base ("Brasco") | 1.7 | 0.4 | -2.5 | -0.5 | -0.1 | 0.0 | 5.9 | 0.4 | -8.1 | -0.5 | 0.3 | 0.0 | |
Towage | 51.1 | 11.1 | 75.6 | 15.2 | 80.1 | 17.5 | 187.6 | 11.2 | 241.6 | 15.3 | 278.4 | 17.6 | |
Logistics | 5.6 | 1.2 | 0.0 | 0.0 | -4.0 | -0.9 | 20.7 | 1.2 | 0.2 | 0.0 | -13.1 | -0.8 | |
Shipyard | 1.0 | 0.2 | -0.3 | -0.1 | 3.2 | 0.7 | 3.9 | 0.2 | -0.9 | -0.1 | 10.7 | 0.7 | |
Ship Agency | 1.0 | 0.2 | 0.9 | 0.2 | 4.1 | 0.9 | 3.9 | 0.2 | 3.1 | 0.2 | 13.9 | 0.9 | |
Corporate | -20.2 | -4.4 | -21.2 | -4.3 | -23.3 | -5.1 | -75.5 | -4.5 | -68.1 | -4.3 | -81.3 | -5.1 | |
(1) | -4.1 | - | 3.4 | -219.5 | 8.1 | -58.0 | -14.9 | - | 10.6 | -240.2 | 26.5 | -60.0 | |
Share of Result of Joint Ventures | |||||||||||||
(1) Corresponds to 50% of results from Offshore Vessels JV. |
* Not included the Offshore Vessel Joint Venture, since its result is not consolidated to the Group (investment)
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7.3 Information on the products and services related to the operating segments
- characteristics of the production process
Port Terminals
Not applicable.
Towage Services
Not applicable.
Logistics
Not applicable.
Maritime agency
Not applicable.
Offshore
Not applicable.
Shipyards
Our shipyards have the specifications for building tugs, OSV, patrol boats, ferries and other vessels of medium size steel or aluminum vessels.
The tugs and OSV's are built using third-party design and engineering (design of known efficiency and quality in the construction of tugs and other vessels), in addition to equipment supply.
In addition, we provide various repair and maintenance services for support vessels and pleasure craft, which include repairs to propulsion systems, hydraulic systems, electrical, mechanical equipment, structural repairs and finishing.
- characteristics of the distribution process
Port Terminals
Not applicable.
Towage Services
Not applicable.
Logistics
Not applicable.
Maritime agency
Not applicable.
Offshore
Not applicable.
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Shipyards
There is no distribution process, the vessels are delivered at the Shipyard itself. The Shipowner (customer) sends the crew to the vessel while still in the shipyard and from that moment the responsibility for removal of the same passes to the Shipowner.
- characteristics of the operating market, in particular: (i) participation in each one of the markets, (ii) competitive conditions in markets.
Port Terminals
Specialized Terminals for Oil and Gas Exploration Activities - the opening up of the exploration and production ("E&P") sector contributed positively to the growth of activities in this segment in Brazil. After 15 bidding rounds of exploratory fields, 5 Pre-Salt and 4 marginal field rounds organized by the National Petroleum Agency (ANP), there are more than 96 companies operating in the sector in 22 basins. The participation of other oil companies is growing, although Petroleo Brazilian S.A. ("Petrobrás") is still the top player, operating more than 46% of the exploration blocks. The phases of Upstream (Exploration, Development and Production) demand different goods and services, and the Offshore Logistics Support Activity is present at all stages, since most Brazilian oil is produced in the sea (96%). The offshore support bases act as a central support point for oil and gas exploration and production operations, performing port operation activities in maritime support vessels to oil platforms, storage and cargo handling; water supply, fuel and all types of bulk products to vessels, offshore platforms and rigs, waste management, among other activities. Among the private logistics operators, Brasco Logistics Ltda., subsidiary of the Company, plays an important role. Its main Support basis are located in Niterói and Caju, both at Guanabara Bay, Rio de Janeiro, which has the main oil and gas companies as clients. Brasco Logistics Offshore Ltda. also has operations in other ports, where it provides offshore support through the public ports at such locations.
Container Port Terminals - The container terminals serve two main customer groups: shipowners, owners or operators of vessels that dock at the terminals, and customers of the shipowners, who are importers and exporters that contract maritime carriage services shipping their cargo through the terminals in which these vessels operate. It could be said that these are distinct markets, but have great interdependence, as the existence of one is directly related to the other.
Basically, shipowner customers hire the services of container port operations, relating to handling of cargo on ships: container loading and unloading operations, removal of the containers on board or on Land and transhipment of containers between ships. All other services that are directly related to the load are usually hired directly by their shippers, such as bonded warehousing services, container consolidation and deconsolidation, power supply and temperature monitoring of reefer containers, among others.
Some factors are determinative of the choice of an owner to operate on a specific port. First, there must be a sufficient amount of cargo at the port to financially justify a port call, involving several high fixed costs, such as port fees, and cost of pilotage and towage. This availability of loads is a direct result of local industry and the logistical costs of port access. These aspects - logistics of port access and maritime carriage supply - can determine the competitiveness of a port on the others in the same region (inter-port competition).
Besides the inter-port competition, when there is more than one container terminal in the same port, there is intra-port competition, in which productivity and price are critical factors in business performance of each terminal.
The provision of port operation service automatically generates the demand for ancillary services by customer shippers. Unlike the operation of port services, where only terminal or port operators can offer service, some ancillary services may be provided by companies located near the port.
Thus, unlike the port operation, where the intra-port competition is restricted to terminals installed in the same port for ancillary services, local competition has a greater impact on the business, since firms located in the port region, but outside the organized port can offer many of the services offered by a terminal.
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Regarding services of port operation, the Company's terminals have material share in markets that it is inserted, such as Tecon Rio Grande in relation to the container cargo imported or exported by states of the Southern Region (also taking into account the volume operated by the coastal shipping), and Tecon Salvador in relation to the Northeastern Region.
In terms of ancillary services, the determination of market share is not so simple because the mix of services consumed by each container depends very much on the nature of the cargo, the shipper's logistics choices and the requirements of certain public bodies such as the Brazil Federal Revenue Service ("RFB") and the Ministry of Agriculture, Livestock and Food Supply, for example. Thus, there are no consolidated statistics.
Among the most relevant ancillary services, we make special note of Bonded Warehousing, which is usually the second highest generator of revenue for a container terminal.
Towage Services
We are leaders in towing services in Brazil. Such leadership comes from experience and knowledge of a one-hundred operation plus the largest fleet of tugboats in the country - with more than 70 tugboats and a geographic coverage that covers the entire Brazilian territory, which gives us reach to approximately 45% market share in port maneuvers.
The geographic range is a key competitive factor in this segment since it allows the service provider of towage to offer its customer the convenience of hiring a single provider of service for its calls along the Brazilian coast. Another important factor of competition is the ability (power and maneuverability) of the tugs that maneuver the ship.
Logistics
Integrated Logistics Operator - Operating in the supply chain, an integrated logistics operator must create and deploy solutions that generate increased competitiveness for its customer's products. They must have proven ability to overcome difficulties, adding value to products and reducing total cost of the supply chain through provision of effective service.
The integrated management model allows to implement and manage nation-wide operations for the different market segments. The performance as integrated operator offers solutions that include the integration of domestic and international commerce logistics chains. Through strategic assets, which are integrated, it is possible to develop full and customized solutions.
Assets in the Southeast include the operation of CLIA Santo André, Santo André Logistics Center and the transportation operations. The assets in the northeast include the operation of EADI Suape, Suape Logistics Center and also the regional transportation operations.
Maritime Agency
The market is characterized by a market with a high level of competition because of the absence of barriers to entry, such as concessions, use of technology, and special economic legislation. Besides the absence of such barriers, services can be carried out by the service taker itself, as occurs currently with the majority of shipowners operating in Brazil.
Offshore
Competition in this segment is established according to minimum bidding requirements of the contracting companies (oil companies, submarine builder companies, among others).
We face competition from (i) Brazilian shipowners, (ii) subsidiaries of foreign companies, and (iii) foreign shipowners.
Shipyard
The offshore market is in high demand due to Petrobras discoveries in the so-calledpre-salt. Our estimated participation in the OSV's boat building segment is 20%, and the tug segment is estimated at 50% . We have very favorable conditions because of the name of our group, as well as our delivery efficiency, together with our internal demand.
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- any seasonality
In general, our activities have no significant seasonality. In the Towage, Port Terminals and Maritime agency segments, there is a small reduction of activity in January and February due to a reduction in the volume of foreign trade.
- main inputs and raw materials, informing: (i) description of the relationships maintained with suppliers, including whether they are subject to governmental control or regulation, identifying the bodies and the respective applicable laws, (ii) possible dependence on a few suppliers; ( iii) potential volatility in price.
Port Terminals
Manpower is the most important input used in port terminals, coupled with fuel and electricity used to power equipment.
Contract manpower for some port activities must be contracted with port worker unions, such as stevedoring tallyman and longshoremen unions. Hiring can be permanent or temporary. The hiring is done on a temporary basis by the Organisation of Manpower Management (Órgão Gestor de Mão-de-obra ("OGMO). The contract is governed by collective bargaining agreements that determine the shifts, values, number of people (crews) and other factors inherent to carrying out the work.
Relationships with fuel suppliers are usually regulated by agreements or contracts governing prices, terms and other commercial conditions and supply is provided according to terminal demand without any type of minimum value requirement. Although agreements are in place, we can change suppliers at any time, without dependence on a few suppliers for this input.
Relations with electricity suppliers are made through contracted demand agreements, where the amount paid is driven by demand contracts. The price is regulated by the COMERC (Free Energy Market).
Towage Services
We consider marine diesel oil to be a fundamental input in this segment. Relations with suppliers are governed by agreements or contracts. Contacts are made on the basis of demands for supplies, where prices, terms and other conditions are agreed upon. Actually we have five vendors in our portfolio.
Price volatility is minimized as these are regulated by the base oil supplied by Petrobras.
Logistics
There are no inputs and/or raw materials applicable to the operation of logistics that is relevant to the development of activities.
Shipping agency
There is no input and/or raw materials applicable to the logistics segment that is relevant to activities carried out.
Offshore
We consider maritime diesel oil to be the fundamental input in this segment however contracts generally require the contracting client cover this cost.
Estaleiros
In our industry steel is the main raw material used. The remaining inputs and raw materials are mechanical, electrical and electronics equipment incorporated to add technology to the types of vessels we build.
For the supply of steel, we have a supply contract with an only supplier who has all necessary qualifications to provide the material. The price, term and other conditions were established at the time of signing the contract. The supply of steel is not regulated by the government.
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7.4 Identify whether there are customers who are responsible for more than
10% of total net revenues of the issuer, informing:
- total amount of revenue from customer
Not applicable, given that no client alone accounts for over 10% of the Company's total net revenue.
- operating segments affected by revenue from the customer
Not applicable.
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7.5 Significant effects of state legislation on activities
- need for government authorization to carry out operations and the history of relations with the government in regard to obtaining such authorizations
Port Terminals
In May 2017, the Decree 9,048 changed relevant points of Law No. 12,815, known as the New Ports Act, which repealed the 1993 Law No. 8,630.
The new decree amended the law which governs the direct or indirect operation by the Federal Government of the ports and port facilities, as well as the activities performed by the port operators. We highlight some of these amendments: the increase in the concession or lease term for 35 years, renewable successively up to the limit of 70 years; the authorization of the expansion of the leased area within the port, as long as it meets technical and efficiency criteria; the authorization of immediate and urgent investments, including outside the leased area with the possibility of advanced revenue to carry out these investments, among others.
In addition, the new Decree made it possible to adjust the existing agreements to the new rules. The Group Wilson Sons' companies have filed their suit to adjust to the new Decree.
The indirect operation of organized port and the port facilities thereof shall be performed upon concession and leased public property only. The indirect exploration of the port facilities located outside the port area shall take place upon authorization. There is no longer restriction for third-party cargo operation.
According to Decree 9.048, the granting authority shall be the Federal Government through the Ministry of Transport, Ports and Civil Aviation, and the responsibility for the bid process of new private operators, previously under the Presidency Secretariat of Ports (SEP) shall now be centralized under ANTAQ (National Agency of Waterway Transport).
The authorities that regulate our port terminal segment are:
- CODEBA ‐ responsible for managing the port of Salvador and carries out activities under article 33 et seq. of Law no. 8,630.
- SUPRG ‐ responsible for administration of the port of Rio Grande and carries out activities under article 33 et seq. of L no. 8,630.
- Customs ‐ oversees import and export processes.
- Port Authority Council (CAP) - organization composed of representatives appointed by the government, by port operators, by union port workers and by users of the port services and the like.
Towage and offshore services
ANTAQ, the regulatory agency under the Ministry of Transport, is responsible for granting authorization to Brazilian legal entities to operate as maritime companies, including in the cases of port support (towage) and maritime support (offshore).
ANTAQ was created by Law no. 10,233, which provides for the restructuring of waterway and land transport and which created the national Department of Transport Infrastructure ‐ ("DNIT"), the National Council of Transport Policies Integration ("CONIT"), and also the creation of the National Land Transport Agency ("ANTT"). All this in order to regulate, supervise and monitor the provision of land transport, water transport and port infrastructure and waterway operations, by aligning the interests of users and service providers, preserving the public interest.
In accordance with resolution ANTAQ no. 52, to obtain authorization, the legal entity must show that it: (i) owns at least one vessel under the Brazilian flag, necessarily with a liability insurance policy in force, (ii) is in good financial condition, and has the required minimum net equity of R$ 2.5 million for the port shipping support and maritime support, and (iii) has a current ratio greater than one. The authorization may be terminated, by waiver, bankruptcy or dissolution of the authorized legal entity, or by ANTAQ by annulment or abrogation.
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Brazilian shipping companies are also subject to ship‐owner registration with the Maritime Court.
Brazilian vessels, like in other jurisdictions, are subject to specific registrations and certifications, which in the case of Brazil are issued by the Brazilian Maritime Court and Port Authority, as will be shown below.
According to Law no. 7,652 which provides for registration of property at sea, Brazilian merchant vessels may only operate under administration of a Company that is registered as the ship‐owner and should be enrolled with the Port Authority with jurisdiction over the Brazilian shipping Company's jurisdiction or where the vessel operates. In case of a vessel with gross tonnage exceeding 100 tons, registration with the Maritime Court will be necessary for any mode of navigation. The vessel owner will be issued a Maritime Property Registration Provision upon completion of the registration process. While the registration is operational, the vessel will be allowed to navigate pursuant to a provisional registration for the period of up to one year, which may be extended.
Vessels with the right to fly the Brazilian flag are: (a) those enrolled in the Maritime Property Registry, and (b) those under a bareboat charter contract, signed with Brazilian shipping Company, subject to provisional suspension of the flag in the country of origin. The Brazilian vessels operated by Brazilian shipping companies may be registered in the Brazilian Special Registry ("REB") in the Maritime Court, which is a special registration granting some incentives for vessels that are registered in it. The REB does not replace the maritime property registration, but rather is complementary. The Maritime Court shall issue, for the vessels included in the REB, the Brazilian Special Registry Certificate.
Moreover, both port support shipping companies as well as maritime support companies should notify the ANTAQ Navigation Superintendent of all Brazilian vessel employed in maritime shipment navigation and maritime support, immediately upon the vessel's entry into operation. Whenever the vessel's characteristics change, including loss of classification, the Brazilian shipping Company shall present a copy of a new vessel registration provision, with appropriate annotation, within fifteen days after such document is issued. The Brazilian shipping company must also notify ANTAQ, within fifteen days after the occurrence of the event, any and all occurrences verified with respect to the vessel, such as: sale, removal from operation, dockage or other reasons related to the stoppage of the vessel for a period greater than ninety consecutive days.
The Brazilian vessels are subject to technical and safety standards of the Port Authority, which are certified by the Classification Entities.
The authorities that regulate our towage activities and support the oil industry are:
- ANTAQ - regulates, supervises and oversees the waterway transport services and operation of waterway and port infrastructure.
- The Port Authority - contributes to supervision of activities relating to the Merchant Marine and related organizations in terms of navigational safety and national security.
- Maritime Court - adjudicates navigation accidents and events, provides and maintains the general record of naval property, naval mortgages and other liens on Brazilian vessels of Brazilian ship‐owners.
Logistics
The logistics activities that deserve attention in relation to regulatory aspects are: bonded warehousing, road freight and intermodal transport, as shown below:
Bonded Warehousing - According to Decree No. 1,910 of May 21, 1996, services performed in customs terminals for public use (handling and storage of goods under customs control), commonly known as customs facilities, may be delegated by means of concession, public service authorization or licensing, the latter case regarding those affected by the Provisory Act No. 612 of April 04, 2013, namely private legal entities whose primary corporate purpose, cumulatively or not, is the storage, custody or transport of goods.
Customs facilities also perform all customs services, under the authority of the RFB, including the processing of import and export customs operations (conference and customs clearance).
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Ground Transportation ‐ road freight services are subject to the standards of ANTT, the regulatory agency under the Ministry of Transport. ANTT has specific duties in respect to road freight, for furtherance of studies and surveys relating to the fleet of trucks and service providers, and organization and maintenance of a national road freight service providers registry.
Road freight operates under a free market system without requirements for entry and exit. There is no specific transportation legislation to exercise the activity, and therefore there is no service authorization, permission and concession.
The Law No. 11,442, which establishes the National Registry of Freight Carriers ("RNTRC") whereby service providers may be registered as Freight Carriers ("TAC") (individual) and Road Freight Transport Company ("ETC") (legal entity). According to that law, road freight service providers existing at the time of the law's publication are ensured RNTC registration and the right to continued exercise of their activities.
Multimodal Transport ‐ in accordance with Decree no. 3,411, the right to exercise the activity of Multimodal Carrier depends on prior ANTT registration. If the Multimodal Carrier wishes to operate internationally, it must also be licensed at RFB. Such licenses will be granted for a period of 10 years.
Shipyards
The ANTAQ Regulatory Resolution No. 13/2016 required the registration of waterway transportation support facilities before ANTAQ as well as set forth obligations for the provision of the respective services.
There are no other specific authorizations for Shipyard activities besides the necessary licenses for industrial activity (operation license issued by the Environmental Company of the State of São Paulo "CETESB"), as well as the Construction License issued by the Brazilian Authority represented by the Classification Entity.
- issuer's environmental policy and costs incurred for the compliance with environmental regulation and, if applicable, other environmental practices, including the compliance with international environmental protection standards
Achieving and maintaining excellence in Occupational Health, Safety and Environment (SMS) is one of Group Wilson Sons' strategic objectives. Its SMS Policy is aligned with the Company's strategic map to guide long-term actions and each business segment has its own structures to carry out SMS programs and activities based on the established guidelines.
The governance of environmental issues is practiced through the SMS Executive Committee comprised by the Group's Presidency, Vice Presidency and Executive Boards, with monthly discussions of the most relevant issues concerning SMS management. This governance structure includes Vice Presidency SMS Committees, and businesses Committees, comprised by the respective Officers, Managers and other leaders of different practice areas. In addition to the aforementioned governance, the Strategy Management Model implemented in the Group Wilson Sons is carried out to monitor the strategic objectives through monthly corporate meetings, the People Committee covers environmental topics through bimonthly (Strategy Monitoring meeting) and annual meetings (Learning meeting). This model is also deployed to contribution panels businesses and their follow-up meetings aligned with the corporate schedule.
The insight into the environmental aspects and impacts of the activities based on the definition of management excellence criteria led to the elaboration of Wilson Sons' Environmental Management Index (IGA). The IGA is a management tool whose priority topics (solid waste, water resources, environmental damage, licensing, stakeholders and atmospheric emissions) have set forth criteria to promote continuous improvement in environmental management and achieve excellence, as they are based on the best current practices. The objective of this index is to allow the planning and monitoring of environmental management in the short, medium and long term aligned with the company's strategy.
The Company's business is subject to extensive federal, state and local legislation on environmental protection. Compliance with this legislation is supervised by means of a management system of Legal Requirements in all
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Businesses of the Group. The environmental licensing, required for most of the Group's activities, is monitored by means of a Corporate Systematics developed specifically to maintain and ensure responsible operation in this procedure.
In addition to environmental permits, existing regulations require that equipment and personnel trained for emergency situations. By means of emergency response plans, a set of procedures is available to minimize the effects for all possible accidental scenarios. The defined plans for the Group Wilson Sons' facilities are instruments for identifying and preventing operational risks, providing the means to minimize the losses caused by incidents and enabling the adoption of control measures through the verified situations, applied notably in port terminals, shipyards, vessels and the transportation of hazardous cargoes. The Company has contracts with service providers specializing in this type of service, and has staff and equipment suitable for such situations at the most critical units. The Company also has access to insurance pools which provide operating and legal insurance for environmental occurrences on its vessels, in addition to sudden pollution coverage for its port terminals, logistics operations and shipyards.
Special attention is given in training the workforce for the prevention of pollution and attending to emergencies. The operational staff are prepared to identify risk situations and fulfill preventive procedures. For emergency situations, exercises are constantly held, where real situations are simulated so as to improve the phases of decision‐making, communication and ensuring action plans are put into effect. The management of activities is done by SMS area.
The possible environmental impacts of activities are prevented or controlled by the use and maintenance of appropriate facilities, equipment, prevention or protection equipment, and operating procedures. The release of pollutants by routine operations or maintenance is controlled by the use of effluent treatment systems and separation of oily or organic material, in terminals, logistics operations and the shipyard, as well as on the vessels. The terminals, vessels and shipyards are assisted by waste management plans, which set forth the procedures related to waste segregation, packaging, storage, transport, treatment and final disposal. The practice is aimed at ensuring adequate segregation and disposal according to its potential polluter.
Other operating environmental risks that are controlled through facilities, equipment and procedures, include the operations of bunkering vessels and fixed and mobile equipment; routine check of equipment critical to the prevention and control of machine and vessel pollution; segregation and storage of hazardous materials, and management of ballast water in maritime support vessels.
The management of carbon emissions at Wilson Sons has been developed to identify opportunities for reduction, compare the units' performance with other similar organizations, and encourage continuous improvement in energy efficiency. The Group has committed to proactively disclose its Corporate Greenhouse Gas Emissions Inventory (GEE) in the GHG Protocol Program since 2014. The Inventory was certified with a silver seal because due to its thoroughness of information. The continuous practice of quantifying the emissions of these gases stimulates the elaboration and transparency of information through disclosure in the Public Registry of Emissions of the program, and the company is one of the first in the shipyard and port industry in Brazil to adopt the methodology and disclose its own inventory.
The adoption of increasingly advanced technologies contributes to the reduction of GEE emissions, such as:
- Modernization of the motorization of maritime support vessels, substituting conventional propulsion systems with diesel-electric systems, with better use of the generated energy;
- Purchase of RTG (Rubber-Tyred Gantry Cranes) at the container terminals with lower environmental impact technology in comparison to conventional diesel equipment.
- Structuring and expansion of the Tug Operations Center (COR), which enables the reduction of fuel consumption with better planning of the vessel's movement and benefitting from the vessel's proximity to ships to be maneuvered, as well as the speed control of the movement.
Other initiatives included better use of water. The main source of water used in the company's units comes from municipal or state public supply systems. The consumption of water in the Group Wilson Sons' activities, through its port terminals, towage, shipyards, offshore support bases and freight logistics is not significant when compared to other economic activities. However, given the importance of the theme to global sustainability, water management is treated as a relevant issue in Wilson Sons. In addition to the clear definition of excellence criteria regarding water consumption, generation and
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disposal of effluents in the IGA, the topic has been strategically addressed through the study of water and energy scenarios related to the company's operations. The results have not identified any vulnerability for the use of water and electric energy, but this analysis shall be constantly reviewed.
At Tecon Salvador, the construction of the Treatment Station for Oil Effluent from the washing of machinery and equipment allows the recovery for reuse of 100% of the effluents. New systems are being implemented to collect rainwater at the warehouse and reuse the locker room showers' water in toilets. At Tecon Rio Grande, the Águas Limpas Project ensures the recovery for reuse of 80% of the water used for washing the equipment. We also highlight Wilson Sons Logistics, located in Santo André, where the implementation of the rainwater capture system allows collecting, filtering, storing and making rainwater available for cleaning the warehouse floor, with an estimated saving of 530 m³ of water per year.
In 2009, the Company joined the Global Compact, an initiative of the United Nations that sets out ten principles in the areas of human rights, labor rights, environmental protection and the fight against corruption, which seeks to provide guidelines for the promotion of sustainable growth and citizenship, involving committed and innovative corporate leaders. In addition to supporting and advancing those principles, the Company is also committed to incorporating these assumptions into its culture, strategy and operations.
Since 2002, Wilson Sons has donated deactivated tugs to the State of Pernambuco Diving Companies Association. Once submerged, they assist in the recovery and conservation of marine ecosystems, serving as nursery for marine life. This initiative won the Socioenvironmental and HR Award of the Pernambuco Sales and Marketing Association in 2014. In 2017 four tugs were submerged, signaling the continuity of the Project and its importance to the Pernambuco Artificial Shipwrecks Park.
- dependence on patents, brands, licenses, concessions, franchises and royalty agreements for the execution of the Company's activities
Port Terminals:
Tecon Rio Grande lease agreement:
Tecon Rio Grande S.A. lease agreement was signed with Rio Grande Port Authority ("SUPRG") on 3 February 1997 for a period of 25 years renewable for a further 25 years. In view of the compliance with the contractual requirements and advanced investments in the expansion works of the terminal, construction of a third berth of docking and of the annual volume handled together with other considerations, Tecon Rio Grande was granted the right to renew the lease as set forth in the first amendment to the lease agreement signed on 7 March 2006.
Among the commitments set forth in the lease agreement and its addendum, the following are highlighted:
- Monthly payment for facilities and leased areas;
- Payment by container moved, with a commitment for minimum contractual movement (MMC);
- Pay per tonne in general cargo handling and unloading.
Tecon Salvador lease agreement:
Tecon Salvador S.A. lease agreement was signed with Bahia Port Authority ("CODEBA") on 14 March 2000 for a period of 25 years renewable for a further 25 years. On 16 November 2016 Tecon Salvador signed the second amendment to the lease agreement which extended the lease term for an additional period of 25 years until March 2050, and established the Company's commitment to carry out maintenance and expansion investments until the end of the lease.
Among the commitments set forth in the lease agreement and its addendums, the following are highlighted:
- Payment of monthly instalments readjusted for the minimum periodicity established in the contract;
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- Payment for the lease of the existing area and the area added under the terms of the second contractual addendum;
- Payment of minimum contractual movement - MMC.
Logistics
Eadi Santo André:
On May 22, 1998, we entered into an agreement with the Federal Government granting us permission to provide the public services of handling and storage of goods (general cargo) at the Inland Customs Station of Santo André, in São Paulo. The term of the agreement is 10 years, terminating in 2008, which was renewed for another 10 years.
The agreement was terminated on July 30, 2013, and said termination was reported by the publication of Executive Declaratory Act No. 55, of July 29, 2013. On the same date, EADI SANTO ANDRÉ TERMINAL DE CARGAS LTDA. was granted a license to operate in the form of Industrial and Customs Logistics Center - CLIA, pursuant to Provisory Act No. 612 of April 4, 2013.
For the services rendered we receive payment of fees by users for storage and handling of goods that are under our customs control. The tariffs are free and may be surcharged, limited to a 100% increase : (i) due to the type of cargo (hazardous goods or harmful products, fragile and difficult to handle); (ii) due to the volume of handling outside normal operation hours; and (iii) from the beginning of the second storage period.
Eadi Suape:
Permission Agreement for the Provision of the Public Services of Handling and Storage of Goods at an Inland Customs Station.
On November 13, 2013, we entered into an agreement with the Federal Government granting us permission to provide the public services of handling and storage of goods (general cargo) at the Inland Customs Station of Ipojuca, in the State of Pernambuco. The agreement's term is 25 years, being renewable for another 10 years and in force since November 20, 2013, date of publication of the agreement's extract in the Official Gazette of the Federal Executive.
For the services rendered we receive payment of fees by users for storage and handling of goods that are under our customs control. The fees are limited according to the contract's bid tender, although lower fees may be charged, as agreed with the user, or higher, limited to a 100% increase: (i) due to the type of cargo (hazardous goods or harmful products, fragile and difficult to handle), (ii) due to the volume of handling outside normal operation hours, and (iii) from the beginning of the second storage period.
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7.6 Material foreign revenue
- revenue from customers assigned to the country of the issuer's headquarters and its share in total net revenues of the issuer
The Company has no revenues from customers in the country of headquarters.
- revenue from customers attributed to each foreign country and their share in the issuer's total net revenue
The Company has no revenues from foreign customers.
- total revenue coming from foreign countries and their share in the issuer's total net revenue
The Company's revenues come 100% from its subsidiaries and affiliates located in Brazil, through services provided in Brazil to customers with headquarters in Brazilian territory or headquartered abroad.
The Company's total revenue in 2018 was US$ 490,195,982.67 (R$ 1,677,469,813.30), of which 100% are from Brazil.
Below is a detailed account of revenue from Brazil:
US$ 254,534,653.32 (R$ 925,694,199.88) - 55% - from customers based in Brazil.
US$ 205,661,329.35 (R$ 751,775,613.42) - 45% - coming from customers headquartered abroad.
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7.7 In relation to foreign countries published in item 7.6, inform the extent to which the issuer is subject to regulation in these countries and how that affects the issuer's business
See item 7.5.a.
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7.8 Regarding social and environmental policies, state:
a. whether the issuer discloses social and environmental information
Wilson Sons believes in sustainability as a comprehensive concept that must pervade the economic, social and environmental dimensions of the company (the triple bottom line), with responsible management focusing on long-term results for the Company and society.
Understanding the relevance of socio-environmental issues to its business, Wilson Sons has defined an operating model that aims to create and protect value, connecting sustainability management with its strategic objectives. In this way, the perspective of reducing impacts and creating business opportunities that are increasingly beneficial to society and the environment becomes concrete and legitimate.
The Company discloses this information in its Annual Report, available on the Company's website: http://wilsonsons.com.br/ri.
b. the methodology followed to prepare such information:
The disclosure of social and environmental information presents standard content from the guidelines for the GRI (Global Reporting Initiative) Sustainability Report.
c. whether this information is audited or reviewed by an independent entity
There Reference Form does not include the requirement for external audit, however, each point addressed is reviewed by those responsible for each agenda.
d. online page on the where this information can be found
The Company discloses this information in its Annual Report, available on the Company's website: http://wilsonsons.com.br/ri.
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7.9 Other material information
The Company believes that there is no other relevant information.
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8 Extraordinary businesses
8.1 Description
- direct and indirect controllers:
Ocean Wilsons Holdings Limited controls the Company, holder of 41,444,000 issuer shares, equivalent to 57.91% ,and 30,117,060 shares equal to 42.09% are outstanding in the market (free float).
The following entities have shareholdings greater than 3% of Ocean Wilsons Holdings Limited:
Shareholders | Shares | % |
Hansa Investment Company Limited | 9,352,770 | 26.45 |
Victualia Limited Partnership | 4,435,064 | 12.54 |
C Townsend | 3,969,049 | 11.22 |
Utilico Emerging Markets Utilities Limited | 2,019,344 | 5.71 |
Dynamo Administração de Recurso | 1,728,854 | 4.89 |
Canaccord Genuity Group Inc | 1,537,953 | 4.35 |
The Company was informed that Mr W H Salomon and family are the beneficiary of shares registered in the name of Victualia Limited Partnership.
The Company was also informed that Mr W H Salomon holds 26.4% and Mr. C Townsend holds 25.9% of the shares with voting rights issued by Hansa Investment Company Limited.
- subsidiaries and affiliates
SUBSIDIARIES
Details of the Company's subsidiaries, and other entities and operations under its control, at the end of the reporting period are as follows:
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Place of | ||||
incorporation | Proportion of ownership interest | |||
and operation | 31/03/2018 | 31/12/2017 | ||
Holding company | ||||
Wilson, Sons de Administração e Comércio Ltda. | Brazil | 100% | 100% | |
WS Participações S.A. | Brazil | 100% | 100% | |
WS Participaciones S.A. | Uruguay | 100% | 100% | |
Wilson, Sons Administração de Bens Ltda. | Brazil | 100% | 100% | |
Towage | ||||
Saveiros Camuyrano Serviços Marítimos S.A. | Brazil | 100% | 100% | |
Shipyard | ||||
Wilson, Sons Comércio, Indústria, e Agência de Navegação Ltda. | Brazil | 100% | 100% | |
Wilson, Sons Estaleiro Ltda. | Brazil | 100% | 100% | |
Ship Agency | ||||
Wilson, Sons Agência Marítima Ltda. | Brazil | 100% | 100% | |
Transamérica Visas Serviços de Despachos Ltda. | Brazil | 100% | 100% | |
Logistics | ||||
Wilson, Sons Logística Ltda. | Brazil | 100% | 100% | |
EADI Santo André Terminal de Carga Ltda. | Brazil | 100% | 100% | |
Allink Transportes Internacionais Ltda. | (1) | Brazil | 50% | 50% |
Port terminal | ||||
Brasco Logística Offshore Ltda. | Brazil | 100% | 100% | |
Tecon Rio Grande S.A. | Brazil | 100% | 100% | |
Tecon Salvador S.A. | Brazil | 100% | 100% | |
Wilport Operadores Portuários Ltda. | Brazil | 100% | 100% |
The Group also holds a 100% stake in an exclusively Brazilian investment fund: Hydrus Private Credit Fixed Income Fund in Investment Fund Quotas. This fund is managed by Banco Itaú and its policies and objectives are determined by the Company.
