Plascar Participações Industriais S.A. Quarterly Information (ITR) at September 30, 2013 and report on review of quarterly information

Transcription

1 (A free translation of the original in Portuguese) Plascar Participações Industriais S.A. Quarterly Information (ITR) at September 30, 2013 and report on review of quarterly information

2 (A free translation of the original in Portuguese) Report on review of quarterly information To the Board of Directors and Stockholders Plascar Participações Industriais S.A. Introduction We have reviewed the accompanying parent company and consolidated interim accounting information of Plascar Participações Industriais S.A., included in the Quarterly Information Form (ITR) for the quarter ended September 30, 2013, comprising the balance sheet as at that date and the statements of operations and comprehensive income for the quarter and nine-month period then ended, and the statements of changes in equity and cash flows for the nine-month period then ended, and a summary of significant accounting policies and other explanatory information. Management is responsible for the preparation of the parent company interim accounting information in accordance with the accounting standard CPC 21, Interim Financial Reporting, of the Brazilian Accounting Pronouncements Committee (CPC), and of the consolidated interim accounting information in accordance with accounting standard CPC 21 and International Accounting Standard (IAS) 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as the presentation of this information in accordance with the standards issued by the Brazilian Securities Commission (CVM), applicable to the preparation of the Quarterly Information (ITR). Our responsibility is to express a conclusion on this interim accounting information based on our review. Scope of review We conducted our review in accordance with Brazilian and International Standards on Reviews of Interim Financial Information (NBC TR Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Brazilian and International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion on the parent company interim information Based on our review, nothing has come to our attention that causes us to believe that the accompanying parent company interim accounting information included in the quarterly information referred to above has not been prepared, in all material respects, in accordance with CPC 21 applicable to the preparation of the Quarterly Information, and presented in accordance 2

3 Plascar Participações Industriais S.A. with the standards issued by the CVM. Conclusion on the consolidated interim information Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated interim accounting information included in the quarterly information referred to above has not been prepared, in all material respects, in accordance with CPC 21 and IAS 34 applicable to the preparation of the Quarterly Information, and presented in accordance with the standards issued by the CVM. Other matters Statement of value added We have also reviewed the parent company and consolidated statements of value added for the nine-month period ended September 30, These statements are the responsibility of the Company's management, and are required to be presented in accordance with standards issued by the CVM applicable to the preparation of Quarterly Information and are considered supplementary information under the International Financial Reporting Standards (IFRS), which do not require the presentation of the statement of value added. These statements have been submitted to the same review procedures described above and, based on our review, nothing has come to our attention that causes us to believe that they have not been prepared, in all material respects, in a manner consistent with the parent company and consolidated interim accounting information taken as a whole. Audit and review of prior-year information The Quarterly Information (ITR) mentioned in the first paragraph includes the accounting information corresponding to the statements of operations, changes in equity, cash flows and value added for the quarter and nine-month period ended September 30, 2012, obtained from the quarterly information as at that date, and the balance sheets at December 31, 2012, obtained from the financial statements as at December 31, 2012, presented for comparison purposes. The review of the Quarterly Information (ITR) for the quarter ended March 31, 2012 and the audit of the financial statements for the year ended December 31, 2012 were conducted by another firm of independent auditors, whose review and audit reports, dated October 31, 2013 and February 28, 2013, respectively, expressed an unqualified opinion on those statements. Campinas, October 25, 2013 PricewaterhouseCoopers Auditores Independentes CRC 2SP000160/O-5 F Mauricio Colombari Contador CRC 1SP195838/O 3

4 Plascar Participações Industriais S,A, Unaudited balance sheets September 30, 2013 and December 31, 2012 (In thousands of reais) (A free translation of the original in Portuguese) Parent Company Parent Company Assets 12/31/ /31/ /31/ /31/2012 Liabilities Current assets Current liabilities Cash and cash equivalents 1 3 1,688 2,063 Trade accounts payable ,933 81,833 Trade accounts receivable (Note 4) , ,242 Related parties 3,755 2,930 2,439 2,273 Related parties (Note 8) Loans and financing (Note 11) , ,419 Inventories (Note 5) , ,266 Other accounts payable ,012 19,799 Taxes recoverable (Note 6) ,259 20,505 Taxes and contributions payable ,284 7,834 Other accounts receivable - - 4,863 6,423 Provisions ,990 32, , ,801 3,783 2, , ,802 Non-current assets Non-current liabilities Accounts receivable from sale of property 4,902 5,061 Loans and financing (Note 11) , ,035 Deferred income and social contribution taxes (Note 7) 60,243 44,463 Other accounts payable Other non-current assets 39,661 34,565 Provisions (Note 13) - - 3,739 1,850 Investments (Note 9) 371, ,305 Property, plant and equipment - PP&E (Note 10) , ,745 Property for investment Intangible assets , , , , , ,834 Total liabilities 3,783 2, , ,801 Shareholders' equity (Note 14) Capital 479, , , ,424 Capital reserve 19,304 16,414 19,304 16,414 Profit reserve 8,278 8,278 8,278 8,278 Accumulated losses (102,896) (52,684) (102,896) (52,684) Other components of equity (36,056) (29,065) (36,056) (29,065) 368, , , ,367 - Non-controlling interests Total shareholders' equity 368, , , ,834 Total assets 371, ,315 1,014, ,635 Total liabilities and shareholders' equity 371, ,315 1,014, ,635 The accompanying notes are an integral part of these financial statements, 1 of 34

