Financial Statements 2006
ANNUAL REPORT 2006 I VOTORANTIM GROUP
Report of Independent Auditors
To the Board of Directors and Shareholders
Votorantim Participações S.A.
1
We have audited the accompanying balance sheets of Votorantim Participações S.A. and the
2
We conducted our audits in accordance with approved Brazilian auditing standards, which
consolidated balance sheets of Votorantim Participações S.A. and its subsidiaries as of December
require that we perform the audit to obtain reasonable assurance about whether the financial
31, 2006 and 2005 and the related statements of income, of changes in shareholders’ equity and of
statements are fairly presented in all material respects. Accordingly, our work included, among
changes in financial position of Votorantim Participações S.A., as well as the related consolidated
other procedures: (a) planning our audit taking into consideration the significance of balances,
statements of income and of changes in financial position for the years then ended. These financial
the volume of transactions and the accounting and internal control systems of the Companies,
statements are the responsibility of the Company’s management. Our responsibility is to express an
(b) examining, on a test basis, evidence and records supporting the amounts and disclosures in
opinion on these financial statements. The audits of the financial statements as of December 31, 2006
the financial statements, and (c) assessing the accounting practices used and significant estimates
and 2005 of the indirect affiliates Mineração Rio do Norte S.A., Petrocoque S.A. Indústria e Comércio,
made by management, as well as evaluating the overall financial statement presentation.
BAESA - Energética Barra Grande S.A., Machadinho Energética S.A., Sirama Participações Administração
e Transportes Ltda., Telefutura Telemarketing S.A. and Compañia Minera Milpo S.A.A., the investments
3
In our opinion, based on our audits and on the reports of other independent auditors, the financial
in which, accounted for on the equity method of accounting, totaled R$ 464,053 thousand (2005
statements referred to in the first paragraph present fairly, in all material respects, the financial
– R$ 330,272 thousand), the jointly controlled companies VBC Energia S.A., Aracruz Celulose S.A. and
position of Votorantim Participações S.A. and Votorantim Participações S.A. and its subsidiaries as of
Usinas Siderúrgicas de Minas Geras S.A. – Usiminas and the subsidiary Votorantim Finanças S.A., whose
December 31, 2006 and 2005, and the results of operations, the changes in shareholders’ equity and
consolidated investments and assets totaled 6,198,537 thousand (2005 – R$ 3,451,974 thousand)
the changes in financial position of Votorantim Participações S.A., as well as the consolidated results
and R$ 55,708,906 thousand (2005 – R$ 40,760,471 thousand), respectively, were conducted by other
of operations and the changes in financial position, for the years then ended, in accordance with
auditors. Our opinion, insofar as it refers to the amounts of these investments and total assets,
accounting practices adopted in Brazil.
as well as the participation of Votorantim Participações S.A. in the net income generated by them,
in the amount of R$ 1,376,448 thousand (2005 – R$ 861,642 thousand), is based solely on the reports
of these other auditors.
São Paulo, April 24, 2007
Auditores Independentes
CRC 2SP000160/0-5
82
Carlos Eduardo Guaraná Mendonça
Contador CRC 1SP 196994/O-2
83
Financial Statements 2006
ANNUAL REPORT 2006 I VOTORANTIM GROUP
Balance Sheets at December 31 (In thousands of reais)
Assets Liabilities and shareholders’ equity
Parent company
2006
2005
Current assets Cash and banks
133
13,103
Interbank investments – (Note 3)
Financial investments and derivative financial instruments – (Note 3)
1,489,327
2,285,382
Interbank accounts
Trade accounts receivable – (Note 4)
Credit operations – (Note 5)
Allowance for doubtful accounts
Inventories – (Note 6)
Taxes recoverable
454,615
313,015
Dividends and interest on own capital receivable – (Note 8)
412,123
529,085
Foreign exchange portfolio
Other
1,267
125
2,357,465
3,140,710
Non-current assets
Long-term receivables
Interbank investments – (Note 3)
Financial investments and derivative financial instruments – (Note 3)
601,456
Trade accounts receivable
Credit operations – (Note 5)
Allowance for doubtful accounts
Loans receivable and advances for future capital increase – (Note 8)
1,081,651
4,069,421
Notes receivable
129,187
Judicial deposits – (Note 14)
24,352
18,136
Tax incentives
4,039
4,039
Deferred income tax and social contribution – (Note 13)
313,654
303,143
Other
36,522
2,061,674
4,523,926
Permanent assets
Investments – (Note 9)
24,777,035
15,555,594
Goodwill (negative goodwill), net – (Note 9)
(200,422)
(550,418)
Property, plant and equipment – (Note 10)
14.793
15,431
Deferred charges
24,591,406
15,020,607
Total assets
29,010,545
22,685,243
The accompanying notes are an integral part of these financial statements.
84
Consolidated
2006
2005
377,592
17,951,404
23,959,773
1,438,828
2,436,270
9,136,992
(308,703)
2,914,337
2,089,612
34,502
752,238
1,944,066
62,726,911
271,474
11,964,575
22,246,098
1,095,348
2,010,497
6,515,639
(318,328)
2,348,460
1,349,769
42,508
1,049,598
1,825,700
50,401,338
1,499,112
755,262
24,435
7,300,087
(119,846)
456,588
374,035
569,458
23,058
2,213,640
1,561,906
14,657,735
786,531
2,339,592
53,412
5,372,608
(56,659)
436,326
482,329
493,618
32,435
2,209,069
1,437,177
13,586,438
1,103,939
2,796,921
17,563,540
720,353
22,184,753
975,475
2,214,944
15,478,107
683,548
19,352,074
99,569,399
83,339,850
Parent company
2006
2005
Current liabilities
Loans and financing – (Note 11)
5,207
7,924
Deposits
Open market
Funds from acceptance and issuance of securities – (Note 12)
Debentures – (Note 12)
Suppliers
1,004
1,114
Salaries and social charges
7,870
7,629
Taxes and contributions payable
171,900
24,417
Income tax and social contribution
Dividends and interest on own capital payable – (Note 8)
367,234
233,027
Derivative financial instruments
Foreign exchange portfolio
Other
7,506
411
560,721
274,522
Non-current liabilities
Long-term liabilities
Loans and financing – (Note 11)
1,030,516
936,280
Deposits
Open market
Funds from acceptance and issuance of securities – (Note 12)
Debentures – (Note 12)
Loans payable – (Note 8)
5,669,803
2,960,178
Deferred income tax and social contribution – (Note 13)
43,567
44,067
Provision for contingencies and tax liabilities – (Note 14)
94,753
102,250
Derivative financial instruments
104,155
57,614
Other
6,942,794
4,100,389
Deferred income
Unrealized profits
Minority interest
Consolidated
2006
2005
5,437,204
8,351,556
13,784,733
446,739
171,579
1,661,682
398,206
1,202,247
1,314,198
511,046
2,069,332
439,269
1,474,763
37,262,554
4,532,330
9,980,147
10,551,338
4,044
240,917
1,360,977
323,174
696,304
841,958
351,948
2,617,314
815,433
866,149
33,182,033
15,449,309
8,561,766
2,633,798
2,269,588
4,190,241
14,841,077
8,173,371
65,385
222,223
2,069,829
1,059,854
1,800,506
1,018,298
800,189
37,783,549
606,042
1,786,197
664,506
642,100
29,070,730
7,560
18,324
2,657,956
2,018,520
Shareholders’ equity (Note 15)
Capital
Capital reserve
Revaluation reserve
Revenue reserve
Retained earnings
12,380,538
836
17,047
778,598
8,330,011
21,507,030
12,112,210
836
17,047
561,699
5,618,540
18,310,332
12,380,538
836
17,047
778,598
8,680,761
21,857,780
12,112,210
836
17,047
561,699
6,358,451
19,050,243
Total liabilities and shareholders’ equity
29,010,545
22,685,243
99,569,399
83,339,850
The accompanying notes are an integral part of these financial statements.