JOINT VENTURES
Proportion | |||
Place of | of ownership interest | ||
incorporation | |||
and operation | 31/03/2018 | 31/12/2017 | |
Towage | |||
Consórcio de Rebocadores Barra de Coqueiros (¹) | Brazil | 50% | 50% |
Consórcio de Rebocadores Baia de São Marcos (¹) | Brazil | 50% | 50% |
Offshore | |||
Wilson, Sons Ultratug Participações S.A.(²) | Brazil | 50% | 50% |
Atlantic Offshore S.A. (³) | Panamá | 50% | 50% |
Logistics | |||
Porto Campinas, Logística e Intermodal Ltda | Brazil | 50% | 50% |
- holding of issuer in group companies
The Company does not have holdings in any company from controlling group.
- holding of group companies in the issuer
No Company from the controlling group has a direct holding in any group company.
91
8.2 Significant changes in the way the issuer's business is conducted
No significant change was made to the way of the Company's business is conducted.
92
8.3. Material contracts entered into by the issuer and its subsidiaries not directly related to their operating activities
There is no contract entered that is not directly related to their core business activities.
93
8.4 Supply other information that the issuer deems relevant
There is no other relevant information.
94
9 Relevant assets
9.1 Describe the non-current assets relevant to the development of issuer's activities, indicating in particular:
- Fixed assets, including those subject to rent or lease, identifying its location
Port Terminals
- STS ("Ship-to-shore") quay cranes;
- Mobile cranes;
- RTG ("Rubber-Tyred Gantry") yard cranes;
- Forklifts;
- Tractors;
- Trucks;
- Scanner;
- General warehouses;
- Inland navigation barges.
Towage Services
- Azimuth tugs;
- Conventional tugs;
- Boats.
Logistics
- Tractors;
- Forklifts;
- Wheel loaders;
- Trucks;
- Gantry cranes;
- Pallet Racking.
Offshore
- PSV vessels *.
- According to IFRS rules, the fixed assets of the segment Offshore Vessels (joint venture Wilson Sons Ultratug Offshore) is not consolidated in the Company's assets. This item is accounted for in a single line in the Balance Sheet ("Investments").
Shipyards
- Cranes;
- Forklifts;
- Cutting Machine CNC (Computerized Numerical Control);
- Other operational equipment
Additionally, we inform that the assets mentioned above are all located in Brazilian territory, where each segment has operations.
- Patents, trademarks, permits, concessions, franchises and contracts of technology transfer, informing
95
Asset type | Asset | Affected | Duration | Events that could cause | Consequence of forfeiture | ||||||||||||
description | area | forfeiture | |||||||||||||||
Concession | Bonded | Brazilian | 25 | years, | a | - The | failure to | make | the | Concession | |||||||
Warehouse | renewable | payment due to FUNDAF by | |||||||||||||||
in | Suape | for | another | its maturity date; | |||||||||||||
(PE) | 10 years | b | - | In | case | any | points | ||||||||||
indicated in the Agreement is | |||||||||||||||||
not remedied; | |||||||||||||||||
c - By virtue of the | |||||||||||||||||
Agreement's | termination | ||||||||||||||||
mutually | agreed | by | the | ||||||||||||||
Parties; | |||||||||||||||||
d | - Agreement's | termination | |||||||||||||||
due | to | expropriation | |||||||||||||||
(resumption of the service by | |||||||||||||||||
the granting | authority | during | |||||||||||||||
the | permission | term), | |||||||||||||||
termination and/or annulment, | |||||||||||||||||
repeal at will, bankruptcy or | |||||||||||||||||
extinction | of | the | authorized | ||||||||||||||
entity; and - By expiration | |||||||||||||||||
when the service provision is | |||||||||||||||||
inadequate, | when | the | |||||||||||||||
authorized | entity | fails | to | ||||||||||||||
comply | with | a | contractual | ||||||||||||||
section | or legal | provision, | |||||||||||||||
when | the | authorized | entity | ||||||||||||||
interrupts | the | service | |||||||||||||||
provision or contributes to it, | |||||||||||||||||
when | the | authorized | entity's | ||||||||||||||
economic, | technical | or | |||||||||||||||
operational | conditions | are | |||||||||||||||
impaired, when the authorized | |||||||||||||||||
entity does not timely comply | |||||||||||||||||
with the penalties imposed for | |||||||||||||||||
infractions, | when | the | |||||||||||||||
authorized | entity | does | not | ||||||||||||||
comply | with | the | granting | ||||||||||||||
authority's | notification | to | |||||||||||||||
regularize | the service, | when | |||||||||||||||
the | authorized | entity | is | ||||||||||||||
convicted in a final decision | |||||||||||||||||
for tax evasion. | |||||||||||||||||
Licenses | Bonded | Brazilian | Indefinite | According | to | RFB | Ordinance | If the right to operate is | |||||||||
Warehouse | No. 3,518, | which | establishes | terminated early, we shall no | |||||||||||||
in | Santo | the | requirements | and | longer have the right to | ||||||||||||
André (SP) | procedures | for | customs | provide storage services in the | |||||||||||||
clearance, and pursuant to the | municipality of Santo André. If | ||||||||||||||||
Provisory | Act | No. 612/13, in | this happens, our results in the | ||||||||||||||
force at the time of transition | logistics segment will be | ||||||||||||||||
to the CLIA regime, the | affected. | ||||||||||||||||
following | events | may | cause | ||||||||||||||
forfeiture: | |||||||||||||||||
a - charging for just the | |||||||||||||||||
passage | of | vehicles | and | ||||||||||||||
pedestrians | in | the | facility, | ||||||||||||||
96
entering or leaving the country | |||||||||||||||||||||
b - charging the first two hours | |||||||||||||||||||||
of | parking | for | passenger | ||||||||||||||||||
vehicles | |||||||||||||||||||||
c - charging the equivalent of | |||||||||||||||||||||
more than R$ 3,00 (three | |||||||||||||||||||||
Reais) per ton for weighing | |||||||||||||||||||||
cargo vehicles | |||||||||||||||||||||
d - charging the equivalent of | |||||||||||||||||||||
more than R$ 5,00 (five reais) | |||||||||||||||||||||
for the first two hours of | |||||||||||||||||||||
parking | for | road | cargo | ||||||||||||||||||
vehicles of cargo in customs | |||||||||||||||||||||
transit | |||||||||||||||||||||
e - establishing a period of | |||||||||||||||||||||
more than six hours for | |||||||||||||||||||||
charging road vehicle parking | |||||||||||||||||||||
The amounts referred to in | |||||||||||||||||||||
items c and d may be | |||||||||||||||||||||
changed | annually | by | the | ||||||||||||||||||
Minister of Finance. | |||||||||||||||||||||
Concession | Tecon | Brazilian | 25 | years | + | The | following | circumstances | In the case of early termination | ||||||||||||
Salvador | 25 | years | characterized | by | serious, | due | to | any | of | the | |||||||||||
(renewable) | continued | and | uncured | aforementioned | reasons, | we | |||||||||||||||
breaches of the terms of the | shall no longer have to right to | ||||||||||||||||||||
lease agreement, | shall | give | operate and manage the port | ||||||||||||||||||
rise to early termination: (i) | terminal, | and | our | terminal | |||||||||||||||||
deviation | from | the | contract | operations will come to an | |||||||||||||||||
purpose, | (ii) | Company | end. | While | our | concessions | |||||||||||||||
dissolution, | (iii) | sublease, | (iv) | establish that we have the | |||||||||||||||||
declaration | of | bankruptcy of | right to receive cash payment | ||||||||||||||||||
the Company, (v) termination | that | reflects | the | unamortized | |||||||||||||||||
of more than three successive | value of the assets leased by | ||||||||||||||||||||
monthly payments due under | us, there is no guarantee that | ||||||||||||||||||||
this | lease | agreement, | (vi) | this value, if any, will be | |||||||||||||||||
interruption | of | execution | sufficient to indemnify us for | ||||||||||||||||||
without | just | cause | (vii) | the value of these assets or | |||||||||||||||||
operating in violation of the | lost profits. If this happens, our | ||||||||||||||||||||
laws | and | regulations; | (viii) | results could be significantly | |||||||||||||||||
failure to comply with judicial | affected. | ||||||||||||||||||||
decisions, and (ix) use or | |||||||||||||||||||||
occupation | of | the | area | ||||||||||||||||||
beyond that established in the | |||||||||||||||||||||
lease agreement. | |||||||||||||||||||||
Concession | Tecon | Rio | Brazilian | 25 | years | + | This | agreement | may | be | In the case of early termination | ||||||||||
Grande | 25 | years | terminated | in | the | following | due | to | any | of | the | ||||||||||
(renewable) | cases: | aforementioned | reasons, | we | |||||||||||||||||
shall no longer have to right to | |||||||||||||||||||||
(i) inadequacy or shortcoming | operate and manage the port | ||||||||||||||||||||
in the execution of port | terminal, | and | our | terminal | |||||||||||||||||
operations or in the provision | operations | will | come to | an | |||||||||||||||||
of | services; | (ii) | non- | end. | While | our | concessions | ||||||||||||||
performance, unjustified delay | establish that we have the | ||||||||||||||||||||
or execution not in compliance | right to receive cash payment | ||||||||||||||||||||
with | the | planned | works' | that | reflects | the | unamortized | ||||||||||||||
agreement; | (iii) | value of the assets leased by | |||||||||||||||||||
noncompliance | with | legal, | us, there is no guarantee that | ||||||||||||||||||
97
regulatory or contractual obligations; (iv) loss or impairment of the economic,
financial, technical or
operational conditions necessary for the normal operation of Tecon Rio Grande; (v) default of
guaranteedfinancial obligations; (vi) shut down of port operations without cause; and (vii) refusal or disinterest in promoting the upgrading and expansion of Tecon Rio Grande facilities.
this value, if any, will be sufficient to indemnify us for the value of these assets or lost profits. If this happens, our results could be significantly affected.
- Ownership interests in companies:
i. Denominação Social | ii. Sede | v. Sociedade | vii. Valor contábil da participação | xii. Razões para | ||||||
iv. Participação | aquisição e | |||||||||
iii. Atividades Desenvolvidas | Controlada | |||||||||
Razão Social | CNPJ | País | UF | Município | do emissor (5) | US$ | R$ | manutenção de tal | ||
ou Coligada | ||||||||||
participação | ||||||||||
Wilson Sons de Administração e Comércio Ltda. | 33.130.691/0001-05 | Brasil | RJ | Rio de Janeiro | Holding | 100% | Controlada | 455,821,805.60 | 1,766,218,332.34 | Estratégia do Grupo |
WS Participações Ltda. | 04.017.445/0001-35 | Brasil | RJ | Rio de Janeiro | Holding | 100% | Controlada | 1,115,152.33 | 4,320,992.24 | Estratégia do Grupo |
WS Participaciones S.A. | 04.017.445/0001-35 | Uruguai | Holding | 100% | Controlada | - | - | Estratégia do Grupo | ||
Wilson Sons Administração de Bens Ltda. | 52.120.995/0001-28 | Brasil | RJ | Rio de Janeiro | Holding | 100% | Controlada | 1,596,357.17 | 6,185,564.75 | Estratégia do Grupo |
Saveiros, Camuyrano Serviços Marítimos S/A. | 33.112.152/0001-35 | Brasil | RJ | Rio de Janeiro | Serviços de rebocagem | 100% | Controlada | 130,783,698.86 | 506,760,676.36 | Estratégia do Grupo |
Wilson Sons Comércio, Ind. e Agência de Navegação Ltda. | 33.411.794/0001-35 | Brasil | RJ | Rio de Janeiro | Estaleiro | 100% | Controlada | 22,564,093.99 | 87,431,351.39 | Estratégia do Grupo |
Wilson Sons Estaleiros Ltda. | 10.320.573/0001-56 | Brasil | RJ | Rio de Janeiro | Estaleiro | 100% | Controlada | 28,165,093.76 | 109,134,647.76 | Estratégia do Grupo |
Wilson Sons Agência Marítima Ltda. | 00.423.733/0001-39 | Brasil | RJ | Rio de Janeiro | Serviços de agenciamento marítimo | 100% | Controlada | 3,221,009.53 | 12,480,767.71 | Estratégia do Grupo |
Transamérica Visas Serviços de Despachos Ltda. | 04.017.202/0001-05 | Brasil | RJ | Rio de Janeiro | Serviços de agenciamento marítimo | 100% | Controlada | 521,082.47 | 2,019,090.37 | Estratégia do Grupo |
Wilson Sons Logística Ltda. | 03.852.972/0001-00 | Brasil | RJ | Rio de Janeiro | Serviços de logística | 100% | Controlada | 10,761,652.05 | 41,699,249.35 | Estratégia do Grupo |
EADI Santo André Terminais de Cargas Ltda. | 03.599.179/0001-33 | Brasil | SP | Santo André | Armazém alfandegário | 100% | Controlada | 8,895,648.55 | 34,468,858.99 | Estratégia do Grupo |
Allink Transportes Internacionais Ltda. * | 86.846.847/0001-07 | Brasil | SP | São Paulo | Serviços de logística | 50% | Controlada | 966,085.72 | 5,460,367.54 | Estratégia do Grupo |
Brasco Logística Offshore Ltda. | 03.562.124/0001-59 | Brasil | RJ | Rio de Janeiro | Operador portuário | 100% | Controlada | 73,147,276.54 | 283,431,067.15 | Estratégia do Grupo |
Tecon Rio Grande S/A. | 01.640.625/0001-80 | Brasil | RS | Rio Grande | Operador portuário | 100% | Controlada | 80,224,558.56 | 310,854,119.53 | Estratégia do Grupo |
Tecon Salvador S/A. | 03.642.342/0001-01 | Brasil | BA | Salvador | Operador portuário | 100% | Controlada | 56,542,291.66 | 219,090,071.73 | Estratégia do Grupo |
Wilport Operadores Portuários Ltda. | 51.077.576/0001-98 | Brasil | RJ | Rio de Janeiro | Operador portuário | 100% | Controlada | 155,965,737.29 | 604,336,038.84 | Estratégia do Grupo |
Consorcio de Rebocadores de Barra dos Coqueiros | 01.279.575/0001-58 | Brasil | MA | São Luis | Serviços de rebocagem | 50% | Coligada | - | - | Estratégia do Grupo |
Consorcio de Rebocadores da Baia de São Marcos | 02.773.207/0001-24 | Brasil | SE | Barra dos Coqueiros | Serviços de rebocagem | 50% | Coligada | - | - | Estratégia do Grupo |
Porto Campinas, Logística e Intermodal Ltda. | 02.812.471/0001-20 | Brasil | SP | Monte Mor | Serviços de logística | 50% | Coligada | 292,686.86 | 1,134,103.05 | Estratégia do Grupo |
Wilson Sons Ultratug participações Ltda. | 04.017.196/0001-88 | Brasil | RJ | Rio de Janeiro | Offshore | 50% | Coligada | 43,770,682.58 | 169,602,640.86 | Estratégia do Grupo |
Atlantic Offshore Services S.A. | Panamá | Offshore | 50% | Coligada | 325,800.59 | 1,262,412.11 | Estratégia do Grupo |
* The Group intends to control Allink Transportes Internacionais Ltda., Even though it owns only 50% of the company's shares. Allink Transportes Internacionais Ltda. controls 100% of Allink Serviços e Gestão de Cargas Ltda.
98
9.2 Other material information
None.
99
10 Officers' comments
10.1 Officers' comments
- general financial and equity conditions
The table below shows some of the Company's financial and indebtedness indexes:
US$ | R$ | |||||
Financial and Debt Ratios | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 |
US$ / Total Debt (% ) | 94.9 | 92.8 | 91.9 | 94.9 | 92.8 | 91.9 |
Debt (million) | 307.3 | 354.7 | 377.8 | 1,190.7 | 1,173.4 | 1,231.4 |
Cash & Cash Equivalents (million) | -69.0 | -111.7 | -112.4 | -267.5 | -369.6 | -366.3 |
Net Debt (million) | 238.3 | 243.0 | 265.4 | 923.3 | 803.8 | 865.1 |
Net Debt / EBITDA | 1.5 x | 1.4 x | 1.7 x | 1.6 x | 1.5 x | 1.7 x |
Indebtedness Index | 0.46 | 0.47 | 0.50 | 0.46 | 0.47 | 0.50 |
Current Liquidity Index | 1.5 | 1.8 | 1.7 | 1.5 | 1.8 | 1.7 |
The total Net Debt amounted to R$ 923.3 million as of December 31, 2018 (December 31, 2017: R$ 803.8 million)
(December 31, 2016: R$ 865.0 million). The increase was mainly due to the R$ devaluation agains the US$ throughout the year, which went from 3.31 to 3.87 of the closing exchange rate, representing a 17% variation. The analysis of the net debt in dollars leads to the verification, when comparing 2018's R$ 238.3 million with 2017's R$ 243.0 million, of a reduction due to the decrease in the Company's operating cash flows and a reduction of the amount raised, since a relevant part of 2018 CAPEX for the expansion of Tecon Salvador was carried out with equity capital.
The reduced Debt/EBITDA index of the last three years reflects the Company's solid cash generation.
On December 31, 2018, the Company's indebtedness index, considering the division of current and non-current liabilities by the total assets was 0.46 (December 31, 2017: 0.47) (December 31, 2016: 0,50). The Company's debts entail low-cost interest and long-term amortization. As of December 31, 2018, the debt's weighted average cost was 3.4% p.a. (December 31, 2017: 3.4% a.a.) (December 31, 2016: 3.25% a.a.).
On December 31, 2018, the Company's current liquidity index (i.e. the index of current assets divided by the current liabilities) was 1.5, compared to 1.8 on December 31, 2017 and 1,7 on December 31, 2016. The decrease in the liquidity index as of December 31, 2018 was mainly due to the decrease in cash and cash equivalents.
- capital structure
The Company's capital structure follows below, including information on the Company's cash and cash equivalents for the last three fiscal years:
100
US$ | R$ | |||||
Capital Structure (in million) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 |
Equity | 515.6 | 547.6 | 516.5 | 1,997.8 | 1,809.9 | 1,683.3 |
Current Liabilities + Non-current Liabilities (Third Party Capital) | 434.2 | 495.1 | 520.3 | 1,682.2 | 1,637.9 | 1,695.8 |
Cash & Equivalents | 69.0 | 111.7 | 112.4 | 267.5 | 369.6 | 366.3 |
Net Third Party Capital | 365.1 | 383.4 | 407.9 | 1,414.8 | 1,268.3 | 1,329.5 |
Net Total Liabilities (Net Third Party Capital + Equity) | 880.7 | 931.0 | 924.4 | 3,412.6 | 3,078.2 | 3,012.8 |
Net Third Party Capital / Net Total Liabilities | 41% | 41% | 44% | 41% | 41% | 44% |
Equity / Net Total Liabilities | 59% | 59% | 56% | 59% | 59% | 56% |
Wison Sons Shareholders' Equity, on December 31, 2018, amounted to R$ 547.6 million. On the same date, the Gross Debt plus Third Party Obligations totaled US$ 495.1 million, with Cash and Cash equivalents (including short-term investments) of US$ 111.7 million.
Wilson Sons Shareholders' Equity, on December 31, 2017, amounted to R$ 547.6 million. On the same date, the Gross Debt plus Third Party Obligations totaled US$ 495.1 million, with Cash and Cash equivalents (including short-term investments) of US$ 111.7 million.
Wison Sons Shareholders' Equity, on December 31, 2016, amounted to R$ 516.5 million. On the same date, the Gross Debt plus Third Party Obligations totaled US$ 520.3 million, with Cash and Cash equivalents (including short-term investments) of US$ 112.4 million.
- payment capacity in relation to the financial commitments assumed
US$ | R$ | |||||
Payment Capacity | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 |
Debt (million) | 307.3 | 354.7 | 377.8 | 1,190.7 | 1,173.4 | 1,231.4 |
US$ / Total Debt (% ) | 94.9 | 92.8 | 91.9 | 94.9 | 92.8 | 91.9 |
FMM / Total Debt (% ) | 77.5 | 70.0 | 67.7 | 77.5 | 70.0 | 67.7 |
Long-Term Debt (% ) | 80.4 | 84.5 | 86.5 | 80.4 | 84.5 | 86.5 |
Currently, the Company uses various sources of financing. The most important is the Merchant Marine Fund (FMM). No significant change in the source of financing is expected, since approximately 77.5% of the plan is expected to come from FMM in 2018, which offers extremely competitive rates.
At the close of the 2018 business year, Wilson Sons Gross Debt totaled US$ 307.3 million. The Net Debt, calculated from the subtraction of cash and investments balance (US$ 69.0 million), was US$ 238.3 million.
Wilson Sons debt profile indicates that 80.4% of loans are long‐term and 94.9% are in U.S. dollars. Regarding debt composition, the total balance of the loans obtained with the BNDES and Banco do Brasil, of funds from the Merchant Marine Fund (FMM) reached US$238.3 million in 2018, which corresponds to 77.5% of total debt.
- sources of financing for working capital and investments in non-current assets
101
As is already occurring, the Company intends to make use of financings already approved and available with financial institutions such as BNDES, Banco do Brasil, in addition to other financial institutions.
- sources of financing for working capital and investments in non-current assets that the Company plans to use to cover liquidity shortfalls
As is already occurring, the Company intends to make use of funds already approved and available with financial institutions such as BNDES, Banco do Brasil, in addition to other financial institutions.
- debt levels and characteristics of such debts, also describing: i. relevant loan and financing agreements
Bank loans | Interest rate % p.a. | US$ | R$ | |||||
2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||
Secured borrowings | ||||||||
BNDES - FMM linked to US Dollar(1) | 2,07% | - 4,13% | 148.593 | 152.165 | 162.408 | 575.769 | 503.364 | 529.305 |
BNDES - FMM linked to US Dollar(1) | 5,00% | 3.409 | 4.666 | 5.977 | 13.210 | 15.434 | 19.480 | |
BNDES - Real | 6,56% | - 8,75% | 14.267 | 20.982 | 25.466 | 55.282 | 69.408 | 82.996 |
BNDES - Finame Real | 4,50% | - 6,00% | 150 | 1.834 | 1.133 | 582 | 6.066 | 3.692 |
BNDES - FMM Real(1) | 10,44% | 1.250 | 1.635 | 1.838 | 4.843 | 5.408 | 5.990 | |
BNDES - linked to US Dollar | 5,07% | - 5,36% | - | - | 5.069 | - | - | 16.520 |
Total BNDES | 167.669 | 181.282 | 201.891 | 649.686 | 599.680 | 657.983 | ||
Banco do Brasil - FMM linked to US Dollar(1) | 2,00% | - 3,00% | 85.142 | 90.750 | 85.576 | 329.907 | 300.201 | 278.900 |
IFC - US Dollar | 7,00% | 21.547 | 35.640 | 48.571 | 83.490 | 117.898 | 158.297 | |
Santander - US Dollar | 4,64% | 25.523 | 31.173 | 14.005 | 98.897 | 103.120 | 45.642 | |
China Construction Bank - US Dollar | 6,14% | 6.364 | 12.708 | 19.047 | 24.658 | 42.038 | 62.077 | |
Eximbank - US Dollar | 6,22% | 1.061 | 3.171 | 5.270 | 4.111 | 10.490 | 17.176 | |
Finimp - US$ | 4,81% | - | - | 1.170 | - | - | 3.814 | |
Others Total | ||||||||
139.637 | 173.442 | 173.639 | 541.063 | 573.747 | 565.906 | |||
Total | ||||||||
Total | 307.306 | 354.724 | 375.530 | 1.190.749 | 1.173.427 | 1.223.889 |
- As agents of the Merchant Marine Fund (Fundo da Marinha Mercante - FMM), Banco Nacional de Desenvolvimento Econômico e Social ("BNDES") and Banco do Brasil ("BB") finance the construction of tugboats and shipyard facilities.
Guarantees
The BNDES loans are guaranteed by Wilson Sons Administração e Comércio Ltda e Wilport Operadores Portuários Ltda. For some agreements the following corporate guarantees were provided: (i) financed tugs and (ii) guarantee for equipment financed from the logistics and port operation.
The Banco do Brasil loans are guaranteed by Wilson Sons Administração and Comércio Ltda as well as the financed tugs.
Saveiros' loan with China Construction Bank (CCB) is guaranteed by Wilson Sons Administração and Comércio Ltda as well as the financed tugs.
Tecon Salvador's loans with IFC are guaranteed by the totality of its shares, in addition to receivables, equipment and constructions.
The loan between Tecon Rio Grande and Export-Import Bank of China to purchase equipment is guaranteed by a surety bond from Banco Itaú BBA S.A., which has the financed equipment as collateral.
102
The loan between Tecon Rio Grande and Santander to purchase equipment is guaranteed by Sinosure and Wilson Sons Administração e Comércio Ltda.
ii. other long-term relations with financial institutions
N/A.
iii. debt subordination level
There is no degree of contractual subordination between the Company's debts. Those of our debts which are guaranteed with in rem guarantee enjoy the preferences and prerogatives provided under the law.
- possible restrictions imposed to the issuer, specifically in relation to limits to debt and contracting of new debts, to the distribution of dividends, sale of assets, issue of new securities and sale of controlling interest and if issuer has been complying with these restrictions.
Some of the long-term financial instruments have obligations related to financial indicators, such as Net Debt/EBITDA; PL/Total Debt; Current Liquidity Index; Coverage of the Debt Service, and others not as relevant.
Wilson Sons de Gestão e Comércio Ltda. ("WSAC") holding e Wilport Operadores Portuários Ltda, as a corporate guarantor, must comply with the restrictive covenants of the financing agreements of Wilson Sons Estaleiros, Brasco Logística Offshore and Tecon Salvador SA, entered into with BNDES.
The subsidiary Tecon Rio Grande S/A must comply with the financial clauses of its loan agreement with Santander, with minimum liquidity and debt service rates.
The subsidiary Tecon Salvador S/A must comply with loan agreements' restrictive covenants, represented in its loan agreement with the International Finance Corporation (IFC), including the maintenance of specific liquidity and capital structure indexes. Also it must comply with the Coverage of the Debt Service of it's agreement with BNDES to finance the terminal expansion.
- limits of use of financing already contracted
Pre‐approved loans
As of December 31, 2018, the Group had an available credit concession of US$ 116.2 million (R$450.1 million) (December 31, 2017: US$ 51.0 million (R$168.6 million)) (December 31 of 2016: US$ 53.2 million (R$ 173.3 million)). Some conditions precedent must be met for each outlay.
- material changes to each item of the financial statements:
Consolidated Financial Statements
103
Consolidated Statements | US$ | R$ | ||||||||||
2018 | AV (%) | 2017 | AV (%) | 2016 | AV (%) | 2018 | AV (%) | 2017 | AV (%) | 2016 | AV (%) | |
Reveneus | 460.196 | 100,0 | 496.340 | 100,0 | 457.161 | 100,0 | 1.677.470 | 100,0 | 1.584.142 | 100,0 | 1.585.363 | 100,0 |
Raw Materials | (38.128) | (8,3) | (37.679) | (7,6) | (37.741) | (8,3) | (138.034) | (8,2) | (120.219) | (7,6) | (130.478) | (8,2) |
Employee expenses | (145.237) | (31,6) | (165.344) | (33,3) | (143.285) | (31,3) | (529.030) | (31,5) | (527.832) | (33,3) | (496.855) | (31,3) |
Depreciation & Amortisation | (56.175) | (12,2) | (57.480) | (11,6) | (52.584) | (11,5) | (204.844) | (12,2) | (183.542) | (11,6) | (182.298) | (11,5) |
Other Operating Expenses | (115.919) | (25,2) | (118.032) | (23,8) | (122.689) | (26,8) | (423.250) | (25,2) | (375.933) | (23,7) | (426.132) | (26,9) |
Profit on disposal of PP&E | (296) | (0,1) | (2.930) | (0,6) | 745 | 0,2 | (1.290) | (0,1) | (9.704) | (0,6) | 2.314 | 0,1 |
EBIT | 104.441 | 22,7 | 114.875 | 23,1 | 101.607 | 22,2 | 381.022 | 22,7 | 366.912 | 23,2 | 351.914 | 22,2 |
Share of Result of Joint Ventures | (4.062) | (0,9) | 3.366 | 0,7 | 8.073 | 1,8 | (15.150) | (0,9) | 10.584 | 0,7 | 26.510 | 1,7 |
Finance income | 5.243 | 1,1 | 11.227 | 2,3 | 23.042 | 5,0 | 19.185 | 1,1 | 36.142 | 2,3 | 81.038 | 5,1 |
Finance costs | (22.951) | (5,0) | (21.976) | (4,4) | (17.621) | (3,9) | (83.829) | (5,0) | (69.847) | (4,4) | (61.038) | (3,9) |
Exchange Gain (Loss) | (9.990) | (2,2) | 1.336 | 0,3 | 6.839 | 1,5 | (36.656) | (2,2) | 4.374 | 0,3 | 23.752 | 1,5 |
Profit before tax | 72.681 | 15,8 | 108.828 | 21,9 | 121.940 | 26,7 | 264.572 | 15,8 | 348.165 | 22,0 | 422.176 | 26,6 |
Income tax expense | (26.433) | (5,7) | (36.056) | (7,3) | (36.836) | (8,1) | (100.032) | (6,0) | (114.068) | (7,2) | (128.894) | (8,1) |
Profit | 46.248 | 10,0 | 72.772 | 14,7 | 85.104 | 18,6 | 164.540 | 9,8 | 234.097 | 14,8 | 293.282 | 18,5 |
Profit for the year attributable to: | - | |||||||||||
Owners of the Company | 44.263 | 9,6 | 71.589 | 14,4 | 84.892 | 18,6 | 157.220 | 9,4 | 230.363 | 14,5 | 292.550 | 18,5 |
Non-controlling interests | 1.985 | 0,4 | 1.183 | 0,2 | 212 | 0,0 | 7.320 | 0,4 | 3.734 | 0,2 | 732 | 0,0 |
46.248 | 10,0 | 72.772 | 14,7 | 85.104 | 18,6 | 164.540 | 9,8 | 234.097 | 14,8 | 293.282 | 18,5 | |
Other comprehensive income | ||||||||||||
Items that will never affect profit or loss | ||||||||||||
Exchange differences on translation | (39.336) | (8,5) | (6.485) | (1,3) | 32.679 | 7,1 | 158.984 | 9,5 | 7.713 | 0,5 | (172.470) | (10,9) |
Post-employment benefits | (187) | (0,0) | (374) | (0,1) | 1.130 | 0,2 | (829) | (0,0) | (1.238) | (0,1) | 3.683 | 0,2 |
Effective portion of changes in fair value of cash flow | 0,1 | 0,1 | 0,3 | 0,1 | 1.763 | 0,1 | 4.769 | 0,3 | ||||
hedges | 542 | 557 | 1.513 | 1.971 | ||||||||
Total comprehensive income for the year | 7.267 | 1,6 | 66.470 | 13,4 | 120.426 | 26,3 | 324.666 | 19,4 | 242.335 | 15,3 | 129.264 | 8,2 |
Total comprehensive income for the year attributable | ||||||||||||
to: | ||||||||||||
Owners of the Company | 5.436 | 1,2 | 65.321 | 13,2 | 120.096 | 26,3 | 317.382 | 18,9 | 238.601 | 15,1 | 128.687 | 8,1 |
Non-controlling interests | 1.831 | 0,4 | 1.149 | 0,2 | 330 | 0,1 | 7.284 | 0,4 | 3.734 | 0,2 | 577 | 0,0 |
7.267 | 1,6 | 66.470 | 13,4 | 120.426 | 26,3 | 324.666 | 19,4 | 242.335 | 15,3 | 129.264 | 8,2 | |
Earnings per share from continuing operations | ||||||||||||
Basic (cents per share) | 62,31c | 100,52c | 119,32c | 220,68c | 323,45c | 411,21c | ||||||
Diluted (cents per share) | 59,82c | 96,74c | 114,77c | 212,46c | 311,30c | 395,52c | ||||||
EBITDA | 160.616 | 34,9 | 172.355 | 37,7 | 154.191 | 33,7 | 585.866 | 34,9 | 550.454 | 34,7 | 534.212 | 33,7 |
104
Consolidated Statements | US$ | R$ | ||||||||
2018x2017 | 2017X2016 | 2018x2017 | 2017X2016 | |||||||
2018 | AH (%) | 2017 | AH (%) | 2016 | 2018 | AH (%) | 2017 | AH (%) | 2016 | |
Reveneus | 460.196 | (7,3) | 496.340 | 8,6 | 457.161 | 1.677.470 | 5,9 | 1.584.142 | (0,1) | 1.585.363 |
Raw Materials | (38.128) | 1,2 | (37.679) | (0,2) | (37.741) | (138.034) | 14,8 | (120.219) | (7,9) | (130.478) |
Employee expenses | (145.237) | (12,2) | (165.344) | 15,4 | (143.285) | (529.030) | 0,2 | (527.832) | 6,2 | (496.855) |
Depreciation & Amortisation | (56.175) | (2,3) | (57.480) | 9,3 | (52.584) | (204.844) | 11,6 | (183.542) | 0,7 | (182.298) |
Other Operating Expenses | (115.919) | (1,8) | (118.032) | (3,8) | (122.689) | (423.250) | 12,6 | (375.933) | (11,8) | (426.132) |
Profit on disposal of PP&E | (296) | (89,9) | (2.930) | (493,3) | 745 | (1.290) | (86,7) | (9.704) | (519,4) | 2.314 |
EBIT | 104.441 | (9,1) | 114.875 | 13,1 | 101.607 | 381.022 | 3,8 | 366.912 | 4,3 | 351.914 |
Share of Result of Joint Ventures | (4.062) | (220,7) | 3.366 | (58,3) | 8.073 | (15.150) | (243,1) | 10.584 | (60,1) | 26.510 |
Finance income | 5.243 | (53,3) | 11.227 | (51,3) | 23.042 | 19.185 | (46,9) | 36.142 | (55,4) | 81.038 |
Finance costs | (22.951) | 4,4 | (21.976) | 24,7 | (17.621) | (83.829) | 20,0 | (69.847) | 14,4 | (61.038) |
Exchange Gain (Loss) | (9.990) | (847,8) | 1.336 | (80,5) | 6.839 | (36.656) | (938,0) | 4.374 | (81,6) | 23.752 |
Profit before tax | 72.681 | (33,2) | 108.828 | (10,8) | 121.940 | 264.572 | (24,0) | 348.165 | (17,5) | 422.176 |
Income tax expense | (26.433) | (26,7) | (36.056) | (2,1) | (36.836) | (100.032) | (12,3) | (114.068) | (11,5) | (128.894) |
Profit | 46.248 | (36,4) | 72.772 | (14,5) | 85.104 | 164.540 | (29,7) | 234.097 | (20,2) | 293.282 |
Profit for the year attributable to: | ||||||||||
Owners of the Company | 44.263 | (38,2) | 71.589 | (15,7) | 84.892 | 157.220 | (31,8) | 230.363 | (21,3) | 292.550 |
Non-controlling interests | 1.985 | 67,8 | 1.183 | 458,0 | 212 | 7.320 | 96,0 | 3.734 | 410,1 | 732 |
46.248 | (36,4) | 72.772 | (14,5) | 85.104 | 164.540 | (29,7) | 234.097 | (20,2) | 293.282 | |
Other comprehensive income | ||||||||||
Items that will never affect profit or loss | ||||||||||
Exchange differences on translation | (39.336) | 506,6 | (6.485) | (119,8) | 32.679 | 158.984 | 1.961,2 | 7.713 | (104,5) | (172.470) |
Post-employment benefits | (187) | (50,0) | (374) | (133,1) | 1.130 | (829) | (33,0) | (1.238) | (133,6) | 3.683 |
Effective portion of changes in fair value of cash flow | (2,7) | (63,2) | 11,8 | (63,0) | 4.769 | |||||
hedges | 542 | 557 | 1.513 | 1.971 | 1.763 | |||||
Total comprehensive income for the year | 7.267 | (89,1) | 66.470 | (44,8) | 120.426 | 324.666 | 34,0 | 242.335 | 87,5 | 129.264 |
Total comprehensive income for the year attributable to: | ||||||||||
Owners of the Company | 5.436 | (91,7) | 65.321 | (45,6) | 120.096 | 317.382 | 33,0 | 238.601 | 85,4 | 128.687 |
Non-controlling interests | 1.831 | 59,4 | 1.149 | 248,2 | 330 | 7.284 | 95,1 | 3.734 | 547,1 | 577 |
7.267 | (89,1) | 66.470 | (44,8) | 120.426 | 324.666 | 34,0 | 242.335 | 87,5 | 129.264 | |
Earnings per share from continuing operations | ||||||||||
Basic (cents per share) | 62,31c | 100,52c | 119,32c | 220,68c | 323,45c | 411,21c | ||||
Diluted (cents per share) | 59,82c | 96,74c | 114,77c | 212,46c | 311,30c | 395,52c | ||||
EBITDA | 160.616 | (6,8) | 172.355 | 11,8 | 154.191 | 585.866 | 6,4 | 550.454 | 3,0 | 534.212 |
Analysis of Fiscal Year Result's Statement
1. 2018 x 2017
1.1 Net Revenue
IFRS revenues decreased 7.3% mainly due to (i) the reduction in towage revenues as a result of the more competitive environment, and (ii) the devaluation of the R$ against the US$.