5 Plascar Participações Industriais S,A, Unaudited statements of operations Year ended September 30 (In thousands of reais, unless otherwise stated) (A free translation of the original in Portuguese) Parent Company Current quarter Accumulated - current year Same quarter of previous year Accumulated - prior year 7/1/2013 to 1/1/2013 to 7/1/2012 to 1/1/2012 to 9/30/2012 9/30/2012 Continuing operations Net operating revenue Cost of sales Gross profit Operating income (expenses) Selling expenses (307) (837) (211) (632) Equity pickup (24,306) (53,606) (10,914) (35,542) Other operating income (24,613) (54,443) (11,125) (36,174) Income (loss) before financial income and expenses (24,613) (54,443) (11,125) (36,174 ) Financial income (expenses) Financial income - - Financial expenses - - (10) (7,522) - - (10) (7,522) Income (loss) before income and social contribution taxes (24,613) (54,443) (11,135 ) 43,696 ) Income and social contribution taxes Current Deferred Net income (loss) for the period Income (loss) for continuing operations (24,613) (54,443) (11,135) 43,696) Income (loss) for discontinued operations Net income (loss) for the year (24,613) (54,443) (11,135) 43,696) Attributable to Controlling shareholder Non-controlling shareholders of 34

6 Plascar Participações Industriais S,A, Unaudited statements of operations Quarters ended September 30 (In thousands of reais, unless otherwise stated) (continued) Current quarter Accumulated current year Same quarter of previous year Accumulated - prior year 7/1/2013 to 1/1/2013 to 7/1/2012 to 1/1/2012 to 9/30/2012 9/30/2012 Continuing operations Net operating revenue 210, , , ,252 Cost of sales (197,614) (586,514) (204,246) (579,734) Gross profit 12,414 59,411 38,064 93,518 Operating income (expenses) Selling expenses (8,499) (28,432) (11,290) (33,160) General and administrative expenses (20,201) (57,230) (20,697) (63,458) Other operating income (628) 1,479 (28,502) (84,767) (32,615) (95,139) Income (loss) before financial income and expenses (16,088) (25,356) 5,449 (1,621) Financial income (expenses) Financial income 1,130 3, ,975 Financial expenses (16,144) (47,771) (15,850) (46,384) (15,014) (44,769) (15,258) (42,409) Income (loss) before income and social contribution taxes (31,102) (70,125) (9,809) (44,030) Income and social contribution taxes Current Deferred (6,563) (15,780) (1,150) (43,735) Net income (loss) for the period Income (loss) for continuing operations (24,640) (54,502) (11,147) (43,735) Income (loss) from discontinued operations Net income (loss) for the year (24,640) (54,502) (11,147) (43,735) Attributable to Controlling shareholder (24,613) (54,443) (11,135) (43,696) Non-controlling shareholders (27) (59) (12) (39) (24,640) (54,502) (11,147) (43,735) The accompanying notes are an integral part of these financial statements, 3 of 34

7 Plascar Participações Industriais S,A, Unaudited statements of comprehensive income Periods ended September 30 (In thousands of reais) (A free translation of the original in Portuguese) Parent Company Current quarter Accumulated current year Same quarter of previous year Accumulated - prior year 7/1/2013 to 1/1/2013 to 7/1/2012 to 1/1/2012 to 9/30/2012 9/30/2012 Net loss for the quarter (24,613) (54,443) (11,135) (43,696) Translation adjustment in foreign subsidiaries (2,172) (2,760) (1,027) (409) Comprehensive income (loss) for the period (26,785) (57,203) (12,162) (44,105) The accompanying notes are an integral part of these financial statements, 4 of 34

8 Plascar Participações Industriais S,A, Unaudited statements of comprehensive income Periods ended September 30 (In thousands of reais) (continued) Current quarter Accumulated current year Same quarter of previous year Accumulated - prior year 7/1/2013 to 1/1/2013 to 7/1/2012 to 1/1/2012 to 9/30/2012 9/30/2012 Net loss for the quarter (24,640) (54,502) (11,147) (43,735) Translation adjustment in foreign subsidiaries (2,174) (2,763) (1,027) (409) Comprehensive income (loss) for the period (26,814) (57,265) (12,174) (44,144) Attributable to: Controlling shareholders (26,785) (57,203) (12,162) (44,105) Non-controlling shareholders (29) (62) (12) (39) (26,814) (57,265) (12,174) (44,144) The accompanying notes are an integral part of these financial statements, 5 of 34

9 Plascar Participações Industriais S,A, Unaudited statements of changes in shareholders equity Periods ended September 30, 2013 and 2012 (In thousands of reais) (A free translation of the original in Portuguese) Attributable to controlling shareholders Profits reserve Capital reserve, options granted and treasury Profit Retained profits or accumulated Other comprehensive income Shareholder's Noncontrolling shareholder's Capital shares reserve losses (losses) Total equity interests equity Balances at January 1, ,080 8,159 8,278 - (22,541) (22,541) 282, ,486 Adjusted opening balances Stock options granted and recognized - 7, , ,496 Share-based payment (Note 15) 4,068 (4,068) Capital increase (debenture conversion) 185, , ,276 Income (loss) for the period (32,561) - (32,561) (32,561) -27 (32,588) Translation adjustments in foreign subsidiary Total comprehensive income for the period (32,561) 618 (31,943) (31,943) (27) (31,970) Realization of PP&E deemed cost ,256 (3, Deferred taxes on PP&E deemed cost (1,107) 1,107) Balances at June 30, ,424 11,579 8,278 (30,412) (24,072) (54,484) 443, ,288 Balances at January 1, ,424 16,414 8,278 (52,684) (29,065 ) (81,749) 421, ,834 Adjusted opening balances Stock options granted and recognized 3, , ,846 Share-based payment (Note 15) 952 (952) Capital increase (debenture conversion) Income (loss) for the period (54,443) (54,443) (54,443) (59) (54,502) Translation adjustments in foreign subsidiary (2,760) (2,760) (2,760) (3) (2,763) Total comprehensive income for the period Realization of PP&E deemed cost 6,410 (6,410) Deferred taxes on PP&E deemed cost (2,179) 2, Balances at September 30, ,376 19,304 8,278 (102,896) (36,056) (138,592) 368, ,415 The accompanying notes are an integral part of these financial statements, 6 of 34