85
Financial Statements 2006
ANNUAL REPORT 2006 I VOTORANTIM GROUP
Statements of Income
Years Ended December 31 (In thousands of reais unless otherwise indicated)
Parent company
2006
2005
Gross revenues
Domestic sales
Export sales
Income from financial intermediation
Supply of electric energy
Service revenues
Taxes on sales and services and other deductions
Net revenues
Cost of products and services
Expenses from financial intermediation
Gross profit
Operating income (expenses)
Selling and lending expenses
General and administrative expenses
(72,283)
(99,890)
Other operating income (expenses)
(2,857)
(75,140)
(99,890)
Operating profit (loss) before equity results and
financial income (expenses)
(75,140)
(99,890)
Equity adjustment from investments
Equity in the results of subsidiaries and affiliated companies (Note 9)
4,124,508
2,224,650
Exchange variation on foreign investments
Goodwill amortization
4,124,508
2,224,650
Financial income (expenses), net
31,463
89,210
Operating profit
4,080,831
2,213,970
Non-operating income, net (Note 18)
254,784
233,061
Profit before income tax, social contribution and minority interest
4,335,615
2,447,031
Income tax and social contribution
Current (8,642)
(13,745)
Deferred
11,010
(215)
2,368
(13,960)
Profit before minority interest
4,337,983
2,433,071
Minority interest
Net income for the year
4,337,983
2,433,071
Net income for the year per thousand shares – R$
806,18
458,80
Statements of Changes in Shareholders’ Equity and
Funds for Capital Increase (In thousands of reais unless otherwise indicated)
Consolidated
2006
2005
14,454,124
7,639,052
8,017,160
1,729,406
1,456,361
33,296,103
(4,318,207)
28,977,896
(14,458,497)
(5,683,868)
8,835,531
11,785,203
6,361,278
6,891,392
1,480,342
365,151
26,883,366
(3,207,446)
23,675,920
(11,253,586)
(4,690,790)
7,731,544
(1,648,924)
(1,570,019)
563,593
(2,655,350)
(1,250,415)
(1,784,588)
(282,855)
(3,317,858)
6,180,181
4,413,686
152,261
(420,958)
(466,204)
(734,901)
739,501
6,184,781
280,830
74,651
(497,327)
(355,218)
(777,894)
(22,618)
3,613,174
246,856
6,465,611
3,860,030
(1,571,526)
(174,893)
(1,746,419)
4,719,192
(319,581)
4,399,611
(1,248,645)
281,484
(967,161)
2,892,869
(257,989)
2,634,880
Capital Revenue
reserve
reserve
Revaluation Advances for
Tax
reserve in
Legal
Retained future capital
Capital incentives
subsidiaries reserve earnings increase
At December 31, 2004
9,400,000
836
17,047
440,045
3,884,978
2,712,210
Capitalization of advances for
future capital increase
2,712,210
(2,712,210)
Net income for the year
2,433,071
Appropriation of net income
Legal reserve
121,654
(121,654)
Interest on own capital proposed
(R$ 8.28 per thousand shares)
(43,889)
Dividends paid and proposed
(R$ 100.69 per thousand shares)
(533,966)
At December 31, 2005
12,112,210
836
17,047
561,699
5,618,540
Capital increase (Note 15(a))
268,328
Prior-year adjustments (Note 15(e))
(379,343)
Net income for the year
4,337,983
Appropriation of net income
Legal reserve
216,899
(216,899)
Interest on own capital proposed
(R$ 90.70 per thousand shares)
(488,028)
Dividends paid and proposed
(R$ 100.77 per thousand shares)
(542,242)
At December 31, 2006
12,380,538
836
17,047
778,598
8,330,011
Total
16,455,116
2,433,071
(43,889)
(533,966)
18,310,332
268,328
(379,343)
4,337,983
(488,028)
(542,242)
21,507,030
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
86
87
Financial Statements 2006
ANNUAL REPORT 2006 I VOTORANTIM GROUP
Statements of Changes in Financial Position
Years Ended December 31 (In thousands of reais)
Notes to the Financial Statements
at December 31, 2006 and 2005 (all amounts in thousands of reais unless otherwise indicated)
Parent company
Consolidated
2006
2005
2006
2005
Financial resources were provided by
Operations
Net income for the year
4,337,983
2,433,071
4,399,611
2,634,880
Amounts not affecting working capital
Equity in the earnings of subsidiaries and affiliated companies
(4,124,508)
(2,224,650)
(152,261)
(74,651)
Negative goodwill realized on sale of investments (349,995)
Exchange variation on foreign long-term net assets
420,958
497,387
Amortization of goodwill on acquisition of subsidiaries
466,204
355,218
Depreciation, amortization and depletion
637
803
1,942,407
1,628,556
Residual value of permanent asset disposals
1,650
73,168
24,062
Gains on changes in shareholding interests
(235,751)
(180,371)
Deferred income tax and social contribution
(11,010)
174,893
(281,484)
Interest and monetary variation on long-term items
79,198
147,165
120,264
Provision for contingencies 437,229
505,404
Provision for losses on hedge transactions
46,541
(8,172)
582,425
Minority interest
319,581
257,989
Prior-year adjustments
(379,343)
(379,343)
(715,446)
101,529
7,849,612
6,250,050
Shareholders
Payment of capital
268,328
Third parties
Decrease in long-term receivables
4,168,527
2,620,964
602,165
Dividends and interest on own capital receivable and received
1,117,844
868,392
34,502
42,508
Write-off of investments
5,365,095
3,492,926
9,261
85,388
Increase in long-term liabilities
5,416,504
2,876,886
7,895,018
9.660,346
Increase in deferred income
15,897
Change in working capital due to increase in interest
192,653
Write-off of permanent assets due to capital decrease
159,779
Total funds provided
15,620,852
9,960,697
16,742,990
16,054,189
Financial resources were used for
Long-term receivables
1,695,265
4,584,344
2,395,445
2,617,834
Permanent assets
Investments
11,344,121
1,678,006
58,299
448,917
Property, plant and equipment
3,511,480
4,579,668
Deferred charges
108,137
40,911
Goodwill (negative goodwill) on acquisition of investments
875,398
424,059
Long-term net assets of subsidiaries acquired
2,620,640
2,072,388
174,186
Decrease in long-term liabilities
319,855
169,428
Change in minority interest
14,104
44,010
Dividends and interest on own capital paid and proposed
1,030,270
577,855
1,030,270
577,855
Decrease in deferred income
10,764
Total funds used
16,690,296
8,912,593
8,497,938
8,902,682
Increase (decrease) in working capital
(1,069,444)
1,048,104
8,245,052
7,151,507
Changes in working capital
Current assets
Current liabilities
(783,245)
286,199
832,517
(215,587)
12,325,573
4,080,521
9,076,697
1,925,190
Increase (decrease) in working capital
(1,069,444)
1,048,104
8,245,052
7,151,507
The accompanying notes are an integral part of these financial statements.
88
1 Operations
The corporate purpose of Votorantim Participações S.A. (the “Company”) is to manage assets and businesses and to invest in other civil
and commercial companies of any nature, to further its interests.
The Company, through its subsidiaries and associated companies, operates in the industrial segment (cement, pulp and paper, chemical
products, metals and aluminum, energy, agribusiness and packaging), as well as in the financial segment (multiple bank with commercial,
credit, financing and investment portfolios, securities dealing on own account or for third parties, leasing portfolio and management
of investment funds).