1.2 Costs, Expenses, EBITDA and Net Profit
Despite cost reductions, EBITDA fell 6.8% in US$ terms to US$160.6M (2017: US$172.4M) mainly due to a decrease in towage results. In R$ terms EBITDA was 6.4% higher.
Raw material costs increased slightly reflecting an increase in shipyard activities due to offshore vessel conversions and tugboat construction.
105
Personnel expenses decreased 12.2% supported by the devaluation of the R$ against the US$. In R$ terms there was an increase of 3.0% due to the reinstatement of payroll taxes. Headcount was in line with prior year. Additionally, the 2017 comparative was negatively affected by one-off redundancy costs related to restructuring.
Depreciation reduced marginally due to the devaluation of the R$ against the US$ and its effects on R$ functional currency subsidiaries.
Profit was affected by the following foreign exchange effects on the consolidated income statement:
- a US$10.0M exchange loss caused by balance sheet translations of R$ denominated net monetary assets, such as net accounts payable, accounts receivable, and cash & cash equivalents in US$ functional currency subsidiaries;
- a net US$0.3M positive impact on deferred taxes principally a result of the balance between the Company's fixed assets and US$ loans. The R$ appreciation increased the net future tax deduction allowable of net assets and loans when converted to the US$ reporting currency; and
- an US$8.8M negative FX impact on investments and loans due to US$ denominated debt in R$ functional currency subsidiaries.
Profit decreased 36.4% to US$46.2M (2017: US$72.8M). Excluding the aforementioned exchange rate effects it would have been US$64.7M.
2. 2017 x 2016
2.1 Net Revenue
2017 Revenues in Reais were in line with 2016, mainly due to a weaker Real affecting the revenues; the reduced orderbook in the Shipyard and fewer Basco operations all had a negative impact, however, the positive numbers in the container terminals contributed to maintaining the previous year's level.
2.2 Costs, Expenses, EBITDA and Net Profit
EBITDA increased 11.8% YoY due to higher revenues and non-recurring FUNDAF effects, despite the increase in costs.
Raw Material costs remained in line, with the reduction of Shipyard's operating materials offset by the increase in fuel costs, as well as a reduction in tugs rental.
Personnel Expenses increased YoY, despite a 7.4% reduction in the number of employees. The increase in costs reflects
- the provision for contingencies; (ii) non-recurring redundancy costs related to the restructuring; (iii) tax burden on employees' payroll in July, repealed by the government in August; and (iv) provision for bonuses and the annual salary adjustment required by law.
The Result of the Sale of Property, Plant and Equipment included depreciation of improvements in a leased depot that is no longer used by the Company.
Expenses with higher interest due to the increase in the debt amount.
Depreciation increased mainly due to a stronger Real and its effects on subsidiaries with functional currency in Reais, as well as due to the investments made in 2016.
The Net Profit for the year was affected by the following exchange rate effects in our consolidated income statement:
- an exchange gain of US$ 1.3 million as a result of the balance conversion of net monetary assets denominated in R$, such as net accounts payable and receivable, cash and cash equivalents;
- a net positive impact of US$ 0.2 million on deferred income tax, mainly due to the Company's, plant and equipment and the loans in US$. With a stronger R$, the future tax deduction allowed for net assets and loans represents a greater value when converted to US$, which is the Company's reporting currency; and
106
- a positive impact of the foreign exchange on investments and loans in the amount of US$ 0.8 million due to the debt in US$ of the subsidiaries reporting in R$.
3. 2016 x 2015
3.1 Net Revenue
There was a 10.2% reduction of revenues in Reais in 2016, mainly due to a weaker Real affecting the revenues; the reduced orderbook in the Shipyard and fewer dedicated operations in Logistics.
3.2 Costs, Expenses, EBITDA and Net Profit
EBITDA decreased by 8% in 2016, with Costs and Expenses being affected by a stronger Real.
Inputs and Raw Materials were impacted by a stronger Real as well as the reduction in third party Shipyard's activities and Oil & Fuel.
Personnel Expenses were impacted by a weaker Real and fewer employees, since businesses such as Shipyard, Logistics, Brasco and Corporate sought greater efficiency. Other Operating Expenses were reduced with lower amounts of freight, rents and outsourced services, mainly due to some dedicated Logistics operations being discontinued.
Interest on Financial Investments increased due to higher interest rates and greater cash balances.
Expenses with higher interest due to the increase in the debt amount.
Depreciation and Amortization benefited from the renewal of the Containers Terminal concession in Salvador for an additional 25 years as well as from other improvements in the assets lifespan, offsetting a greater asset base and a stronger foreign exchange rate in R$. The net profit for the fiscal year was affected by three significant exchange rate effects on our consolidated balance sheet due to a stronger Real:
- Firstly, the exchange gains of US$ 6.8m as a result of the conversions of the Balance Sheet net monetary assets denominated in R$, such as net accounts receivable and payable, cash and cash equivalents;
- Secondly, a net positive impact of US$ 8.1 million in Deferred Income Tax, mainly due to the Company's Property, Plant and Equipment and loans in US$. When the R$ is stronger, the future tax deduction allowed for net assets and debt is lower when converted to US$, the reporting currency; and
- Thirdly, a positive impact on investments and loans in the amount of US$ 8.6 million due to the debts in US$ of the subsidiaries that have the Real as their functional currency.
The Net Profit with a constant exchange rate (excluding the three items identified above) would be US$ 63.9m in 2016 versus US $ 81.9m in the comparative year, a 22.0% increase.
Balance Sheet
107
Consolidated statements of financial position | US$ | R$ | |||||||||||
2018 | AV (%) | 2017 | AV (%) | 2016 | 2018 | AV (%) | 2017 | AV (%) | 2016 | AV (%) | |||
Assets | |||||||||||||
Non-current assets | |||||||||||||
Goodwill | 27.515 | 2,9 | 30.319 | 2,9 | 30.607 | 106.615 | 2,9 | 100.295 | 2,9 | 99.751 | 3,0 | ||
Other intangible assets | 25.468 | 2,7 | 30.592 | 2,9 | 30.444 | 98.683 | 2,7 | 101.198 | 2,9 | 99.220 | 2,9 | ||
Property, plant and equipment | 602.451 | 63,4 | 634.878 | 60,9 | 646.922 | 2.334.377 | 63,4 | 2.100.176 | 60,9 | 2.108.383 | 62,4 | ||
Deferred tax assets | 28.223 | 3,0 | 28.639 | 2,7 | 29.055 | 109.358 | 3,0 | 94.738 | 2,7 | 94.693 | 2,8 | ||
Investment in joint ventures | 26.528 | 2,8 | 26.644 | 2,6 | 22.230 | 102.791 | 2,8 | 88.138 | 2,6 | 72.450 | 2,1 | ||
Other trade receivables | 55.890 | 5,9 | 58.104 | 5,6 | 55.070 | 216.564 | 5,9 | 192.208 | 5,6 | 179.479 | 5,3 | ||
Other non-current assets | 7.446 | 0,8 | 9.535 | 0,9 | 13.408 | 28.852 | 0,8 | 31.543 | 0,9 | 43.698 | 1,3 | ||
Total non-current assets | 773.521 | 81,4 | 818.711 | 78,5 | 827.736 | 2.997.240 | 81,4 | 2.708.296 | 78,5 | 2.697.674 | 79,8 | ||
Current assets | - | - | - | - | - | - | |||||||
Inventories | 10.875 | 1,1 | 13.773 | 1,3 | 15.427 | 42.138 | 1,1 | 45.561 | 1,3 | 50.278 | 1,5 | ||
Operational trade receivables | 57.627 | 6,1 | 57.980 | 5,6 | 54.247 | 223.291 | 6,1 | 191.799 | 5,6 | 176.797 | 5,2 | ||
Other trade receivables | 39.208 | 4,1 | 40.583 | 3,9 | 27.018 | 151.925 | 4,1 | 134.247 | 3,9 | 88.053 | 2,6 | ||
Short-term investments | 29.110 | 3,1 | 31.636 | 3,0 | 37.400 | 112.794 | 3,1 | 104.652 | 3,0 | 121.890 | 3,6 | ||
Cash and cash equivalents | 39.924 | 4,2 | 80.099 | 7,7 | 75.001 | 154.699 | 4,2 | 264.967 | 7,7 | 244.436 | 7,2 | ||
Total current assets | 176.744 | 18,6 | 224.071 | 21,5 | 209.093 | 684.847 | 18,6 | 741.226 | 21,5 | 681.454 | 20,2 | ||
Total assets | 950.265 | 100,0 | 1.042.782 | 100,0 | 1.036.829 | 3.682.087 | 100,0 | 3.449.522 | 100,0 | 3.379.128 | 100,0 | ||
Equity and liabilities | |||||||||||||
- | - | ||||||||||||
Capital and reserves | - | - | - | - | - | - | |||||||
Share capital | 9.916 | 1,9 | 9.913 | 1,8 | 9.905 | 26.852 | 1,3 | 26.842 | 1,5 | 26.815 | 1,6 | ||
Capital reserves | 90.121 | 17,5 | 89.934 | 16,4 | 89.196 | 190.923 | 9,5 | 190.191 | 10,5 | 187.817 | 11,2 | ||
Profit reserve and derivatives | 1.163 | 0,2 | 620 | 0,1 | 61 | 2.814 | 0,1 | 841 | 0,0 | (928) | (0,1) | ||
Share Options | 13.424 | 2,6 | 12.121 | 2,2 | 9.790 | 32.159 | 1,6 | 29.237 | 1,6 | 23.461 | 1,4 | ||
Retained earnings | 502.946 | 97,4 | 497.312 | 90,8 | 463.094 | 1.196.861 | 59,8 | 1.173.542 | 64,8 | 1.062.104 | 63,1 | ||
Translation reserve | - 101.979 | (19,8) | (62.779) | (11,5) | (56.328) | 548.204 | 27,4 | 389.220 | 21,5 | 381.507 | 22,7 | ||
Equity attributable to owners of the Company | 515.591 | 99,9 | 547.121 | 99,9 | 515.718 | 1.997.813 | 99,9 | 1.809.873 | 99,9 | 1.680.776 | 99,9 | ||
Non-controlling interests | 523 | 0,1 | 527 | 0,1 | 770 | 2.028 | 0,1 | 1.744 | 0,1 | 2.510 | 0,1 | ||
Total equity | 516.114 | 100,0 | 547.648 | 100,0 | 516.488 | 1.999.841 | 100,0 | 1.811.617 | 100,0 | 1.683.286 | 100,0 | ||
Non-current liabilities | - | - | - | - | - | - | |||||||
Bank loans | 247.097 | 56,9 | 300.436 | 60,7 | 325.750 | 957.451 | 56,9 | 993.842 | 60,7 | 1.061.651 | 62,6 | ||
Deferred tax liabilities | 50.023 | 11,5 | 51.531 | 10,4 | 48.974 | 193.829 | 11,5 | 170.465 | 10,4 | 159.611 | 9,4 | ||
Derivatives | - | - | 395 | 0,1 | 1.182 | - | - | 1.306 | 0,1 | 3.852 | 0,2 | ||
Post-employment benefits | 1.190 | 0,3 | 1.083 | 0,2 | 648 | 4.612 | 0,3 | 3.583 | 0,2 | 2.111 | 0,1 | ||
Provisions for tax, labour and civil risks | 17.335 | 4,0 | 18.232 | 3,7 | 20.037 | 67.168 | 4,0 | 60.311 | 3,7 | 65.303 | 3,9 | ||
Obligations under finance leases | 59 | 0,0 | 309 | 0,1 | 1.085 | 229 | 0,0 | 1.022 | 0,1 | 3.536 | 0,2 | ||
Total non-current liabilities | 315.704 | 72,7 | 371.986 | 75,1 | 397.676 | 1.223.289 | 72,7 | 1.230.529 | 75,1 | 1.296.064 | 76,4 | ||
Current liabilities | - | - | - | - | - | - | |||||||
Bank loans | 60.209 | 13,9 | 54.288 | 11,0 | 49.780 | 233.298 | 13,9 | 179.585 | 11,0 | 162.238 | 9,6 | ||
Operational trade payables | 37.872 | 8,7 | 44.718 | 9,0 | 49.042 | 146.747 | 8,7 | 147.928 | 9,0 | 159.833 | 9,4 | ||
Other trade payables | 19.179 | 4,4 | 18.987 | 3,8 | 18.621 | 74.314 | 4,4 | 62.809 | 3,8 | 60.687 | 3,6 | ||
Derivatives | 422 | 0,1 | 1.108 | 0,2 | 712 | 1.635 | 0,1 | 3.665 | 0,2 | 2.322 | 0,1 | ||
Current tax liabilities | 719 | 0,2 | 3.201 | 0,6 | 3.299 | 2.785 | 0,2 | 10.590 | 0,6 | 10.751 | 0,6 | ||
Obligations under finance leases (2) | 46 | 0,0 | 846 | 0,2 | 1.211 | 178 | 0,0 | 2.799 | 0,2 | 3.947 | 0,2 | ||
Total current liabilities | 118.447 | 27,3 | 123.148 | 24,9 | 122.665 | 458.957 | 27,3 | 407.376 | 24,9 | 399.778 | 23,6 | ||
Total liabilities | 434.151 | 100,0 | 495.134 | 100,0 | 520.341 | 1.682.246 | 100,0 | 1.637.905 | 100,0 | 1.695.842 | 100,0 | ||
Total equity and liabilities | |||||||||||||
950.265 | 1.042.782 | 1.036.829 | 3.682.087 | 3.449.522 | 3.379.128 |
108
Consolidated statements of financial position | US$ | R$ | ||||||||
2018x2017 | 2017x2016 | 2018x2017 | 2017x2016 | |||||||
2018 | 2017 | AH (%) | 2016 | AH (%) | 2018 | 2017 | AH (%) | 2016 | AH (%) | |
Assets | ||||||||||
Non-current assets | ||||||||||
Goodwill | 27.515 | 30.319 | (9,2) | 30.607 | (0,9) | 106.615 | 100.295 | 6,3 | 99.751 | 0,5 |
Other intangible assets | 25.468 | 30.592 | (16,7) | 30.444 | 0,5 | 98.683 | 101.198 | (2,5) | 99.220 | 2,0 |
Property, plant and equipment | 602.451 | 634.878 | (5,1) | 646.922 | (1,9) | 2.334.377 | 2.100.176 | 11,2 | 2.108.383 | (0,4) |
Deferred tax assets | 28.223 | 28.639 | (1,5) | 29.055 | (1,4) | 109.358 | 94.738 | 15,4 | 94.693 | 0,0 |
Investment in joint ventures | 26.528 | 26.644 | (0,4) | 22.230 | 19,9 | 102.791 | 88.138 | 16,6 | 72.450 | 21,7 |
Other trade receivables | 55.890 | 58.104 | (3,8) | 55.070 | 5,5 | 216.564 | 192.208 | 12,7 | 179.479 | 7,1 |
Other non-current assets | 7.446 | 9.535 | (21,9) | 13.408 | (28,9) | 28.852 | 31.543 | (8,5) | 43.698 | (27,8) |
Total non-current assets | 773.521 | 818.711 | (5,5) | 827.736 | (1,1) | 2.997.240 | 2.708.296 | 10,7 | 2.697.674 | 0,4 |
Current assets | - | - | - | - | - | - | ||||
Inventories | 10.875 | 13.773 | (21,0) | 15.427 | (10,7) | 42.138 | 45.561 | (7,5) | 50.278 | (9,4) |
Operational trade receivables | 57.627 | 57.980 | (0,6) | 54.247 | 6,9 | 223.291 | 191.799 | 16,4 | 176.797 | 8,5 |
Other trade receivables | 39.208 | 40.583 | (3,4) | 27.018 | 50,2 | 151.925 | 134.247 | 13,2 | 88.053 | 52,5 |
Short-term investments | 29.110 | 31.636 | (8,0) | 37.400 | (15,4) | 112.794 | 104.652 | 7,8 | 121.890 | (14,1) |
Cash and cash equivalents | 39.924 | 80.099 | (50,2) | 75.001 | 6,8 | 154.699 | 264.967 | (41,6) | 244.436 | 8,4 |
Total current assets | 176.744 | 224.071 | (21,1) | 209.093 | 7,2 | 684.847 | 741.226 | (7,6) | 681.454 | 8,8 |
Total assets | 950.265 | 1.042.782 | (8,9) | 1.036.829 | 0,6 | 3.682.087 | 3.449.522 | 6,7 | 3.379.128 | 2,1 |
Equity and liabilities | ||||||||||
- | ||||||||||
Capital and reserves | - | - | - | - | - | - | ||||
Share capital | 9.916 | 9.913 | 0,0 | 9.905 | 0,1 | 26.852 | 26.842 | 0,0 | 26.815 | 0,1 |
Capital reserves | 90.121 | 89.934 | 0,2 | 89.196 | 0,8 | 190.923 | 190.191 | 0,4 | 187.817 | 1,3 |
Profit reserve and derivatives | 1.163 | 620 | 87,6 | 61 | 916,4 | 2.814 | 841 | 234,6 | (928) | (190,6) |
Share Options | 13.424 | 12.121 | 10,7 | 9.790 | 23,8 | 32.159 | 29.237 | 10,0 | 23.461 | 24,6 |
Retained earnings | 502.946 | 497.312 | 1,1 | 463.094 | 7,4 | 1.196.861 | 1.173.542 | 2,0 | 1.062.104 | 10,5 |
Translation reserve | - 101.979 | (62.779) | 62,4 | (56.328) | 11,5 | 548.204 | 389.220 | 40,8 | 381.507 | 2,0 |
Equity attributable to owners of the Company | 515.591 | 547.121 | (5,8) | 515.718 | 6,1 | 1.997.813 | 1.809.873 | 10,4 | 1.680.776 | 7,7 |
Non-controlling interests | 523 | 527 | (0,8) | 770 | (31,6) | 2.028 | 1.744 | 16,3 | 2.510 | (30,5) |
Total equity | 516.114 | 547.648 | (5,8) | 516.488 | 6,0 | 1.999.841 | 1.811.617 | 10,4 | 1.683.286 | 7,6 |
Non-current liabilities | - | - | - | - | - | - | ||||
Bank loans | 247.097 | 300.436 | (17,8) | 325.750 | (7,8) | 957.451 | 993.842 | (3,7) | 1.061.651 | (6,4) |
Deferred tax liabilities | 50.023 | 51.531 | (2,9) | 48.974 | 5,2 | 193.829 | 170.465 | 13,7 | 159.611 | 6,8 |
Derivatives | - | 395 | - | 1.182 | (66,6) | - | 1.306 | - | 3.852 | (66,1) |
Post-employment benefits | 1.190 | 1.083 | 9,9 | 648 | 67,1 | 4.612 | 3.583 | 28,7 | 2.111 | 69,7 |
Provisions for tax, labour and civil risks | 17.335 | 18.232 | (4,9) | 20.037 | (9,0) | 67.168 | 60.311 | 11,4 | 65.303 | (7,6) |
Obligations under finance leases | 59 | 309 | (80,9) | 1.085 | (71,5) | 229 | 1.022 | (77,6) | 3.536 | (71,1) |
Total non-current liabilities | 315.704 | 371.986 | (15,1) | 397.676 | (6,5) | 1.223.289 | 1.230.529 | (0,6) | 1.296.064 | (5,1) |
Current liabilities | - | - | - | - | - | - | ||||
Bank loans | 60.209 | 54.288 | 10,9 | 49.780 | 9,1 | 233.298 | 179.585 | 29,9 | 162.238 | 10,7 |
Operational trade payables | 37.872 | 44.718 | (15,3) | 49.042 | (8,8) | 146.747 | 147.928 | (0,8) | 159.833 | (7,4) |
Other trade payables | 19.179 | 18.987 | 1,0 | 18.621 | 2,0 | 74.314 | 62.809 | 18,3 | 60.687 | 3,5 |
Derivatives | 422 | 1.108 | (61,9) | 712 | 55,6 | 1.635 | 3.665 | (55,4) | 2.322 | 57,8 |
Current tax liabilities | 719 | 3.201 | (77,5) | 3.299 | (3,0) | 2.785 | 10.590 | (73,7) | 10.751 | (1,5) |
Obligations under finance leases (2) | 46 | 846 | (94,6) | 1.211 | (30,1) | 178 | 2.799 | (93,6) | 3.947 | (29,1) |
Total current liabilities | 118.447 | 123.148 | (3,8) | 122.665 | 0,4 | 458.957 | 407.376 | 12,7 | 399.778 | 1,9 |
Total liabilities | 434.151 | 495.134 | (12,3) | 520.341 | (4,8) | 1.682.246 | 1.637.905 | 2,7 | 1.695.842 | (3,4) |
Total equity and liabilities | (8,9) | 0,6 | 6,7 | 2,1 | ||||||
950.265 | 1.042.782 | 1.036.829 | 3.682.087 | 3.449.522 | 3.379.128 |
Balance Sheet Analysis
1. 2018 x 2017
1.1. Cash and cash equivalents
The R$ 102.1 million decrease was significantly inferior in comparison to 2017, reflecting mainly:
- Purchase of property, plant and equipment and intangible assets in the amount of R$ 227.3 million (101.8% above 2017), given lower investments in the comparative period;
- Payment of dividends, totaling R$ 133.1 million (13.1% more than 2017);
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- Fundraising in the amount of R$ 34.5 million (12.5% less than 2017).
1.2 Accounts receivable - Current and Non-current
The R$ 73.5 million increase (equivalent to a 14.2% increase) mainly due to the payment of Constremac to commence Tecon Salvador expansion.
1.3. Property, Plant and Equipment
The property, plant and equipment increased 11,2% against the comparative (equivalent to an increase of R$234.2 million) with a special mention to:
- CAPEX totaling R$ 220.4 million, the main investments in the period being related to the construction of new tugs, programmed dry-docking operations, and the civil work for Tecon Salvador expansion;
- Depreciation totaling R$ 192.3 million.
1.4 Suppliers - Current
The R$ 10.3 million increase (equivalent to 4.9%) mainly reflects the weaker R$ average exchange rate against the US$. In R$ terms, it decreased 10.4%.
1.5. Financings
Total financings increased to R$ 1,190.7 million (equivalent to a 1.5%), mainly related to the the weaker R$ average exchange rate against the US$, since as of December 31, 2018, 94.9% of the debt was pegged to the dollar.
2. 2017 x 2016
2.1. Cash and cash equivalents
The R$ 3.3 million increase was in line with 2016, reflecting mainly:
- Operating cash generation of R$ 348.2 million (6.6% higher than 2016);
- Purchase of property, plant and equipment and intangible assets in the amount of R$ 112.7 million (68.5% less than 2016), given higher investments in the comparative period;
- Payment of dividends, totaling R$ 117.7 million (6.7% less than 2016);
- Fundraising in the amount of R$ 39.5 million (74.5% less than 2016), reflecting a lower level of investments than in recent years.
2.2 Accounts receivable - Current and Non-current
The R$ 73.9 million increase (equivalent to a 16.6% increase) mainly due to taxes and recoverable contributions.
2.3. Property, Plant and Equipment
The property, plant and equipment were in line with the comparative, with a reduction of R$ 8.2 million (equivalent to a
0.4% reduction) with a special mention to:
- CAPEX totaling R$ 161.9 million, the main investments in the period being related to the construction of new tugs and equipment for the Terminals and
- Depreciation totaling R$ 171.9 million.
2.4 Suppliers - Current
The R$ 9.8 million reduction (equivalent to a reduction of 4.4%) mainly reflects the reduced orderbook in the shipyard operational accounts payable (suppliers), due to the lower volume of activities and suppliers of vessel construction parts.
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2.5. Financings
Total financings decreased to R$ 1,173.4 million (equivalent to a 4.1% reduction), mainly related to the amounts amortized throughout 2017 in the amount of R$ 175.0 million.
3. 2016 x 2015
3.1. Cash and cash equivalents
The R$ 145.7 million reduction (equivalent to a reduction of 28%) mainly reflects:
- Operating cash generation of R$ 326.8 million (36.6% lower than 2015);
- Purchase of property, plant and equipment and intangible assets in the amount of R$ 358.0 million (60% higher than 2015), given lower investments in the comparative period;
- Payment of dividends totaling R$ 125.7 million (43.3% higher than 2015);
- Fundraising in the amount of R$ 155.3 million (38.3% higher than 2015), mainly related to investments in the Port Operation (Tecon Rio Grande) and Towage segments.
3.2 Accounts receivable - Current and Non-current
The R$ 41.9 million reduction (equivalent to a reduction of 144.1%) is mainly due a reduction in operating accounts receivable (customers), which is a reflection of lower revenues.
3.3. Property, Plant and Equipment
The R$ 67.3 million reduction in property, plant and equipment (equivalent to a reduction of 3%) is mainly due to:
- CAPEX totaling R$ 342.6 million, the main investments in the period being related to the acquisition of new tugs and equipment for the Terminals;
- Loss on foreign currency conversion into the Real totaling R$ 236.3 million, due to the dollar exchange rate variation in the period; and
- Depreciation totaling R$ 164.0 million.
3.4 Suppliers - Current
The R$ 85.1 million reduction (equivalent to a 27.8% increase) is mainly due the reduced orderbook in the shipyard accounts payable (suppliers), which is a reflection of the lower volume of activities and suppliers of vessel construction parts.
3.5. Financings
Total financing decreased to R$ 1,223.9 million (equivalent to a reduction of 13.8%), mainly due to a stronger Real, since as of December 31, 2016, 91.8% of the debt was pegged to the dollar (December 31, 2015: 91.8%) (December 31, 2014: 87.0%) in addition to the fundraising in the period.
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10.2 Operating and financial results
- resultados das operações do emissor, em especial:
Next, we present comments on the Company's financial and economic performance. All information presented herein, except if otherwise indicated, are expressed in US Dollars (Dollars or US$) and are in compliance with the International Financial Reporting Standards. The operational and financial performance of Wilson Sons is directly influenced by two main factors: (i) domestic and international commerce behavior; and (ii) oil and gas local industry dynamics.
Financial Highlights - In million | US$ | R$ | |||||||||||||
2018 x 2017 | 2017 x 2016 | 2016 x 2015 | 2018 x 2017 | 2017 x 2016 | 2016 x 2015 | ||||||||||
2018 | AH (%) | 2017 | AH (%) | 2016 | AH (%) | 2015 | 2018 | AH (%) | 2017 | AH (%) | 2016 | AH (%) | 2015 | ||
Net Reveneus | 460.2 | -7.3 | 496.3 | 8.6 | 457.2 | -10.2 | 509.3 | 1,677.5 | 5.9 | 1,584.1 | -0.1 | 1,585.4 | -5.8 | 1,683.2 | |
Container Terminals | 183.0 | -2.4 | 187.4 | 26.3 | 148.3 | -2.7 | 152.5 | 668.4 | 11.7 | 598.3 | 16.9 | 511.8 | 1.5 | 504.3 | |
Oil & Gas Support Base ("Brasco") | 20.8 | 32.6 | 15.7 | -19.2 | 19.4 | -17.2 | 23.5 | 75.9 | 51.5 | 50.1 | -26.5 | 68.1 | -11.7 | 77.2 | * |
Towage | 165.6 | -19.9 | 206.8 | 0.5 | 205.7 | -3.9 | 214.1 | 603.4 | -8.6 | 660.0 | -7.8 | 715.6 | 0.4 | 712.6 | |
Logistics | 56.9 | 4.0 | 54.7 | 26.3 | 43.3 | -13.1 | 49.9 | 207.5 | 18.9 | 174.5 | 15.7 | 150.8 | -7.2 | 162.6 | |
Shipyards | 24.0 | 13.1 | 21.2 | -19.7 | 26.4 | -51.0 | 53.9 | 85.9 | 27.1 | 67.6 | -25.4 | 90.5 | -48.3 | 175.2 | * |
Ship Agency | 10.0 | -11.9 | 11.3 | -18.8 | 13.9 | -9.7 | 15.4 | 36.3 | 0.8 | 36.1 | -25.6 | 48.4 | -5.6 | 51.3 | |
EBITDA | 160.6 | -6.8 | 172.4 | 11.8 | 154.2 | -8.1 | 167.8 | 585.9 | 6.4 | 550.5 | 3.0 | 534.2 | -4.2 | 557.5 | |
Container Terminals | 83.6 | 1.5 | 82.4 | 36.8 | 60.2 | -9.9 | 66.9 | 305.5 | 16.2 | 262.9 | 26.9 | 207.2 | -6.6 | 221.8 | |
Oil & Gas Support Base ("Brasco") | 5.1 | 321.0 | 1.2 | -63.5 | 3.3 | -43.8 | 5.8 | 18.1 | 353.4 | 4.0 | -66.5 | 11.9 | -38.4 | 19.3 | * |
Towage | 79.4 | -22.5 | 102.4 | -1.3 | 103.8 | 3.2 | 100.6 | 290.9 | -11.1 | 327.3 | -9.2 | 360.4 | 7.2 | 336.3 | |
Logistics | 7.1 | 319.6 | 1.7 | -172.3 | -2.4 | -179.8 | 2.9 | 26.2 | 378.3 | 5.5 | -174.8 | -7.3 | -199.4 | 7.4 | |
Shipyards | 2.7 | 28.9 | 2.1 | -48.6 | 4.1 | -52.3 | 8.6 | 9.9 | 45.9 | 6.8 | -50.1 | 13.7 | -52.1 | 28.5 | * |
Ship Agency | 1.2 | -6.3 | 1.3 | -70.9 | 4.5 | 21.5 | 3.7 | 4.7 | 15.7 | 4.1 | -73.4 | 15.3 | 23.2 | 12.4 | |
Corporate | -18.5 | -1.1 | -18.7 | -3.1 | -19.3 | -6.5 | -20.6 | -69.5 | 15.5 | -60.1 | -10.2 | -66.9 | -1.9 | -68.2 | |
EBIT | 104.4 | -9.1 | 114.9 | 13.1 | 101.6 | -11.3 | 114.6 | 381.0 | 3.8 | 366.9 | 4.3 | 351.9 | -8.1 | 382.7 | |
Container Terminals | 64.1 | 2.8 | 62.4 | 49.8 | 41.7 | -11.4 | 47.0 | 234.6 | 17.8 | 199.1 | 39.2 | 143.0 | -9.4 | 157.8 | |
Oil & Gas Support Base ("Brasco") | 1.7 | -168.2 | -2.5 | 2336.5 | -0.1 | -102.8 | 3.6 | 5.9 | -173.3 | -8.1 | -3153.2 | 0.3 | -97.8 | 12.1 | |
Towage | 51.1 | -32.4 | 75.6 | -5.7 | 80.1 | -1.1 | 81.0 | 187.6 | -22.4 | 241.6 | -13.2 | 278.4 | 2.3 | 272.2 | |
Logistics | 5.6 | n.a. | 0.0 | -100.0 | -4.0 | 149.2 | -1.6 | 20.7 | 11030.3 | 0.2 | -101.4 | -13.1 | 50.8 | -8.7 | |
Shipyards | 1.0 | -436.1 | -0.3 | -109.4 | 3.2 | -60.2 | 8.1 | 3.9 | -516.9 | -0.9 | -108.7 | 10.7 | -59.9 | 26.8 | |
Ship Agency | 1.0 | 9.6 | 0.9 | -77.8 | 4.1 | 20.6 | 3.4 | 3.9 | 25.3 | 3.1 | -77.8 | 13.9 | 22.0 | 11.4 | |
Corporate | -20.2 | -4.9 | -21.2 | -9.2 | -23.3 | -13.1 | -26.8 | -75.5 | 10.8 | -68.1 | -16.2 | -81.3 | -8.5 | -88.9 | |
Share of result of Joint Ventures* | -4.1 | -220.7 | 3.4 | -58.3 | 8.1 | 66.7 | 4.8 | -100.0 | 10.6 | -60.1 | 26.5 | 54.1 | 17.2 | ||
* Corresponds to 50% of results from Offshore Vessels JV. |
Comparison of result per business 2018 x 2017:
1. Highlights per Business
1.1. Container Terminals and Oil & Gas Terminal
In 2018, the net revenue from Containers Terminals achieved US$ 183.0 million, 2.4% higher than the previous year. EBITDA presented a growth of 1.5% in 2018, being US$ 83.6 million for the year and US$ 82.4 million for the previous year. Results were negatively affected by the devaluation of the R$ against the US$.