10 Plascar Participações Industriais S,A, Unaudited statements of cash flows Indirect method Periods ended September 30, 2013 and 2012 (In thousands of reais) (A free translation of the original in Portuguese) Parent Company Cash flows from operating activities Income before income tax (54,443) (43,696) (54,443) (43,696) Adjustments: Depreciation and amortization (Note xx) 38,782 32,641 Equity pickup 53,606 35, Share-based payment expenses 3,842 5,839 Loss (gain) on disposal of PP&E 3,685 6,002 Interest and monetary variation, net - 7,522 40,949 38,205 Provision for judicial demands 4,729 1,248 Deferred income and social contribution taxes - 4 (15,780) 483 Provision for adjustment to market value and inventory obsolescence (309) 91 Provision for impairment of trade receivables (961) 1,946 Dividends proposed - Other 10 (70) (57) (29) Changes in assets and liabilities (operating profit) Trade accounts receivable 22,599 (30,463) Receivables - related parties 825 3, Inventories 8,446 26,040 Accounts receivable from sale of property - 19,280 Taxes recoverable 1,439 5,965 Other assets, net (5,101) 3,520 Trade accounts payable 7,100 (10,858) Payables - related parties - - Salaries, vacation and social charges payable 10,346 13,007 Taxes payable (550) 2,355 Advances from customers 16,160 (24,491) Dividends proposed - (2,577) - - Provision for judicial demands (payments) (2,841) (993) Share-based payment (settlement) (952) - Other liabilities, net 5,177 4,435 Other - - Net cash provided by (used in) operating activities ,823 7,797 Cash flows from financing activities Intangibles (5,746) (1,116) Property, plant and equipment (75,100) (87,625) Reduction in loans to related parties 825 (3,276) - - Proceeds from sale of PP&E 391 3,922 Net cash provided by (used in) investment activities - - (80,455) (84,819) Cash flows from financing activities Loans and financing 285, ,766 Payment of loans and financing (principal and interest) (287,768) (226,550) Dividends payed - (2,577) Increase (decrease) in loans receivable from related parties Net cash provided by (used in) financing activities - - (2,180) (34,947) Increase (decrease) in cash and cash equivalents, net (2) 1 (375) 655 Cash and cash equivalents at the beginning of the year 3 1 2,063 2,831 Exchange gains (losses) on cash and overdraft accounts Cash and cash equivalents at the end of the year 1 2 1,688 3,486 The accompanying notes are an integral part of these financial statements, 7 of 34

11 Plascar Participações Industriais S,A, Unaudited statements of value added Periods ended September 30, 2013 and 2012 (In thousands of reais) (A free translation of the original in Portuguese) Parent Company Revenues Sales of goods, products and services , ,512 Set-up/reversal of allowance for doubtful accounts ,038 Other Input acquired from third parties , ,550 Cost of sales - - (349,147) (350,373) Materials, energy, third parties services and others - - (77,951) (112,763) Loss/recovery of asset amounts (91) Other (426,789) (463,227) Gross added value 350, ,323 Depreciation and amortization - - (38,782) (32,641) Net added value provided by the Company , ,682 Added value received from transfer Equity pickup (53,606) (35,542) - - Financial income - - 3,002 3,975 Total added value to distribute (53,606) (35,542) 314, ,657 Distribution of added value Personnel Direct compensation , ,271 Other ,950 78,174 Taxes, charges and contributions Federal 60,319 58,916 State 34,556 37,213 Local ,409 1,315 Remuneration of third-parties capital 431 7,843 62,659 59,425 Remuneration of own capital (54,443) (43,696) (54,384) (43,657) Retained earnings (loss) for the period - Continuing Operations Retained earnings (loss) for the period - Discontinued Operations Total added value distributed (53,606) (35,542) 314, ,657 The accompanying notes are an integral part of these financial statements, 8 of 34

12 (A free translation of the original in Portuguese) Non-financial information included in the report, as well as the percentages derived therefrom and information on EBITDA, were not reviewed by our independent auditors. All amounts in thousands of reais unless otherwise stated Gross profit All amounts in thousands of reais R$ R$ R$ R$ ,7% R$ R$ R$ R$ ,9% 9,2% 3Q12 3Q13 9M12 9M13 Net income Gross profit * Includes net sales of R$ 79,016 in the quarter (R$ 202,821 in the nine-month period) and gross profit of R$ 10,466 in the quarter (R$ 24,264 in the nine-month period) in 2012 of Plascar Argentina S.A. ** Includes net sales of R$ 61,429 in the quarter (R$ 188,067 in the nine-month period) and gross profit of R$ 177 in the quarter (R$ 10,871 in the nine-month period) in 2013 of Plascar Argentina S.A. 9 of 34

13 According to data from Brazil's Vehicle Makers Association (ANFAVEA), in the third quarter of 2013 the vehicle production in Brazil presented an increase of 6.8% in comparison with the same period in On the other hand, according to Argentina s Vehicle Makers Association (ADEFA) data, there was no variation in the vehicle production in Argentina, as shown below: SOURCE: ANFÁVEA BRAZIL 3Q12 3Q13 Variatio n % SOURCE: ADEFA ARGENTINA Variatio 3Q12 3Q13 n % VEHICLE PRODUCTION % VEHICLE SALES 1, % % Accumulat Accumulat Variatio Accumulat Accumulat Variatio ed 2012 ed 2013 n % ed 2012 ed 2013 n % VEHICLE PRODUCTION 2,495 2, % % VEHICLE SALES 2,789 2, % % Net income At September 30, 2013, the combined result of all the above-mentioned factors resulted in a negative cash generation (EBITDA) of R$ 2,175 (1.0%) in the third quarter, as shown in the table below: EBITDA (R$) EBITDA margin (%) 31,056 * 16,868 * 13,484 ** 7.0% 4.6% 2.1% -1.0% 3Q12 3Q13 9M12 9M13 (2,175)** ** Includes R$ 5,939 in the quarter (R$ 14,549 in the 9M12) of Plascar Argentina S.A. ** Includes R$ 4,548 in the quarter (R$ 768 in 9M13) of Plascar Argentina S.A. 10 of 34