2 Significant Accounting Practices
The parent company and consolidated financial statements have been prepared and are being presented in accordance with accounting
practices adopted in Brazil.
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and revenues and expenses, including estimates relating to the selection of the useful lives of property, plant
and equipment, provisions necessary for contingent liabilities and the determination of provisions for income tax and other similar
charges. Actual results may differ from the estimates.
(a) Determination of results of operations
Results are determined on the accrual basis of accounting. Sales and service revenues and related costs are recognized upon product
delivery or at the time the services are rendered.
Income from financial intermediation is basically represented by the income accrued on credit operations, foreign exchange transactions,
securities and derivative financial instruments.
Revenues from electric energy distribution are recognized based on the tariffs regulated by the National Electric Energy Agency (ANEEL)
when the energy is made available. Unbilled revenues, related to each monthly billing cycle, are accrued considering an estimate based
on prior month billings. Unbilled revenues are calculated based on the reading of the meters to determine the total energy consumed
from the cut-off date of the last billing until the end of the period. When differences between estimated and actual unbilled revenues
arise, which historically have been insignificant, they are recognized in the subsequent month. These revenues arise from the sale
of energy generated and are accounted for based on the delivery and capacity generated at rates specified in contractual terms and
conditions or market price.
(b) Financial investments and derivative financial instruments
(i) Financial segment
In accordance with Circular 3068 of the Brazilian Central Bank (BACEN), marketable securities are classified in the following categories,
according to management’s investment intention:
• Trading securities - acquired to be actively and frequently traded, adjusted to market value against results for the year.
• Securities held to maturity - securities acquired with the intention or obligation, and financial capacity, of being held in portfolio
until maturity, recorded only at cost of purchase plus accrued earnings, and not marked to market.
The decreases in market value of the assets held to maturity, below their respective costs plus accrued income, related to reasons
considered to be other than temporary, are reflected in current results as realized losses.
The derivative financial instruments are evaluated and classified either as hedge or non-hedge. In the financial segment, the transactions
that use financial instruments, carried out at customers’ request, or on own account, or which do not comply with the hedge criteria
defined in BACEN Circular 3082, are recorded at market value, with realized and unrealized gains and losses recognized directly in the
statement of income.
89
ANNUAL REPORT 2006 I VOTORANTIM GROUP
(ii) Industrial and shared energy segments
Investment fund quotas are classified as trading securities, as they were acquired to be actively and frequently traded. The other
financial investments are recorded at cost of purchase plus accrued income, since Votorantim Participações S.A. and its subsidiaries
intend to hold the investment up to maturity.
The derivative financial instruments for hedge purposes are evaluated and accounted for according to the conditions under which they
were contracted and are not recorded at market value. A portion of these derivatives was contracted with Votorantim Finanças S.A.
(c) Allowance for doubtful accounts
The allowance for doubtful accounts is recorded at an amount considered sufficient by management to cover estimated losses on the
collection of trade accounts receivable, as well as the rules of BACEN for the financial segment and the official accounting manual
for the shared energy industry.
(d) Inventories
Inventories are stated at the average cost of purchase or production, which is lower than replacement cost or realizable value. Imports
in transit are stated at the accumulated cost of each import.
(e) Other current assets and long-term receivables
These are recorded at cost plus, when applicable, earnings calculated on a pro rata daily basis and accrued monetary and exchange
variations up to the balance sheet date, adjusted by a provision, in order to reflect realizable values.
(f) Investments
Investments in subsidiaries and affiliated companies are accounted for on the equity method of accounting, plus goodwill and
negative goodwill arising from investments (Note 9). Other investments are stated at cost of purchase, adjusted for inflation up
to December 31, 1995.
Goodwill and negative goodwill determined on the purchase of a company is calculated as the difference between the purchase value
and the book value of the investment acquired. Goodwill, based on future economic recovery, is amortized over the period of recovery,
not exceeding 10 years. Negative goodwill is amortized only upon the realization of the related asset by sale or disposal.
The financial statements of the foreign subsidiaries have been prepared in accordance with accounting practices adopted in the countries
of origin and in their respective currencies. For equity accounting and consolidation purposes, these statements were adjusted to the
accounting practices adopted in Brazil and translated into reais at the exchange rates in effect on the balance sheet date.
(g) Property, plant and equipment
Property, plant and equipment is stated at cost of purchase or construction. The interest arising from financing directly linked to these
assets while under construction is capitalized. Depreciation is calculated on the straight-line method (Note 10). Forestry development
costs, primarily project implementation costs, are capitalized as incurred.
Management reviews the useful lives of the assets, particularly those of buildings and equipment used in each operation, for the
purpose of determining and measuring impairment on a recurring basis or when events or changes indicate that the carrying value of
an asset or group of assets may not be recoverable through operating activities. Write-down of the carrying value of assets or groups
of assets is made if and when appropriate.
(h) Deferred charges
Deferred charges, which consist primarily of pre-operational expenditures related to expansion projects, are amortized over a period
of up to 10 years.
90
Financial Statements 2006
(i) Income tax, social contribution and tax incentives
The provision for income tax and deferred income tax on temporary differences is determined at the rate of 25%, and social contribution
at the rate of 9%. Some subsidiaries are also subject to income tax arising from their operations abroad.
Income tax and social contribution are accrued on taxable results. Deferred taxes are calculated based on the results which will be
taxable or deductible in the future. The deferred tax benefit of tax losses is generally recognized as an asset to the extent that realization
is considered probable. In the financial segment, the depreciation generated from the leasing portfolio is tax effected at 25% and the
fair market value adjustment of securities and derivative financial instruments is tax effected at the statutory rates, recorded in “Other
liabilities,” in current liabilities, and “Deferred income tax and social contribution,” in long-term liabilities.
Taxes on profit are included in the statement of income gross of tax incentives. The tax incentive benefit is credited directly to
shareholders’ equity at the time the option for the incentive is made, against a decrease in liabilities.
(j) Current and long-term liabilities
These liabilities are stated at known or estimated amounts including, when applicable, accrued charges and indexation adjustments.
The provisions for profit sharing are recorded when the companies grant this right to the employees, in accordance with performancebased plans.
(l) Environmental expenditures
Expenditures relating to ongoing environmental programs are charged against earnings as incurred. The ongoing programs are
developed to reduce the environmental impact of operations and to manage environmental risks. The provisions relating to these costs
are recorded when they are considered probable and reasonably estimable.
(m) Interest on own capital
Brazilian corporations are permitted to deduct, as a financial expense for tax purposes, the interest attributed to shareholders’ equity.
For financial reporting purposes, the interest attributed to shareholders’ equity is recorded as a deduction from unappropriated retained
earnings, in a manner similar to a dividend.
(n) Pension plan and other post-retirement benefits
The contributions made by Votorantim Participações S.A. and its subsidiaries to the defined contribution pension plans and employee
welfare plans (Note 16) were determined by independent actuaries and are recorded as operating expenses.
An indirect subsidiary of Votorantim Participações S.A. abroad and an indirect jointly controlled company of VBC Participações S.A.
have a defined benefit plan that also offers, among other services, medical assistance and life insurance. The cost of the retirement
benefits and of the other benefits of these plans granted to eligible employees is determined on the projected benefit method prorated on the service and management’s best estimates of investment yields, salary adjustments, future cost trends and mortality and
retirement age of the employees.
(o) Consolidated financial statements
The consolidated financial statements include the accounts of the direct and indirect subsidiaries described below. All significant
accounts and transactions among the companies were eliminated in the consolidated financial statements.