1.2. Brasco presented an increase of 32.6% and 321.0% in the net revenue and EBITDA, respectively, with the increase in vessel turnarounds, despite the backdrop of a continuing constrained oil sector. Logistics
The logistics business has focused its efforts in the development of customs terminals with associated logistics and transportation centers, together with the operation of Non Vessel Operating Common Carrier, Allink.
In 2018, it had an increase of 4.0% in net revenue, especially, due to an increase in the volumes of customs storage and contribution of Allink.
1.3. Towage
In 2018, net revenue decreased 19.9% compared to the previous year, and EBITDA fell 22.5%, pressured by a more competitive environment impacting both volumes and prices, despite strong cost-reduction and efficiency improvement initiatives.
- Offshore Support Vessels
- Net profit includes the interest of 50% of the Company in the joint venture Wilson Sons Ultratug Offshore ("WSUT"). Net profit of US$ -4.1 million was negatively affected with the end of eight long-term contracts in 2018.
Shipyard
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As a result of the increase in the construction of vessels to third parties and dry-docking operations, net revenue had an increase of 13.1%. This same factor and cost-reduction and efficiency iniciatives benefitted EBITDA in 28.9%.
The shipyard's construction orderbook consisted of one 90-tonne bollard pull tugboat for Wilson Sons, expected to be delivered in the beginning of 2H19. There are also 22 dry-docking operations scheduled for 2019, including 11 tugboats for Wilson Sons, 10 tugs for third parties, and one PSV for WSUT JV.
Comparison of result per business 2017 x 2016:
1. Highlights per Business
1.1 Container Terminals and Oil & Gas Terminal
In 2017, the net revenue from Containers Terminals achieved US$ 187.4 million, 26.4% higher than the previous year. EBITDA presented a growth of 36.8% in 2017, being US$ 82.4 million for the year and US$ 60.2 million for the previous year. Such results are resulted from a more profitable revenue mix.
Brasco presented a decrease of 19.3% and 62.6% in the net revenue and EBITDA, respectively. The results reflect the challenging scenario in the sector of oil and gas, despite the increase in the number of berths.
1.2 Logistics
The logistics business has focused its efforts in the development of customs terminals with associated logistics and transportation centers, together with the operation of Non Vessel Operating Common Carrier, Allink.
In 2017, it had an increase of 26.2% in net revenue, especially, due to an increase in the volumes of customs storage and contribution of Allink.
1.3 Towage
Although it is a more competitive environment, the business reported higher volumes of port operations, showing its strength. In 2017, the net revenues remained aligned with the previous year and, the EBITDA, had a small reduction of 1.3% due to the reduction in the number of special operations, reflecting the reduced demand in the oil and gas sector.
1.4 Offshore Support Vessels
Net profit includes the interest of 50% of the Company in the joint venture Wilson Sons Ultratug Offshore ("WSUT"). With the renegotiation of new contractual terms with Petrobras, net profit totaled US$ 3.4 million, representing a decrease of 58% when compared to the last year.
1.5 Shipyards
As a result of the reduction in the construction of vessels to third parties, net revenue had a decrease of 19.6%. The same factor explains the decrease of 47.8% of EBITDA (2017: US$ 2.1 million (2016: US$ 4.1 million)).
The Shipyard's parcel portfolio comprises four vessels, including two 80-tons bollard pulls for Wilson Sons, with the delivery projected for 2018 and 2019, and two 70-tons bollard pulls for third parties, with delivery projected for 2018. There are also 15 dockage operations projected for 2018, including five tugs for Wilson Sons, two PSVs for WSUT, and seven tugs and one sheerleg for third parties.
Comparison of results per business 2016 x 2015:
2. Highlights per Business
1.1 Container Terminals and Oil & Gas Terminal
In 2016, the net revenue from Containers Terminals achieved US$ 148.3 million, 2.7% lower than the previous year. EBITDA presented a reduction of 9.9% in 2016, being R$ 60.2 million for such year and US$ 66.9 million for the previous year. These results are from the worse mix of revenues and from a modest international demand.
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Brasco presented a reduction of 17.2% and 43.8% in the net revenue and EBITDA, respectively. The results are due to the amount of berthing and the ongoing weak scenario of the industry in 2016.
1.2 Logistics
The logistics business has focused its efforts in the development of the customs terminals with associated logistics and transportation centers, together with the operations of Non Vessel Operating Common Carrier, Allink.
The reduction of 13.1% in the net revenue is resulted from the end of dedicated operations throughout the past years.
1.3 Towage
The net revenue decreased in 3.9% (2016: US$ 205.7 million (2015: US$ 214.1 million)), the revenues were negatively impacted by the reduction in the volume of special operations. In 2015, the towage revenue decreased 19.6%, especially from certain special operations occurred during the year, however, even so, there was a negative impact due to the consolidation of certain liners ship-owners and the depreciation of the Brazilian Real resulting in lower revenues.
1.4 Offshore Support Vessels
Net profit includes the interest of 50% of the Company in the joint venture Wilson Sons Ultratug Offshore ("WSUT"). Net Profit totaled US$ 8.1 million, an increase of 67% when compared to the previous year, result of the Brazilian Real's appreciation, of the commencement of operations of the PSVs 5000 Larus and Pinguim, whose daily rates are above the average of the fleet, and Albatroz, Fragata and Gaivota in operation during 2016.
1.5 Shipyards
The net revenue decreased 51% (2016: US$ 26.4 million (2015: US$ 53.9 million)) as a reflex of a reduced orderbook of
the shipyard. Such factor is the reason for the decrease of 52.3% of the EBITDA (2016: US$4.1 million (2015: US$8.6 million)).
The Shipyard's parcel portfolio includes six tugs for Wilson Sons' fleet and another two tugs for Saam Smit.
b. changes in revenues due to variations in prices, exchange rates, inflation and volume and to the introduction of new products and services
See item 10.1 and 10.2.
c. impact of inflation, price variation of the main inputs and products, exchange rate and interest rate in the operating result and financial result of the issuer
See item 10.1 and 10.2.
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10.3. Officers should comment on the material effects that the events below have caused or are expected to cause the financial statements of the issuer and its results:
- introducing or sale operating segment
There was no introduction or sale of Company operating segments.
- constitution, acquisition or disposal of equity interest
There was no constitution, acquisition or disposal of equity interest.
- unusual events or transactions
There were no unusual events or relevant transactions for the required periods.
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10.4 Significant changes in accounting practices - qualifications and emphases in the auditor's opinion report
- Changes in accounting policies and disclosures
The Group applied IFRS 15 and IFRS 9 for the first time. The nature and effect of the changes as a result of adoption of these new accounting standards are described below.
Several other amendments and interpretations apply for the first time in 2018, but do not have an impact on the consolidated financial statements of the Group. The Group has not early adopted any standards, interpretations or amendments that have been issued, but are not yet effective.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 supersedes IAS 11 Construction Contracts, IAS 18 Revenue and related Interpretations and it applies, with limited exceptions, to all revenue arising from contracts with customers. IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.
IFRS 15 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard requires extensive disclosures.
The Group adopted IFRS 15 using the modified retrospective method of adoption with the date of initial application of 1 January 2018. Under this method, the standard can be applied either to all contracts at the date of initial application or only to contracts that are not completed at this date. The Group elected to apply the standard to all contracts as at 1 January 2018.
The Company's main revenues are related to services. An evaluation was carried out in the prior year of the five steps of the requirements of IFRS 15, the Company did not identify changes or impacts in the current recognition of its income, since they are recognised through transfer of control upon the service delivery.
In relation to the Shipyard revenue, management's review concluded that the timing of revenue recognition is over time, since the client has the rights to suggest changes on the initial design throughout the period of the project and the customer derives benefits from the work completed (after a certain point in the construction process) and controls the asset, conceptually the customer could move the vessel to another shipyard to continue construction, subject to agreeing appropriate compensation with the Group.
Therefore, in 2018, the Company did not present effects and changes in income recognition and there were no adjustments needed to be made to the opening balance of retained earnings. Only revenue disaggregation disclosures adjustments were made, and are detailed in Note 4.
Change in presentation
"Trade and other receivables" and "Recoverable taxes" are now shown as separate line items on the face of the balance sheet (they were previously included in one "Trade and other receivables" line). The change was made in order to improve the presentation.
IFRS 9 Financial Instruments
IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and Measurement for annual periods beginning on or after 1 January 2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement; impairment; and hedge accounting.
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The Group applied IFRS 9 prospectively, with an initial application date of 1 January 2018. The Group has not restated the comparative information, which continues to be reported under IAS 39.
There were no material effects of adopting IFRS 9 as at 1 January 2018.
i. Classification and measurement
Loans as well as trade receivables are held to collect contractual cash flows and give rise to cash flows representing solely payments of principal and interest. The Group analysed the contractual cash flow characteristics of those instruments and concluded that they meet the criteria for amortised cost measurement under IFRS 9. Therefore, reclassification for these instruments is not required.
The assessment of financial assets under the IFRS 9 is detailed in the table below:
Financial Assets | FS Group | Asset category |
Cash and bank | Cash and cash equivalents | Amortised Cost |
Fixed income investment | Cash and cash equivalents | FVPL |
Exchange funds | Cash and cash equivalents | FVPL |
Time deposit | Short-term investments | Amortised Cost |
Time deposit | Cash and cash equivalents | Amortised Cost |
Receivable for services rendered | Operational trade receivables | Amortised Cost |
Related parties' loans | Other trade receivables | Amortised Cost |
Insurance indenisation receivable | Other trade receivables | Amortised Cost |
Other trade receivables | Other trade receivables | Amortised Cost |
ii. Impairment
The adoption of IFRS 9 has fundamentally changed the Group's accounting for impairment losses for financial assets by
replacing IAS 39's incurred loss approach with a forward-looking expected credit loss (ECL) approach. IFRS 9 requires the Group to recognise an allowance for ECLs for all debt instruments not held at fair value through profit or loss and contract assets.
iii. Hedge accounting
At the date of initial application, all of the Group's existing hedging relationships were eligible to be treated as continuing
hedging relationships. IFRS 9 provides an accounting policy choice: entities can either continue to apply the hedge accounting requirements of IAS 39, or they can apply IFRS 9 (with the scope exception only for fair value macro hedges of interest rate risk). This accounting policy choice will apply to all hedge accounting and cannot be made on a hedge -by- hedge basis. The Group continues applying the requirements of IAS 39. Under IAS 39, all gains and losses arising from the Group's cash flow hedging relationships were eligible to be subsequently reclassified to profit or loss.
If an entity initially decides to continue applying IAS 39 hedge accounting, it can subsequently decide to change its accounting policy and commence applying the hedge accounting requirements of IFRS 9 at the beginning of any reporting period (subject to the other transition requirements of IFRS 9).
- significant changes in accounting practices
As mencioned in item a, there were no material effects in 2018 with the changes of policies and disclosures.
- reservations and emphasis in the auditor's report
There were no reservations or emphasis in the auditor's report for the year ended 2018.
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10.5 Critical accounting policies
Accounting decisions and key assumptions to estimate uncertainties
The preparation of the financial statements, in accordance with the IFRS rules, requires management to make decisions, estimates and use assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues and expenses. Actual results may diverge from those estimates.
The estimates and assumptions are reviewed on an ongoing basis. Reviews related to accounting estimates are recognized for the period in which the estimates are reviewed and in any subsequent period affected.
During the process of applying the accounting policies adopted by the Group, described before, the Management adopted the following judgments and assumptions that may cause material effects in the financial statements, as mentioned below.
- Provisions for tax, labor and civil risks - Judgment
Throughout the regular business course in Brazil, the Group is exposed to the risk to be judicially claimed. Provisions for lawsuits are estimated by the Group's Management in conjunction with its legal counsel, considering the likely outcome of the contingency on financial outlays. Provisions are measured based on the best estimate of the Management, evidenced by opinion of its legal counsel about the likely future payments that a lawsuit might generate for the Group. For lawsuits related to labor, the provision is estimated based on historical experience and best information that Management has on relevant facts and circumstances.
The amount of provisions for tax, labor and civil risks at the end of the period was US$ 17.3 million (R$ 67.2 million) (2017: US$ 18.2 million (RS$60.3 million)). The details are described in note 18.
- Recoverability of Goodwill - Judgment and estimation
The determination of the recoverability of goodwill requires estimation of the value in use of cash generating units to which goodwill has been allocated. The recoverable amount requires Management to estimate the entity's expected future cash flows resulting from the unit's cash generation and an appropriate discount rate to calculate the net present value.
Goodwill at the end of the reported period was of US$ 27.5 million (R$ 106.6 million) (2017: US$ 30.3 million (R$ 100.3 million). The details of calculation for recoverability of goodwill are described in note 10. There is no provision for impairment of goodwill for the disclosed periods.
- Fair value of derivatives - Estimation
As described in note 27, the Group may perform operations with derivatives in order to manage risks. For derivative financial instruments, assumptions are developed based on the market price set by the specific characteristics of these instruments.
The fair value of derivatives at the end of the period was US$ 0.4 million (R$ 1.6 million) (2017: US$ 1.5 million (R$ 5.0 million)).
- Provision for expected credit losses of trade receivables and contract assets - Estimation
The Group uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns.
The provision matrix is initially based on the Group's historical observed default rates. The Group will calibrate, when appropriate, the matrix to adjust the historical credit loss experience with forward-looking information.
The Group's management will update the default rate per business every six months.
The amount of provision for expected credit losses of trade receivables and contract assets at the end of the reporting period was US$1.5m (R$ 5.8 million) (2017: US$1.0m (R$3.2 million). Details are disclosed in note 15.
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10.6 Items not reported in the financial statements
- the assets and liabilities directly or indirectly held by the issuer, not included in the balance sheet (off- balance sheet items), such as:
- operational leasing, assets and liabilities;
Group as lessee
The operational financial lease payments recognized in the income as of December 31, 2018 were of US$ 22.3 million (R$80.9 million) (2017: US$ 19.2 million (R$61.3 million).
The Group has several lease commitments for operational areas, buildings, vehicles, tugs, plant and equipment in scope of IFRS 16. The new standard will be effective for annual reporting periods beginning on 1 January 2019 and will brings to the balance sheet (assets and liabilities) a large part of the lease commitments, which are currently recognised as an expense when incurred.
The main lease commitments are described below:
Tecon Rio Grande lease agreement:
Tecon Rio Grande S.A. lease agreement was signed with Rio Grande Port Authority ("SUPRG") on 3 February 1997 for a period of 25 years renewable for a further 25 years. In view of the compliance with the contractual requirements and advanced investments in the expansion works of the terminal, construction of a third berth of docking and of the annual volume handled together with other considerations, Tecon Rio Grande was granted the right to renew the lease as set forth in the first amendment to the lease agreement signed on 7 March 2006.
Among the commitments set forth in the lease agreement and its addendum, the following are highlighted:
- Monthly payment for facilities and leased areas;
- Payment by container moved, with a commitment for minimum contractual movement (MMC);
- Pay per tonne in general cargo handling and unloading.
Tecon Salvador lease agreement:
Tecon Salvador S.A. lease agreement was signed with Bahia Port Authority ("CODEBA") on 14 March 2000 for a period of 25 years renewable for a further 25 years. On 16 November 2016 Tecon Salvador signed the second amendment to the lease agreement which extended the lease term for an additional period of 25 years until March 2050, and established the Company's commitment to carry out maintenance and expansion investments until the end of the lease.
Among the commitments set forth in the lease agreement and its addendums, the following are highlighted:
- Payment of monthly instalments readjusted for the minimum periodicity established in the contract;
- Payment for the lease of the existing area and the area added under the terms of the second contractual addendum;
- Payment of minimum contractual movement - MMC.
Brasco:
Brasco lease commitments mainly refer to a 30-year lease right to operate a sheltered area at Guanabara Bay, Rio de Janeiro, Brazil with privileged location to attend Campos and Santos oil producing basins.
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Logistics:
Logistics lease commitments mainly refer to the bonded terminals and distribution centers located in Santo André and Suape with terms between eighteen and twenty-four years.
The table below presents the annual minimum future payments, which are required and non-cancellable, related to Group´s lease commitments in scope of IFRS 16 as of 31 December 2018.
In the second to | ||||||
US$ | Within one year | fifth year inclusive | Greater | than | five | Total |
years | ||||||
Minimum payments required | 21,763 | 73,916 | 339,032 | 434,711 | ||
In the second to | ||||||
R$ | Within one year | fifth year inclusive | Greater | than | five | Total |
years | ||||||
Minimum payments required | 84,327 | 286,409 | 1,313,680 | 1,684,416 |
- receivables portfolios offset as regards to which the Company assumes risks and responsibilities, indicating the respective liabilities;
N/A
iii. future purchase and sale agreements for products or services
N/A
- agreements for constructions to be concluded
The Company, through its Shipyard, has construction agreements for Tug vessels, for third-party companies and for companies of the Group.
On August, 2018, the shipyard delivered a Tug to the company Saam Smit Towage Brasil.
On October, 2017, the shipyard delivered a Tug to a company belonging to the Group, Saveiros Camuyrano Serviços Marítimos S/A.
In the vessel construction agreements the costs are recognized in the result of the year as each construction phase is completed, and the revenues are recognized according to the POC formula (Percentage of Completion).
As at December 31, 2018, it was under construction one tug to a company belonging to the Group, Saveiros Camuyrano Serviços Marítimos S/A.
v. future loan agreements.
As informed in item 3.9 of this report, the Company has loan agreements available and approved for future settlements.
b. other items not included in the financial statements.
There are no other items not contained in the financial statements on December 31, 2018, unless those items are identified in 10.8.a.
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10.7 Regarding each of the items not indicated in the financial statements established in item 10.6, the officers must comment on:
a. how these items change or may change revenue, expenses, operational results, financial expenses or other items of the issuer's financial statements.
As detailed in item 10.6.a., amounts in respect to the operating lease, due to the new IFRS 16 standards (operating leases), which is effective for annual periods beginning on 1 January 2019, that eliminates the accounting for operating lease agreements for the lessee, including IAS 17 - Leases and related interpretations (IFRIC 4, SIC 15 and SIC 27), there will be significant changes in the accounting of these operating leases. For the implementation of the new standards, during 2018, the Group has performed a detailed impact assessment of IFRS 16 identifying existing contracts, as well as the environment of internal controls and systems impacted by the adoption of the new standard. The assessment was divided into stages, such as:
- Identification of contracts;
- Transition approach;
- Effects of first-time adoption.
Identification of contracts
Management prepared a full lease contract inventory identifying the types of contracts that would be in pronouncement scope. The Group will elect to use the exemptions proposed by the standard on lease contracts for which the lease terms ends within 12 months as of the date of initial application, and lease contracts for which the underlying asset is of low value.
Transition approach
The modified retrospective transition method will be applied, which does not require the presentation of comparative information, and liabilities and the Right-of-Use Asset are stated at present value of remaining instalments.
Effects in first-time adoption
Management concluded that lease´s amounts which are currently recorded as operational leasing expenses will start to be recognised under "Depreciation" and "Financial expenses".
Although this new pronouncement does not introduce any change to total amount that shall be taken to net income over the contract's useful life, it is correct to state that a temporal effect will occur mainly in net income due to the method adopted for recognition of interest and monetary restatements associated to leases.
On 1 January 2019, the Group will recognise a right of use asset and a lease liability at present value of US$177.0 million (R$683.2 million). The impact will be principally due to the recognition of right-of-use assets previously recognised as operating leases in respect of the commitments expressed in Note 26.As detailed in item 10.6.a., Construction Agreement amounts will impact the Company's financial statements since they represent the Company revenues and expenses, as each phase of construction is completed.
As detailed in item 10.6.a. in respect to Future Receivables Financings, these will impact the Company's financial statements, as they will represent financial expenses and revenues of the Company.
b. nature and purpose of the operation.
See item 10.6.a
c. nature and amount of obligations assumed and rights generated on behalf of the Company as a result of the operation.
See item 10.6.a
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10.8 Business Plan
-
investments, including:
i. quantitative and qualitative description of investments in progress and estimated investments
Material projects in progress:
- Investments in Tecon Salvador
Expansion of Salvador Terminal, commenced in October 2018 and expected completion at the first semester of 2020, which includes the expansion of the quay in 423 meters at the end of the work, totaling 800 meters of quay. In addition to the purchase of three Ship-to-Shore Cranes Super Post-Panamax and three Rubber-Tyred Gantry Cranes.
ii. financing sources
We have priority in the FMM, which shall provide proceeds to finance the construction of vessels. The sources of financing for other investments will be determined according to need and conditions of financing offered at the time of contracting.
iii. material divestments in progress and estimated divestments
N/A
b. provided that already disclosed, indicate acquisitions of plants, equipment, patents or other assets which could materially affect the issuer's production capacity
N/A
c. new products and services, including:
i. description of research in progress already disclosed
N/A.
ii. total amounts spent by the issuer in research for the development of new products or services
N/A.
iii. projects under development that have already been disclosed
N/A.
iv. total amounts spent by the issuer in the development of new products or services
N/A.
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10.9 Other factors with material influence
Not Applicable.
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11 Projections
11.1 Disclosed projections and assumptions
As per article 20 of CVM Instruction No. 480/09, the disclosure of projects and assumptions is optional. Thus, the Company chooses to disclose only the information related to investments.
In 2019, the Company intends to invest in the following projects:
●
- Expansion of Salvador Containers Terminal.
It is noteworthy that, according to the IFRS rules, CAPEX of the Offshore Vessels segment is not to be consolidated in the Company's CAPEX. This item is entered in a single line of the Balance Sheet.
The Company is still diligent when looking for new opportunities and is committed in allocating the capital of its shareholders in high-profitability assets.
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11.2 Monitoring and changes in disclosed projections
a. indicate what are being replaced by new projections included in the form and which are being repeated in the form
For 2018, the Company estimated investments (IFRS) between US$ 65 million and US$ 80 million which included part of the first phase of expansion of Tecon Salvador and the maintenance of current assets. In 2018, US$ 62 million of investments was disbursed, a smaller amount than estimated due to the process of environmental licensing the works of Salvador terminal took longer than expected initially.
For 2019, the Company estimates between US$100 million and US$120 million of investments (IFRS) comprising a relevant part of the expansion of Tecon Salvador and the maintenance of current assets.
b. about the projections related to past periods, compare the data projected with the effective performance of the indicators, clearly indicating the reasons for differences in projections
Below, we present the comparison between the CAPEX projection disclosed in 2018 and the realized amounts:
(US$M) | Expected | Actual |
CAPEX | 65 a 80 | 62 |
The realized CAPEX performed in accordance with the projections, except for the commencement of the civil works for the Tecon Salvador expansion, that took longer than expected due to the environmental licensing.
c. about projections for periods still ongoing, whether the projections are still valid on the date of submission of the form and, when appropriate, explain why they were abandoned or replaced
See item 11.2.a.
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12 General Meeting and Management
12.1 Describe the issuer's management structure, as stipulated in its bylaws and internal operating rules, identifying:
- responsibilities of each body and committee i. internal bylaws:
As described in the Company's Bylaws approved on 9 April 2007, the Board of Directors has the power to manage and conduct our business and, therefore, is the body responsible for making decisions, formulating general guidelines and long-term investment strategy. In the management of our business, the Board may exercise all powers and prerogatives that are not, by law or by our Bylaws, reserved to our shareholders at the Annual General Meeting. Currently, our Board of Directors is our sole deliberative body, but may decide to create an Executive Committee being responsible for the appointment and supervision of the members of such Committee. The Company bylaws can be found at www.wilsonsons.com.br/ri.
The Company internal board procedures were approved by the Board of Directors on 13 May 2019.
ii. Statutory Audit Committee:
The Company does not have a Statutory Audit Committee.
iii. How does the Board of Directors evaluates the work of the independent audit:
During the Board meetings the Company's consolidated financial statements and the notes to the financial statements for the analysed period are reviewed in detail.
The Company does not hire extra-audit services if they may compromise the auditor's independence.
- in relation to the members of the board of directors, their attributions and individual power
Under Bermuda law, there is no need to appoint a board of executive officers, since the Board of Directors has the power to represent the Company.
- date of installation of the fiscal council, if this is not permanent, and creation of the committees
The Company does not have Fiscal Council.
- mechanisms for evaluating the performance of each body or committee
The members of the Board of Directos and its Committees shall participate annually in an evaluation process. The following are assessed: (i) in relation to the collective basis rather than on individual contributions of the the Board, comittees and collegiate bodies, (ii) self-assessment as the basis for their review and individual participation of members,
- an evaluation of the Chairman should be made by each director and should form the basis of the Chairman's review by the Deputy Chairman. The main opportunities to improve the practices and dynamics of these bodies, identified during this evaluation process, are consolidated and discusses with their members to reinforce their commitment and engagement with the continuous improvement of the Company's governance.
The Executive Officers, including the Chief Executive Officer, are evaluated annually in a formal process conducted by the Board of Directors, according to their performance, based on objective and qualitative goals. However, they are only evaluated by financial performance excluding non-financial.
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12.2 Describe the rules, policies and practices relating to general meetings, indicating:
- periods of convocation
The annual general meetings of shareholders shall be held annually within four months immediately after the end of the fiscal year. A notice at least 30 days in advance of the annual general meeting must be delivered to each shareholder who is entitled to vote at such meeting, stating the date, time and place where the meeting will be held.
The extraordinary general shareholder meetings may be convened by the Board of Directors at its discretion whenever such meeting is required. A notice at least 30 days in advance of an extraordinary general meeting shall be delivered to each shareholder who is entitled to attend and vote at such meeting, stating the date, time and place and the matters to be discussed at the meeting. At the request of shareholders holding at the date of filing at least one tenth of the paid-up capital of the company entitled to vote on this date, the Board of Directors shall immediately convoke an extraordinary general meeting.
The Board of Directors may determine any date as the record date for determining the Shareholders who shall be entitled to receive notice and vote at any general meeting of the company, except that the record date shall not be fixed on a date earlier than five days from the date on which notice of the general meeting is delivered. A general meeting of shareholders, notwithstanding being convoked with less advance notice than specified in the bylaws of the Company, shall be deemed properly convoked if so agreed by (i) all shareholders who are entitled to vote at such meeting in the case of an annual general meeting and (ii) by a majority of shareholders who have the right to vote at the meeting, provided that these hold as a whole not less than 95% of nominal value of shares entitled to vote at such meeting in the case of a general meeting.
- competence
The approval of the following acts shall require the votes of at least 66 and 2/3% of the votes that can be cast of those members present in person or by proxy at a general meeting: (i) the creation of new classes of shares of the Company, (
- any reduction in the dividend provided in clauses 15.2 and 15.3 of the Company's bylaws, (iii) any material changes in the Company's business from what is permitted under its bylaws, (iv) the liquidation or dissolution of the Company, (v ) the delisting of the Company's shares, as described in clause 74 of the bylaws and (vi) amendments to the bylaws.
- Address (physical or electronic) on which the documents relating to the general meeting of shareholders will be available for analysis
Clarendon House, 2 Church Street, Hamilton, HM11 , Bermuda.
- identification and management of conflicts of interest
Any dispute arising from or related to its existence, validity or termination, shall be referred and resolved permanently by arbitration under the Court of International Arbitration in London, and such rules shall be deemed incorporated by reference herein. The place of arbitration shall be the city of London. The language of arbitration shall be English. The laws applicable to these Bylaws shall be the substantive laws of Bermuda. The tribunal will consist of three arbitrators. The arbitral decision shall be in writing and establish the reasons for the decision. To the extent that there is a need for recourse to the courts for assistance with respect to any arbitration in accordance with terms of the Bylaws, this recourse shall be exclusively to the English Courts. This provision shall not apply with respect to any application for recognition or enforcement of an arbitration award. If any of disputes cannot be arbitrated, it shall be subject to enforcement only by the Courts of Bermuda.
- solicitation of proxies by management to exercise the right to vote
Participation in the general assembly will be made by shareholders in person or represented by proxy, pursuant to the model proxy in clause 30 of the bylaws of the Company.
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- formalities necessary for acceptance of proxies granted by shareholders
The proxy must be received at least 2 days before any meeting at the headquarters or other location specified in the meeting convocation notice. The proxy model is found in clause 30 of the Company's bylaws.
- formalities required for acceptance of the remote voting form
Not Applicable, because the votes are made directly to the Custodian.
- if the Company makes available an electronic system to receive the form for remote voting or participation
Not Applicable, because the votes are made directly to the Custodian.
- instructions for the shareholder or group of shareholders to include proposals for resolutions, slates or candidates for members of the Board of Directors and the Fiscal Council in the remote voting form
At the request of the shareholders held on the date of filing of the request, at least one-tenth of the Company's paid-up share capital entitled to vote on this date, the Board of Directors shall immediately convene an extraordinary general meeting.
- maintenance of forums and pages on the World Wide Web intended to receive and share feedback from shareholders on the agendas of meetings
The Company has no forums and pages on the World Wide Web intended to share comments from shareholders about the agendas of meetings.
- Other information required for remote participation and the exercise of the right to vote remotely
There is no other relevant information that has not already been addressed regarding this topic.
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12.3 | Rules, policies and practices related to the Board of Directors: | |
a. | Frequency of meetings | |
Meetings | Quantity | |
Ordinary Meetings | 4 | |
Extraordinary Meetings | 3 | |
Total | 7 | |
- Provisions of the shareholders agreements setting forth restrictions or ties to the exercise of the voting rights by the Board Members
Not applicable.
- Rules on identification and management of conflicts of interest
The Company's bylaws provide that a Director who is directly or indirectly interested in a contract or proposed arrangement with the company shall declare the nature of such interest as required by law. An advisor may not vote on any contract or proposed agreement in which such Director is interested and cannot attend or be counted in the quorum of such meeting. A determination of the Board that this director is interested shall be final and conclusive.
- if the issuer has a policy for appointment and filling positions of the Board of Directors formally approved, informing, if so
The Company has a policy of nomination and diversity of the Board of Directors, approved on 13 March 2019. The policy provides the continuous analysis of the composition of the board, evaluating the balance of competencies, experience, independence and knowledge of the members.
As described in our bylaws approved on April 9, 2007, the Board shall consist of at least five Directors; such number to be determined from time to time by the Members, at least 20% of whom shall at all times be Independent Directors.
Directors shall be elected by the Members at each general meeting in any year in which a vacancy in scheduled to occur in the composition of the Board due to the expiry of the term of office of the incumbent directors.
Any Member or group of Members representing at least 10% of the Company's paid-up share capital, whether alone or with Associates, shall have the right to elect a single Director at any annual general meeting, in a separate resolution that will exclude the cote of the Controlling Shareholders (a "Minority Director").