14 MONTH/ YEAR NET SALES R$ CONSOLIDATED PLASCAR (BRAZIL + ARGENTINA) GROSS PROFIT EBITDA (accumulated) R$ % sales R$ % sales Retained earnings (accumulated losses) in the period (R$) Sep/11 791, , % 132, % 31,605 Dec/11 1,020, , % 135, % 11,510 Mar/12 219,090 25, % 3, % (18,663) Jun/12 430,942 55, % 14, % (32,561) Sep/12 673,252 93, % 31, % (43,696) Dec/12 910, , % 36, % (57,614) Mar/13 197,648 20, % 3, % (17,866) Jun/13 435,897 46, % 15, % (29,830) Sep/13 645,925 59, % 13, % (54,443) Automotive parts trade balance According to data of the automotive parts trade balance provided by the Ministry of Development, Industry and Trade (MDIC), the Brazilian deficit in this industry could reach US$ 4.72 billion in the accumulated for the first nine-month period (an increase of 60.6% from the same period in 2012). Human resources Despite economic hardships in Brazil, the Company continues to invest in the professional development of its employees, with approximately 155 hours coaching and training per employee (in the last 12 months), focused on National Service for Industrial Training (SENAI) learning, internships, high school equivalency program, as well as technical and operational development training. At September 30, 2013 the Company had 4,481 employees (4,689 at September 30, 2012). Relationship with independent auditors As required by the Brazilian Securities and Exchange Commission (CVM) Instruction 381, we inform that, during the nine-month period ended September 30, 2013, the Company contracted nonaudit services with our firm amounting to R$ 89 thousand. Based on discussions with its independent auditors, Plascar management has concluded that the service provided has not impaired their independence and objectivity, considering the definition of the work scope and procedures performed. The policy of the Company and its subsidiary on engaging non-audit services with the independent auditors is based on principles that preserve the independence of the independent auditor, as follows: the auditors should not audit their own work; the auditors should not hold any management position at their client and the auditor should not advocate for that client. 11 of 34

15 (A free translation of the original in Portuguese) 1 Operations Plascar Participações Industriais S.A. ("Plascar S.A." or "Company"), headquartered in the city of Campinas, State of São Paulo, is a publicly-held corporation with shares traded on the São Paulo Futures, Commodities and Securities Exchange - BM&FBovespa S.A. (BM&FBOVESPA) (ticker symbol PLAS3). The Company's activities are represented by the controlling interest it holds in its subsidiary Plascar Indústria de Componentes Plásticos Ltda. ("Plascar Ltda."), which operates in the automotive industry and whose operational activity is the manufacturing and selling of automotive internal and external finishing component parts. Plascar Ltda. holds 100% of Plascar Argentina S.A. ("Plascar Argentina"), located in Argentina, with plants in the cities of Tortuguitas, Córdoba and Rosário. Plascar Argentina is the parent company of Ristolsur S.A. ("Ristolsur"), located in Uruguay, which does not have relevant operations. Plascar Ltda. also controls Plascar Indústria de Componentes Plásticos S.A., located in the city of Tortuguitas, Argentina, with no relevant operations. Plascar Ltda. has 5 manufacturing plants located in the cities of Jundiaí, Pindamonhangaba and Campinas, State of São Paulo, and Varginha and Betim, in the State of Minas Gerais. The industrial plants operate mainly in the automotive industry, focused on meeting the needs of vehicle assembly plants, supplying bumpers, dashboards, air diffusers, cup holders, door trim panels, parcel racks, carpets, electric window regulators and other small components. Manufacturing of non-automotive products, focused on injection and assembly of supermarket trolleys, multiuse boxes, pallets and ecological furniture, represents less than 10% of total assets, consolidated net revenue and net income of the Company. Controlling interest in Permali do Brasil Indústria e Comércio Ltda., which holds 47.33% of Plascar Participações Industriais S.A. capital, is held by IAC - International Automotive Components Group Brazil, LLC, a joint venture set up in 2005 between WL Ross & Co. LLC and Franklin Mutual Advisers LLC, headquartered in Delaware, United States. Financial situation In the three-month period ended September 30, 2013, the Company's net revenue decreased by 13.3% when compared to the same prior year period, mainly because of some vehicle models which were discontinued in 2012, whose production was held by Plascar, and because of a decrease in revenue from the sale of tooling in the period, which had a negative effect on the Company's cash flows and profit (loss) for of 34

16 Several cost reduction measures were applied by Plascar, promoting arrangements with customers regarding price transferring and debt extension and renegotiation. Plascar was appointed to a series of other projects involving the manufacture of injected parts for vehicles, in addition to new business not related to the automobile industry, all of which are under development. Production for most of these projects will start in 2014, and the Company expects to gradually recover its results throughout that year. The Company's received a COMFORT LETTER from its main stockholder, WL Ross & Co. LLC, wherein the latter assumed a strong commitment with the financial institutions with which the Company has relationships of not affecting the companies' operations in Brazil and Argentina and of continuing to support the Company's management as necessary in order to meet its financial needs in both countries. The Company has been accompanying the Brazilian and Argentine automotive market growth and, to that effect, has consistently invested in improvement and expansion of its industrial facilities, aiming at supplying auto makers currently installed and those in phase of installation in these countries. 2. Summary of significant accounting practices 2.1 Basis of preparation and presentation The individual and consolidated interim financial information of the Company and its subsidiaries, including the notes, are presented in thousands of reais, unless otherwise stated. The authorization for conclusion of this interim financial information was granted at the Supervisory Board meeting held on October 24, The consolidated interim financial information includes the financial statements of Plascar S.A. and the companies in which the Company holds controlling interest, either directly or indirectly, as follows: Interest 12/31/2012 and 9/30/2012 Direct Indirect Direct Indirect Plascar Indústria de Componentes Ltda % % - Plascar Indústria de Componentes S.A % % Plascar Argentina S.A % % Ristolsur S.A % % 13 of 34