Investments among the companies, accounts receivable and payable, income and expenses and unrealized gains among the companies
were eliminated. Minority interest in shareholders’ equity and in the results is stated separately. Goodwill and negative goodwill arising
from transactions with third parties are classified as Investments.
The results of derivative financial instruments contracted to hedge the consolidated foreign exchange exposure of the Votorantim
Group were fully eliminated in the preparation of the consolidated financial statements.
Jointly controlled companies were consolidated proportionally to the ownership interest held in their capital and include VBC
Energia S.A., Aracruz Celulose S.A., Ripasa S.A. Celulose e Papel, Usinas Siderúrgicas de Minas Gerais S.A. – Usiminas and Suwannee
American Cement, LLC.
The main subsidiaries included in the consolidation and the percentage of interest of Votorantim Participações S.A. and its subsidiaries,
held directly and indirectly, are as follows:
91
Financial Statements 2006
ANNUAL REPORT 2006 I VOTORANTIM GROUP
Percentage
2006
2005
Industrial segment
Cement
Call Itaú Participações Minas Gerais S.A.
100.00
Calmit Industrial Ltda.
100.00
Calsete Industrial S.A.
100.00
Cimento Poty S.A. (ii)
Cimento Rio Branco S.A. (i)
Cimento Sergipe S.A. (ii)
Cimento Tocantins S.A. (i)
Cimex Comércio e Indústria de Cimento Ltda. (i)
100.00
Companhia Cimento Portland Itaú (i)
Votorantim Cimentos NNE (ii)
98.80
Empresa de Transporte CPT Ltda.
100.00
Engemix S.A.
100.00
St. Barbara Cement Inc.
100.00
St. Marys Cement Inc. (Canadá e Estados Unidos)
100.00
Suwannee American Cement, LLC
50.00
Votorantim Cement North America, Inc.
100.00
Votorantim Cimentos América S.A.
94.56
Votorantim Cimentos Ltda.
98.47
Votorantim Investimentos Industriais S.A.
100.00
Votorantim Investimentos Internacionais S.A.
100.00
100.00
100.00
100.00
95.31
100.00
95.61
99.87
100.00
100.00
100.00
100.00
100.00
100.00
100.00
50.00
100.00
94.56
100.00
100.00
100.00
Companhia Brasileira de Alumínio
99.74
Companhia Níquel Tocantins (iv)
Indústria e Comércio Metalúrgica Atlas S.A.
99.86
Votorantim Metais Níquel S.A. (iv)
100.00
Votorantim Metais-Cajamarquilla S.A.
99.99
Siderúrgica Barra Mansa S.A.
100.00
Votorantim Metais Zinco S.A.
99.92
Votorantim Metais Ltda.
100.00
Usinas Siderúrgicas de Minas Gerais S.A.
5.76
99.74
99.98
99.86
100.00
99.06
100.00
99.92
100.00
Pulp and paper
Aracruz Celulose S.A.
12.35
Nova HPI Participações e Comércio Ltda.
100.00
Ripasa S.A. Celulose e Papel
50.00
Ripasa Participação S.A.
Votorantim Celulose e Papel S.A.
52.15
12.35
100.00
50.00
55.49
Agribusiness
Citrovita Comercial Exportadora S.A.
Citrovita Industrial e Comercial Ltda.
Citrovita Agroindustrial Ltda.
Citrovita Agro Pecuária Ltda.
Sucorrico S.A.
99.99
100.00
99.99
99.99
100.00
Chemical
Companhia Agro Industrial Igarassu
Companhia Nitro Química Brasileira
99.98
99.98
99.98
99.98
100.00
75.00
100.00
75.00
99.99
100.00
99.98
99.99
100.00
Trading
Votorantim International Holding
The Bulk Service Corporation
92
Percentual
2006
2005
Holding and other segments
Metallurgy
Companhia de Luz e Força Santa Cruz (v)
Hailstone Limited
100.00
TIVIT - Tecnologia da Informação S.A.
99.99
Santa Cruz Geração de Energia S.A.
100.00
Votorantim Comercial Exportadora e Importadora Ltda.
99.98
Votorantim Comércio e Indústria Ltda.
100.00
Votorantim Investimentos Latino-Americanos S.A.
94.56
Votocel Investimentos Ltda. (iii)
100.00
Votorantim Energia Ltda.
100.00
Voto - Votorantim Overseas Trading Operations III Ltd.
100.00
Voto - Votorantim Overseas Trading Operations IV Ltd.
100.00
Votorantim Novos Negócios Ltda.
99.99
99.99
100.00
99.99
100.00
99.98
100.00
94.56
100.00
100.00
100.00
100.00
99.99
Financial segment
Banco Votorantim S.A.
BV Financeira S.A.
BV Leasing e Arrendamento Mercantil S.A.
BV Sistemas Ltda.
BV Trading S.A.
CP Promotora de Vendas Ltda.
Votorantim Bank Limited
Votorantim Finanças S.A.
Votorantim International Business Limited
Votorantim C.T.V.M. Ltda.
Votorantim Asset Management D.T.V.M. Ltda.
Votorantim Seguros e Previdência S.A.
Banco Votorantim Securities, Inc
99.94
99.99
99.99
99.94
99.99
99.40
95.84
100.00
100.00
99.98
99.99
99.99
100.00
99.92
99.99
99.99
99.94
99.99
99.40
95.84
100.00
100.00
99.98
99.99
99.99
VBC Participações S.A.
33.33
Shared energy segment
VBC Energia S.A.
50.00
(i) In 2006, the following companies were merged into Votorantim Cimentos Brasil Ltda., current name of Cimex Comércio e Indústria
de Cimento Ltda.: Cimento Rio Branco S.A., Companhia de Cimento Portland Itaú and Cimento Tocantins S.A.
(ii) In 2006, Cimento Poty S.A. and Cimento Sergipe S.A. were merged into Votorantim Cimentos NNE, current name of Companhia de
Cimento Portland Poty.
(iii) Votocel Investimentos Ltda. is the current name of Votocel Filmes Flexíveis Ltda.
(iv) Companhia Níquel Tocantins was merged into Mineração Serra da Fortaleza S.A. during 2006 and its name was changed to
Votorantim Metais Níquel S.A.
(v) Company sold in December, 2006.
Main acquisitions in 2006
Acquisition of Ripasa
On May 24, 2006, an Extraordinary General Meeting of Ripasa approved the merger, into the net assets of Ripasa Participações
S.A. (Ripar), of the shares issued by Ripasa and held by the non-controlling shareholders on that date. Accordingly, these
non-controlling shareholders became shareholders of Ripar, based on the share exchange ratio established in the Protocol
approved at the mentioned meeting.
After the approval of the merger of the shares of Ripasa into Ripar, the Extraordinary General Meetings held by VCP, Suzano
and Ripar approved the total spin-off of Ripar, with the transfer of its net assets at April 30, 2006, in equal portions, to VCP and
Suzano, leading to (i) an increase in the capital of VCP and Suzano, with the issue of new shares, which were distributed among
the former non-controlling shareholders of Ripar based on the share exchange ratio established in item 3 of the Significant
Event Notice issued on May 5, 2006 and (ii) the dissolution of Ripar.
93
Financial Statements 2006
ANNUAL REPORT 2006 I VOTORANTIM GROUP
After the corporate restructuring described above, VCP and Suzano started to hold 50% of the shares of Ripasa S.A. Celulose
e Papel each, in the amount of R$ 1,397,773, R$ 844,436 of which refer to the goodwill on the acquisition, based on future
profitability and which is being amortized over 10 years. This procedure will be applied until the corporate restructuring of
Ripasa is concluded and an industrial unit consortium is created.