For so long as members of the OWHK Group have or control the right to exercise one-third or more the votes capable of being exercised at a general meeting of the Company, OWHL shall have the right to appoint a majority of members to the Board and to remove them or any of them from office.
The Bylaws can be found at www.wilsonsons.com.br/ri.
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12.4 As the case may be, describe the arbitration clause contained in the bylaws for the resolution of conflicts among shareholders and between shareholders and the issuer by means of arbitration
Any dispute arising out of or in connection with our Bylaws, including any question regarding its existence, validity or termination, will be submitted and resolved definitively by arbitration in accordance with the rules of the International Court of Arbitration in London, whose rules are considered to be incorporated into our bylaws. The place and the language of arbitration shall be, respectively, London and English. The laws applicable to our bylaws are the laws of Bermuda. The Court will be comprised by three arbitrators. The award of the arbitral tribunal shall be written, containing reasons. If there is need for recourse to the courts for assistance related to any arbitration on our bylaws, the appeal must be submitted exclusively to the English courts. The arbitration provision does not apply in relation to any application for recognition or enforcement of an arbitration award. If any of those disputes cannot be arbitrated, it will be subject to resolution exclusively by the courts of Bermuda.
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12.5 Identify each of the managers and members of the issuer's audit committee in table form:
José Francisco Gouvêa Vieira b. Date of Birth: 01/11/1949
c. Occupation: Lawyer
- CPF/MF - Individual Taxpayers' Register: 011.531.107-68
- Elective office held: Chairman of Board of Directors
- Election Date: 25/04/2019
- Investiture Date: 25/04/2019
- Term of office: Annual General Meeting 2021
- Other positions or functions held at the issuer: Not Applicable
- Elected by the controlling shareholder or not: Elected by Annual General Meeting.
- Independent members and criteria used by the issuer to determine their independence: N/A
- Consecutive Terms: 10
- Curriculum Vitae: José Francisco Gouvêa Vieira - Chairman: Mr. Gouvêa Vieira received a Law Degree from the Catholic University of Rio de Janeiro in 1972. He holds a Masters degree in Law from Columbia University, New York (1978). He has been a Partner with Gouvêa Vieira Advogados since 1971 and has been with the Company since 1991. He has served as Chairman of the Board (1997) and Director of Wilson, Sons de Administração e Comércio (1992), Ocean Wilsons Holdings Limited (1997) and of Ocean Wilsons (Investments) Limited (1997). He served as a Director of various companies, including PSA Peugeot Citroen Brazil, Lafarge Brazil, Ultrapar, Cetip, Concremat - Engenharia e Tecnologia S.A (member of China Communication and Construction Company). He is a member of the Corporate Governance Committee of the American Chamber of Commerce - Sao Paulo (2005) and honorary consul to the Kingdom of Morocco in Rio de Janeiro (2007).
- Criminal Conviction: None
William Henry Salomon b. Date of Birth: 30/09/1957 c. Occupation: Lawyer
d. CPF/MF - Individual Taxpayers' Register: 3560235729
e. Elective office held: Deputy Chairman of Board of Directors
f. Election Date: 25/04/2019
g. Investiture Date: 25/04/2019
h. Term of office: Annual General Meeting 2021
i. Other positions or functions held at the issuer: Not Applicable
j. Elected by the controlling shareholder or not: Elected by Annual General Meeting.
k. Independent members and criteria used by the issuer to determine their independence: N/A
l. Consecutive Terms: 10
m. Curriculum Vitae: William Henry Salomon - Deputy Chairman: Mr. William Henry Salomon graduated from Magdalene College Cambridge with a degree in law and then qualified at the English Bar. He was Chairman of Rea Brothers PLC and subsequently became Deputy Chairman of the investment division of Close Brothers PLC. In 1999 Mr. Salomon established Hansa Capital, an FCA regulated investment manager and adviser. He is the Senior Partner of Hansa Capital Partners LLP. He is also Chairman of ScotGems PLC as well as a Director of Hansa Investment Company Limited and Hanseatic Asset Management LBG. In addition he is Deputy Chairman of Ocean Wilsons Holdings Limited, the company which holds the controlling interest in Wilson Sons.
n. Criminal Conviction: None.
Augusto Cezar Tavares Baião b. Date of Birth: 08/02/1960
c. Occupation: Economist
- CPF/MF - Individual Taxpayers' Register: 665.168.627-53
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e. Elective office held: Director
f. Election Date: 25/04/2019
g. Investiture Date: 25/04/2019
h. Term of office: Annual General Meeting 2021
i. Other positions or functions held at the issuer: CEO of Operations in Brazil
j. Elected by the controlling shareholder or not: Elected by Annual General Meeting.
k. Independent members and criteria used by the issuer to determine their independence: N/A
l. Consecutive Terms: 7
m. Curriculum Vitae: Cezar Baião - Director: Mr. Cezar Baião graduated in Economics from the Catholic University of Rio de Janeiro (PUC/RJ). Having joined Wilson Sons in 1994 as CFO, he currently acts as the CEO of operations in Brazil. From 1982 to 1989, he served as Money Market Manager at JP Morgan and also as Finance Director of Grupo Lachmann, between 1989 and 1994. He is a member of the board of directors of the Brazilian Association of Public-Use Container Terminals (ABRATEC). Mr. Baião is also a member of the Oil & Gas production Committee at the São Paulo Industry Federation (COMPETRO - FIESP) and Business Counsellor of Infrastructure at the Rio de Janeiro Industry Federation (FIRJAN).
n. Criminal Conviction: None.
Claudio Marote
b. Date of Birth: 29/08/1941
c. Occupation: Lawyer
- CPF/MF - Individual Taxpayers' Register: 017.432.528-20
- Elective office held: Director
- Election Date: 25/04/2019
- Investiture Date: 25/04/2019
- Term of office: Annual General Meeting 2021
- Other positions or functions held at the issuer: Not Applicable
- Elected by the controlling shareholder or not: Elected by Annual General Meeting.
- Independent members and criteria used by the issuer to determine their independence: N/A
- Consecutive Terms: 7
- Curriculum Vitae: Claudio Marote - Director: Mr. Marote earned a Law Degree from the Law School of Curitiba (FDC). He also holds diplomas from the following institutions: International Maritime Law from Lloyds of London, England; Executive Development Programme of the Kellogg Institute from Northwestern University, Evanston, Illinois, U.S.A.; Structures and Economic Systems - FDC, Paraná; and in Brazilian Policies and Strategies from the Association of Graduates of the Higher War College, in Santos, São Paulo. He joined the Company in 1964 and has held various executive positions, from branch manager to regional director, to superintendent-director. He began his professional career in 1956 at Agência Marítima Intermares Ltda., a subsidiary of the Bunge Born Group. He is currently a Director of the Company and a Partner at CMMR - Intermediação Comercial Ltda.
- Criminal Conviction: None
Claudio Frischtak
b. Date of Birth: 09/11/1949
c. Occupation: Economist
- CPF/MF - Individual Taxpayers' Register: 268.631.117-72
- Elective office held: Independent Director
- Election Date: 25/04/2019
- Investiture Date: 25/04/2019
- Term of office: Annual General Meeting 2021
- Other positions or functions held at the issuer: Not Applicable
- Elected by the controlling shareholder or not: Elected by Annual General Meeting.
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k. Independent members and criteria used by the issuer to determine their independence: Mr Claudio Frischtak has been appointed as the Independent Minority Director by minority shareholders representing more than 10% of the share capital pursuant to Company Bye-law 34.4(b).
l. Consecutive Terms: 3
m. Curriculum Vitae: Claudio Frischtak - Independent Director: Mr. Claudio Frischtak is the head of Inter.B - Consultoria Internacional de Negócios, a financial and economic consulting firm based in Rio de Janeiro, Brazil. Mr. Frischtak was formerly a Principal Economist at the World Bank where he worked from 1984 to 1991. Mr. Frischtak's graduate work in economics was undertaken at the University of Campinas, Brazil and at Stanford University (1980-84). While at the World Bank he was an Adjunct Professor at the Department of Economics at Georgetown University (1987-1990). He has published over 100 academic papers and books and has worked extensively on issues related to infrastructure, industrial organisation and regulatory/competition policy, and innovation and technological change.
n. Criminal Conviction: None.
Andrés Rozental
b. Date of Birth: 27/04/1945
c. Occupation: International Relations
d. CPF/MF - Individual Taxpayers' Register: 08003001684
e. Elective office held: Director
f. Election Date: 25/04/2019
g. Investiture Date: 25/04/2019
h. Term of office: Annual General Meeting 2020
i. Other positions or functions held at the issuer: Not Applicable
j. Elected by the controlling shareholder or not: Elected by Annual General Meeting.
k. Independent members and criteria used by the issuer to determine their independence: N/A
l. Consecutive Terms: 7
m. Curriculum Vitae: Andrés Rozental - Director: Ambassador Rozental has a Bachelor's Degree in International Relations from the University of the Americas in Mexico, and an MA in International Economics from the University of Pennsylvania. He was a career diplomat for more than 35 years with the Mexican Foreign Ministry holding a number of senior diplomatic posts. He is the author of four books on Mexican foreign policy and of numerous articles on international affairs. He founded his own consultancy firm, Rozental & Asociados, that works with major multinational corporations on their Latin American strategies. Currently, he is an Independent Director with Ocean Wilsons Holdings and Director of Wilson Sons. He is a member of the Board of HSBC Bank in Mexico and serves as an advisor to Toyota de México, Brookfield Asset Management and APCO Worldwide in Washington. He is a member of the Trilateral Commission, a Senior Policy Advisor at Chatham House (London) and a Board member of Canada's Center for International Governance Innovation.
n. Criminal Conviction: None.
Fernando Fleury Salek
b. Date of Birth: 07/06/1969
c. Occupation: Economist
- CPF/MF - Individual Taxpayers' Register: 028.253.437-73
- Elective office held: Director
- Election Date: 25/04/2019
- Investiture Date: 25/04/2019
- Term of office: Annual General Meeting 2021
- Other positions or functions held at the issuer: CFO of the Brazilian subsidiaries and Investor Relations
- Elected by the controlling shareholder or not: Elected by Annual General Meeting.
- Independent members and criteria used by the issuer to determine their independence: N/A
- Consecutive Terms: 2
- Curriculum Vitae: Fernando Salek - Director: Mr. Salek is an economist educated at PUC-Rio specialising in Corporate Finance, International Finance and Marketing. He has been part of Wilson Sons since 2016, where he acts as CFO. He
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has solid experience in leadership roles for capital-intensive companies. In his last position, he served as BG Group Finance Vice President in Brazil where he was responsible for the areas of Planning and Budgeting, Accounting including Audit, Risk Management, Tax and IT. Previously, Salek worked at BHP Billiton, where for six years he served as Vice President of Corporate Finance in Netherlands and subsequently in Great Britain.
n. Criminal Conviction: None.
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12.6 Percentage attendance at Board of Directors' meetings last year:
Meetings of the Board of Directors and Audit Committee | Board of Directors | Audit Committee | ||||
José Francisco Gouvêa Vieira | 7/7 | 4/4 | ||||
William Henry Salomon | 7/7 | 4/4 | ||||
Cezar Baião | 7/7 | NA/NA | ||||
Claudio Marote | 7/7 | 4/4 | ||||
Andrés Rozental | 5/7 | 4/4 | ||||
Claudio Frischtak | 7/7 | 4/4 | ||||
Fernando Fleury Salek* | 5/5 | NA/NA | ||||
PARTICIPAÇÃO EM REUNIÕES | 96% | 100% | ||||
* Fernando Fleury Salek was appointed as a Director to the Board of the Company on 26 April 2018.
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12.7 Provide the information mentioned in item 12.6 in relation to the members of the statutory councils, as well as the audit, risk, financial and compensation dossiers, even if such committees or structures are not statutory
Audit committee
José Francisco Gouvêa Vieira b. Date of Birth: 01/11/1949
c. Occupation: Lawyer
- CPF/MF - Individual Taxpayers' Register: 011.531.107-68
- Elective office held: Chairman of Board of Directors
- Election Date: 25/04/2019
- Investiture Date: 25/04/2019
- Term of office: Annual General Meeting 2021
- Other positions or functions held at the issuer: Not Applicable
- Elected by the controlling shareholder or not: Elected by Annual General Meeting.
William Henry Salomon b. Date of Birth: 30/09/1957 c. Occupation: Lawyer
d. CPF/MF - Individual Taxpayers' Register: 3560235729
e. Elective office held: Deputy Chairman of Board of Directors
f. Election Date: 25/04/2019
g. Investiture Date: 25/04/2019
h. Term of office: Annual General Meeting 2021
i. Other positions or functions held at the issuer: Not Applicable
j. Elected by the controlling shareholder or not: Elected by Annual General Meeting.
Claudio Marote
b. Date of Birth: 29/08/1941
c. Occupation: Lawyer
- CPF/MF - Individual Taxpayers' Register: 017.432.528-20
- Elective office held: Director
- Election Date: 25/04/2019
- Investiture Date: 25/04/2019
- Term of office: Annual General Meeting 2021
- Other positions or functions held at the issuer: Not Applicable
- Elected by the controlling shareholder or not: Elected by Annual General Meeting.
Claudio Frischtak
b. Date of Birth: 09/11/1949
c. Occupation: Economist
- CPF/MF - Individual Taxpayers' Register: 268.631.117-72
- Elective office held: Independent Director
- Election Date: 25/04/2019
- Investiture Date: 25/04/2019
- Term of office: Annual General Meeting 2021
- Other positions or functions held at the issuer: Not Applicable
- Elected by the controlling shareholder or not: Elected by Annual General Meeting.
Andrés Rozental
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b. Date of Birth: 27/04/1945
c. Occupation: International Relations
d. CPF/MF - Individual Taxpayers' Register: 08003001684
e. Elective office held: Director
f. Election Date: 25/04/2019
g. Investiture Date: 25/04/2019
h. Term of office: Annual General Meeting 2020
i. Other positions or functions held at the issuer: Not Applicable
j. Elected by the controlling shareholder or not: Elected by Annual General Meeting.
Risk Committee
Arnaldo Calbucci Filho
b. Date of Birth: 26/02/1957
c. Occupation: Engineer
- CPF/MF - Individual Taxpayers' Register: 035.819.038-06
- Elective office held: Member
- Election Date: 01/09/.2011
- Investiture Date: 01/09/2011
- Term of office: N/A
- Other positions or functions held at the issuer: COO of Maritime Services
- Elected by the controlling shareholder or not: no
Luiz Sergio Fisher
b. Date of Birth: 24/08/1956
c. Occupation: Engineer
- CPF/MF - Individual Taxpayers' Register: 600.003.767-87
- Elective office held: Member
- Election Date: 01/09/2011
- Investiture Date: 01/09/2011
- Term of office: N/A
- Other positions or functions held at the issuer: COO of Port Terminal and Logistics Services
- Elected by the controlling shareholder or not: no
Helvécio de Oliveira Rodrigues Neto b. Date of Birth: 10/05/1976
c. Occupation: Engineer
- CPF/MF - Individual Taxpayers' Register: 072.551.457-44
- Elective office held: Member
- Election Date: 01/04/2017
- Investiture Date: 01/04/2017
- Term of office: N/A
- Other positions or functions held at the issuer: Strategy, Planning & Risk Manager
- Elected by the controlling shareholder or not: no
Fernando Moreira Deveza b. Date of Birth: 24/09/1958 c. Occupation: Manager
- CPF/MF - Individual Taxpayers' Register: 490.239.777-34
- Elective office held: Member
- Election Date: 01/09/2011
- Investiture Date: 01/09/2011
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h. Term of office: N/A
i. Other positions or functions held at the issuer: Governance and Audit Manager
j. Elected by the controlling shareholder or not: no
Fernando Fleury Salek
b. Date of Birth: 07/06/1969
c. Occupation: Economist
- CPF/MF - Individual Taxpayers' Register: 028.253.437-73
- Elective office held: Member
- Election Date: 01/04/2017
- Investiture Date: 01/04/2017
- Term of office: N/A
- Other positions or functions held at the issuer: CFO of the Brazilian subsidiaries and Investor Relations
- Elected by the controlling shareholder or not: não
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12.9 Inform the existence of a marital relationship, civil union or even familial relationship up to the second degree:
- managers of the issuer
We are unaware.
- (i) managers of issuer and (ii) managers of subsidiaries, direct or indirect of issuer
We are unaware.
-
(i) managers of issuer or its subsidiaries, directly or indirectly, and (ii) direct or indirect subsidiaries of
issuer
Mr. C. A. Townsend is nephew of Mr. W. H. Salomon (see item 8.1.a).
- (i) managers of issuer and (ii) managers of direct and indirect subsidiaries of the issuer
We are unaware.
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12.10 Inform the subordination relations, service rendering or control maintained over the past 3 fiscal years, between issuer's managers and:
a. company directly or indirectly controlled by the issuer
Director Augusto Cezar Tavares Baião is a partner of Allink Transportes Internacionais Ltda, a company 50% controlled by the Group of the issuer and which leases the warehouses of the Group's terminals. Allink also has agency service agreements at the Group's branches.
b. direct or indirect controller of the issuer
We are unaware.
c. if relevant, supplier, customer, debtor, or creditor of the Company, of its subsidiary or controlling companies or subsidiaries of any of such persons
Mr. José Francisco Gouvea Vieira, chairman of the Board of Directors of the Company, is a partners of the law firm Gouvea Vieira which provides legal services to the issuer's subsidiaries in Brazil.
Director Claudio Marote is a shareholder and Officer of CMMR Intermediação Comercial Limitada which provides consulting services to the issuer's subsidiaries in Brazil.
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12.11Agreements, including insurance policies, for payment or reimbursement of managers' expenses
The Company has an insurance policy to protect its managers against civil liability, the main objective of which is to protect the insured against third party claims and, related to management actions taken in the exercise of Company management powers. The current policy provides an indemnity limit, subject to sub‐limits and deductibles tailored to the coverage contracted.
On December 31, 2018, the insurance coverage purchased by the Group:
Risk Type | Purpose | Coverage | Coverage |
US$ | R$ | ||
Managers and officers | Civil liability for administrators | 14,794,263 | 50,000,000 |
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12.12If the issuer follows a Good Practices code for corporate governance, inform the code and different practices of corporate governance adopted
Revoked.
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12.13Other relevant information
In order to ensure that investors have access to other important information on the issuer's practices regarding general meetings, in this item, we set forth the data related to meetings held in the last 3 (three) years:
Type | Data | 2nd Calling | Calling quorum |
General Ordinary Meeting | 25/04/2019 | No | 54,932,741 |
General Ordinary Meeting | 26/04/2018 | No | 55,028,064 |
General Ordinary Meeting | 27/04/2017 | No | 56,121,339 |
There is no other material information which has not been addressed in this item 12.
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13 Management compensation
13.1 Description of compensation policy or practice including that of the non- Executive Board
a. objectives of the compensation policy or practice
Board of Directors:
As described in the Company's Bylaws approved on April 9, 2007, the remuneration (if any) of the Directors and the Executive Committee, as well as any other committee of the Board shall be determined by the Board. As required, the Board of Directors readjusts the members' remuneration considering a preliminary analysis of market levels and inflation.
Executive Board of Brazilian subsidiary:
The compensation policy for the Executive Board of the Brazilian subsidiary seeks to compensate and retain the best professionals and is in line with market practices.
b. composition of compensation, indicating:
i. description of the compensation elements and each one's objectives:
Board of Directors:
The compensation is composed of fixed salary in US$.
Executive Board of Brazilian subsidiary:
The compensation consists of fixed monthly salary and variable compensation, comprised by: Stock Options and profit sharing.
- with respect to the last three fiscal years, what's the proportion of each element in total compensation?
Board of Directors:
The fixed compensation corresponded in 2018 to 100% of total compensation.
The fixed compensation corresponded in 2017 to 100% of total compensation.
The fixed compensation corresponded in 2016 to 100% of total compensation.
Executive Board of Brazilian subsidiary:
The fixed compensation corresponded in 2018 to approximately 40% of the total compensation and variable compensation in respect to profit sharing corresponded to 47%. Benefits totaled 13% of total compensation.
Further information
- Fixed Compensation = salary + allowance for time of service + 13th salary + vacation;
- Variable Compensation = profit sharing + Stock Options + bonuses;
- Direct and indirect Benefits = life insurance + health care + Meal and Food voucher
- Post-employmentBenefits = private pension + social charges (INSS and FGTS)
The fixed compensation corresponded in 2017 to approximately 41% of the total compensation and variable compensation in respect to profit sharing corresponded to 46%. Benefits totaled 14% of total compensation.
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Further information
- Fixed Compensation = salary + allowance for time of service + 13th salary + vacation;
- Variable Compensation = profit sharing + Stock Options + bonuses;
- Direct and indirect Benefits = life insurance + health care + Meal and Food voucher
- Post-employmentBenefits = private pension + social charges (INSS and FGTS)
The fixed compensation corresponded in 2016 to approximately 50% of the total compensation and variable compensation in respect to profit sharing corresponded to 45%. Benefits totaled 5% of total compensation.
Further information
- Fixed Compensation = salary + allowance for time of service + 13th salary + vacation;
- Variable Compensation = profit sharing + Stock Options + bonuses;
- Direct and indirect Benefits = life insurance + health care + Meal and Food voucher
- Post-employmentBenefits = private pension + social charges (INSS and FGTS)
iii. methodology of calculation and adjustment of each element of the compensation
Board of Directors:
The fixed compensation is paid in US$ and is not subject to any automatic adjustment.
Executive Board of Brazilian subsidiary:
The amounts paid are periodically compared with the market to assess their competitiveness and the need to make adjustments to some components of pay. In addition, executives are measured by their performance in their respective areas of responsibility in order to give due recognition both in fixed and variable compensation.
iv. reasons that justify the compensation composition
Board of Directors:
Compensate professionals in accordance with their responsibilities and market practices.
Executive Board of Brazilian subsidiary:
Compensate professional according to job responsibilities, market practices and level of competitiveness of the Company. Seeks to engage our management and retain of our executives.
v. existence of members who were not compensated by the issuer and the reason for this fact
There is no non-compensated member.
- main performance indicators that are considered in determining each element of compensation
Board of Directors:
We do not have performance indicators for determining the compensation of members of the board.
Executive Board of Brazilian subsidiary:
The Fixed Compensation is established by means of market research criteria to ensure competitiveness and the salary progression is based on their performance evaluation. The variable compensation, in addition to being based on market parameters, is based on the company's results and target evaluations of individual targets for each executive.
- how the compensation is structured to reflect the performance indicators evolution
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Board of Directors:
The amounts payable and interest of members in the Board depend on the Company's progress.
Executive Board of Brazilian subsidiary:
The amounts payable, such as variable compensation in force, depend on the Company's progress and on achieving expected results. The progression of fixed compensation is based on the executive's performance evaluation.
-
how the compensation policy or practice aligns with the interests of issuer in the short, medium, and long
term
Board of Directors:
The compensation of the board of directors is aligned in order to generate value to the Company.
Executive Board of Brazilian subsidiary:
The format for compensating Executive Board of the Brazilian subsidiary seeks to encourage better profitability of investments and projects conducted.
In the short term, this is done through salary and benefits in line with the market and through profit sharing (variable compensation). In the long term, by means of the current stock options plan.
- existence of compensation paid by subsidiaries, or direct or indirect controllers
Board of Directors:
A member of the board receives Directors fees which amount to R$93,600 per annum thought the company's subsidiaries.
Executive Board of Brazilian subsidiary:
Members of the Executive Board of the Brazilian subsidiary receive compensation paid by subsidiaries/controlled companies of the Company. The total compensation paid to statutory officers of the company is divided among its subsidiaries according to the performance of their activities among such subsidiaries. The total amount paid to the 18 officers in the year 2018, was R$ 36,294,977.04.
- existence of any compensation or benefit related to the occurrence of certain corporate event, such as the disposal of controlling interest of the issuer
Board of Directors:
No
Executive Board of Brazilian subsidiary:
The policy of the options Plan provides that in case of change of controlling interest, the options may be exercised early.
- practices and procedures adopted by the Board of Directors to define the individual compensation of the Board of Directors and Board of Executive Officers
As described in the Company's bylaws approved on 9 April 2007, the remuneration (if any) of the Directors and the Executive Committee, as well as any other committee of the Board, shall be determined by the Board. The Directors and members of such committee may also receive reimbursement of travel, hotel and other expenses appropriately incurred by attendance at meetings of the Board or of any committee appointed by the Board, general meetings of the Company,
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or in connection with the business of the Company or of its attributions as Board Member or committee members in general.
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13.2 Total compensation of the Board of Directors, Executive Board of Executive Board, and fiscal council
Fiscal year ended in December 31, 2018
R$ | 2016 | 2017 | 2018 | 2019 Forecast | ||||
Board of | Board of | Board of | Board of | |||||
a. Body | subsidiaries in | subsidiaries in | subsidiaries in | subsidiaries in | ||||
Brazil | Brazil | Brazil | Brazil | |||||
b. Number of members | 18.50 | 18.00 | 18.00 | 18.00 | ||||
c. Remuneration segregated in | 35,316,137.87 | 34,243,252.06 | 36,294,977.04 | 38,323,203.77 | ||||
Annual fixed compensation | 15,883,734.18 | 14,591,223.70 | 15,434,397.34 | 15,578,909.17 | ||||
Salary or management's fees | 15,015,152.25 | 13,624,271.09 | 14,530,493.51 | 14,354,684.12 | ||||
Direct and indirect benefits | 868,581.93 | 966,952.61 | 903,903.83 | 1,224,225.05 | ||||
Participation in committees | 0.00 | 0.00 | 0.00 | 0.00 | ||||
Others | 0.00 | 0.00 | 0.00 | 0.00 | ||||
Variable compensation | 15,565,269.84 | 15,607,548.65 | 16,933,828.41 | 17,443,670.36 | ||||
Bonus | 395,351.53 | 527,971.59 | 33,130.20 | 0.00 | ||||
Profit sharing | 15,169,918.31 | 15,079,577.06 | 16,900,698.21 | 17,443,670.36 | ||||
Participation in meetings | 0.00 | 0.00 | 0.00 | 0.00 | ||||
Commissions | 0.00 | 0.00 | 0.00 | 0.00 | ||||
Others | 0.00 | 0.00 | 0.00 | 0.00 | ||||
Post-employment | 3,867,133.85 | 4,044,479.71 | 3,926,751.29 | 5,300,624.24 | ||||
End of term of office | 0.00 | 0.00 | 0.00 | 0.00 | ||||
Share-based payment | 0.00 | 0.00 | 0.00 | 0.00 | ||||
d. Total compensation | 35,316,137.87 | 34,243,252.06 | 36,294,977.04 | 38,323,203.77 | ||||
Fiscal year ended in December 31, 2018 | ||||||||
R$ | 2016 | 2017 | 2018 | |||||
Board of | Board of | Board of | ||||||
a. Body | subsidiaries in | subsidiaries in | subsidiaries in | |||||
Brazil | Brazil | Brazil | ||||||
b. Number of members | 7 | 6 | 7 | |||||
c. Remuneration segregated in | ||||||||
Management's fees | 940,320.15 | 895,496.25 | 1,120,230.00 |
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13.3 Variable compensation of the Board of Directors, Executive Board and Fiscal Council
Fiscal year ended in December 31, 2018
R$ | 2016 | 2017 | 2018 | 2019 Forecast |
Board of | Board of | Board of | Board of | |
a. Body | subsidiaries | subsidiaries in | subsidiaries in | subsidiaries in |
in Brazil | Brazil | Brazil | Brazil | |
b. Total Number of Members | 18.50 | 18.00 | 18.00 | 18.00 |
c. Number of Compensated Members | 18.50 | 18.00 | 18.00 | 18.00 |
d. Bonus | ||||
i. Minimum Amount under Compensation Plan | ||||
ii. Maximum Amount under Compensation Plan | ||||
iii. Amount Payable under Compensation Plan for Fulfillment | ||||
of Targets | ||||
iv. Amount Actually Recognized in Income | ||||
e. Profit Sharing | ||||
i. Minimum Amount under Compensation Plan | ||||
ii. Maximum Amount under Compensation Plan | ||||
iii. Amount Payable under Compensation Plan for Fulfillment | ||||
of Targets | ||||
iv. Amount Actually Recognized in Income | 15,169,918.31 | 15,079,577.06 | 16,900,698.21 | 17,443,670.36 |
There were no variable compensations for members of the Board of Directors in the last three fiscal years.
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13.4 Share-based compensation plan for the Board of Directors and Executive Board
a. general terms and conditions
Long-Term Incentive Plan: on January 8, 2014, the Board of Directors of Wilson Sons Limited approved a new Stock Options Plan (or "Option Plan") for eligible employees selected by the Board of Directors. Shareholders at an extraordinary general meeting approved such plan, including authorized capital increase of the Company through the creation of up to 4,410,927 new shares. The option plan grants participants the right to purchase shares via Brazilian Depositary Receipts ("BDRs") in Wilson Sons Limited, for a pre-established fixed price, which should not be less than the average share price of the three days prior to the date of the issuance option. The options were granted to the employees, officers or directors of the Company and its subsidiaries ("Eligible Employees").
b. principal objectives of the plan.
The main objective of the Plan is the retention of its principal executives, in order to keep them committed and motivated to integrate their objectives to the interests of the Company's shareholders.
c. how the plan contributes to these objectives.
The Long-Term Incentive Plan contributes to: (a) enhance the Company's operating and financial performance by allowing top executives and employees to acquire stock options, fomenting their integration with the strategic plan of the Company and its shareholders; in addition to allowing the Company to obtain services from its top executives and employees, offering to them the possibility to become responsible for the results of the Company.
d. how the plan fits into the Company's compensation policy.
The Long-Term Incentive Plans are inserted into the compensation policy of Wilson Sons Limited through the maintenance of a proper competition level to the Company's businesses and to the context of the competition market, taking into account the changes in the domestic and foreign market.
e. how the plan aligns the interest of the managers and the Company in short, medium and long term
The design of the Long-Term Incentive Plan considers the annual performance factor of the executive and the Company, to the extent it incorporates the performance factor of Wilson Sons Limited due to the variation of its shares over the period of the plan. Accordingly, the plans align the interests of the managers and the interests of the Company in the short, medium and long term.
f. maximum number of shares affected.
The granting of options under the Option Plan will observe the maximum limit of 4,410,927,97 common shares representative of total capital, of which 6.2% of outstanding capital issued by the Company.
g. maximum number of options to be granted.
The granting of options under the Option Plan will observe the maximum limit of 4,410,927,97 common shares representative of total capital, of which 6.2% of outstanding capital issued by the Company.
h. conditions for acquiring shares.
N/A The Long-Term Incentive Plan does not grant to the executives' options to acquire shares of the Company.
i. criteria for setting the acquisition or exercise price.
The Participant will pay the Exercise Price according to an Option in relation to the number of BDRs acquired or paid up.
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- criteria to set the exercise term
The Options may be exercised by the Participant after compliance of the following Period of Acquisition:
- up to 33% of the BDRs subject to an Option may be acquired or subscribed, as the case may be, after the third anniversary of the Date of Concession;
- an addition of 33% of the BDRs (or 66% of the total number of BDRs) subject to an Option may be acquired or paid up, as the case may be, after the quarto anniversary of the Date of Concession; and
- an addition of 34% of the BDRs (or 100% of the total number of BDRs) subject to an Option may be acquired or paid up, as the case may be, after the fifth anniversary of the Date of Concession.
- settlement method
Not applied. The Options may be exercised by the Participant after compliance of the Period of Acquisition.
l. restrictions of transferring the shares.
An Option may be transferred by the Participant to an Authorized Beneficiary by notice in writing to the Company, and the notice must be followed by the relevant Certificate of Option and Notice of Exercise. After the receipt by the Company, it will issue a new Certificate of Option in favor of the Authorized Beneficiary, together with a new Notice of Exercise.
m. criteria and events that, when detected, lead to suspension of, changes in or termination of the plan
If an individual (except for any Shareholder or group of shareholders holding more than 20% of the Shares issued on the date of adoption of this Plan) obtains the Control of the Company, all the Remaining Options will be automatically considered as fully exercised immediately prior to (and conditioned to) obtaining of the Company's Control by said individual.
If there is the sale of all the venture, businesses and assets of the Company or the sale of the venture, businesses or assets of the Company representing more than 60% of the Value of the Group, any Remaining Option may be exercised immediately prior and conditioned to the conclusion of the sale or within one month immediately after the conclusion. All the Remaining Options will expire, to the extent they are not exercised, at the end of said period.
If the Company approves a resolution to begin a voluntary settlement, any Remaining Option may be exercised within 6 months from the beginning and any Remaining Option (if any) will expire to the extent it is not exercised on the expiry of said period.
n. The impact of the withdrawal of managers from the Company on their entitlement as provided for on the share- based compensation plan.
If a Participant ceases to be employee or ceases to hold position in the Group in view of the following reasons:
- injury, disability or retirement; or
- the employer corporation or the corporation where he holds position ceases to be partner of the Group; or
- the transfer of his job or position to outside the Group due to the fact that the businesses in relation to which he is employee or holds position are transferred to outside the Group; or
- dismissal without cause (to participant with options issued prior to March 21, 2016),
Any Remaining Option that he or his Authorized Participant holds may only be exercised within the period of 6 months as of the date of termination (and it will expire at the end of said period to the extent the Option (if any) continues not exercised, except if the Participant dies within said period.