17 The Company's individual interim financial information for the quarter ended September 30, 2013 was prepared in accordance with Technical Pronouncement CPC 21 - Interim Financial Reporting, issued by the Brazilian Financial Accounting Standards Board (CPC), and the consolidated interim financial information was prepared in accordance with CPC 21 - Interim Financial Reporting and with International Accounting Standard (IAS) 34 - Interim Financial Reporting. The interim financial information does not include all information and disclosures required in the annual financial statements and should be read in conjunction with the December 31, 2012 financial statements. 2.2 Accounting practices The accounting practices adopted in the preparation of the interim financial information are consistent with those disclosed in Note 2 to the financial statements at December 31, The Company adopted all standards, revised standards and interpretations issued by Brazilian Accounting Pronouncements Committee (CPC), Brazilian Securities and Exchange Commission (CVM), International Accounting Standards Board (IASB) and other regulators effective as at September 30, IFRS 9 Financial Instruments - Classification and Measurement; IFRS 10 - Financial Statements; IFRS 11 - Joint Arrangements; IFRS 12 - Disclosure of Interests in Other Entities; IFRS 13 - Fair Value Measurement; IAS 27 (R) - and Separate Financial Statements; and IAS 28 (R) - Investments in Associates and Joint Ventures became effective for fiscal years beginning on or after January 1, The Company does not expect any material impact on its financial statements and interim financial information arising from the adoption of these pronouncements. 3. Significant accounting judgments, estimates and assumptions The estimates and assumptions considered for preparing the interim financial information are consistent with those disclosed in Note 3 to the financial statements at December 31, Trade receivables 12/31/2012 Third parties - domestic 98, ,893 Third parties - abroad (Note 22.a) 29,884 41,776 Accounts receivable from tooling (domestic) 2,293 5,234 Provision for impairment of trade receivables (2,700) (3,661) 127, , of 34

18 At September 30, 2013 and December 31, 2012, changes in the provision for impairment of trade receivables are as follows: 12/31/2012 Opening balance (3,661) (2,348) (Increase) Decrease in provision 961 (1,313) Closing balance (2,700) (3,661) At September 30, 2013 and December 31, 2012, the composition of trade receivables by maturity date, net of provision for impairment, was as follows: 12/31/2012 Not yet due 116, ,302 Overdue: 1 to 30 days 8,190 6, to 60 days 1,920 2, to 90 days 642 2,718 Over 90 days ,125 11,940 Total 127, , Inventories 12/31/2012 Finished products 4,822 5,848 Work in progress 18,232 19,057 Raw materials 40,437 42,124 Imports in transit 4,090 2,797 Maintenance and auxiliary materials 3,566 5,290 Tooling and molds in progress intended for sale 53,768 51,145 Advances to suppliers 6,915 14,016 Provisions for adjustment to market value and inventory obsolescence (2,702) (3,011) 129, ,266 During the quarter ended September 30, 2013, the changes in provision for adjustment to market value and inventory obsolescence were as follows: Opening balance (3,011) Reversal of provision 1,266 Increase in provision (957) Decrease, net (Note 19) 309 Closing balance (2,702) 15 of 34

19 6. Taxes recoverable 12/31/2012 Value-added Tax on Sales and Services (ICMS) on 11,729 9,360 property and equipment - CIAP Value-added tax (IVA) - Argentina 7,272 11,492 Social Contribution on Revenues (COFINS) 4,565 4,397 recoverable - PAES (1) Other 3,418 3,173 26,984 28,422 Current (17,259) (20,505) Non-current 9,725 7,917 (1) This refers to the balance of Social Contribution on Revenues (COFINS) included in the Special Installment Payment Program (PAES). In previous years Plascar Ltda. joined the special installment payment plan, however the Brazilian Internal Revenue Service did not approve calculations and excluded Plascar from said plan. Guided by its legal advisors, management continued to make the payment of the installments and filed a lawsuit for approval of the calculations. With the adhesion to the installment payment program according to Law /09, and waiver of said lawsuit, Plascar Ltda. recorded the amount of R$ 3,178 (R$ 4,397 as restated at December 31, 2012 and R$ 4,565 as restated at September 30, 2013) referring to payments made. The Company applied to the Brazilian Internal Revenue Service for refund of these values, considered by legal advisors to be absolutely certain. This request is yet to be approved. 7. Income tax and social contribution a) Composition of deferred income tax and social contribution 12/31/2012 Assets: Income tax and social contribution losses (1) 85,323 67,416 Provision for contingencies and other temporary differences 5,216 5,101 90,539 72,517 Liabilities: Property and equipment - deemed cost (2) (10,151) (13,006) Depreciation - economic useful life review (3) (20,145) (15,048) (30,296) (28,054) Net 60,243 44,463 (1) These refer to the balances of subsidiaries of Plascar Ltda. and Plascar Argentina S.A. in the amounts of R$ 84,030 and R$ 1,293, respectively (R$ 66,112 and R$ 1,304 at December 31, 2012, respectively). Plascar S.A., parent company of Plascar Ltda., has income tax and social contribution losses in the amounts of R$ 48,381 and R$ 59,383, respectively (R$ 47,544 and R$ 58,546 at December 31, 2012, respectively), on which deferred tax assets were not recorded, as there is no expectation of future taxable profits. (2) This refers to deferred taxes on deemed cost of property and equipment, arising from accounting for fair value thereof upon first-time adoption of CPC 27 (IAS 16). (3) This refers to deferred taxes on the difference of property and equipment depreciation generated after the review of economic useful lives of assets. 16 of 34

