HENCORP COMMCOR DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA.

Transcription

1 HENCORP COMMCOR DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA. AUDITOR S REPORT on December 31, 2010 AFMF/ VHF/RML/KD 0375i/11

2 HENCORP COMMCOR DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA. Financial statements on December 31, 2010 and 2009 Contents Independent auditor s report Balance sheets Income statement Statement of changes in equity Statement of cash flows Management s explanatory notes to the financial statements 2

3 Horwath Tufani, Reis & Soares Rua Com. Miguel Calfat, 109 Vila Olímpia São Paulo SP Brasil Tel (55 11) Fax (55 11) AUDITOR S REPORT To the Administrators of Hencorp Commcor Distribuidora de Títulos e Valores Mobiliários São Paulo SP We have audited the financial statements of the financial institution Hencorp Commcor Distribuidora de Títulos e Valores Mobiliários Ltda., which include the balance sheet on December 31, 2010 and the respective statements of income, changes in equity and cash flows of the period then ended, as well as the summary of the main accounting practices and other explanatory notes. Responsibility of the Institution s Management regarding the financial statements The institution's management is responsible for the preparation and fair presentation of these financial statements according to the accounting practices adopted in Brazil, applicable to institutions licensed to operate by the Central Bank of Brazil, and to the internal controls established by it as necessary to enable the preparation of financial statements free of material misstatements, whether due to fraud or errors. Responsibility of the Independent Auditors Our responsibility is to express an opinion on those financial statements based on our audit, which is conducted in accordance with the Brazilian and international audit standards. Those standards require the compliance with ethical requirements for auditors and also that the audit is planned and implemented with the objective of obtaining reasonable assurance about whether the financial statements are free of material misstatement. An audit involves selected procedures to obtain evidences about the amounts and disclosures presented in the financial statements. The procedures are selected according to the auditor s understanding of the needs, including risk assessment of material misstatement in the financial statements, whether due to fraud or error. In this risks assessment the auditor considers the relevant internal controls for the preparation and fair presentation of the Institution s financial statements to plan the appropriate audit procedures according to the circumstances, but this is not for purposes of expressing an opinion on the effectiveness of such internal controls. An audit also includes appraisal on the appropriateness of the used accounting practices and the reasonability of the accounting estimates made by the Company s management, as well as the evaluation of the financial statements presentation as a whole. 3

4 We believe that the audit evidence obtained is sufficient and appropriate to base our opinion. Opinion In our opinion, the above-mentioned financial statements fairly represent, in all relevant aspects, the equity and financial position of the Financial Institution Hencorp Commcor Distribuidora de Títulos e Valores Mobiliários Ltda. on December 31, 2010, the performance of its operations and its cash flows for the period closed on that date, according to the accounting practices adopted in Brazil and applicable to institutions authorized to operate by the Central Bank of Brazil. March 04,

5 HENCORP COMMCOR DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA. Balance sheets on December 31, 2010 and 2009 ASSETS LIABILITIES Current assets Current liabilities Available funds Other liabilities Tax and social security Interbank funds applied Negotiation and intermediation of values Applications in pledged operations Sundry Securities Own portfolio Long-term payable Other credits Income receivable Other liabilities Negotiation and intermediation of values Tax contingencies Sundry Assets and rights acquisitions Other credits in liquidation 7 - Long-term receivables Debtors - deposit in escrow Permanente assets Equity Capital Investments Domiciled in the country Other investments Capital reserves Profit reserves Fixed assets for use Accumulated profits Other fixed assets for use (-) Accumulated depreciations (683) (502) Deferred Organization and expansion expenses (-) Accumulated amortizations (416) (275) Total assets Total liabilities The management s explanatory notes make part of the financial statements. 5

6 HENCORP COMMCOR DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA. Income statement Periods º Semester period period Financial intermediation Revenue Securities operations revenue Other operating Income (expenses) (293) (154) Services income Personnel expenses (331) (708) (886) Other administrative expenses (9.090) (16.245) (10.802) Tax expenses (1.122) (2.064) (1.488) Other operating income (expenses) (388) Operating result Result before taxation on profit Income tax and social contribution (1.030) (1.672) (764) Net profit of the semester/period Profit per share (Lote mil) - R$ 0,1541 0,2789 0,1531 The management s explanatory notes make part of the financial statements. 6