For options issued after March 21, 2016, if a Participant ceases to be employee or ceases to hold position in the Group due to dismissal without cause any Vested Option that he or his Authorized Participant holds may only be exercised within
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the period of 6 months as of the date of termination (and it will expire at the end of said period to the extent the Vested Option (if any) continues not exercised, except if the Participant dies within said period.
If a Participant dies, any Remaining Option held by him or by his Authorized Participant shall be exercised within months from the death by his legal representative or by his Authorized Participant, respectively (and each Option will expire at the end of said period to the extent the Option (if any) continues not exercised).
If a Participant ceases to be employee or ceases to hold position in the Group (unless in the forms addressed above), no Remaining Option of which he or his Authorized Participant is the Participant shall be exercised after:
- the date of termination; or
- if previously, the date in which the Participant provides or receives notice of termination of employment or position, and each Remaining Option (if any), to the extent it is not exercised, will expire on that date, unless the Board notifies the Participant, in writing, within 60 days from the date the Remaining Option may be exercised during the period stated in the notice which does not expire after 6 months from the termination. The Board will notify the Participant when, in the opinion of the Board, the Participant has received the notice terminating the employment, but has in no time, violated any term of the employment agreement or the circumstances are those that the notice is fair and reasonable. A notice shall be in relation to a few or all of the Remaining Options of a Participant. When the Board notifies a Participant, any relevant Option will expire at the end of the period stated in the notice to the extent the Option continues not exercised, except if the Participant dies within said period.
No Participant will be treated as if he has ceased to be employee or hold position in the Group, if he continues to hold any job or position in the Company of the Group.
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13.5 Share-based compensation of the Board of Directors and Executive Board
Fiscal year ended December 31, 2018
Grant on 31/12/2018
a. | body | Board of | Executive | Total | |
Directors | Board | ||||
b. number of members | - | 0 | 0 | ||
c. in relation to each granting of stock options | - | - | - | ||
i. granting date; | - | - | - | ||
number of options granted | - | - | - | ||
term for the options to become exercisable | - | - | - | ||
iv. maximum period for exercise of the options | - | - | - | ||
iii. period of restriction to the transfer of the shares | - | - | - | ||
vi. | weighted average exercise price of each of the | - | - | - | |
following groups of options: | |||||
outstanding at the start of the fiscal year | - | 0 | 0 | ||
. lost during fiscal year | - | 0 | 0 | ||
. exercised during fiscal year | - | 0 | 0 | ||
. expired during fiscal year | - | 0 | 0 | ||
d. fair value of the options on the granting date | - | - | - | ||
e. potential dilution in the case of the exercise of all the options | - | - | - | ||
granted | |||||
- 33% after 3 years, 33% after 4 years, 34% after 5 years **50% of shares remain held for 6 months from exercise date
Fiscal year ended December 31, 2017
Grant on 15/05/2017
a. | body | Board of | Executive | Total |
Directors | Board | |||
b. number of members | - | 1 | 1 | |
c. in relation to each granting of stock options | - | - | - | |
i. granting date; | - | 15/05/2017 | 15/05/2017 | |
number of options granted | - | 47,000 | 47,000 | |
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term for the options to become exercisable | - | 5 years* | 5 years* | |
iv. maximum period for exercise of the options | - | 10 years | 10 years | |
iii. period of restriction to the transfer of the shares | - | 6 months** | 6 months ** | |
vi. | weighted average exercise price of each of the | - | - | - |
following groups of options: | ||||
outstanding at the start of the fiscal year | - | 0 | 0 | |
. lost during fiscal year | - | 0 | 0 | |
. exercised during fiscal year | - | 0 | 0 | |
. expired during fiscal year | - | 0 | 0 | |
d. fair value of the options on the granting date | - | 592,219 | 592,219 | |
e. potential dilution in the case of the exercise of all the options | - | 0.07% | 0.07% | |
granted | ||||
- 33% after 3 years, 33% after 4 years, 34% after 5 years **50% of shares remain held for 6 months from exercise date
Fiscal year ended December 31, 2016
Grant on 11/08/2016
a. | body | Board of | Executive | Total | |
Directors | Board | ||||
b. number of members | - | 2 | 2 | ||
c. in relation to each granting of stock options | - | - | - | ||
i. granting date; | - | 11/08/2016 | 11/08/2016 | ||
number of options granted | - | 236,000 | 236,000 | ||
term for the options to become exercisable | - | 5 years* | 5 years* | ||
iv. maximum period for exercise of the options | - | 10 years | 10 years | ||
iii. period of restriction to the transfer of the shares | - | 6 months** | 6 months ** | ||
vi. | weighted average exercise price of each of the | - | - | - | |
following groups of options: | |||||
outstanding at the start of the fiscal year | - | 2,609,594 | 2,609,594 | ||
. lost during fiscal year | - | 0 | 0 | ||
. exercised during fiscal year | - | 0 | 0 | ||
. expired during fiscal year | - | 0 | 0 | ||
154
d. fair value of the options on the granting date | - | 2,609,594 | 2,609,594 |
e. potential dilution in the case of the exercise of all the options | - | 0.33% | 0.33% |
granted
* 33% after 3 years, 33% after 4 years, 34% after 5 years **50% of shares remain held for 6 months from exercise date
155
13.6 Regarding the outstanding options of the Board of Directors and of the Executive Board at the end of the last fiscal year, prepare table with the following content:
Fiscal year ended December 31, 2018.
a. | body | Board of | Executive Board | Total |
Directors | ||||
b. number of members | 7 | 21 | 28 | |
c. | number of members who received | - | 16 | 16 |
compensation | ||||
d. | in relation to the options not yet exercised | |||
i. number | - | 977,756 | 977,756 | |
ii. date on which they become exercisable | - | 2019 - 772,636 | 2019 - 772,636 | |
2020 - 93,390 | 2020 - 93,390 | |||
2021 - 95,750 | 2021 - 95,750 | |||
2022 - 15,980 | 2022 - 15,980 | |||
iii. maximum period to exercise shares | - | 2024 - 694,756 | 2024 - 694,756 | |
2026 - 236,000 | 2026 - 236,000 | |||
2027 - 47,000 | 2027 - 47,000 | |||
iv. period of restriction to the transfer of the | - | 6 meses* | 6 meses* | |
shares | ||||
v. average weighted price of the exercise | - | 32.33 | 32.33 | |
fair value of the options at the last day of the | - | 11,683,274.02 | 11,683,274.02 | |
fiscal year | ||||
e. | in relation to the exercisable options | |||
i. number | - | 1,348,644 | 1,348,644 | |
ii. maximum period to exercise shares | - | 2024 - | 2024 - | |
1,348,644 | 1,348,644 | |||
iii. period of restriction to the transfer of the | - | 6 meses* | 6 meses* | |
shares | ||||
iv. average weighted price of the exercise | - | 31.31 | 31.31 | |
fair value of the options at the last day of the | - | 16,464,013.72 | 16,464,013.72 | |
fiscal year | ||||
fair value of the total options at the last day of | - | 28,147,287.74 | 28,147,287.74 | |
the fiscal year | ||||
*50% of shares remain held for 6 months from exercise date.
156
13.7 Regarding the options exercised and shares delivered related to the share- based compensation of the Board of Directors and of the Executive Board, for the last 3 fiscal years, prepare the table with the following contents:
Fiscal year ended December 31, 2018
a. | body | Board of | Executive | Total | |
Directors | Board | ||||
b. number of members | N/A | 0 | 0 | ||
c. in relation to each granting of stock options | - | 0 | 0 | ||
i. number of shares | N/A | 0 | 0 | ||
ii. average weighted price of the exercise | N/A | 0 | 0 | ||
iii. | total value of the difference between the value of exercise and | N/A | 0 | 0 | |
the market value of the shares related to the options exercised | |||||
d. in relation to the shares delivered, report: | - | 0 | 0 | ||
i. number of shares | N/A | 0 | 0 | ||
ii. acquisition average weighted price | N/A | 0 | 0 | ||
iii. | total value of the difference between the value of purchase and | N/A | 0 | 0 | |
the market value of the shares purchase | |||||
Fiscal year ended December 31, 2017 | |||||
a. | body | Board of | Executive | Total | |
Directors | Board | ||||
b. number of members | N/A | 0 | 0 | ||
c. in relation to each granting of stock options | - | 0 | 0 | ||
i. number of shares | N/A | 0 | 0 | ||
ii. average weighted price of the exercise | N/A | 0 | 0 | ||
iii. | total value of the difference between the value of exercise and | N/A | 0 | 0 | |
the market value of the shares related to the options exercised | |||||
d. in relation to the shares delivered inform: | - | 0 | 0 | ||
i. number of shares | N/A | 0 | 0 | ||
ii. acquisition average weighted price | N/A | 0 | 0 | ||
iii. | total value of the difference between the value of purchase and | N/A | 0 | 0 | |
the market value of the shares purchase | |||||
157
Fiscal year ended December 31, 2016
a. | body | Board of | Executive | Total | |
Directors | Board | ||||
b. number of members | N/A | 0 | 0 | ||
c. in relation to each granting of stock options | - | 0 | 0 | ||
i. number of shares | N/A | 0 | 0 | ||
ii. average weighted price of the exercise | N/A | 0 | 0 | ||
iii. | total value of the difference between the value of exercise and | N/A | 0 | 0 | |
the market value of the shares related to the options exercised | |||||
d. in relation to the shares delivered inform: | - | 0 | 0 | ||
i. number of shares | N/A | 0 | 0 | ||
ii. acquisition average weighted price | N/A | 0 | 0 | ||
iii. | total value of the difference between the value of purchase and | N/A | 0 | 0 | |
the market value of the shares purchase | |||||
158
13.8 Information required to understand the data disclosed in items 13.5 to 13.7 - Pricing method of the value of shares and options
a. pricing model
The fair value of stock option plan is determined using the binomial model. The assumptions used in calculating fair value are: expected volatility, expected life, risk free rate and expected dividend returns. The expected volatility is determined by calculating the historical volatility of the price of shares of the Group. The expected dividend return is based on the dividend policy of the Group. The turnover of employees is consistent with the recent turnover and is appropriate to the employees who opted for the plan. In determining the risk free rate the Group uses as interest rate government securities (zero coupon) currency to which the exercise price is determined.
b. data and assumptions used in the pricing model, including the average weighted price of the shares, exercise price, expected volatility, option period, expected dividends and risk-free interest rate
See item above and 13.4.
c. method used and assumptions made to incorporate the expected effects of early exercise
See item above and 13.4.
d. method of determining expected volatility
See item above.
e. whether any other feature of the option was included in measurement of its fair value
See item above
159
13.9 Investments in shares, quotas and other convertible securities, held by managers and directors of fiscal council - per body
a. Number of shares or quotas directly or indirectly held, in Brazil or abroad, issued by the Company, by members of the Board of Directors, Executive Board or Fiscal Council, grouped by body, at the date of closing of the last fiscal year:
Board of Directors:
Number of common shares in the form of BDRS (30/09/2019): 33,500 of the Company.
Executive Board
Number of common shares in the form of BDRS (30/09/2019): 33,500 of the Company.
b. Number of shares or quotas held directly or indirectly, in Brazil or abroad, and other securities convertible into shares or quotas issued by the Company's direct or indirect controlling shareholders, by members of the Board of Directors, of the Executive Board or of the Fiscal Council, grouped by body, on the closing date of the last fiscal year:
Ocean Wilsons Holdings Limited controls the Company, holder of 41,444,000 issuer shares, equivalent to 57.91% ,and 30,117,060 shares equal to 42.09% are outstanding in the market (free float).
The following entities have shareholdings greater than 3% of Ocean Wilsons Holdings Limited:
Shareholders | Shares | % |
Hansa Investment Company Limited | 9,352,770 | 26.45 |
Victualia Limited Partnership | 4,435,064 | 12.54 |
C Townsend | 3,969,049 | 11.22 |
Utilico Emerging Markets Utilities Limited | 2,019,344 | 5.71 |
Dynamo Administração de Recurso | 1,728,854 | 4.89 |
Canaccord Genuity Group Inc | 1,537,953 | 4.35 |
The Company was informed that Mr W H Salomon and family are the beneficiary of shares registered in the name of Victualia Limited Partnership.
The Company was also informed that Mr W H Salomon holds 26.4% and Mr. C Townsend holds 25.9% of the shares with voting rights issued by Hansa Investment Company Limited.
- Number of shares or quotas directly or indirectly held, in Brazil or abroad, and other securities convertible into shares or quotas, issued by the Company's subsidiaries, by members of the Board of Directors, Executive Board or Fiscal Council, grouped by body, at the date of closing of the last fiscal year:
Wilson Sons de Adm e Comércio Ltda
ShareholderON
Board of Directors | 2 |
160
Executive Board | 0 |
Allink Transportes Internacionais LTDA | |
Shareholder | ON |
Board of Directors | 45 |
Executive Board | 90 |
WS Participações Ltda | |
Shareholder | ON |
Board of Directors | 1 |
Executive Board | 0 |
161
13.10Regarding the effective social security plans granted to the members of the Board of Directors and Executive Board, include the following information in the table:
Fiscal year ended in December 31, 2018
R$ | 2016 | 2017 | 2018 | ||
a. Body | Board of subsidiaries | Board of subsidiaries | Board of subsidiaries | ||
in Brazil | in Brazil | in Brazil | |||
b. Number of members | 18.5 | 18.0 | 18.0 | ||
c. Number of compensated members | 18.5 | 18.0 | 18.0 | ||
d. Plan name | Icatu Hartford | Icatu Hartford | Icatu Hartford | ||
e. Number of managers in a position to retire | 2 | 2 | 3 | ||
f. Conditions for early retirement | |||||
g. Updated amount of accumulated contributions | |||||
to | |||||
the pension plan up to the close of the last fiscal | 10,732,850.98 | 10,603,742.01 | 13,320,008.17 | ||
year, minus the amount contributed directly by the | |||||
Executive Officers | |||||
h. Total accumulated amount of contributions | |||||
made during the last year, minus the amount | 623,811.54 | 789,566.14 | 795,713.68 | ||
contributed directly by the managers |
g. conditions for early retirement
The plan does not provide for early retirement.
h. if early redemption is allowed and what are the conditions
The participant may affect early redemption based in the following conditions:
- During the time between the registration date and date of granting the benefit (deferred period), the participant is allowed, at any time,
-
to request redemption of all or part of the reserves constituted with their own contributions. The minimum interval between redemption requests of a participant in the selected plan will be 60 (sixty) days counted from the final redemption request registration date. Finally, in case of early redemption of base participating account, the
Company will withdraw the same amount redeemed by the employee in the grantor's basis account; - During the deferral period, the reserve consisting of the basic contributions made by the Company will only be available to the participant at the time when employment is lost. The reserve redemption percentage will vary from 20% to 100%, in observance of the proportionality over a period of two (2) to 15 (fifteen) years working for the grantor;
- Regarding the occurrence of death or disability of the participant before retirement, payment will be made of 100% of the accrued balance up to occurrence of the fact to the participant, or failing that, to the listed beneficiaries. In turn, they will select the lump sum payment or retirement income annuity.
162
13.11Maximum, minimum and average compensation of the Board of Directors, Executive Board and Fiscal Council
Fiscal year ended in December 31, 2018
R$ | 2016 | 2017 | 2018 | ||
Board of | Board of | Board of | |||
a. Body | subsidiaries in | subsidiaries in | subsidiaries in | ||
Brazil | Brazil | Brazil | |||
b. Number of members | 18.50 | 18.00 | 18.00 | ||
c. Number of members receiving compensation | 18.50 | 18.00 | 18.00 | ||
d. Amount of highest compensation | 7,086,453.13 | 7,090,283.73 | 6,663,266.29 | ||
e. Amount of lowest compensation | 78,000.00 | 78,000.00 | 78,000.00 | ||
f. Average compensation amount | 1,546,351.28 | 1,741,382.90 | 1,831,461.50 | ||
R$ | 2016 | 2017 | 2018 | ||
a. Body | Board of Directors | Board of Directors | Board of Directors | ||
b. Number of members | 6.00 | 6.00 | 7.00 | ||
c. Number of members receiving compensation | 4.00 | 4.00 | 4.00 | ||
d. Amount of highest compensation | 268,950.00 | 268,950.00 | 395,550.00 | ||
e. Amount of lowest compensation | 215,160.00 | 215,160.00 | 241,560.00 | ||
f. Average compensation amount | 282,397.50 | 282,397.50 | 280,057.50 |
163
13.12Describe agreements, insurance policies or other instruments that structure mechanisms of compensation or indemnity for managers in case of removal from office or retirement, including financial consequences to the issuer
In case of separation of managers who make fixed contributions to the health plan, they may continue in the policies, based on the applicable legislation, bearing the full cost of the plan, by age, and within the period indicated by the corresponding legislation. The consequences of this are the impact on the claims of the policies and the mandatory provision in the balance sheet of the corresponding actuarial liability.
164
13.13Regarding the past three fiscal years, provide the percentage of total compensation of each body, recognized in the issuer's results, for members of the Board of Directors, Executive Board of Executive Board and fiscal council who are direct or indirect related persons of the controlling shareholders, as defined in the applicable accounting rules
N/A.
165
13.14 Compensation of officers and members of the Fiscal Council, grouped by body, received for any reason other than the position they hold
In US$
Associated | 2016 | 2017 | 2018 | |
Escritório de Advocacia Gouvêa Vieira | 79,000 | 73,000 | 66,000 | |
CMMR Intermediação Comercial Ltda. | 182,000 | 157,000 | 87,000 | |
Total | 261,000 | 230,000 | 153,000 | |
In R$ | ||||
Associated | 2016 | 2017 | 2018 | |
Escritório de Advocacia Gouvêa Vieira | 268,000 | 233,000 | 249,000 | |
CMMR Intermediação Comercial Ltda. | 630,000 | 501,000 | 316,000 | |
Total | 898,000 | 734,000 | 565,000 | |
Dr. J. F. Gouvêa Vieira, Chairman of the Council, is partner at Escritório de Advocacia Gouvêa Vieira. The fees were paid to Escritório de Advocacia Gouvêa Vieira for its legal services provided.
Mr. C. M. Marote, director of the Council, is shareholder and Officer of CMMR Intermediação Comercial Limitada. The fees were paid to CMMR Intermediação Comercial Limitada for its advisory services provided to Wilson Sons in the tugs segment.
Obs.: In the regular course of its businesses, the Group presents related-party operations observing usual market conditions and on equitable bases. Additionally, the Company maintains certain contracts between companies of this economic group in order to maintain services for the construction of vessels, chartering of vessels and support (including management services, legal and financial).
Executive Board
N/A
Fiscal Council
N/A
166
13.15Amounts recognized in the income of direct or indirect controlling shareholders, joint ventures and subsidiaries of the Company, as compensation paid to the members of the Boards of Directors and Executive Officers, or the Fiscal Council of the Company, grouped by administrative body, detailing the reason for payment to these persons
Fiscal Year 2018 - remuneration received due to the exercise of the position in the issuer
Em R$ | Conselho de Administração | Diretoria Estatutária | Conselho Fiscal | Total | ||||||
Controladores diretos e indiretos | N/A | N/A | N/A | N/A | ||||||
Controladas do emissor | N/A | 36,294,977.04 | N/A | 36,294,977.04 | ||||||
Sociedades sob controle comum | N/A | 1,322,074.41 | N/A | 1,322,074.41 | ||||||
Fiscal Year 2018 - other remuneration received, specifying the title to which they were | ||||||||||
Em R$ | Conselho de Administração | Diretoria Estatutária | Conselho Fiscal | Total | ||||||
Controladores diretos e indiretos | 1,026,630.00 | N/A | N/A | 1,026,630.00 * | ||||||
Controladas do emissor | 93,600.00 | N/A | N/A | 93,600.00 | ||||||
Sociedades sob controle comum | N/A | N/A | N/A | N/A | ||||||
- The Directors who also hold the position of Directors of the parent company Ocean Wilsons Holdings Limited receive remuneration in respect of these positions, directly from the controlling shareholder.
Fiscal Year 2017 - remuneration received due to the exercise of the position in the issuer
Em R$ | Conselho de Administração | Diretoria Estatutária | Conselho Fiscal | Total | ||||||
Controladores diretos e indiretos | N/A | N/A | N/A | N/A | ||||||
Controladas do emissor | N/A | 34,243,252.06 | N/A | 34,243,252.06 | ||||||
Sociedades sob controle comum | N/A | 2,607,694.96 | N/A | 2,607,694.96 | ||||||
Fiscal Year 2017 - other remuneration received, specifying the title to which they were | ||||||||||
Em R$ | Conselho de Administração | Diretoria Estatutária | Conselho Fiscal | Total | ||||||
Controladores diretos e indiretos | 895,496.25 | N/A | N/A | 895,496.25 * | ||||||
Controladas do emissor | 93,600.00 | N/A | N/A | 93,600.00 | ||||||
Sociedades sob controle comum | N/A | N/A | N/A | N/A | ||||||
- The Directors who also hold the position of Directors of the parent company Ocean Wilsons Holdings Limited receive remuneration in respect of these positions, directly from the controlling shareholder.
Fiscal Year 2016 - remuneration received due to the exercise of the position in the issuer
Em R$ | Conselho de Administração | Diretoria Estatutária | Conselho Fiscal | Total | ||||||
Controladores diretos e indiretos | N/A | N/A | N/A | N/A | ||||||
Controladas do emissor | N/A | 35,316,137.87 | N/A | 35,316,137.87 | ||||||
167
Sociedades sob controle comum | N/A | 2,437,799.95 | N/A | 2,437,799.95 | |||||
Fiscal Year 2016 - other remuneration received, specifying the title to which they were | |||||||||
Em R$ | Conselho de Administração | Diretoria Estatutária | Conselho Fiscal | Total | |||||
Controladores diretos e indiretos | N/A | N/A | |||||||
976,140.00 | 976,140.00 * | ||||||||
Controladas do emissor | N/A | N/A | |||||||
93,600.00 | 93,600.00 | ||||||||
Sociedades sob controle comum | N/A | N/A | N/A | N/A | |||||
- The Directors who also hold the position of Directors of the parent company Ocean Wilsons Holdings Limited receive remuneration in respect of these positions, directly from the controlling shareholder.
168
13.16Provide other information that issuer deems relevant
The Board of Directors is empowered to manage the business and thus is the body responsible for making decisions, formulating general guidelines and plans of action for businesses including for long‐term investments.
In addition, we are reporting in this section the Brazilian subsidiary's Executive Board, which together with the Board of Directors participate in the Company's decision‐making process.
169
14 Human Resources
14.1 Description of Human Resources
a. Number of employees (total, by groups based on the performed activity and geographical location)
Segments | 2018 | 2017 | 2016 | ||||||||
Port Terminals | 1846 | 1823 | 1556 | ||||||||
Towage | 951 | 1016 | 1087 | ||||||||
Logistics | 448 | 476 | 446 | ||||||||
Ship Agency | 159 | 180 | 201 | ||||||||
Offshore Vessels JV | N.A. | N.A. | N.A. | ||||||||
Shipyards and Others Non-Segmented Activities | 698 | 675 | 987 | ||||||||
Total | 4102 | 4170 | 4277 | ||||||||
Geographic Location | 2018 | 2017 | 2016 | ||||||||
Brasil | 4096 | 4164 | 4271 | ||||||||
Rio de Janeiro | 800 | 714 | 749 | ||||||||
São Paulo | 774 | 853 | 924 | ||||||||
Espírito Santo | 85 | 87 | 93 | ||||||||
Pernambuco e Ceará | 100 | 116 | 139 | ||||||||
Rio Grande do Sul | 1087 | 1004 | 934 | ||||||||
Bahia | 999 | 1031 | 1030 | ||||||||
Paraná | 54 | 60 | 65 | ||||||||
Santa Catarina | 32 | 91 | 106 | ||||||||
North and Northeast Branchs (AP, AL, AM, RN, SE, MA, PA) | 165 | 208 | 231 | ||||||||
Bermuda | 6 | 6 | 6 | ||||||||
Total | 4102 | 4170 | 4277 | ||||||||
- Number of outsourced third-party staff (total, by groups based on the performed activity and geographical location)
Segments | 2018 | 2017 | 2016 | ||||||||
Port Terminals | 316 | 483 | 439 | ||||||||
Towage | 4 | 12 | 24 | ||||||||
Logistics | 213 | 169 | 213 | ||||||||
Ship Agency | 5 | 4 | 5 | ||||||||
Offshore Vessels JV | N.A. | N.A. | N.A. | ||||||||
Shipyards and Others Non-Segmented Activities | 192 | 141 | 291 | ||||||||
Total | 730 | 809 | 972 | ||||||||
Geographic Location | 2018 | 2017 | 2016 | ||||||||
Rio de Janeiro | 121 | 96 | 128 | ||||||||
São Paulo | 318 | 242 | 353 | ||||||||
Minas Gerais | 0 | 0 | 0 | ||||||||
Espírito Santo | 0 | 1 | 1 | ||||||||
Pernambuco e Ceará | 30 | 30 | 33 | ||||||||
Rio Grande do Sul | 155 | 303 | 312 | ||||||||
Bahia | 102 | 126 | 131 |
170
Paraná | 1 | 0 | 0 | ||||||||
Santa Catarina | 0 | 0 | 2 | ||||||||
Paraíba | 0 | 0 | 0 | ||||||||
North and Northeast Branchs (AP, AL, AM, RN, SE, MA, PA) | 0 | 0 | 0 | ||||||||
Central West Branches (MS, GO, MT) | 3 | 11 | 12 | ||||||||
Total | 730 | 809 | 972 | ||||||||
c. | Turnover rate | |||
Turnover¹: | 2018 | 2017 | 2016 | |
% | 16.80% | 17.37% | 18.76% |
¹ The turnover rate represents the average rate of disconnections over the years.
171
14.2 Comment on any relevant change in relation to the figures disclosed in 14.1 above
There has been no material changes occurred in item 14.1 in the periods mentioned.
172
14.3 Describe the compensation policies for the issuer's employees, informing:
a. policy of variable salaries and compensation
Each year, the salaries paid to our employees are subject to collective agreements or agreement between the Company's businesses or trade unions and union workers, and wage increases will vary based on inflation, through indicators such as the INPC and IPCA, in defined periods, referred to as the base date, in January, February, April, May, June, October and November, depending on the location of our subsidiaries.
Regardless of collective labor agreements or arrangements, the merits and promotions of managers are performed in a meritocratic form, through clear and assertive mechanisms, binding the performance review to the position in the salary range, thus, ensuring that the employees have salaries aligned to their individual performance, organizational skills and the market. In addition, through such methodology we contribute with the fair merit distribution and with the company's financial health.
b. Benefits policy
We offer the following benefits to our employees: meal allowances, medical and dental plan, life insurance, pension plan, transportation, payroll deductible loan and funeral expenses payment in order to be make our workers terms competitive with the market.
c. features of share-based compensation plans for employees other than managers, identifying:
We do not have share-based compensation plans for non‐management employees.
.
173
14.4 Description of the relationship between the issuer and unions
Our employees are represented by labor unions in the various regions where we operate. Therefore, we sign agreements and collective bargaining agreements with several unions, and there is no history of conflict between the parties. Our relationship with the unions is based on understanding, respect, transparency and communication.
174
14.5 Other relevant information
All relevant information regarding Human Resources were previously provided herein.
175
15 | Control and Economic Group | ||||||
15.1 / 15.2 Shareholding position | |||||||
Shareholder | Nacionality | Qty. of Common Shares (Units) | Shares % | Last change | Qty. total shares (Units) | Total shares % | |
Ocean Wilsons Holdings Limited | 41,444,000 | 57.91% | 27/4/2007 | 41,444,000 | 57.9% | ||
Others | 30,117,060 | 42.09% | 30,117,060 | 42.1% | |||
Treasury Shares | - | - | - | - | - | ||
TOTAL | 71,561,060 | 100.0% | 71,561,060 | 100.0% | |||
Shareholder | Nacionality | Qty. of Common Shares (Units) | Shares % | Last change | Qty. total shares (Units) | Total shares % | |
Ocean Wilsons Holdings Limited | 41,444,000 | 57.91% | 27/4/2007 | 41,444,000 | 57.9% | ||
Aberdeen Asset Management PLC | English | 7,066,959 | 9.88% | 30/8/2019 | 7,066,959 | 9.9% | |
3G Radar | 4,183,500 | 5.85% | 28/12/2017 | 4,183,500 | 5.8% | ||
Dynamo Internacional Gestão de Recursos Ltda. | 3,613,413 | 5.05% | 21/1/2019 | 3,613,413 | 5.0% | ||
Others | 15,253,188 | 21.31% | 15,253,188 | 21.3% | |||
Treasury Shares | - | - | - | - | - | ||
TOTAL | 71,561,060 | 100.0% | 71,561,060 | 100.0% | |||
Ocean Wilsons Holdings Limited | |||||||
Hansa Investment Company Limited | 9,352,770 | 26.45% | |||||
Victualia Limited Partnership | 4,435,064 | 12.54% | |||||
C Townsend | 3,969,049 | 11.22% | |||||
Utilico Emerging Markets Utilities PLC | 2,019,344 | 5.71% | |||||
Dynamo Internacional Gestão de Recursos | 1,728,854 | 4.89% | |||||
Canaccord Genuity Group Inc | 1,537,953 | 4.35% | |||||
Others | 12,320,006 | 34.84% | |||||
Total | 35,363,040 | 100.00% |
176
15.3 Distribution of capital
Date of last shareholders' meeting: 25/04/2019
Number of shareholders - individuals (Units): 573
Number of shareholders - companies (Units): 138
Number of institutional investors (Units): 76 Outstanding shares
Number of common shares (Units): 29,799,660
% common shares: 41.83
Number of preferred shares (Units): 0
- preferred shares: 0 Total (Units): 29,799,660
- total: 41.83
177
15.4 Organization Chart of Shareholders and Economic Group
Wilson Son Limited | As at: | 31/07/2019 | |||||||||||||||||||||||||||||||||||||||||||||||
Corporate Structure | |||||||||||||||||||||||||||||||||||||||||||||||||
Ocean Wilsons Holdings Limited (CS) | |||||||||||||||||||||||||||||||||||||||||||||||||
- Bermuda - | |||||||||||||||||||||||||||||||||||||||||||||||||
58.17% | |||||||||||||||||||||||||||||||||||||||||||||||||
50% | Atlantic Offshore | ||||||||||||||||||||||||||||||||||||||||||||||||
Wilson Sons Limited (1) | |||||||||||||||||||||||||||||||||||||||||||||||||
Services SA (22) - | |||||||||||||||||||||||||||||||||||||||||||||||||
- Bermuda - | |||||||||||||||||||||||||||||||||||||||||||||||||
Panama - | |||||||||||||||||||||||||||||||||||||||||||||||||
100% | 100% | ||||||||||||||||||||||||||||||||||||||||||||||||
WS Participaciones | S.A. | ||||||||||||||||||||||||||||||||||||||||||||||||
South Patagonia | |||||||||||||||||||||||||||||||||||||||||||||||||
(3) -Uruguay | |||||||||||||||||||||||||||||||||||||||||||||||||
100% | SA (23) -Uruguay | ||||||||||||||||||||||||||||||||||||||||||||||||
WSAC Ltda (2) | 99.99% | WS Part. Ltda (4) | |||||||||||||||||||||||||||||||||||||||||||||||
100.% | 50% | 50% | 100% | 100% | 100% | 100% | 100% | 49.13% | 0.87% | ||||||||||||||||||||||||||||||||||||||||
Wilport Ltda | Saveiros S.A. | WSCI | WSAM Ltda | ||||||||||||||||||||||||||||||||||||||||||||||
Por. Campinas | Allink | Brasco | WS Estaleiros | WS Ultratug | |||||||||||||||||||||||||||||||||||||||||||||
(5) | (11) | (12) | (8) | (14) | Ltda(15) | Ltda (16) | (17) | Part. S.A. (19) | |||||||||||||||||||||||||||||||||||||||||
99.99% | 100% | 100% | 100% | 100% | |||||||||||||||||||||||||||||||||||||||||||||
Allink Ger. | WS Administração | Transamérica | WS Offshore | Magallanes | |||||||||||||||||||||||||||||||||||||||||||||
(13) | de Bens Ltda (24) | Visas Ltda (18) | S.A. (20) | Nav. S.A. (21) | |||||||||||||||||||||||||||||||||||||||||||||
100% | 100% | 100% | 100% | ||||||||||||||||||||||||||||||||||||||||||||||
TECON | TECON SV | WSLog Ltda | EADI Ltda | ||||||||||||||||||||||||||||||||||||||||||||||
RG S.A. (6) | S.A. | (7) | (9) | (10) | |||||||||||||||||||||||||||||||||||||||||||||
Controlling Shareholder | CS Ocean Wilsons Holdings Limited | ||||||||||||||||||||||||||||||||||||||||||||||||
Holding | 1 Wilson Sons Limited |
2 | Wilson, Sons de Administração e Comércio Ltda. | |
3 | WS Participaciones S.A (former FREWYR INT. S.A.) | |
4 | WS Participações Ltda. | |
Terminals | 5 | Wilport Operadores Portuários Ltda. |
6 | Tecon Rio Grande S.A. | |
7 | Tecon Salvador S.A. | |
8 | Brasco Logística Offshore Ltda. | |
Logistics | 9 | Wilson, Sons Logística Ltda. |
10 | Eadi Santo André Ltda. | |
11 | Porto Campinas Ltda. | |
12 | Allink Transportes Internacionais Ltda. | |
13 | Allink Serviços e Gerenciamento de Cargas Ltda. | |
Towage | 14 | Saveiros, Camuyrano Serviços Marítimos S.A. |
Shipyard | 15 | Wilson, Sons Com., Ind. e Agência de Navegação Ltda. |
16 | Wilson, Sons Estaleiros Ltda | |
Shipping Agency | 17 | Wilson, Sons Agência Marítima Ltda. |
18 | Transamérica Visas Serv.Despachos Ltda | |
O ffshore Vessels | 19 | Wilson Sons Ultratug Participações S.A. |
20 | Wilson Sons Offshore S.A. | |
21 | Magallanes Navegação S.A. | |
22 | Atlantic Offshore Services | |
23 | South Patagonia SA -Uruguay | |
Non-segmented | 24 | Wilson, Sons Administração de Bens Ltda |
a. all direct and indirect controllers and, if the issuer wishes, shareholders with a stake equal to or greater than 5% of a class or type of shares
Ocean Wilsons Holdings Limited controls the Company, holder of 41,444,000 issuer shares, equivalent to 57.91% ,and 30,117,060 shares equal to 42.09% are outstanding in the market (free float).