20 Based on a technical study, the Company expects to fully recover tax credits as follows: , , , , , , , ,869 90,539 b) Reconciliation of income tax and social contribution expense 7/1/2013 to 1/1/2013 to 7/1/2012 to 9/30/2012 1/1/2012 to 9/30/2012 Loss before income tax and social contribution (31,102) (70,125) (9,809) (44,030) Income tax and social contribution at effective rates (34%) 10,575 23,843 3,335 14,970 Adjustments to effective rate statement: Share-based payment plan (357) (1,306) (822) (3,368) Tax effect on unrecognized income tax and social contribution losses for the period (1) (3,689) (6,419) (3,428) (9,724) Other permanent differences (67) (495) (423) (1,583) Income tax and social contribution expense 6,462 15,623 (1,338) 295 Current (101) (157) (188) (188) Deferred 6,563 15,780 (1,150) 483 6,462 15,623 (1,338) 295 (1) Tax effect on income tax and social contribution losses of Plascar S.A., which is not recorded due to the nonexpectation of future taxable profits. c) Changes in deferred tax assets and liabilities Assets Liabilities Net At December 31, ,517 (28,054) 44,463 Deferred taxes on realization of deemed cost of property and equipment arising from the depreciation and disposals of these assets 115 2,181 2,296 Tax effect on changes in temporary differences Deferred taxes recorded by foreign subsidiary Deferred taxes on depreciation difference - (5,097) (5,097) Tax effect on income tax and social contribution losses for the period 17,907-17,907 At September 30, ,539 (30,296) 60,243 Other disclosures referring to this note were not materially changed in relation to information disclosed in Note 7 to the financial statements at December 31, of 34

21 8. Transactions with related parties a) Key management remuneration Remuneration of Management and Supervisory Board is composed by fixed remuneration defined at General Meeting and is paid on a monthly basis. The remuneration of top executives and managers of the Company and its subsidiaries consists of fixed salary, variable pay based on targets set and additional benefits. For the periods ended September 30, 2013 and 2012, key management remuneration was as follows: 7/1/2013 to 1/1/2013 to 7/1/2012 to 9/30/2012 1/1/2012 to 9/30/2012 Fixed remuneration (1) 1,779 5,201 1,746 5,746 Variable pay (2) Officers' fees (Note 19) 1,779 5,201 2,054 6,067 Share-based payment plan 1,052 3,842 2,419 9,907 2,831 9,043 4,473 15,974 (1) Refers to salaries and fees for management, in addition to vacation pay, 13th month salary, private pension and social charges (contribution to the National Institute of Social Security( INSS), Government Severance Indemnity Fund for Employees (FGTS) and others). (2) Refers to profit sharing and bonus. b) Related companies The Company engages in business operations and loan agreements with its subsidiaries and other related parties, in accordance with the criteria set out below: Commercial transactions between the Company and its subsidiaries include the purchase and sale of raw materials and parts, supplementing products sold to vehicle assembly plants by the Company's related parties. Such commercial transactions occur through regular bid pricing, and price quotes, also payment conditions and terms are similar to those observable with third parties and not exceeding 90 days, bearing no interest or charge. Historically, the balances (accounts receivable) referring to commercial operations have been promptly settled according to the dates set out in the respective purchase orders, upon closing exchange contracts. Consequently, at September 30, 2013 and December 31, 2012, no impairment loss has been accounted for in accounts receivable relating to the amounts due by related parties. 18 of 34

22 The Company and its subsidiaries enter into loan agreements with related parties for cash-flow needs to be remedied immediately, in order to do without approval processes required by financial institutions. These agreements are subject to the availability of funds and not compromising the lender's cash flow. Such loan agreements are executed in accordance with rates agreed between the parties. The main assets and liabilities balances at September 30, 2013 and December 31, 2012, as well as the main transactions that impacted the profit (loss) for the quarters ended September 30, 2013 and 2012 are as follows: Parent company 12/31/ /31/2012 Current assets (Note 22. a) Accounts receivable: IAC NA Warren - USA IAC Madsnvil - USA Other Current liabilities Loan agreement: Permali do Brasil Ind. e Com. Ltda ,439 2,273 Plascar Ltda. 3,755 2, /1/2013 to 1/1/2013 to 7/1/2012 to 9/30/2012 1/1/2012 to 9/30/2012 Profit (loss) Sales revenue IAC NA Warren - USA IAC Madsnvil - USA Other Accounts receivable refer to product sales, denominated in foreign currencies, which do not affect remuneration. The loan agreement between the Company (lender) and Plascar Ltda. (borrower) is not subject to interest charges, as the Company is the direct owner of 99.89% of the Plascar Ltda. capital. This is the only loan agreement in which the lender is a nonoperating holding Company and holds direct participation of approximately 100% of the borrower's capital, a circumstance which justifies no interest-bearing agreement. This contract was signed on May 31, 2000 to adjust the cash flow of Plascar Ltda. The loan agreement between Permali do Brasil Indústria e Comércio Ltda. (lender) and Plascar Ltda. (borrower) bears monthly interest of 1.0% and has an indefinite maturity date. This agreement was executed on March 31, 2009 for cash flow adequacy of Plascar Ltda. 19 of 34