7 HENCORP COMMCOR DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA. Statement of Equity Changes ) Accumulated Paid-up Capital Profits Profit Capital Reserves Reserves (losses) Total Balances on January 01, Net profit of the period Legal reserve (100) - Distributed profits (1.214) (1.214) Profits reserve - (2.639) (889) - Balances on December 31, Changes in the period - (2.639) (213) 776 Balances on July 01, Net profit of the period Legal reserve (97) - Distributed profits (252) (252) Profits reserve - (2.639) (847) - Balances on December 31, Changes in the period - (2.639) (97) 847 Balances on January 01, Net profit of the period Legal reserve (54) Distributed profits (1.207) (1.207) Balances on December 31, Changes in the period (169) (115) The management s explanatory notes make part of the financial statements. 7

8 HENCORP COMMCOR DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA. Statement of Cash Flows (In R$ 1,000) Operating activities cash flow Periods º Semester period period Net profit of the Quarter/Year before adjustments Net profit adjustments Depreciations and amortizations Gross cash Assets and liabilities variations Other Obligations Increase/Decrease (4.557) (860) Interbank funds applied Increase/Decrease (1.256) (2.742) (10.739) Securities Increase/Decrease (2.028) Other credits Increase/Decrease (3.187) Debtors - Deposits in Escrow (13) 4 Net cash from operating activities (582) (616) (2.590) Investments activities cash flow Investments Increase (80) (80) 11 Deferred Increase - - (149) Fixed Assets Increase (280) (396) (236) Net cash from investment activities (360) (476) (374) Financing activities cash flow Capital Payment Distributed Profits (252) (1.214) (1.207) Net cash from financing activities (252) (1.214) (1.207) Net increase (decrease) in cash and cash equivalents 82 6 (2.903) Cash and cash equivalent at the beginning of the period Cash and cash equivalent at the end of the period Net increase (decrease) in cash and cash equivalents 82 6 (2.903) The management s explanatory notes make part of the financial statements. 8

9 HENCORP COMMCOR DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA. Management s explanatory notes to the financial statements. 1. Operational context The business purpose of the Company is to explore the activity of securities distribution, as per despacho dated 02/25/2009, published in the Diário Oficial of 02/27/2009, and Deorf/GTSP2-2009/01172 of Central Bank of Brazil, dated 02/27/2009, which consists in negotiating and/or registering operations with securities in stock market, commodities and futures. 2. Preparation and presentation of the financial statements The financial statements have been prepared in accordance with the accounting practices adopted in Brazil, which include the Brazilian corporate law and the pronouncements, orientations and interpretations issued by the Accounting Pronouncements Commission CPC, and presented in accordance with Central Bank of Brazil determinations through the chart of accounts of the National Financial System Institutions - COSIF. For the preparation of the Financial Statements it is necessary the use of estimates to record certain assets, liabilities and other transactions. Therefore, the financial statements include estimates related to determination of the useful lives of fixed assets, provision for contingent liabilities, provisions for income tax and other similar estimates. The actual results might present variations to the estimates. 3. Main accounting practices Determination of result Income and expenses were appropriated according to the period regime (accrual basis). Securities Securities were classified as available for sale and adjusted at their market value at the balance sheet date. The adjustment was recorded in a specific equity account Updating of Equity Securities at the value net of the tax effects Current assets and liabilities Current assets and liabilities are shown at cost value including, when applicable, the yields, charges and incurred monetary and exchange 9

10 HENCORP COMMCOR DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA. Management s explanatory notes to the financial statements. variances, deducting from the corresponding income the expenses to be appropriated and, when applicable, provision for losses. Negotiation and intermediation trade It is shown as the balance of securities purchase or sale operations, made in the Futures and Commodities Exchange - BM&F, on account of the clients, pending for liquidation within the statutory time period. Permanent It is shown at the acquisition cost. Fixed assets depreciation is calculated through the straight-line method at rates that consider the economic-useful life of the assets: 20% for Data Processing Equipment and Rights of Use and 10% for other fixed assets Deferred is represented by expenses incurred in the renovation and installation of the new central office of the Institution, which will be amortized in a 60-month period. Taxes ad contributions Provisions for Income Tax, Social Contribution, PIS and COFINS were calculated at 15% rate plus additional, 9%, 1,65% and 7,6%, respectively, considering for the respective calculation basis, the legislation pertinent to each tax. 4. Available funds Cash 1 0 Banks