Acquisition of Companhia de Cimento Ribeirão Grande
In November 2006, the indirect subsidiary Cal Itaú Participações S.A. acquired the shareholding control of Companhia de
Cimento Ribeirão Grande, for R$ 425,376, recording a goodwill on acquisition of R$ 319,693, based on the expectation of
future profitability, and which will be amortized in up to ten years.
VBC Energia S.A.
In 2006, by means of a corporate restructuring process, VBC Participações S.A. was split up and merged into its shareholders.
Through asset swaps, the Votorantim Group and the Camargo Corrêa Group started to jointly control VBC Energia S.A.
VBC Energia owns 139,002,671 common shares, corresponding to 28.97% of the capital of CPFL Energia. Of this total,
122,945,367 common shares which originally made up the controlling block remained as such and are subject to the terms of
the Shareholders’ Agreement of CPFL Energia.
The corporate restructuring was carried out at market values, resulting in a goodwill of R$ 120,000 in the Votorantim Group,
net of the provisions for unrealized profits and gains and losses on changes in equity investments, and will be amortized as
of 2007, according to projections of future profitability.
Main acquisitions in 2005
In February 2005, the Votorantim Group acquired the net assets of Cemex, Inc., located in the Great Lakes region in the USA,
for US$ 389 million, equivalent to R$ 1,012,567.
In February 2005, the acquisition of Sucorrico S.A. was concluded. The total amount of the transaction was US$ 70 million,
equivalent to R$ 183,223, of which R$ 148,071 refers to goodwill on acquisition.
In March 2005, a jointly controlled affiliate of Votorantim Celulose e Papel S.A. and Suzano Bahia Sul S.A. acquired 77.59% of the
voting capital and 46.06% of the total capital of Ripasa for R$ 1,484,190, of which R$ 1,004,726 refers to goodwill on acquisition
based on the financial statements of Ripasa at March 31, 2005. Additionally, a purchase and sale option agreement relating
to 22.41% of the voting capital and 13.45% of total capital was entered into. Such option can be exercised within six years,
whereby in the first five years the sellers have a put option and in the sixth year the buyers have a call option for R$ 433,255,
indexed to Brazil’s base rate (“SELIC”) from March 31, 2005 to the day of effective payment and ownership transfer. The sellers
have assigned to the purchasers the beneficial ownership of the shares’ voting and economic rights for a six-year period.
In July 2005, a 75% interest in the capital of The Bulk Service Corporation was acquired for US$ 33,925 thousand, equivalent
to R$ 79,584 on that date. The goodwill paid on acquisition was R$ 67,137.
In November 2005, the Votorantim Group acquired 24.92% of the capital of Compañia Minera Milpo S.A.A., headquartered in
Peru, for US$ 100,206 thousand, equivalent to R$ 221,154, recording a goodwill of R$ 160,185 on that date.
Main sale in 2006
In December 2006, Companhia Luz e Força Santa Cruz was sold to CPFL Energia S.A. for R$ 203,000, obtaining a gain of R$ 124,347,
recorded in the consolidated financial statements in non-operating income (expenses).
Main acquisitions in 2005
In July 2005, the Votorantim Group sold the investee Empresa Brasileira de Filmes Flexíveis Ltda. for R$ 251,000, resulting
in a gain of R$ 124,765, recorded in the consolidated financial statements in non-operating income (expenses).
In December 2005, the 50% interest in Nordesclor S.A. was sold for R$ 37,323, resulting in a gain of R$ 14,323, recorded
in the consolidated financial statements in non-operating income (expenses).
Reconciliation of shareholders’ equity and net income for the year between the parent company and the consolidated
2006
2005
Shareholders’
Net income Shareholders’
Net income
equity
for the year equity for the year
Parent company
21,507,030
4,337,983
18,310,332
2,433,071
Supplement to equity pick-up (i)
61,628
61,628
351,551
184,890
Elimination of negative goodwill among subsidiaries (ii)
435,083
435,083
Adjustment of unrealized profits (iii)
(46,723)
7,477
Prior-year adjustments in jointly controlled subsidiary (iv)
9,442
Tax effect
(145,961)
Consolidated
21,857,780
4,399,611
19,050,243
2,634,880
(i) Refers to a supplement of equity pick-up of consolidated companies stated at historical cost, which were accounted for on the
equity method for consolidation purposes.
(ii) Reversal of negative goodwill generated among consolidated companies.
(iii) Adjustment of unrealized profits resulting from the sale of CPFL Energia to VBC, which were eliminated or realized
upon consolidation.
(iv) Prior-year adjustment arising from the provision for the Energy Research, Development and Efficiency Programs in the jointly
controlled subsidiary VBC.
3 Financial Investments
(a) Financial investments and derivative financial instruments
Parent company
Consolidated
2006
2005
2006
2005
Trading securities (*)
Financial Treasury Bills (LFTs)
332,983
9,131
National Treasury Bills (LTNs)
2,129,024
4,024,932
National Treasury Notes (NTNs)
4,724,047
3,563,031
Brazilian Central Bank Notes (NBCs)
28,706
Bank Deposit Certificates (CDBs)
52,029
897,781
Eurobonds
958,304
3,090,514
C-Bonds
289,498
61,889
Debentures
1,087,669
1,146,077
Investment fund quotas
884,107
1,239,376
5,009,917
4,510,122
Fixed time deposit – foreign currency
2,220,603
Credit Rights Investment Fund (FIDC)
77,519
136,863
Mortgage notes
11,841
Variable income securities
54,963
465,223
152,338
Other
832,453
119,241
936,136
1,294,339
18,127,240
17,752,466
Securities held to maturity
Eurobonds
680,910
1,006,522
Foreign currency-denominated investments
1,154,647
991,043
1,652,865
1,247,872
Bank Deposit Certificates (CDBs)
1,792,611
1,468,430
Interbank Deposit Certificates (CDIs)
209,658
126.288
Debentures 343,042
Other
1,154,647
991,043
4,679,086
3,849,112
Derivative financial instruments – (Note 17)
1,908,709
2,984,112
2,090,783
2,285,382
24,715,035
24,585,690
Current
(1,489,327)
(2,285,382)
(23,959,773)
(22,246,098)
Long term
601,456
755,262
2,339,592
(*) Trading securities - the criteria for the pricing of marketable securities are defined by the risk management area of Votorantim
Participações S.A. and Votorantim Finanças S.A., considering prices and rates officially disclosed by entities such as the National
Association of Open Market Institutions (ANDIMA) and the Futures and Commodities Exchange (BM&F), in addition to possible price
adjustments for low liquidity securities, which consider offers, latest prices, possible dispersal and other factors to fairly determine the
market value, in the local and foreign markets.
94
95
Financial Statements 2006
ANNUAL REPORT 2006 I VOTORANTIM GROUP
For securities traded in the Brazilian market, the average rates of the instruments disclosed by ANDIMA are considered, for the
closing date, as well as the closing price disclosed for positions in the BM&F, the prices of the last negotiations of debentures
disclosed by ANDIMA, taking into account the adoption of criteria considered to be adequate to establish the price of low liquidity
instruments. For the assets of foreign investees, the closing prices for the public debt securities in the international market disclosed
by Bloomberg and other information services are considered, as well as the adoption of criteria considered to be adequate for the
correct pricing of low liquidity securities.
The Public Securities, Eurobonds and C-Bonds issued by the Brazilian government fall due up to January 2018 and, for the most
part, are recorded in current assets, irrespective of their maturity terms, due to the highly liquid nature of the instruments and
intent to optimize market opportunities.
Investment fund quotas are recorded at their realizable value obtained by the last quotation available.