23 9. Investments Parent company 12/31/2012 In subsidiary: Plascar Ltda. 371, , , ,305 Relevant information related to Plascar Ltda. is stated as follows: 12/31/2012 Share capital 389, ,082 Total quotas 389,082, ,082,159 Quotas held 388,654, ,654,169 Interest held 99.89% 99.89% Subsidiary's equity 372, ,772 Investment recorded by Plascar S.A. 371, ,305 Loss for the period (1) (53,665) (49,295) Equity in the earnings of subsidiaries (53,606) (49,240) (1) In the quarter and nine-month period ended September 30, 2012, Plascar Ltda. Recorded loss of R$ 10,926 and R$ 35,581 resulting in a balance of equity in the results of subsidiaries by Plascar S.A amounting to R$ 10,914 and R$ 35,542, respectively. Plascar Ltda. fully owns Plascar Indústria de Componentes Plásticos S.A. (Argentina), whose information is as follows: 12/31/2012 Share capital 17,826 19,256 Total shares 6,012 6,012 Shares held 6,012 6,012 equity interest % % Subsidiary's equity 8,290 9,135 Investment recorded by Plascar Ltda. 8,290 9,135 Profit (loss) for the period (1) (443) 333 Equity in the earnings of subsidiaries (443) 333 (1) In the quarter and nine-month period ended September 30, 2012, Plascar Ltda. recorded profit of R$ 66 and R$ 263, respectively. Plascar Ltda. also holds 100% ownership interest in Plascar Argentina S.A., whose information is as follows: 12/31/2012 Share capital 42,011 27,609 Total shares 109,091 66,367 Shares held 105,775 63,049 equity interest 96.96% 95.00% Subsidiary's equity 18,556 21,068 Investment recorded by Plascar Ltda. 17,992 20,015 Loss for the period (1) (18,287) (3,137) Equity in the earnings of subsidiaries (17,731) (2,980) (1) In the quarter and nine-month period ended September 30, 2012, it recorded loss of R$ 443 and R$ 1,293, respectively. 20 of 34

24 As approved on January 23, 2013, capital of Plascar Argentina S.A. was increased by R$ 2,797, through capitalization of the loan agreement amount at December 31, 2012 between Plascar Indústria de Componentes Plásticos Ltda. and Plascar S.A. As approved on August 3, 2013, capital of Plascar Argentina S.A. was increased by R$ 15,128, through fund contribution. Other disclosures referring to this note were not materially changed in relation to information disclosed in Note 9 to the financial statements at December 31, Property and equipment Composition Annual depreciation rate % 12/31/2012 Cost Depreciation Net Net Buildings 2 to 4 31,564 (6,060) 25,504 23,689 Machinery and equipment 4 to (1) 853,773 (355,993) 497, ,511 Molds 6 to 9 43,059 (25,829) 17,230 17,970 Furniture and fittings 6 to 10 21,847 (15,302) 6,545 7,338 Vehicles to 20 7,385 (4,520) 2,865 3,222 IT equipment 15 to ,006 (7,411) Land - 3,071-3,071 3,319 Replacement parts and materials - 5,045-5,045 4,987 Construction in progress - 14,117-14,117 14,117 Advances to suppliers - 56,019-56,019 77,962 1,043,886 (415,115) 628, ,745 (1) Weighted average rate of 5.82%. Advances to suppliers substantially relate to the purchase of machinery and equipment for expansion of production plants of the Company. From the total amount recorded at September 30, 2013, R$ 36,585 refer to the purchase of equipment items, still under construction, financed by the FINAME program (see Note 11). b) Changes in cost Nine-month period ended September 30, 2013 Opening Exchange gains (losses) on foreign Closing balance subsidiaries Additions Disposals Transfers balance Buildings 29,018 (614) 3,312 (408) ,564 Machinery and equipment 773,945 (4,944) 65,655 (2,532) 21, ,773 Molds 40,580-2, ,059 Furniture and fittings 22,145 (383) 352 (108) (159) 21,847 Vehicles 7,673 (20) 529 (753) (44) 7385 IT equipment 8,943 (111) 249 (1,241) 166 8,006 Land 3,319 (133) - (114) (1) 3,071 Replacement parts and materials 4, ,045 Construction in progress 14, ,117 Advances to suppliers 77, (21,943) 56, ,689 (6,205) 72,558 (5,156) - 1,043, of 34

25 c) Changes in depreciation Nine-month period ended September 30, 2013 Opening Exchange gains (losses) on foreign Closing balance subsidiaries Additions Disposals Transfers balance Buildings (5,329) 198 (958) - 29 (6,060) Machinery and equipment (330,434) 2,516 (29,547) 1,565 (93) (355,993) Molds (22,610) - (3,219) - - (25,829) Furniture and fittings (14,807) 236 (796) 77 (12) (15,302) Vehicles (4,451) 10 (626) (4,520) IT equipment (8,313) 100 (438) 1, (7,411) (385,944) 3,060 (35,584) 3,353 - (415,115) d) Cost of capitalized loans The amounts of capitalized costs during the quarter and nine-month period ended September 30, 2013 were R$ 1,442 and R$ 4,686 respectively (R$ 1,457 and R$ 7,172 at September 30, 2012 respectively). e) Impairment of non-financial assets During the nine-month period ended September 30, 2013 no impairment of property and equipment was recorded. f) Finance lease agreements At September 30, 2013, Plascar Ltda. and Plascar Argentina S.A. had seven finance lease agreements for machinery, equipment, buildings and vehicles. The book value of property and equipment held for finance leases at September 30, 2013 amounted to R$ 18,515 (R$ 34,981 at December 31, 2012). Finance lease liabilities are secured by the leased items. 11. Borrowings Type/purpose Financial charges at 12/31/2012 Working capital - local currency CDI + interest of 0.19% to 0.49% p.m. 293, ,832 Export credit notes CDI + interest of 0.46% p.m. 2,119 21,063 Lease Interest of 1.02% to 1.80% p.m. 15,041 20,416 Cashed checks Interest of 2.17% p.m. - (Argentina) 3,690 9,456 FINAME Interest of 0.21% p.m. to 0.73% p.m. 149, ,687 Total (at R$ 441,011 Brazil and R$ 23,331 Argentina) 464, ,454 Current (261,901) (226,419) Non-current 202, ,035 CDI - Interbank Deposit Certificate FINAME - Government Agency for Machinery and Equipment Financing 22 of 34