11 HENCORP COMMCOR DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA. Management s explanatory notes to the financial statements. 5. Securities On December 31, 2009 they were represented by: Securities available for sale: Market Description Maturity Cost Value L.F.T. 09/07/ CDB BRADESCO 08/06/ CDB BRADESCO 06/06/ CDB-DI ITAU 04/20/ CDB SAFRA 02/25/ CDB-SAFRA 03/15/ On December 31, 2010, they were represented by: Securities available for sale: Market Description Maturity Cost Value LFT 09/07/ LFT 09/07/ LFT 09/07/ CDB-SAFRA 12/20/ Securities were classified as available for sale and adjusted at their market value at the balance sheet date. The adjustment was recorded in a specific equity account Updating of Equity Securities at the value net of tax effects. The cost value refers to the security value effectively disbursed, plus the yields up to the balance sheet date. The market value of those securities was obtained through quotations made in the market and validated by comparing it with information supplied by Central Bank of Brazil. 11

12 HENCORP COMMCOR DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA. Management s explanatory notes to the financial statements. 6. Other credits Current Long-term Current Long-term Income receivable: Commissions and Brokerage Negotiation and intermediation: Operations with non-residents in the country Compensation agent Market Institutions Individuals and Legal Entities Sundry: Advances third parties Debtors - deposits in escrow Taxes and contributions to be off-set Sundry debtors in the country Other credits in liquidation Provision for doubtful receivable (709) - (709) Negotiation and intermediation of values It corresponds to values deriving from securities purchase and sale operations made in the last days of the month at Futures and Commodities Exchange - BM&F, on account of clients, and liquidated in the first days of the following month. 7. Fixed assets Annual Deprec. Rate Cost Deprec. Net Net Furniture and equipments 10% 240 (129) Communication and Data Processing system 20% (553) Total (682) The fixed assets increase in the period is mainly due to purchase of IT Hardware, Data Processing System, and Software. 12

13 HENCORP COMMCOR DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA. Management s explanatory notes to the financial statements. 8. Other obligations Current Long-term Current Long-term Tax and social security: Taxes and contrib.on profits Taxes and contrib, on third parties services Taxes and contrib. on salaries Taxes and contrib. Payable (*) Negotiation and intermediation of values: Cash of register in liquidation Commissions and brokerages payable Creditors/ pending liquidations account Operations with financial assets for liquidation Sundry: Obligation from acquisition of assets and rights Provision for payments to be made Sundry creditors in the country (*) It refers to a judicial process related to payment of ISS on operations with BM&F for which a judicial deposit in the same amount was made and, according to lawyers, the probability of being successful is remote. 9. Equity The capital on December 31, 2010, is represented by quotas in the amount of R$ 1.00 (one real) each. 10. Responsibilities The most relevant responsibilities recorded in compensation accounts are the following: Non-registered securities - SELIC Negotiation and intermediation of values Total

14 HENCORP COMMCOR DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA. Management s explanatory notes to the financial statements. 11. Other administrative expenses Communication expenses Services performance expenses Financial system services expenses Specialized technical services expenses Expenses with travels in the country Other expenses Total Remuneration to administrators The remuneration to key-personnel of the Company s management in the period 2009 and 2010 was made through profits distribution. 13. Operational and market risks In the risk assessment of the several functions, the three basic risks will be considered: Operational Risk It is defined as the risk of loss generated by failure or inadequate internal processes, people and systems, or also by external events. Market Risk It is defined as the risk of loss deriving from fluctuation in the market values of positions kept by a financial institution and includes the risks of operations subject to exchange variance, interest rates of the stocks prices and commodities prices. Credit risk It describes the exposure to real losses or opportunity costs as result of default by a legal or economic entity (the debtor) with which the organization makes business. The credit risk is the risk of financial loss when the debtor, for any reason, fails to fully pay its contractual and financial obligations to the Institution. The compliance area, subordinated to Risk Management, is responsible for the coordination of the activities related to operational and market risks and has, among other purposes, the compliance with the provisions of Resolutions nºs and 3.464, of the National Monetary Council. 14

15 HENCORP COMMCOR DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS LTDA. Management s explanatory notes to the financial statements. The fundamental principle of operational risk management in the Institution is that the areas managers, at all levels of the Company, be responsible for the risk assessment and control, incorporating this concept to the Company s activities and to new business modalities. This process is coordinated and controlled by the compliance area, which helps in the identification of risks in each process of the Company and performs tests on the defined controls. Besides, the compliance area defines and manages the methodology and the work schedule using IT system specific for mapping, documenting, recording and analyzing operational risks, providing solid data base for decision-makings and eventual improvements in the internal process of the organization. 15