Votorantim Finanças S.A., through its subsidiary Votorantim Asset Management DTVM Ltda., manages various fixed and variable
income funds with total net assets of R$ 23,649,758 (2005 - R$ 17,586,224). Of the total financial investments in investment fund
quotas held by the Votorantim Group, R$ 3,814,713 (2005 - R$ 2,399,595) was invested in funds managed by Votorantim Asset
Management DTVM Ltda.
(b) Interbank investments
The portfolio comprises interbank deposits bearing interest at fixed or floating rates, falling due up to September 2011, in the amount
of R$ 2,515,759 (2005 - R$ 2,078,897), open market investments, backed by government securities, totaling R$ 16,915,517 (2005 R$ 10,627,372) and foreign currency-denominated investments amounting to R$ 19,240 (2005 - R$ 44,837).
4 Trade Accounts Receivable - Consolidated
Credit risk is minimized by the broad customer base and control procedures, as well as the monitoring of customers’ credit limits.
Votorantim Participações S.A. and its subsidiaries also contract a credit insurance policy for most of their export receivables.
The companies of the industrial segment have irrevocable receivable assignment transactions to the Credit Rights Investment Fund
(FIDC). The fund, which is managed by Banco Bradesco S.A., has no defined term and, at December 31, 2006, reported net equity
of R$ 251,707 (2005 – R$ 250,328), of which R$ 191,720 (2005 – R$ 106,369) are in senior quotas owned by closed-end funds of
subsidiaries and R$ 59,987 (2005 - R$ 143,958) in subordinated quotas held by subsidiaries.
At December 31, 2006, the outstanding balance of receivables assigned to the FIDC was R$ 257,896 (2005 – R$ 201,193). Expenses
incurred on these assignments in 2006 amount to R$ 30,231 (2005 – R$ 32,202), classified as financial expenses in the consolidated
statement of income for the year.
5 Credit Operations
(a) Analysis of credit operations
Loans – public sector
Loans – private sector
Financing – private sector
Financing – marketable securities
Total credit operations (current and long-term)
Leasing, classified as “Other receivables”
Foreign exchange portfolio: advances on exchange
contracts, classified as deduction of “Other liabilities”
Consolidated
2006
2005
200,725
168,752
4,532,312
2,108,386
11,561,819
9,507,791
142,223
103,318
16,437,079
11,888,247
46,400
33,462
355,371
16,838,850
247,021
12,168,730
(b) Analysis of the portfolio by type of customer
Industry Commerce
Rural
Other services
Financial institutions
Individuals
(c) Analysis of the portfolio of credit operations by corresponding risk levels. The analysis of the portfolio by risk level
in the financial segment is as follows:
Risk level
AA
A
B – overdue from 15 to 30 days
C – overdue from 31 to 60 days
D – overdue from 61 to 90 days
E – overdue from 91 to 120 days
F – overdue from 121 to 150 days
G – overdue from 151 to 180 days
H – overdue for more than 180 days
2006
Credits
Credits
falling due
overdue
2,596,502
10,283,928
1,209,110
556,442
1,175,702
411,318
104,208
112,503
6,004
82,395
630
57,656
675
46,585
4,360
190,832
15,381,119
1,457,731
Total
2,596,502
10,283,928
1,765,552
1,587,020
216,711
88,399
58,286
47,260
195,192
16,838,850
Risk level
AA
A
B – overdue from 15 to 30 days
C – overdue from 31 to 60 days
D – overdue from 61 to 90 days
E – overdue from 91 to 120 days
F – overdue from 121 to 150 days
G – overdue from 151 to 180 days
H – overdue for more than 180 days
2005
Credits
Credits
falling due
overdue
2,353,124
7,557,141
814,014
390,357
570,404
224,331
15,083
66,664
372
42,935
490
27,618
216
21,365
1,512
83,104
11,312,356
856,374
Total
2,353,124
7,557,141
1,204,371
794,735
81,747
43,307
28,108
21,581
84,616
12,168,730
6 Inventories
Finished products Work in progress Raw materials Consumer goods warehouse Other
96
Consolidated
2006
2005
2,739,690
2,124,761
1,259,171
911,345
182,034
145,820
1,882,152
1,670,786
33,857
6,512
10,741,946
7,309,506
16,838,850
12,168,730
Consolidated
2006
2005
878,976
866,934
873,490
344,543
413,405
486,569
445,764
532,881
302,702
117,533
2,914,337
2,348,460
97
Financial Statements 2006
ANNUAL REPORT 2006 I VOTORANTIM GROUP
7 Taxes Recoverable
Taxes recoverable are mainly represented by income tax withheld on earnings from financial investments (parent company
and consolidated) and Value-added Tax on Sales and Services (ICMS) credits arising from the purchase of fixed assets and
consumable products (consolidated), recorded based on the realization terms.
8 Significant Balances and Transactions with Related Parties
Parent company
Dividends and Dividends and Loans receivable
interest on own interest on own
and advances for Net financial
capital receivable capital payable future increase
Loans payable charges on loans
2006
2005
2006
2005
2006
2005
2006
2005
2006
2005
Segment/Company
Cement
Calsete Industrial S.A.
Empresa de Transportes
CPT Ltda.
18,823
18,823
Itaú Agro Florestal Ltda.
4,323
St. Marys Cement Inc.
578
Votorantim Cimentos Ltda.
10,203 (549,773) 2,290,787
Votorantim Investimentos
Industriais S.A.
123,155 100,045 3,477,160 1,713,687
Votorantim Investimentos
Internacionais S.A. 277,004
260,072
Engemix S.A.
Itapisserra Mineração S.A.
Votorantim Cement North
America, Inc.
596
Votorantim Cimentos NNE S.A.
190
4,861
Metals
Votorantim Metais Zinco S.A.
Votorantim Metais Ltda. 161,342 152,575
152,573
Votorantim Investimentos
Latino-Americanos S.A.
14,540
Chemical
Companhia Nitro Química
Brasileira
35,878
Energy
Votorantim Energia Ltda.
Agribusiness
Citrovita Agroindustrial Ltda.
4,798
57
Citrovita Industrial
e Comercial Ltda.
42,429
42,429
Fazenda Bodoquena Ltda.
2,170
2,170
Finance
Votorantim Finanças S.A.
124,950
98,985
489
490
Pulp and paper
Nova HPI Participações
e Comércio Ltda.
216
216
Indústria de Papel Pedras
Brancas Ltda.
Votorantim Celulose
e Papel S.A.
119,589
112,441
17
98
1,845
309,288
7,258
952,212
4,323
578
192,354
545,588
(119,253)
(40,043)
70,364
10,052
(364)
(52)
8,784
1,845
151,633
55,182
290,150
10
10
1,149
1,149
12,982
13,706
(4,182)
(823)
Parent company
Dividends and Dividends and Loans receivable
interest on own
interest on own
and advances for
capital receivable capital payable future increase
Loans payable
2006
2005
2006
2005
2006
2005
2006
2005
Net financial
charges on loans
2006
2005
Segment/company
Other
Hailstone Limited
45,320
46,339
Hejoassu Administração S.A. 367,234
212,080
1,708
1,722
Interávia Táxi Aéreo Ltda.
7,508
225
Interávia Transportes Ltda.
2,997
Máquinas Piratininga
do Nordeste S.A.
2,525
3,032
TIVIT Tecnologia da
Informação S.A.
6,275
1,380
5,500
21,455
Santa Maria Comércio
e Serviços Ltda. 16,373
12,280
21,641
19,080
(2,562)
Silcar Empreendimentos,
Comércio e Participações Ltda.
60,763
94,090
St. Helen Holding II B.V.
12
306,383 335,430
Votocel Investimentos Ltda.
3,589
14,959
Votorantim Comercial
Exportadora e Importadora Ltda.
370,922 437,424
Votorantim International
Holding N.V.