The following entities have shareholdings greater than 3% of Ocean Wilsons Holdings Limited:
Shareholders | Shares | % |
Hansa Investment Company Limited | 9,352,770 | 26.45 |
Victualia Limited Partnership | 4,435,064 | 12.54 |
C Townsend | 3,969,049 | 11.22 |
Utilico Emerging Markets Utilities Limited | 2,019,344 | 5.71 |
Dynamo Administração de Recurso | 1,728,854 | 4.89 |
Canaccord Genuity Group Inc | 1,537,953 | 4.35 |
The Company was informed that Mr W H Salomon and family are the beneficiary of shares registered in the name of Victualia Limited Partnership.
The Company was also informed that Mr W H Salomon holds 26.4% and Mr. C Townsend holds 25.9% of the shares with voting rights issued by Hansa Investment Company Limited.
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subsidiaries and affiliates
SUBSIDIARIES
Details of the Company's subsidiaries, and other entities and operations under its control, at the end of the reporting period are as follows:
Place of | |||
incorporation | Proportion of ownership interest | ||
and operation | 31/03/2018 | 31/12/2017 | |
Holding company | |||
Wilson, Sons de Administração e Comércio Ltda. | Brazil | 100% | 100% |
WS Participações S.A. | Brazil | 100% | 100% |
WS Participaciones S.A. | Uruguay | 100% | 100% |
Wilson, Sons Administração de Bens Ltda. | Brazil | 100% | 100% |
Towage | |||
Saveiros Camuyrano Serviços Marítimos S.A. | Brazil | 100% | 100% |
Shipyard | |||
Wilson, Sons Comércio, Indústria, e Agência de Navegação Ltda. | Brazil | 100% | 100% |
Wilson, Sons Estaleiro Ltda. | Brazil | 100% | 100% |
Ship Agency | |||
Wilson, Sons Agência Marítima Ltda. | Brazil | 100% | 100% |
Transamérica Visas Serviços de Despachos Ltda. | Brazil | 100% | 100% |
Logistics | |||
Wilson, Sons Logística Ltda. | Brazil | 100% | 100% |
EADI Santo André Terminal de Carga Ltda. | Brazil | 100% | 100% |
Allink Transportes Internacionais Ltda.(1) | Brazil | 50% | 50% |
Port terminal | |||
Brasco Logística Offshore Ltda. | Brazil | 100% | 100% |
Tecon Rio Grande S.A. | Brazil | 100% | 100% |
Tecon Salvador S.A. | Brazil | 100% | 100% |
Wilport Operadores Portuários Ltda. | Brazil | 100% | 100% |
In 2 February 2016, the Group, through its subsidiaries, concluded the acquisition of 7.5% of Tecon Salvador's ordinary shares for a price of US$5.1 million (R$20.7 million) of Intermarítima Terminais Ltda. consideration included US$2.6 million in cash (R$10.5 million) and debt settlement totaling US$2.8 million (RS$11.3 million). As a result of this change, Wilson Sons now holds 100% of the subsidiary's shares.
The Group also holds a 100% stake in an exclusively Brazilian investment fund: Hydrus Private Credit Fixed Income Fund in Investment Fund Quotas. This fund is managed by Banco Itaú and its policies and objectives are determined by the Group's Treasury.
JOINT VENTURES
Proportion | |||
Place of | of ownership interest | ||
incorporation | |||
and operation | 31/03/2018 | 31/12/2017 | |
Towage | |||
Consórcio de Rebocadores Barra de Coqueiros (¹) | Brazil | 50% | 50% |
Consórcio de Rebocadores Baia de São Marcos (¹) | Brazil | 50% | 50% |
Offshore | |||
Wilson, Sons Ultratug Participações S.A.(²) | Brazil | 50% | 50% |
Atlantic Offshore S.A. (³) | Panamá | 50% | 50% |
Logistics | |||
Porto Campinas, Logística e Intermodal Ltda | Brazil | 50% | 50% |
- holding of issuer in group companies
The Company does not have holdings in any company from controlling group.
- holding of group companies in the issuer
No Company from the controlling group has a direct holding in any group company.
- companies under joint control
Please, see item b.
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15.5 With respect to any shareholders agreement filed at the headquarters of the issuer or to which the controller is a party, governing the exercise of voting rights or transfer of shares issued by the issuer, state:
The Company has no shareholder agreement.
181
15.6 Indicate significant changes in the holdings of control group members and issuer managers
There were no significant changes in the participation of our control group members since the public issue of shares.
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15.7 Principal corporate transactions
Capital Reduction of Wilson, Sons Com., Ind. e Agência de Navegação Ltda. on February 25, 2013.
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Main business conditions:
The parties are indirect subsidiaries through Wilson Sons Limited and the purpose of the capital reduction transaction is to separate structures and assets and exclude exceeding capital, in order to provide higher operational and administrative efficiency to the Company's business. Thus, Wilson, Sons Com., Ind. e Agência de
Navegação Ltda., only kept assets bound to the provision of shipyard and real estate services, transferring to Saveiros, Camuyrano Serviços Marítimos S.A. and Wilson, Sons de Administração e Comércio Ltda. corporate assets bound to other activities.
Due to the reduction, the capital of Wilson, Sons Com., Ind. e Agência de Navegação Ltda. has been reduced in R$ 88,000,000.00, going to R$ 33,230,446.00, at the shareholding interest ratio of the shareholders of W Wilson, Sons Com., Ind. e Agência de Navegação Ltda. - Companies involved:
Wilson, Sons Com., Ind. e Agência de Navegação Ltda. Wilson, Sons de Administração e Comércio Ltda. Saveiros, Camuyrano Serviços Marítimos S.A.
Wilport Operadores Portuários Ltda. Wilson, Sons Agência Marítima Ltda. Tecon Salvador S.A.
Wilson, Sons Logística Ltda. Eadi Santo André Ltda. - Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Capital Reduction of Saveiros on May 06, 2013
-
Main business conditions:
To provide higher administrative and operational efficiency to the Company's business.
Due to the reduction, the capital and the interest is distributed into 41,404,051 (91.39%) shares to Wilson, Sons de Administração e Comércio Ltda and 3,898,934 (8.61%) to Vis Limited. - Companies involved:
Wilson, Sons de Administração e Comércio Ltda. Vis Limited. - Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Capital Reduction of Wilport Operadores Portuários Ltda, on August 05, 2013.
-
Main business conditions:
The parties are indirect subsidiaries through Wilson Sons Limited and the purpose of the capital reduction transaction is to separate structures and assets and exclude exceeding capital, in order to provide higher
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operational and administrative efficiency to the Company's business. Thus, Wilport Operadores Portuários Ltda, considering its capital has exceeded, the company has reduced its capital in R$ 72,500,000.75 (seventy-two million, five hundred thousand million Reais and seventy-five cents).
Due to the reduction, the capital of Wilport Operadores Portuários Ltda went to R$ 7,500,000.00 (seven million, five hundred thousand Reais), at the shareholding interest ratio of the shareholders of Wilson, Sons de Administração e Comércio Ltda. and WS Participações Ltda.
-
Companies involved:
Wilson, Sons de Administração e Comércio Ltda. WS Participações Ltda. - Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Acquisition of de 100% of the quotas of Frewyr International S.A on July 10, 2013
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Main business conditions:
Acquisition of 100% of shares of the Uruguayan company Frewyr International SA, with a paid-up capital of 40,000 Uruguayan Pesos, at the cost of USD 4,500, on July 10, 2013. Frewyr International SA changed its name to WS Participaciones S.A - Companies involved: Wilson Sons Limited
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Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Capital Increase of Brasco Logistica Offshore Ltda, on 01 December 2014.
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Main business conditions:
Capital increase by virtue of capitalization of the Advances for Future Capital Increase (AFAC).
Due to the capital increase, performed by Partner Wilson Sons Management e Comércio Ltda, there has been an increase of R$ 112,710,000.00 (one hundred twelve million, seven hundred ten thousand Reais), with R$ 109,610,000.00 (one hundred nine million, six hundred ten thousand Reais) being paid until 10/09/2014 and the amount of R$ 3,100,000.00 (three million, one hundred thousand Reais) payable within 180 days.
Due to such capital contribution, Brasco Logísitica Offshore went from R$ 25,181,135.00 (twenty-five million, one hundred eighty-one thousand, one hundred thirty-five Reais) to R$ 137,891,135.00 (one hundred thirty-seven million, eight hundred ninety-one thousand, one hundred thirty-five Reais). - Companies involved:
Wilson, Sons de Administração e Comércio Ltda. - Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
184
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Adjustment of capital structure of Wilson, Sons Operations Marítimas Especiais Ltda, on January 31, 2014.
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Main business conditions:
Adjustment in the composition and proportion of the company's capital, by virtue of the closing of the former partner Wilson, Sons Apoio Marítimo Ltda, which occurred on 10.30.2012, re-adapting the interests that its partners Wilson, Sons de Administração e Comércio Ltda and Saveiros, Camuyrano - Serviços Marítimos S/A held in the capital, to the ratio of 99.99% and 0.01%, respectively. - Companies involved:
Wilson, Sons de Administração e Comércio Ltda. Saveiros, Camuyrano - Serviços Marítimos S/A - Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Assignment of quota owned by quotaholder Christian von Lachmann to WS Participações Ltda, in the capital of Transamerica Visas Serviços de Despachos Ltda, on May 09, 2014.
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Main business conditions:
Quotaholder partner Christian von Lachmann herein assigned and transferred with express consent from the other quotaholder of the company, 1 quota held by him to WS Participações Ltda, which became a part of the company.
Due to the abovementioned quota assignment, Christian von Lachmann withdrew himself from the Company. - Companies involved:
Wilson, Sons de Administração e Comércio Ltda. WS Participações Ltda. - Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Shareholding interest jointly held by Allink Serviços e Gerenciamento de Cargas Ltda and Nelson Ubirajara Barbosa Cajado, on September 01, 2015.
-
Main business conditions:
Shareholding interest jointly held by Allink Serviços e Gerenciamento de Cargas Ltda with Nelson Ubirajara Barbosa Cajado, on September 01, 2015. The company will provide innovative services of maritime agency, position agency and ancillary activities of air transportation. Interest of Wilson Sons: 99.99%, Interest of Nelson Ubirajara Cajado.: 0.01%. - Companies involved:
Allink Transportes Internacionais Ltda.
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- Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Dissolution of Bric Brazilian Intermodal Complex S.A. through merger by Brasco Logistics Offshore Ltda. on September 01, 2015.
-
Main business conditions:
The parties are indirect subsidiaries through Wilson Sons de Management e Comércio Ltda and the purpose of the merger transaction is to improve structures and assets, in order to provide higher operational and administrative efficiency to the Company's business. Thus, Bric Brazilian Itermodal Complex S.A. was dissolved at the merger by
Brasco Logísitica Offshore Ltda, transferring to Brasco Logísitica Offshore the assets related to the provision of maritime support services to oil and gas exploration and production.
The total amount of net equity of Saveiros, Camuyrano Serviços Marítimos S.A. as at the transaction date was of R$ 167,408,000.00 and the amount of the spun-off portion was calculated in R$ 10,797,000.00.
Due to the merger, the capital of Brasco Logistics Offshore Ltda. has increased in R$ 323.00, going from R$ 137,891,135.00 to R$ 137,891,458.00, with the issuance of 323 new quotas, each fully subscribed and paid by WS Participações Ltda, which became a part of the company.
As a result of the merger, the Partner of Brasco Logísitica Offshore Ltda, Wilson Sons Operadores Portuários Ltda withdrew itself from the company through encumbered assignment of its sole quota representing the capital of Wilson Sons Management e Comércio Ltda in the amount of R$ 1.00. - Companies involved:
Wilson Sons de Administração e Comércio Ltda. Wilson Sons Operadores Portuários Ltda. Wilson Sons Participações Ltda.
Brasco Logísitica Offshore Ltda.
Bric Brazilian Itermodal Complex S.A. - Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Dissolution of Sobrare-Servemar Ltda. through merger by Saveiros, Camuyrano Serviços Marítimos S.A. on December 01, 2015.
-
Main business conditions:
Dissolution of Sobrare-Servermar Ltda through the merger of Sobrare-Servermar Ltda by Saveiros Camuyrano Serviços Marítimos S/A with the transfer of its assets and liabilities, and Saveiros is the successor of the Company in relation to all of its rights and obligations. Saveiros Camuyrano Serviços Maritimos S.A hereby approves the increase of its capital, in the amount of R$ 23,213,217.41 (twenty-three million, two hundred thirteen thousand, two hundred seventeen Reais and forty-one cents), upon the issuance of twenty-eight million, eight hundred fifteen thousand, four hundred forty-four (28,815,444) new registered common shares, without par value, as a result of the merger, going from R$ 36,495,292.94 (thirty-six million, four hundred ninety-five thousand, two hundred ninety- two Reais and ninety-four cents) to R$ 59,708,510.35 (fifty-nine million, seven hundred eight thousand, five hundred ten Reais and thirty-five cents). - Companies involved:
186
Wilson, Sons de Administração e Comércio Ltda.
Sobrare-Servermar Ltda.
Saveiros Camuyrano Serviços Maritimos S.A.
Wilson, Sons Comércio, Indústria e Agência De Navegação Ltda.
Vis Limited
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Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Purchase of shares of Intermarítima Portos e Logisticas S.A by Wilson, Sons de Administração e Comércio Ltda in the company Tecon Salvador S.A, on December 22, 2015.
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Main business conditions:
Wilson, Sons de Administração e Comércio Ltda. acquired a total of two million, seventy-one thousand, two hundred seventy-one (2,071,271) registered common shares without par value issued by Tecon Salvador S.A held by Intermarítima, representing seven point five percent (7.5%) of the total voting capital stock of Tecon Salvador S.A.
The Shares will be transferred to Wilson Sons de Administração e Comércio Ltda with all the rights that they represent, including rights to dividends, bonus and any other rights conferred upon them, and all Shares are free and clear of any liens, encumbrances, debts, withholding rights, charges, levy, options and any other similar rights or claims of any nature.
The Shares were purchased for the price of R$ 18,828,911.52 (eighteen million, eight hundred twenty-eight thousand, nine hundred eleven Reais and fifty-two cents). - Companies involved:
Wilson, Sons de Administração e Comércio Ltda. Wilport Operadores Portuários Ltda.
Tecon Salvador S.A. - Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Liquidation of Vis Limited through voluntary liquidation on October 27, 2016.
-
Main business conditions:
Dissolution of Vis Limited through liquidation with transfer of its assets and liabilities, and Wilson Sons Limited is the successor of the Company in relation to all of its rights and obligations. - Companies involved: Wilson Sons Limited Vis Limited
- Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
187
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Purchase of shares of Allink Transportations Internacionais Ltda by Wilson, Sons de Administração e Comércio Ltda on December 12, 2017.
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Main business conditions:
Wilson, Sons de Administração e Comércio Ltda. acquired a total of two hundred twenty-five (225) registered common shares without par value issued by Allink Transportations Internacionais Ltda., held by Wilport Operadores Portuários Ltda., representing fifty percent (50.0%) of the total voting capital stock of Allink Transportations Internacionais Ltda.
The Shares will be transferred to Wilson Sons de Administração e Comércio Ltda with all the rights that they represent, including rights to dividends, bonus and any other rights conferred upon them, and all Shares are free and clear of any liens, encumbrances, debts, withholding rights, charges, levy, options and any other similar rights or claims of any nature.
The Shares were purchased for the price of R$ 225,000.00 (two hundred twenty-five thousand Reais). - Companies involved:
Allink Transportations Internacionais Ltda. Wilport Operadores Portuários Ltda.
Wilson, Sons de Administração e Comércio Ltda - Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Purchase of shares of Porto Campinas, Logística e Intermodal Ltda. by Wilson, Sons de Administração e Comércio Ltda on December 12, 2017.
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Main business conditions:
Wilson, Sons de Administração e Comércio Ltda. acquired a total of two million, eight hundred one thousand, nine hundred thirty-one (2,801,931) registered common shares without par value issued by Porto Campinas, Logística e Intermodal Ltda., held by Wilport Operadores Portuários Ltda., representing fifty percent (50.0%) of the total voting capital stock of Porto Campinas, Logística e Intermodal Ltda.
The shares will be transferred to Wilson Sons de Administração e Comércio Ltda with all the rights that they represent, including rights to dividends, bonus and any other rights conferred upon them, and all shares are free and clear of any liens, encumbrances, debts, withholding rights, charges, levy, options and any other similar rights or claims of any nature.
The shares were purchased for the price of R$ 2,801,931 (two million, eight hundred one thousand, nine hundred thirty-one Reais). - Companies involved:
Porto Campinas, Logística e Intermodal Ltda. Wilport Operadores Portuários Ltda.
Wilson, Sons de Administração e Comércio Ltda
188
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Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Transfer of shares of Saveiros, Camuyrano Serviços Marítimos S.A. to Wilson, Sons de Administração e Comércio Ltda on 22 December 2017 through dividend distribution.
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Main business conditions:
Wilson, Sons de Administração e Comércio Ltda. acquired a total of fourteen million, five hundred eighteen thousand, five hundred twenty-three (14,518,523) registered common shares without par value issued by Saveiros, Camuyrano Serviços Marítimos S.A., held by Wilson, Sons Comércio, Indústria e Agência de Navegação Ltda., representing nineteen point fifty-nine percent (19.59%) of the total voting capital stock of Saveiros, Camuyrano Serviços Marítimos S.A.
The shares will be transferred to Wilson Sons de Administração e Comércio Ltda with all the rights that they represent, including rights to dividends, bonus and any other rights conferred upon them, and all shares are free and clear of any liens, encumbrances, debts, withholding rights, charges, levy, options and any other similar rights or claims of any nature.
The shares were purchased for the price of R$ 14,518,523 (fourteen million, five hundred eighteen thousand, five hundred twenty-three Reais). - Companies involved:
Saveiros, Camuyrano Serviços Marítimos S.A.
Wilson, Sons Comércio, Indústria e Agência de Navegação Ltda. Wilson, Sons de Administração e Comércio Ltda. - Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Capital increase of Wilport Operadores Portuários Ltda. on 26 March 2018 with the transfer of shares from Wilson, Sons Logística Ltda., Eadi Santo André Terminal de Cargas Ltda., Tecon Salvador S/A, e Tecon Rio Grande S/A.
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Main business conditions:
Wilport Operadores Portuários Ltda. received a capital increase with registered common shares without par value issued by Wilson, Sons Logística Ltda., held by Wilson, Sons de Administração e Comércio Ltda., representing thirty-six point eighty-two percent (36.82%) of the total voting capital stock of Wilson, Sons Logística Ltda.
Wilport Operadores Portuários Ltda. received a capital increase with registered common shares without par value issued by Eadi Santo André Terminal de Cargas Ltda., held by Wilson, Sons de Administração e Comércio Ltda., representing fifty percent (50%) of the total voting capital stock of Eadi Santo André Terminal de Cargas Ltda.
Wilport Operadores Portuários Ltda. received a capital increase with registered common shares without par value issued by Tecon Salvador S/A, held by Wilson, Sons de Administração e Comércio Ltda., representing forty-nine point twenty-eight percent (49.28%) of the total voting capital stock of Tecon Salvador S/A.
189
Wilport Operadores Portuários Ltda. received a capital increase with registered common shares without par value issued by Tecon Rio Grande S/A, held by Wilson, Sons de Administração e Comércio Ltda., representing one hundred percent (100%) of the total voting capital stock of Tecon Rio Grande S/A.
The shares were transferred to Wilport Operadores Portuários Ltda. with all the rights that they represent, including rights to dividends, bonus and any other rights conferred upon them, and all Shares are free and clear of any liens, encumbrances, debts, withholding rights, charges, levy, options and any other similar rights or claims of any nature.
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Companies involved:
Wilson, Sons de Administração e Comércio Ltda. Wilport Operadores Portuários Ltda.
Wilson, Sons Logística Ltda.
Eadi Santo André Terminal de Cargas Ltda. Tecon Salvador S/A
Tecon Rio Grande S/A - Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and of issuer's managers.
Capital increase of Wilson, Sons de Administração e Comércio Ltda. on 31 July 2019 where Wilson Sons Limited paid up its interest in the subsidiary with shares it held in Saveiros, Camuyrano Serviços Marítimos S.A.
-
Main business conditions:
Wilson, Sons de Administração e Comércio Ltda. received a capital increase with registered common shares issued by Saveiros, Camuyrano Serviços Marítimos S.A., held by Wilson Sons Limited ("WSL"), representing five point twenty-six percent (5.26%) of the total and voting capital stock of Saveiros, Camuyrano Serviços Marítimos S.A..
With the capital increase, WSL transfers its direct interest in Saveiros, Camuyrano Serviços Marítimos S.A., which becomes a wholly owned subsidiary of Wilson, Sons de Administração e Comércio Ltda., which is ninety-eight percent (98%) held by WSL. - Companies involved:
Wilson Sons Limited
Wilson, Sons de Administração e Comércio Ltda. Saveiros, Camuyrano Serviços Marítimos S.A. - Effects resulting from transaction on the ownership structure, especially, on the controlling shareholder's interest, shareholders owning more than 5% of the capital and issuer's managers:
There have been no effects on controlling shareholder's interest, of shareholders with more than 5% of capital and
of | issuer's | managers. |
190
b. Corporate structure before and after
Wilson Son Limited | As at: | 31/12/2015 | |||||||||||||
Corporate Structure | |||||||||||||||
BERMUDA, GUERNSEY & PANAMA | |||||||||||||||
Ocean Wilsons Holdings Limited (CS) | |||||||||||||||
- Bermuda - | |||||||||||||||
58.25% | |||||||||||||||
VIS Ltd (2) | 100% | Wilson Sons Limited(H) | 50% Atlantic Offshore | ||||||||||||
Services SA (22) - | |||||||||||||||
- Guernsey - | - Bermuda - | ||||||||||||||
Panama - | |||||||||||||||
100% | 100% | ||||||||||||||
WS Participaciones | S.A. | South Patagonia | |||||||||||||
(3) | -Uruguay | SA (23) -Uruguay | |||||||||||||
100% | |||||||||||||||
WSAC Ltda (1) | 99.99% | WS Part. Ltda (4) | BRASIL | ||||||||||||
100% | 100.% | 36.82% | 100% | 75.15% | 5.26% | 100% | 100% | 100% | 48.06% | 1.94% | |||||
TECON RG | Wilport Ltda | 63,18% | Brasco | Saveiros S.A. | 19.59% | WSCI | WS Estaleiros | WSAM Ltda | WS Ultratug | ||||||
S.A. (6) | (5) | WSLog Ltda (9) | (8) | (14) | Ltda(15) | Ltda (16) | (17) | Part. S.A. (19) | |||||||
50% | 50% | 100% | 100% | 100% | 100% | ||||||||||
EADI Ltda | WS Administração | Transamérica | WS Offshore | Magallanes | |||||||||||
(10) | de Bens Ltda (24) | Visas Ltda (18) | S.A. (20) | Nav. S.A. (21) | |||||||||||
41.78% | 50.72% | ||||||||||||||
TECON SV S.A. | 50% | Por.Campinas | |||||||||||||
(7) | (11) | ||||||||||||||
99.99% | |||||||||||||||
50% | Allink | Allink | |||||||||||||
- Ger. (13)
Terminals | Logistics | Brasco | Towage | Shipyard | Agency | Offshore |
Port and Logistics Business | Maritime and Oil Business |
192
193
194
Wilson Son Limited | As at: | 31/07/2019 | |||||||||||||||||||||||||||||||||||||||||||||||
Corporate Structure | |||||||||||||||||||||||||||||||||||||||||||||||||
Ocean Wilsons Holdings Limited (CS) | |||||||||||||||||||||||||||||||||||||||||||||||||
- Bermuda - | |||||||||||||||||||||||||||||||||||||||||||||||||
58.17% | |||||||||||||||||||||||||||||||||||||||||||||||||
50% | Atlantic Offshore | ||||||||||||||||||||||||||||||||||||||||||||||||
Wilson Sons Limited (1) | |||||||||||||||||||||||||||||||||||||||||||||||||
Services SA (22) - | |||||||||||||||||||||||||||||||||||||||||||||||||
- Bermuda - | |||||||||||||||||||||||||||||||||||||||||||||||||
Panama - | |||||||||||||||||||||||||||||||||||||||||||||||||
100% | 100% | ||||||||||||||||||||||||||||||||||||||||||||||||
WS Participaciones | S.A. | ||||||||||||||||||||||||||||||||||||||||||||||||
South Patagonia | |||||||||||||||||||||||||||||||||||||||||||||||||
(3) -Uruguay | |||||||||||||||||||||||||||||||||||||||||||||||||
100% | SA (23) -Uruguay | ||||||||||||||||||||||||||||||||||||||||||||||||
WSAC Ltda (2) | 99.99% | WS Part. Ltda (4) | |||||||||||||||||||||||||||||||||||||||||||||||
100.% | 50% | 50% | 100% | 100% | 100% | 100% | 100% | 49.13% | 0.87% | ||||||||||||||||||||||||||||||||||||||||
Wilport Ltda | Allink | Brasco | Saveiros S.A. | WSCI | WSAM Ltda | WS Ultratug | |||||||||||||||||||||||||||||||||||||||||||
Por. Campinas | WS Estaleiros | ||||||||||||||||||||||||||||||||||||||||||||||||
(5) | (11) | (12) | (8) | (14) | Ltda(15) | Ltda (16) | (17) | Part. S.A. (19) | |||||||||||||||||||||||||||||||||||||||||
99.99% | 100% | 100% | 100% | 100% | |||||||||||||||||||||||||||||||||||||||||||||
Allink Ger. | WS Administração | Transamérica | WS Offshore | Magallanes | |||||||||||||||||||||||||||||||||||||||||||||
(13) | de Bens Ltda (24) | Visas Ltda (18) | S.A. (20) | Nav. S.A. (21) | |||||||||||||||||||||||||||||||||||||||||||||
100% | 100% | 100% | 100% | ||||||||||||||||||||||||||||||||||||||||||||||
TECON | TECON SV | WSLog Ltda | EADI Ltda | ||||||||||||||||||||||||||||||||||||||||||||||
RG S.A. (6) | S.A. | (7) | (9) | (10) | |||||||||||||||||||||||||||||||||||||||||||||
Controlling Shareholder | CS Ocean Wilsons Holdings Limited | ||||||||||||||||||||||||||||||||||||||||||||||||
Holding | 1 Wilson Sons Limited |
2 | Wilson, Sons de Administração e Comércio Ltda. | |
3 | WS Participaciones S.A (former FREWYR INT. S.A.) | |
4 | WS Participações Ltda. | |
Terminals | 5 | Wilport Operadores Portuários Ltda. |
6 | Tecon Rio Grande S.A. | |
7 | Tecon Salvador S.A. | |
8 | Brasco Logística Offshore Ltda. | |
Logistics | 9 | Wilson, Sons Logística Ltda. |
10 | Eadi Santo André Ltda. | |
11 | Porto Campinas Ltda. | |
12 | Allink Transportes Internacionais Ltda. | |
13 | Allink Serviços e Gerenciamento de Cargas Ltda. | |
Towage | 14 | Saveiros, Camuyrano Serviços Marítimos S.A. |
Shipyard | 15 | Wilson, Sons Com., Ind. e Agência de Navegação Ltda. |
16 | Wilson, Sons Estaleiros Ltda | |
Shipping Agency | 17 | Wilson, Sons Agência Marítima Ltda. |
18 | Transamérica Visas Serv.Despachos Ltda | |
O ffshore Vessels | 19 | Wilson Sons Ultratug Participações S.A. |
20 | Wilson Sons Offshore S.A. | |
21 | Magallanes Navegação S.A. | |
22 | Atlantic Offshore Services | |
23 | South Patagonia SA -Uruguay | |
Non-segmented | 24 | Wilson, Sons Administração de Bens Ltda |
195
15.8 Any other information which the issuer deems relevant
Não há outras informações relevantes.
16 Related party transactions
16.1 Describe the rules, policies and practices of the issuer in respect to transactions with related parties as defined by accounting rules that deal with this issue
In the regular course of business, the Group engages in transactions with related parties observing usual market conditions and equitable bases. The conflicts of interest are dealt with in the Company's Bylaws deliberated on April 9, 2007, which is available on the website: http://ri.wilsonsons.com.br/.
Additionally, the Company maintains certain contracts between companies of this economic group in order to maintain services for the construction of vessels, chartering of vessels and support (including management services, legal and financial).
197
16.2 Information on transactions with related parties
Related Party | Date | Amount (R$) | Balance | Amount | Period | Loan | Interest | |||||
CMMR Intermediação Comercial Ltda | 31/12/2018 | - | 316,000.00 | |||||||||
Relation | We entered into a service agreement with CMMR Intermediação Comercial Ltda, effective for an | |||||||||||
indeterminate term. Mr. Claudio Marote, member of our Board of Directors, is a partner and administrator. | ||||||||||||
Object | Mr. C. M. Marote is a shareholder and director of CMMR Intermediação Comercial Ltda. Fees were paid to | |||||||||||
CMMR Intermediação Comercial Ltda. for consultancy services to the Wilson Sons towage segment. | ||||||||||||
Escritório de Advocacia Gouvêa Vieira | 31/12/2018 | - | 249,000.00 | |||||||||
Relation | We entered into a service agreement with Gouvêa Vieira Advogados for an indefinite period, of which José | |||||||||||
Francisco Gouvêa Vieira, a member of the Board of Directors, is a partner. | ||||||||||||
By means of such agreement, Gouvêa Vieira Advogados provides us with legal advisory services. The | ||||||||||||
contracted fees are calculated based on the hours spent by the professionals involved in the preparation of | ||||||||||||
Object | the works (time sheet basis) and are charged regularly. In the case of specific issues, such as defense in | |||||||||||
administrative and judicial proceedings and the preparation of opinions, the fees are previously agreed | ||||||||||||
between the parties. | ||||||||||||
Allink Transportes Internacionais Ltda | 31/12/2018 | - | 1,348,000.00 | - | 4,000.00 | |||||||
Relation | Subsidiary active in the Logistics segment, Allink Transportes Internacionais Ltda is 10% owned by Augusto | |||||||||||
Cezar Baião, a member of our Board of Directors. | ||||||||||||
Object | Allink Transportes Internacionais Ltda. rents the Group's terminal warehouse. | |||||||||||
Wilson Sons Ultratug Participações S.A. | 31/12/2018 | 9,433,000.00 | 39,027,000.00 | |||||||||
Relation | The Company holds a 50% stake in the company. | |||||||||||
Object | Intercompany loans with Wilson Sons Ultratug (interest rate - 0.3% a.m., without maturity) and other | |||||||||||
accounts payable and receivable from Wilson, Sons Offshore and Magallanes. | ||||||||||||
Consórcio de Rebocadores Barra de Coqueiros | 31/12/2018 | - | 252,000.00 | |||||||||
Relation | The Company holds a 50% stake in the company. Transactions with Joint Venture are disclosed as a result | |||||||||||
of the proportional amounts not eliminates in the consolidation. | ||||||||||||
Object | Consortiums charter boats from Towage business. Transactions with Joint Venture are disclosed as a result | |||||||||||
of the proportional amounts not eliminates in the consolidation. | ||||||||||||
Consórcio de Rebocadores Baía de São Marcos | 31/12/2018 | 95,000.00 | 8,521,000.00 | |||||||||
Relation | The Company holds a 50% stake in the company. | |||||||||||
Object | Consortiums charter boats from Towage business. Transactions with Joint Venture are disclosed as a result | |||||||||||
of the proportional amounts not eliminates in the consolidation. | ||||||||||||
Atlantic Offshore S.A. | 31/12/2018 | - | 78,142,000.00 | |||||||||
Relation | The Company holds a 50% stake in the company. | |||||||||||
Object | Intercompany loans with Atlantic Offshore S.A. |
198
- Regarding each transaction or group of transactions mentioned in item
- above, carried out in the last fiscal year: (a) identify the measures taken to treat conflict of interests; and (b) show the strictly commutative nature of the conditions agreed or the appropriate countervailing payment
We have not identified any conflict of interests regarding agreements entered into between our managers and the related parties mentioned in item 16.2. In order to ensure the necessary independence, our Bylaws requires that:
- A Director that is directly or indirectly interested in an agreement or contract proposed with the Company shall declare the nature of such interest, as required by law, and
- A Director may not vote on any contract or proposed agreement in which such Director is interested and cannot attend or be counted in the quorum of such meeting. A determination of the Board that this director is interested shall be final and conclusive.