26 Non-current liabilities mature as follows: 12/31/ months 42,660 46, months 26,162 24, months 25,221 22, months 20,844 19, months 24,579 22, months 20,557 20, months 42,418 46, , ,035 Loans to meet working capital requirements and export credit notes were obtained by Plascar Ltda.; R$ 26,047 are guaranteed by machinery and equipment (CAPEX) and the remaining balance guaranteed by receivables and sureties of the Company. Cashed checks refer to post-dated checks received from car assembly plants by Plascar Argentina S.A. FINAME financing is secured by fiduciary lien of financed assets. Of the total amount recorded at September 30, 2013, R$ 36,585 refer to contracts for the purchase of injectors, still under construction by suppliers, recorded against advances to suppliers, in property and equipment. Lease liabilities are secured by the leased items. 12. Debentures As approved by majority vote at the Extraordinary General Meeting of Stockholders held on April 7, 2010, the Company approved the private issue, in a single series, of 40,000 subordinated debentures mandatorily convertible into Company shares, with a par value of R$ 10 each. The debentures had two-year maturity from the date of issuance, and therefore expired on May 7, 2012, and were remunerated at a rate equal to 110% of CDI. On December 8, 2011, the Company obtained approval from the CVM to undertake to auction the remaining debentures. However, in accordance with the communication sent to the CVM, filed on March 28, 2013, the Company decided not to proceed with the auction of remaining debentures, which would be made through primary distribution public offering. Accordingly, there were no new subscriptions. On May 7, 2012, 14,756 debentures were converted at the issue price of R$ 2.60 per share with consequent Company capital increase of R$ 185,276 equivalent to 71,260,040 new shares. Interest was mandatorily paid on maturity, through payment in kind with Company shares. Consequently, as from that date all debentures were recorded by the Company. Other disclosures referring to this note were not materially changed in relation to information disclosed in Note 12 to the financial statements at December 31, of 34

27 13. Commitments and contingencies a) Operating lease (Sale and Leaseback transaction) During the year ended December 31, 2011, Plascar Ltda. carried out Sale and Leaseback transactions of the buildings and plots of land of the industrial units of Varginha, Jundiaí and Betim. Real estate lease contracts are valid for a period of 10 years and may be renewed for an additional 10-year-period, after express consent of Plascar Ltda. There is no option to purchase the properties at the end of contracts. Other disclosures referring to this note were not materially changed in relation to information disclosed in Note 14 to the financial statements at December 31, b) Judicial proceedings The Company and its subsidiaries are parties to lawsuits and administrative proceedings before courts and government agencies, arising in the normal course of operations, involving tax, labor, civil and other matters. The Company's management, based on information provided by its internal and external legal advisors with respect to proceedings pending decision, set up a provision at an amount considered sufficient to cover losses with ongoing matters, as follows: 12/31/2012 Labor 3,739 1,850 3,739 1,850 Changes in provision for contingencies in the three-month period ended September 30, 2013 were as follows: Quarter ended September 30, 2013 Opening balance Additions Payments Closing balance Labor 1,850 4,729 (2,840) 3,739 1,850 4,729 (2,840) 3,739 Tax At September 30, 2013, there were nine tax proceedings against Plascar Ltda. assessed by the legal advisors as possible losses, in the amount of R$ 9,158 (R$ 9,049 at December 31, 2012), for which no provision has been recorded. Labor The provision for labor claims primarily comprises employees' claims related to employment relationship and it was set up based on estimation provided by Company's legal advisors for labor proceedings whose chances of loss were assessed as probable. 24 of 34

28 14. Equity In the nine-month period ended September 30, 2013, the following change was made to the Company's capital: At the Ordinary and Extraordinary General Meeting held on April 30, 2013, the stockholders approved increase of Company capital by R$ 952, from R$ 478,424 to R$ 479,376, as approved at the Board of Directors' meeting held on April 16, Other disclosures referring to this note were not materially changed in relation to information disclosed in Note 15 to the financial statements at December 31, Share-based payment plan At the Board of Directors' meeting held on April 16, 2013 the subscription of 2,163,594 new shares of the Company at the price of R$ 0.44 (market price) per share was authorized, generating a capital increase of R$ 952. The shares were granted to management at the Ordinary General Meeting held on April 30, See details of the plan and assumptions used for valuation in Note 16 to the financial statements at December 31, Earnings per share Basic earnings or loss per share are calculated by dividing profit or loss for the quarter, attributed to the Company's common stockholders, by the weighted average number of common shares outstanding for the quarter. Diluted earnings or loss per share are calculated by dividing profit or loss attributed to Company's common stockholders by the weighted average number of common shares outstanding for the quarter, plus the weighted average number of common shares that would be issued should all potentially dilutive common shares be converted into common shares. The following chart presents shares and loss used to calculate basic and diluted loss per share for the quarters and nine-month periods ended September 30, 2013 and 2012 (in thousands, except loss per share): 7/1/2013 to 1/1/2013 to 7/1/2012 to 9/30/2012 1/1/2012 to 9/30/2012 Numerator: Loss for the period (24,613) (54,443) (11,135) (43,696) Denominator: Weighted average number of shares 242,017, ,017, ,853, ,926,725 Basic and diluted (loss) per share - R$ ( ) ( ) ( ) ( ) 25 of 34