48,464
Voto-Votorantim Overseas
Trading Operations N.V. III
82,849 288,277
Votorantim Novos Negócios Ltda.
36,851
65,000
Votorantrade N.V. 406,262
423,330
50,872
6,599
Votorantim Investimentos Ltda.
3,633
2,299
Voto-Votorantim Overseas
Trading Operations N.V. IV
127
Usinas Siderúrgicas de Minas
Gerais S.A. - Usiminas
10,834
Other
8,497
1
20,947
84
412,123 529,085 367,234
233,027 1,081,651 4,069,421 5,669,803 2,960,178
(1,483)
(2,765)
(43,876) (100,790)
(11,351)
(10,455)
19,883
21,574
(161,341) (135,201)
Loan transactions are carried out under terms and conditions agreed upon by the parties with or without financial charges, without
a defined settlement term.
Assets
Company
2006
2005
Accounts receivable/payable
BAESA - Energética Barra Grande S.A.
Machadinho Energética S.A.
Mineração Rio do Norte S.A.
41,300
Petrocoque S.A. Indústria e Comércio
525
41,825
Loans
Hejoassu Administração S.A.
456,588
436,326
Consolidated
Liabilities
2006
2005
8,404
30,651
36,327
5,546
44,601
3,253
39,580
Income (expenses)
2006
2005
(48,337)
(48,639)
(50,764)
(108,789)
(205,765)
(50,764)
Transactions are carried out under terms and conditions agreed upon by the parties with or without financial charges, without
a defined settlement term.
99
Financial Statements 2006
ANNUAL REPORT 2006 I VOTORANTIM GROUP
9 Investments
Parent company
Balance of
Resulf of investments
equity
(provision for net
December 31, 2006
accounting
capital deficiency)
Adjusted
shareholders’
equity (net
Result
Corporate
capital
for
interest
Segmento/Empresa deficiency)
year - %
2006
2005
2006
2005
Cement
Calsete Industrial S.A.
8,507
(1,108)
100.00
(1,108)
(34)
8,507
9,615
Empresa de Transportes CPT Ltda.
1,294,011
(31,517)
100.00
(31,517)
(35,654) 1,294,012 1,325,527
Votorantim Cimentos Ltda.
2,654,384
60,127
34.62
72,843
283,470
924,695
740,842
Votorantim Investimentos Industriais S.A.
11,289,171
1,320,365
99.99 1,320,365
13,755 11,288,314 2,685,060
Votorantim Investimentos Internacionais S.A.
1,046,831
(94,886)
68.75
(65,234)
(79,421)
719,696
784,930
Votorantim Cimentos América S.A.
599,662
(36,264)
45.45
(16,484)
(16,766)
272,573
144,527
Votorantim Cimentos Brasil S.A. (i)
1,793,424
496,819
6.34
38,171
113,768
75,492
Votorantim Cimentos NNE S.A. (ii)
2,438,879
41,214
0.45
184
801
10,920
10,276
Metals
Companhia Brasileira de Alumínio
494,452
Votorantim Metais Ltda.
655,176
498,299
924,105
Usinas Siderúrgicas de Minas Gerais S.A. - Usiminas 10,418,031
2,505,461
5.76
146,139
602,762
Chemical
Companhia Nitro Química Brasileira
275,508
58,092
99.98
58,080
55,835
275,467
272,508
Agribusiness
Citrovita Agroindustrial Ltda.
542,026
393,655
99.99
275,888
2
542,022
537,181
Citrovita Comercial Exportadora S.A.
668,574
83,736
99.99
89,134
99,818
668,562
143,605
Citrovita Industrial Comercial Ltda.
1,061,461
29,276
82.81
318
1,156
878,995
1,138
Citrovita Agro Pecuária Ltda.
148,081
(32,369)
Companhia Agro Inudstirla Igarassu
29,883
11,313
0.33
42
45
98
82
Sucorrico S.A.
161,075
4,734
77.09
5,215
124,179
Fazenda Bodoquena Ltda.
12,992
(394)
100.00
(394)
(1,093)
12,992
13,385
Energy
Votorantim Energia Ltda.
66,424
205,184
Finance
Votorantim Finanças S.A.
5,519,404
959,693
99.99
959,693
697,403 5,519,386
4,212,525
Pulp and paper
Nova HPI Participações e Comércio Ltda.
27,050
28,679
250,828
Votorantim Celulose e Papel S.A.
293,027
270,983
2,053,631
Indústria de Papel Pedras Brancas Ltda.
(1,903)
831
8,227
Other
Azben Holding G.M.B.H.
326,059
214,730
100.00
203,820
(62,819)
326,059
125,996
Empresa de Mineração Acariuba Ltda.
99.15
(430)
738
10,633
Hailstone Limited
319,172
22,250
100.00
(5,649)
(26,651)
319,172
325,208
Nordeste Participações S.C. Ltda.
14,735
TIVIT Tecnologia da Informação S.A.
656,079
31,376
84.21
26,421
5,915
552,477
469,510
St. Helen Holding II B.V.
(72,918)
(19,671)
100.00
(14,950)
(20,351)
(72,918)
(58,665)
Santa Maria Comércio e Serviços Ltda.
8,999
(1,778)
100.00
(1,778)
(926)
8,999
10,778
Silcar Empreendimentos, Comércio
e Participações Ltda.
37,112
28,688
99.98
28,682
12,853
37,104
8,422
Votocel Investimentos Ltda. (iii)
9,559
4,128
29.99
1,238
3,585
2,867
2,021
Votorantim Comercial Exportadora
e Importadora Ltda.
84,290
(49,433)
(54,894)
Votorantim Investimentos Latino-Americanos S.A.
573,265
28,551
45.45
12,978
(6,063)
260,573
123,797
Votorantim Overseas Oper. Trad - Voto 4
34,837
4,486
50.00
801
17,419
Votorantim Novos Negócios Ltda.
6,836
(31,685)
100.00
(31,685)
(27,976)
6,836
(26,478)
Votorantim Empreendimentos Ltda. (iv)
(12,444)
(1,283)
100.00
(1,283)
(12,444)
Interávia Táxi Aéreo Ltda.
2,881
(459)
94.76
(435)
2,730
3,164
Igara Participações S.A. (v)
25,474
59,494
Other investments
(27,671)
2,058
55,283
12,960
Total investments in subsidiaries and affiliates 4,124,508 2,224,650 24,761,105 15,410,614
Other investments stated at cost
15,930
144,980
4,124,508 2,224,650 24,777,035 15,555,594
Negative goodwill on acquisition of investments
(200,422)
(550,418)
100
At December 31, 2006 and 2005, the financial statements of the subsidiaries and affiliated companies were audited and/or reviewed
by independent auditors.
At December 31, 2006 and 2005, the report of the independent auditors on the financial statements of the jointly controlled subsidiary
VBC Energia S.A. contains a matter of emphasis paragraph alerting to the provisional tariff rates granted by ANEEL.
(i) In 2006, the following companies were merged into Votorantim Cimentos Brasil Ltda., current name of Cimex Comércio e Indústria
de Cimento Ltda.: Cimento Rio Branco S.A., Companhia de Cimento Portland Itaú and Cimento Tocantins S.A.
(ii) In 2006, the companies Cimento Poty S.A. and Cimento Sergipe S.A. were merged into Votorantim Cimentos NNE, which is the
current name of Cia. de Cimento Portland Poty.
(iii) Votocel Investimentos Ltda., current name of Votocel Filmes Flexíveis Ltda.
(iv) Votorantim Investimentos Ltda., current name of Trevo Industrial e Comercial Ltda.
(v) Company was merged into Votorantim Participações S.A. in 2006.