199
16.4 Other relevant information
None.
200
17 Capital
17.1 Prepare a table containing the following information about the capital:
a. issued capital, separated by class and type
b. subscribed capital, separated by class and type
- paid-incapital, separated by class and type In US$
Issued capital | Capital stock | Contributed Capital | Number of shares | Class of shares | ||||
10,102,975.40 | 10,102,975.40 | 10,102,975.40 | 71,561,060 | Common | ||||
In R$ | ||||||||
Issued capital | Capital stock | Contributed Capital | Number of shares | Class actions | ||||
27,584,024.80 | 27,584,024.80 | 27,584,024.80 | 71,561,060 | Common | ||||
- term to pay up the capital not yet paid up, separated by class and type
Not applicable.
- authorized capital, stating the number of shares, value and date of approval
Not applicable.
- securities convertible into shares and conditions for conversion
Not applicable.
201
17.2 In relation to capital increases of the issuer, state:
a. | date of the resolution | 20/07/2017 | |
b. | body that decided the increase | Board of Directors | |
c. | date of issue | 21/07/2017 | |
d. | the total amount of increase | R$512,172.00 | |
e. | amount of securities issued, divided by class and type | 16,400 BDRs | |
f. | issue price | R$31.23 | |
g. | form of payment | Money | |
h. | criteria used to determine the issue value (art. 170, § 1, of Law No. 6404, 1976) | See item 13.4 a. | |
i. | state if the subscription was private or public | Private | |
j. | percentage that increase represents in relation to the share capital immediately | 0.02% | |
prior to the capital increase | |||
a. | date of the resolution | 26/07/2017 | |
b. | body that decided the increase | Board of Directors | |
c. | date of issue | 27/07/2017 | |
d. | the total amount of increase | R$373,780.00 | |
e. | amount of securities issued, divided by class and type | 11,000 BDRs | |
f. | issue price | 33.98 | |
g. | form of payment | Money | |
h. | criteria used to determine the issue value (art. 170, § 1, of Law No. 6404, 1976) | See item 13.4 a. | |
i. | state if the subscription was private or public | Private | |
j. | percentage that increase represents in relation to the share capital immediately | 0.02% | |
prior to the capital increase | |||
a. | date of the resolution | 13/11/2017 | |
b. | body that decided the increase | Board of Directors | |
c. | date of issue | 13/11/2017 | |
d. | the total amount of increase | R$1,202,355.00 | |
e. | amount of securities issued, divided by class and type | 38,500 BDRs | |
202
f. | issue price | 31.23 |
g. | form of payment | Money |
h. | criteria used to determine the issue value (art. 170, § 1, of Law No. 6404, 1976) | See item 13.4 a. |
i. | state if the subscription was private or public | Private |
j. | percentage that increase represents in relation to the share capital immediately | 0.05% |
prior to the capital increase | ||
a. | date of the resolution | 07/12/2017 |
b. | body that decided the increase | Board of Directors |
c. | date of issue | 08/12/2017 |
d. | the total amount of increase | 312,300.00 |
e. | amount of securities issued, divided by class and type | 10,000 BDRs |
f. | issue price | 31.23 |
g. | form of payment | Money |
h. | criteria used to determine the issue value (art. 170, § 1, of Law No. 6404, 1976) | See item 13.4 a. |
i. | state if the subscription was private or public | Private |
j. | percentage that increase represents in relation to the share capital immediately | 0.44% |
prior to the capital increase | ||
a. | date of the resolution | 16/08/2018 |
b. | body that decided the increase | Board of Directors |
c. | date of issue | 16/08/2018 |
d. | the total amount of increase | 742,024.80 |
e. | amount of securities issued, divided by class and type | 23,760 BDRs |
f. | issue price | 31.23 |
g. | form of payment | Money |
h. | criteria used to determine the issue value (art. 170, § 1, of Law No. 6404, 1976) | See item 13.4 a. |
i. | state if the subscription was private or public | Private |
j. | percentage that increase represents in relation to the share capital immediately | 0.03% |
prior to the capital increase | ||
203
a. | date of the resolution | 17/12/2019 |
b. | body that decided the increase | Board of Directors |
c. | date of issue | 17/12/2019 |
d. | the total amount of increase | R$543,402.00 |
e. | amount of securities issued, divided by class and type | 17,400 BDRs |
f. | issue price | R$31.23 |
g. | form of payment | Money |
h. | criteria used to determine the issue value (art. 170, § 1, of Law No. 6404, 1976) | See item 13.4 a. |
i. | state if the subscription was private or public | Private |
j. | percentage that increase represents in relation to the share capital immediately | 0.02% |
prior to the capital increase | ||
a. | date of the resolution | 09/01/2020 |
b. | body that decided the increase | Board of Directors |
c. | date of issue | 10/01/2020 |
d. | the total amount of increase | R$9,369,000.00 |
e. | amount of securities issued, divided by class and type | 300,000 BDRs |
f. | issue price | R$31.23 |
g. | form of payment | Money |
h. | criteria used to determine the issue value (art. 170, § 1, of Law No. 6404, 1976) | See item 13.4 a. |
i. | state if the subscription was private or public | Private |
j. | percentage that increase represents in relation to the share capital immediately | 0.42% |
prior to the capital increase | ||
204
17.3 In respect to splits, combinations and stock dividends, inform in table
form:
b. Number of shares before | c. Number of shares after | |||||
a. Resolution date | approval, separated by | approval, separated by | ||||
class and type | class and type | |||||
Split | February 26, 2007 | 5,012,000 common shares - | 60,144,000 common shares | |||
single class | - singe class | |||||
Increase in capital | April 9, 2007 | 60,144,000 common shares | 71,144,000 common shares | |||
- single class | - single class | |||||
No further splits, combinations or increase in capital have taken place since the events described above.
205
17.4 Regarding reductions in capital of the issuer, state:
a. date of the resolution
Not applicable.
b. date of the reduction
Not applicable.
c. the total reduction
Not applicable.
d. number of shares canceled by the reduction, separated by class and type
Not applicable.
e. returned value per share
Not applicable.
f. form of restitution: i. cash
ii in goods, description of goods
Not applicable.
g. percentage that the reduction represents in relation to company immediately prior to the capital reduction
Not applicable.
206
17.5 Any other information which the issuer deems relevant
Not applicable.
207
18 Securities
18.1 Shares' rights:
- Right to dividends
At the board of the 20th and 21st of March 2016 the Board of Directors approved a new dividend policy of an amount of approximately 50% of the Company's Net Profit, provided that::
- The dividend policy will not compromise the policy for growth of the Company whether it be, through acquisition of other companies, or by reason of development of new business; and
- The Board of Directors considers that the payment of such dividend would be in the interests of the Company and in compliance with the laws to which the Company is subject.
Our Board of Directors may, in accordance with article 15 of our bylaws and in accordance with the companies act of Bermuda companies, declare that a dividend be paid to shareholders in proportion to the number of shares held by them from Company funds and the shareholders from time to time may decide to make available for payment as dividends in accordance with Articles 15.2 and 15.3 of our Bylaws, and such dividend may be paid at sight fully or partially in kind, and in this case the Board of Directors may determine the value for distribution in kind of any assets. No unpaid dividend will accrue interest against the Company.
According to Article 15.2 of our bylaws, a value of at least 25% of our adjusted net earnings (as defined in our bylaws) for the current year will be declared by our Board of Directors as a dividend to be paid to shareholders in one or more installments before the immediately following general meeting, except that the dividend will be binding unless the Board finds that the payment of the dividend would not be in the Company's interest, in which case the value of dividends not distributed this way will recorded in a special profit reserve account "Retained Dividends" and, if not offset against future losses shall be paid whenever the Board of Directors considers this payment in the interest of the Company.
BDR-holders will be entitled to receive dividends in the same way as holders of our Shares, subject to deduction of fees paid to the Custodian and the Depositary, the costs of currency conversion and taxes, if any.
Any dividend or other amounts payable with respect to a share that has not been claimed for three years from the due date of your payment, if the Board of Directors so decides, will lose the rights and will no longer be payable by the Company.
- voting rights
All shares have one vote per share on all matters submitted for vote by shareholders.
- convertibility into another class or kind of share, including:
Subject to the Company's Bylaws, at the discretion of the Board, whether or not related to the issuance and sale of any shares or other equity of the Company, the Company may issue equity, contracts, guarantees or other instruments evidencing any shares, option rights, securities with conversion or option rights or obligations under the terms, conditions or other provisions as may be determined by the Board.
i. conditions
There are no conditions imposed on the convertibility of shares currently issued by the Company.
ii. effects on company capital
Not applicable.
208
- rights to capital reimbursement
Not applicable.
- the right to participate in a public offering for sale of control
Not applicable.
- circulation restrictions
Not applicable.
- conditions for modification of the rights guaranteed by such securities
Not applicable.
- possibility of redemption of shares:
- hypothesis for redemption
- formula for calculation of the redemption value Not applicable.
- other relevant characteristics Not applicable.
- foreign issuers must identify the differences between the characteristics described in items "a" to "i" and those usually attributed to similar securities issued by domestic issuers, which are differentiated from the securities described and which are imposed by rules of the country of origin of the issuer or the country in which their securities are under custody.
We have not identified differences in the characteristics of securities issued by the Company.
209
18.2 Describe, if any, rules in the bylaws that limit the voting rights of significant shareholders or oblige them to hold a public offer
According to the Company's Bylaws, no shareholder will be entitled to vote at a general meeting unless he has paid all capital calls related to all shares held. Article 72.4 of the Bylaws requires that controlling shareholders within 60 days after a person becomes a controlling shareholder (and provided this person has not been a controlling shareholder prior to such date) make a public offer to acquire all the issued and outstanding shares of the Company (including stock backed certificates or other beneficial interests representing Shares) at the same price and terms for acquisition of such person's controlling interest in the Company. According to the Bylaws (i) control means, except as otherwise expressly stated in the Bylaws, the direct or indirect power to direct or cause the direction of the business, administration or policy of the Company or such person, whether through ownership of shares with voting rights, by contract or otherwise, except however that ownership of more than 50% of the voting shares of the Company or such person shall be deemed as control, and (ii) the controlling shareholder will mean a controlling shareholder, alone or with associates, of the Company. In accordance with Article 75 of our bylaws, following the Offer, if a controlling shareholder or its affiliate, individually or jointly, acquires shares (or stock backed certificates) representing more than one third of the outstanding shares ( all Shares issued by the Company (or stock back certificates), excluding the shares (or stock backed certificates) held by any controlling shareholder and its affiliates and shares held by management) at the time, this controlling shareholder shall be required to make an offer to purchase all outstanding shares (including stock backed certificates) at a price equal to the economic value of such shares and stock backed certificates. According to the bylaws, economic value and the value of shares of stock backed certificates shall mean the value of one share equal to the value of the Company divided by the number of shares issued, pursuant to valuation made according to one or more of the following methods, at the discretion of the Board, (i) shareholders equity at book value, (ii) shareholders equity at market value, (iii) discounted cash flow, (iv) multiples comparison and ( v) the market price determined by the market price of securities. The appraisal report will be prepared by an independent expert appointed by the Board. This offer shall comply with the rules and regulations in each jurisdiction in which shares (or stock backed certificates) are traded or are listed, including rules and regulations of relevant stock exchanges and securities commissions. In accordance with Article 72 of our bylaws, if at any time the person who is not part of the economic group that includes the Selling Shareholder and its affiliates, participating in purchasing shares or stock backed certificates, that when combined with any other shares or stock backed certificates held by that person (or any associate of that person), results, taken together, in the right to exercise 20% or more of the votes that may be cast in a resolution proposed at a General Meeting of the Company, such person or such associate (or, by prior approval of the Board, any one or more but not all of them) shall be required, within 60 days of that acquisition, to jointly and severally (if there is more than one part), to make a public offer to acquire all outstanding shares and stock backed certificates outstanding that are not owned by that person or any of its associates for a price payable in cash within 20 days of acceptance of the offer (or in a longer period and on such terms as may be required to comply with any laws, rules or regulations, including the requirements of any relevant investment or stock exchange), at least the Minimum Price applicable to this offer . To this end, "Minimum Price" means, with respect to an offer of shares or stock backed certificates, the price per share or, as applicable, stock backed certificates, specified by the Directors, which shall be one of the following items chosen by the Directors, at its discretion: (a) the value determined by the Directors as being equivalent to the highest price for any shares or the equivalent number of stock backed certificates paid by that person or any member during the 12 months immediately prior to the acquisition thereof, (2) the value determined by the Directors as being equivalent to the Economic Value (as defined above) of a share or, as in case of stock back certificates, (3) the value determined by the Directors as equivalent to 120% of the subscription price applicable to any public offering of shares, stock backed certificates or other securities or instruments representing shares of the Company, and effected by the Company in the 24 months immediately prior to such acquisition, adjusted upwards so to reflect any increase in its rate of inflation or changes in exchange rates between the date of this public offering and the acquisition thereof, and (4) the amount determined by the Directors as being equivalent to 120% of the average middle market quotations relating to a share or the equivalent amount of stock backed certificates on the stock exchange on which shares or stock backed certificates are most widely transacted during the 90 days immediately prior to such acquisition. The requirement to undertake a public offering described above will not persist if (i) the full rights of that person, and any associate of that person to exercise their vote is reduced to less than 20% of voting rights within 30 days of purchase and remains below 20% for the continuous period of 12 months thereafter, or (ii) the Board, at its discretion, decides to waive this requirement as provided in our bylaws (which waiver may be general or effected on any number of occasions and with respect to one
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acquisition and/or one person and/or any one or more of the associates of this person, as may be decided by the Board at its sole discretion and recorded on the respective resolution). The Board shall have power at any time while the right to exercise 20% or more of the votes eligible to be cast in respect to resolution proposed at a general meeting of the Company remains owned or controlled by a person, who is not a member of the economic group formed by OWHL and affiliates, and any associate of that person, to send one or more notifications (each hereinafter referred to as "Restriction Notice") to that person, which may determine that, with respect to all shares held by such person or any member, the said person and / or each pertinent associate (or anyone acting on his behalf or upon his instructions) shall not be entitled to vote at general meetings and / or class meetings of the Company.
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18.3 Describe exceptions and conditions precedent relating to political or economic rights provided for in bylaws
In accordance with clause 11.5 of the Company's Bylaws, the Board of Directors may at its sole discretion and without reason refuse the transfer of such share that is not fully paid up. The Board will refuse to register a transfer unless all consents, authorizations and permits applying to any court or government agency with jurisdiction of the Bermuda Islands have been obtained. If the Board refuses to register a transfer of any share, the Secretary, within 60 days after the day on which the transfer has been registered with the Company, shall send to the transferor and the transferee a notice of refusal. The Board may, in accordance with article 15 of the Bylaws and in accordance with the companies act of Bermuda, declare that a dividend be paid to shareholders in proportion to the number of shares held by them from the resources of the Company and shareholders from time to time may decide to make available for payment as dividends in accordance with Articles 15.2 and 15.3 of our Bylaws, and such dividend may be paid at sight all or partly in kind, in which case the Board may determine the value for distribution of any assets in kind. No unpaid dividend shall accrue interest against the Company. In accordance with Article 15.2 of the Bylaws, a value of at least 25% of our adjusted net income (as defined in our bylaws) concerning the current year will be declared by our Board of Directors as a dividend to be paid to shareholders in one or more installments before the general meeting immediately thereafter, except that the dividend will be binding unless the Board finds that the payment of the dividend would not be in the Company's interest, in which case the value of dividends not distributed this way will be booked to a special profit reserve account called "Retained Dividends " and, if not offset against future losses shall be paid whenever the Board considers this payment as being in the Company's interest . The owners of the BDR will be entitled to receive dividends in the same way as holders of our Shares, subject to deduction of fees paid to the Custodian and the Depositary, the costs of currency conversion and taxes, if any. If a shareholder does not claim a dividend within seven years from the dividend payment date, then the resources corresponding to the shares of that the shareholder deposited with the paying agent for payment of dividends will be returned to the Company as provided in the Paying Agency Agreement of December 1, 2006 between The Bank of New York (Luxembourg) SA. and the Company. Any dividend or other amounts payable with respect to a share that has not been claimed for three years from the payment due date, if the Board so decides, shall lose the rights and will no longer be payable by the Company. Bermuda law provides that the Memorandum of Association may be amended by resolution passed at a General Meeting of Shareholders duly convened. In accordance with article 70 of our bylaws, the bylaws will not be terminated, changed or modified until such has been approved by a resolution of the Board and a resolution of the General Meeting with votes of at least 66 2/3% of votes of shareholders present. Under Bermuda law, holders of a total of not less than 20% nominal value of the share capital issued by the Company or a class thereof, have the right to request the Supreme Court of Bermuda for the annulment of any amendment to the memorandum of association approved by the shareholders at a General Meeting, save for a change that alters or reduces the capital of the Company as provided in the Companies Act (Companies Act).When this request is made, the amendment becomes valid only insofar as confirmed by the Supreme Court. An application for annulment of an amendment of the memorandum of association shall be made within 21 days after the date of approval of the amendment and may be made on behalf of people who have the right to make such a request by one or more of their proxies appointed by them for this purpose. This application for annulment cannot be done by people who voted for the amendment.
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18.4 Trading volume as well as highest and lowest prices of securities traded on a stock exchange or Organized OTC, in each of quarters in the last three fiscal years
Fiscal Year 2018
Quarter | Trading Volume | Highest Quotation (R$) | Lowest Quotation (R$) | Average Quotation (R$) |
31-03-18 | 53,604,910 | 40.19 | 36.51 | 38.55 |
30-06-18 | 131,017,501 | 43.90 | 36.61 | 40.67 |
30-09-18 | 106,207,398 | 50.50 | 40.50 | 40.90 |
31-12-18 | 108,999,204 | 49.00 | 38.20 | 39.95 |
Fiscal Year 2017
Quarter | Trading Volume | Highest Quotation (R$) | Lowest Quotation (R$) | Average Quotation (R$) |
31-03-17 | 77,362,096 | 36.00 | 29.50 | 35.40 |
30-06-17 | 54,199,492 | 40.00 | 34.07 | 37.74 |
30-09-17 | 62,333,622 | 43.00 | 31.10 | 42.32 |
31-12-17 | 35,669,339 | 43.03 | 36.10 | 39.50 |
Fiscal Year 2016
Quarter | Trading Volume | Highest Quotation (R$) | Lowest Quotation (R$) | Average Quotation (R$) |
31-03-16 | 62,809,378 | 34.99 | 26.00 | 31.95 |
30-06-16 | 77,519,488 | 34.00 | 29.00 | 31.57 |
30-09-16 | 38,643,590 | 38.99 | 30.55 | 30.00 |
31-12-16 | 38,574,762 | 36.99 | 32.00 | 31.80 |
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18.5 Other securities other than shares, including:
The Company does not have securities admitted to trade other than stock.
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18.6 Brazilian markets in which our securities are traded
The Company's shares are traded on B3 S.A. - Brasil, Bolsa, Balcão, under the ticker symbol "WSON33"
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18.7 Classes and types of securities admitted to trading on foreign markets, including
- country
Luxembourg.
- market
EuroMTF.
- entity administering the markets in which securities are admitted to trading
Luxembourg Stock Exchange.
- date of admission to trading
April 30, 2007.
- if any, indicate the segment of negotiation
There is no trading segment.
- date of listing in the trading segment
None.
- percentage of trading volume abroad in relation to the total volume of negotiations for each class and type in the last year
There was no trading volume abroad. The shares are held in custody with The Bank of New York to back the BDR in circulation on B3 (ex-BM&FBovespa - Bolsa de Valores, Mercadorias e Futuros).
- if any, proportion of depositary receipts abroad for each class and type of shares:
None.
- if any, the depositary bank
The Bank of New York (Luxembourg) S.A.
- if applicable, the custodian
The Bank of New York (Luxembourg) S.A.
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18.8 Description of securities traded in foreign markets:
- identification of securities and Jurisdiction
BMG968101094, Luxembourg
- quantity (Units)
29,799,660
- global face value
GBP$0.0833333333333333
- issuing Date
April 30, 2007.
- outstanding debt balance at the end of the last fiscal year
Not Applicable.
- restriction to outstanding units
Not Applicable.
- convertibility condition and effects on share capital
Not Applicable.
- possibility of Redemption
Not Applicable.
- characteristics of securities
Not Applicable.
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18.9 Describe the distribution of public offerings made by the issuer or by third parties, including controllers and associated companies and subsidiaries, in securities of the issuer
1st Public Distribution of BDR's:
In April of 2007 we made an initial public offering of 29.7 million primary shares in the form of BDRs issued by us, free and clear of any liens or encumbrances, of which 26.4 million were common shares in the form of initially offered BDRs and
3.3 supplementary common shares, exclusively in the form of BDRs resulting from exercise of the supplemental tranche of shares. The selling price per share was fixed after the completion of the bookbuilding process at R$ 23.77, totaling R$ 705,969,000.00. The public distribution included: (i) the public distribution of shares in Brazil in the unorganized OTC market in accordance with CVM Instruction 400, through the coordinators of that offering, with the participation of certain member institutions of the securities and brokerage consortium and, simultaneously, (ii) efforts to place the shares in the United States, conducted by certain placement agents and certain international institutions engaged by them, exclusively with qualified institutional investors, resident and domiciled in the United States defined in accordance with the provisions of Rule 144A, regulating Securities Act of 1933 ("Rule 144A" and "Securities Act" respectively), in transactions exempt from registration in accordance with the provisions of the Securities Act, and investors in other countries except the United States and Brazil, according to the law of the country of residence of each investor and in accordance with the procedures laid down in Regulation S enacted pursuant to the Securities Act ("Foreign Investors"), which invest in Brazil in accordance with mechanisms for investment provided by National Monetary Council Resolution No. 2689 of January 26, 2000, as amended (the " CMN Resolution 2689), and CVM Instruction No. 325, of January 27, 2000 , as amended ("CVM Instruction 325") and Law No. 4131 of September 3, 1962, as amended ("Law 4131 "). No registration of the offering or of the shares was made with any agency or regulatory organ in the capital markets of any other country, except Brazil.
This offering was registered with the CVM under No. 08004-7, on April 27, 2007.
Common shares in the form of BDRs, issued by the Company began trading on the B3 (ex-BM&FBovespa - Bolsa de Valores, Mercadorias e Futuros) on April 30, 2007.
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18.10Use of proceeds from public offerings and possible deviations
a. how the resulting funds of the offering were used:
The proceeds from public offering have been used as follows:
1. Port Terminals:
- Investment for expansion of our terminal capacity (Tecon Rio Grande and Tecon Salvador) such expansion of berths, the storage capacity of position;
- Acquisition of remaining equity in the subsidiary Tecon Salvador (see item 6.5
- Acquisition and extension of the operating port terminal (Brasco) and
- Other infrastructure works.
2. Offshore
- In building new PSV vessels to supply demand for maritime support operations and production of oil and gas.
3. Towage
- Fleet renewal through the construction of new tugs.
b. whether there were significant deviations between the effective investment of the funds and the proposed investments disclosed in the prospectuses of the respective distribution.
The Company followed the planned use of resources informed at the time of the public offering.
c. if there were deviations, reasons for such deviations:
The Company followed the planned use of resources informed at the time of the public offering.
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18.11Description of tender offers made by the issuer related to the shares issued by third parties
Not Applicable
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18.12Any other information which the issuer deems relevant
Not applicable.
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19 Plans to buyback securities in treasury
19.1 For plans to buy back shares of the issuer, provide the following information:
- dates of resolutions that have approved plans to repurchase
- for each plan, indicate:
- number of shares under the plan, separated by class and type
- percentage of the total outstanding shares, separated by class and type
- buy back period
- reserves and profits available for repurchase
- other important characteristics
- quantity of shares purchased, separated by class and type
- weighted average price of the acquisition, separated by class and type
- percentage of shares purchased in relation to the total approved
The Company has no plan to repurchase shares and securities in treasury.
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19.2 Regarding the transaction of securities held in treasury, present these in table form, segregating by type, class and kind, indicating the quantity, value and total weighted average price to purchase the following:
- initial balance
- acquisitions
- sales
- cancellations
- final balance
The Company has no plan to repurchase shares and securities in treasury.
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19.3 Provide any other information which the issuer deems relevant
The Company has no plan to repurchase shares and securities in treasury.
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20 Securities trading policy
20.1 Indicate whether the issuer has adopted a trading policy for securities issued by its direct or indirect controlling shareholders, officers, members of the board, audit committee and any other organ with technical and consultancy functions, created in the bylaws, informing:
- responsible for approving the policy and date of approval
The Board of Directors was responsible for approval. The policy was approved on May 10th, 2010.
- persons bound
Members of the Board of Directors and executives of the Company's subsidiaries and persons with access to privileged information.
- main features
The Company, Directors, Employees with access to Inside Information, the Shareholder, the Subsidiaries and the people who, because of their position, function or position in the Controller or the Subsidiaries, may have knowledge of Inside Information about Company and which have signed the Adhesion Agreement, may not trade their securities in the periods in which there is an impediment to trading of Securities, by determination of the Legal Representative ("Trading Blackout Period").
It is forbidden to trade Securities: (a) by the Company, (b) by the Controlling Shareholder, Directors, Audit Committee Members and Staff with access to inside information, and also (c) by any person who, by virtue of his position, function or position in the Controller or the Subsidiaries which have signed the adhesion, may have knowledge of Inside Information about the Company, until it discloses to the market in Material Fact or Event, in the following cases:
- upon occurrence of any Material Fact or Event to business of the Company;
- (a) when the purchase or sale of securities by the Company, its Subsidiaries or any other company under common control is ongoing, (b) or when an option or mandate has been granted for this purpose, only the dates on which the Company trades or informs Accredited Brokers who trade securities for its own issue, and
- when there is an intention to promote the merger, partial or total spinoff, transformation or reorganization of the Company.
The trading restrictions here described shall not apply to the Company, the Controlling Shareholder, the Directors, the Audit Committee and Staff which have access to Inside Information, from the date of signing of the Adhesion Agreement, when carrying out operations under the Trading Policy under this Manual.
It will be framed within the Trading Policy the negotiations of above persons that constitute long-term investment, given at least one of these characteristics:
- performance by the Company, of purchases the program to repurchase shares for cancellation or to be held in treasury, and
- application of the variable compensations, received in respect of participation in profits of the Company, in the purchase of Securities.
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The Company, its Directors, Controlling Shareholder, Employees with access to inside information, and also people who, by virtue of their office, function or position in the Controller or the Subsidiaries, may have knowledge of Insider Information on the Company and have signed the adhesion agreement, may not trade securities:
-
within 60 (sixty) days prior to the disclosure or publication of the Company's annual information ("DFP" and Reference
Form) or the period between the end of the fiscal year and the announcement date, if smaller, and according to the rules of the CVM, or - if the Company or Controlling Shareholder issue semester reports, within 60 (sixty) days prior to the disclosure or publication of the these reports or the period between the end of the semester and the announcement date, if smaller, and according to the rules of the CVM; and
- if the Company issues quarterly reports, within 15 (fifteen) prior to the publication of quarterly results (ITR, excluding the second quarter's) or the period between the end of the quarter and the announcement date, if smaller, and according to the rules of the CVM.
As políticas da Companhia podem ser consultadas em seu site: http://ri.wilsonsons.com.br/
- trading blackout periods and description of procedures used to monitor the trading in such periods
See item 20.1.c
Any trading of securities by the Board of Directors, executives of subsidiaries in Brazil and people with access to privileged information requires informed consent. Such consent is given on the basis of an objective view of the existence of any act or fact, without regard to references to information of the requesting party.
In addition to item 20.1.c above, in order to ensure the trading standards with the Company's securities, all negotiations will only be carried out with the intermediation of some of the accredited stockbrokers firms, according to the relation sent by the Company to the CVM.
The Accredited Brokerage Firms will not record the purchase or sale of Securities carried out by the persons mentioned above, if made during periods of fence, as mentioned in item 20.1.c.
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20.2 Any other information which the issuer deems relevant
Not Applicable.
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21 Disclosure Policy
21.1 Describe rules, regulation or procedures adopted by the issuer to ensure that the information to be disclosed publicly is collected, processed and reported accurately and timely
See item 21.2.
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21.2 Describe the policy for disclosing a material fact or event adopted by the issuer, indicating the procedures for maintaining secrecy in respect to undisclosed information
The Policy of Disclosure of a Material Fact or Event is based on the following principles and objectives:
- Provide full information to shareholders and investors;
- Ensure full and immediate disclosure of the material fact or event;
- Provide equal access to public information about the Company to all investors;
- Ensure the secrecy of the undisclosed material fact or event;
- Collaborate for stability and development of Brazilian capital markets;
- Restate the Company's best corporate governance practices
Procedures for Disclosure:
The dissemination and communication to CVM and to Market Entities of a Material Fact or Event through institutional channels of communication, as well as the adoption of other procedures described below, is the duty of the Legal Representative of the Subsidiary in Brazil. Its contents should be disclosed by release of the respective information in at least identical content as sent to CVM and Market Entities, on the World Wide Web (Internet) at the address www.cvm.gov.br.
The information should be presented clearly and accurately, in language which is objective and accessible to the investing public. Whenever a technical concept that, in the judgment of the Brazilian Subsidiary's Legal Representative is considered more complex, an explanation of its meaning must be contained in the information disclosed.
In the event that a Material Fact or Event is circulated by any means of communication, press releases, or at meeting with trade association, investors, analysts or selected members of the public, in Brazil or abroad, the Brazilian Subsidiary's Legal Representative shall simultaneously disclose the respective information to the market in the form established in this document.
The Controlling Shareholder, the Directors and any employee who may have access to a Material Fact or Event shall be responsible for reporting to the Brazilian Subsidiary's Legal Representative any material fact or event of which they have knowledge and that they know has not come to the attention of the Brazilian Subsidiary's Legal Representative, and shall verify that the Brazilian Subsidiary's Legal Representative took the steps prescribed in this document regarding the disclosure of the respective information. If such persons verify the omission of Brazilian Subsidiary's Legal Representative to fulfill his duty of disclosure and dissemination, and it has not been decided to keep confidential the material fact or event, such persons shall immediately report the material fact or event directly to CVM for exemption from liability imposed by the rules applicable in case of its non-disclosure.
When CVM or the Market Entities require from the Brazilian Subsidiary's Legal Representative further clarification to communication and disclosure of a material fact or event, or if there is unusual fluctuation in the price or trading volume of securities issued by the Company or related thereto, the Brazilian Subsidiary's Legal Representative shall inquire with the people with access to Material Facts or Events, in order to establish whether they are aware of information that should be disclosed to the market.
Members of the Board and other employees required in the form shall respond to the Brazilian Subsidiary's Legal Representative request forthwith. If they are unable to personally meet or talk by phone with the Brazilian Subsidiary's Legal Representative on the same day of being made aware of the respective requirements of CVM or the Market Entities.
In case it is exceptionally imperative that the disclosure of the Material Fact or Event occurs during trading hours, the Brazilian Subsidiary's Legal Representative may, upon reporting the Material Fact or Event, request always
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simultaneously to the Brazilian and foreign market entities suspension of trading of securities of the Company's issued or referenced thereby for the time necessary to adequately disseminate the respective information.
Procedures for the Preservation of Confidentiality:
The Controlling Shareholder, the Board of Directors, in addition to other employees and agents of the Company, shall preserve the confidentiality of information pertaining to Material Facts or Events to which they have privileged access by virtue of the office or position they occupy, until the actual release to the market as well as ensure that subordinates and others in a position of trust do the same, bearing liability severally with these in case of failure to company.
For the purpose of preserving confidentiality, people mentioned therein shall observe and ensure observance of the following, without prejudice to the adoption of other measures as may be appropriate when faced with an actual situation:
- Disclose the confidential information strictly to those who indispensably require the information;
- Do not discuss confidential information in the presence of third parties who have no knowledge of it, even though one might expect that the third party may not understand the meaning of the conversation;
- Do not discuss confidential information in conference calls in which one cannot be sure what people are actually participating;
- Maintain documentation of any kind relating to confidential information, including handwritten personal notes in a safe, locked cabinet or file, to which only persons authorized to have knowledge of the information are authorized;
- Generate documents and electronic files relating to confidential information always with password protection systems;
- Circulate internal documents containing confidential information in sealed envelopes, which should always be delivered directly to the individual recipient;
- Do not send confidential documents via facsimile, except where there is certainty that only the person authorized to have the information will have access to the receiving device;
- Without prejudice to liability of the transmitter of confidential information, require a third party outside the Company who requires access to the information to sign a confidentiality agreement, which shall specify the nature of the information and include the statement that the third party acknowledges the confidential nature thereof and undertakes not to disclose it to anyone else and not to trade securities issued by the Company prior to dissemination of the information to the market.
When confidential information needs to be disclosed to any employee of the Company or other person holding office, function or position in the Company, its controller, subsidiaries or affiliates, other than the Board of Directors of the Company, the person responsible for transmitting information shall ensure that the person who is receiving such information has knowledge of the Material Fact or Event Disclosure Policy, requiring further that the same sign the instrument containing such information before being allowed access to the information.
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21.3 Administrators responsible for implementation, maintenance, evaluation, and supervision of the information disclosure policy
The director responsible for implementing, maintaining, evaluating and supervising the disclosure policy is the Investor Relations Officer, the legal representative in Brazil.
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21.4 Any other information which the issuer deems relevant
Not Applicable.
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Wilson Sons Ltd. published this content on 14 January 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 January 2020 22:02:03 UTC