Changes in investments
Opening balance
Equity in the earnings of subsidiaries and affiliated companies
Acquisitions of investments and capital increase in investees
Sale of investments and capital decrease in investees
Gains (losses) on sale of investments
Prior-year adjustment in subsidiary - (Note 15(e))
Dividends received and receivable
Closing balance
Parent company
2006
2005
15,555,594
15,833,885
4,124,508
2,224,650
11,344,121
1,678,006
(4,985,752)
(3,492,926)
235,751
180,371
(379,343)
(1,117,844)
(868,392)
24,777,035
15,555,594
Acquisitions of investments and capital increase in investees
• In June 2005, the Company increased the capital of TIVIT Tecnologia da Informação S.A. (current name of Optiglobe Tecnologia da
Informação S.A.) by R$ 295,091, through the capitalization of an advance for future capital increase.
• In August and December 2005, the Company increased the capital of Votorantim Finanças S.A. by R$ 500,000 and R$ 239,767,
respectively.
• In November 2005, the Company sold, at book value, its 99.74% interest in Companhia Brasileira de Alumínio to Votorantim
Investimentos Industriais S.A. for R$ 3,475,306.
• In December 2005, the Company increased the capital of Citrovita Agro Industrial Ltda., in the amount of R$ 614,440, through the
capitalization of an advance for future capital increase.
• In January 2006, the Company increased the capital of Votorantim Novos Negócios Ltda. by R$ 65,000, through the capitalization
of an advance for future capital increase.
• In February 2006, the Company received, by means of a capital increase, an investment in Votorantim Investimentos Latino Americanos
S.A. in the amount of R$ 123,799, and one in Votorantim Cimentos América S.A., in the amount of R$ 144,529.
• In March 2006, the Company increased the capital of Votorantim Investimentos Industriais S.A. by R$ 3,475,306 through the
capitalization of an outstanding loan balance.
• In April 2006, the Company increased the capital of TIVIT Tecnologia da Informação S.A. by R$ 61,455, through the capitalization of
an advance for future capital increase.
• In 2006, the Company increased the capital of Votorantim Finanças S.A. by R$ 1,000,000.
• In December 2006, the Company increased the capital of Votorantim Investimentos Industriais S.A. through the transfer of the
investments in the companies Indústria de Papel Pedras Brancas, Nova HPI Participações Ltda., Votener - Votorantim Comercializadora
de Energia Ltda., Votorantim Comercial Exportadora e Importadora Ltda., Votorantim Metais Ltda. and Votorantim Celulose e Papel S.A.
at book value and the capitalization of an advance for future capital increase, in the amount of R$ 4,048,108.
• In December 2006, the Company increased the capital of Sucorrico S.A. by R$ 118,964 by purchasing 80,775,948 shares of this
investee.
• In March and November 2006, the Company purchased new shares of Usiminas, in the amounts of R$ 17,849 and R$ 189,586,
respectively.
• In December 2006, the Company increased the capital of Citrovita Comercial e Exportadora by R$ 435,825.
• In December 2006, the Company increased the capital of Citrovita Industrial e Comercial Ltda. by R$ 879,209.
101
Financial Statements 2006
ANNUAL REPORT 2006 I VOTORANTIM GROUP
Sales of investments and capital decrease in investees
• In April 2006, the Company transferred its investment in Votorantim Energia Ltda. to Votorantim Investimentos Industriais, at a book
value of R$ 205,184.
• In October 2006, the Company sold, at book value, its 99.15% interest in the capital of Empresa de Mineração Acariuba Ltda. to
Votorantim Cimentos Ltda, for R$ 10,204.
Consolidated
Result of
Balance of
2006
equity accounting
investments
Adjusted
Result for Corporate
shareholders’
the year/
interest corporate
Companies
equity
period - %
2006
2005
2006
2005
BAESA - Energética Barra Grande S.A. (*)
443,072
51,082
15.00
7,662
(894)
66,461
58,863
Campos Novos Energia S.A. (*)
388,787
42.73
174,032
166,125
Companía Minera Milpo S.A.A.
491,776
206,653
19.93
51,215
(26)
123,055
64,664
Machadinho Energética S.A.
357,395
3,212
29,11
935
1,398
104,038
103,103
Mineração Rio do Norte S.A.
584,885
340,808
10.00
34,567
42,476
58,489
57,897
Petrocoque S.A. Indústria e Comércio
44,194
19,090
22.50
(823)
1,894
9,944
8,229
Sirama Participações Administração
e Transportes Ltda.
232,065
89,142
38.241
34,097
27,002
89,984
88,771
Other investments
24,608
2,801
119,339
33,205
Total investments accounted for
on the equity method 152,261
74,651
745,342
580,857
Other investments stated at cost
Alunorte - Alumina do Norte S.A.
85,208
63,307
Usinas Siderúrgicas de Minas
Gerais S.A. - Usiminas
125,479
Other investments
273,389
205,832
358,597
394,618
Total investments
152,261
74,651 1,103,939
975,475
(*) Company in the pre-operating stage.
Goodwill (negative goodwill) on acquisitions
Parent company
Consolidated
Description
2006
2005
2006
2005
Aracruz Celulose S.A. (i)
329,411
448,620
BAESA - Energética Barra Grande S.A. (ii)
9,334
9,334
Companhia de Cimento Ribeirão Grande (iii)
319,693
Campos Novos Energia S.A. (ii)
68,891
58,121
Companía Minera Milpo S.A.A. (iii)
155,191
169,888
Companhia Paulista de Força e Luz (vii)
149,971
140,704
Empresa de Transporte CPT Ltda.
(1,409)
(1,409)
Hailstone Limited (iv)
(199,013)
(199,013)
(199,013)
(199,013)
Votorantim Metais Níquel S.A. (v)
22,469
Votorantim Metais-Cajamarquilla S.A. (iii)
196,813
207,867
Riocell S.A. (vi)
27,806
48,661
Rio Grande Energia S.A. (vii)
42,602
39,995
Ripasa S.A. Celulose e Papel (iii)
734,999
464,686
S&W Materials Inc. (i)
17,735
23,114
St. Marys Cement Inc. (iii)
432,191
566,209
Sucorrico S.A. (iii)
148,071
148,071
Suwannee American Cement, LLC (i)
37,616
49,025
VBC Energia (iii)
120,000
Votocel Filmes Flexíveis Ltda.
(141,683)
Votorantim Celulose e Papel S.A.
(208,313)
Other
205,610
17,193
102
(200,422)
(550,418)
2,796,921
(i) Goodwill supported by expected future profitability, amortized over an eight-year period.
(ii) Goodwill supported by expected future profitability, amortized over 10 years as from the start-up of the plant’s operations.
(iii) Goodwill supported by expected future profitability, amortized over at most 10 years.
(iv) In August 2002, Votorantim Participações S.A. acquired the controlling interest of Optiglobe Tecnologia da Informação S.A., resulting
in a negative goodwill of R$ 199,013, which will be amortized through the realization of the related asset upon sale or disposal.
(v) Goodwill supported by expected future profitability, amortized over a 38-month period.
(vi) Goodwill recorded on the acquisition of control of Riocell S.A., supported by: (i) the market value of assets, which will be amortized
pursuant to their realization, and (ii) future profitability, which is being amortized over 10 years as from January 2004.
(vii) Goodwill being amortized based on the future profitability over the remaining concession period.
10 Property, Plant and Equipment
Accumulated
Cost
depreciation
Land and buildings
15,199
(5,203)
Equipment and installations
324
(260)
Vehicles
2,553
(1,343)
Furniture and fixtures
2,230
(1,877)
Other
3,170
23,476
(8,683)
Parent company
2006
2005 Net
Net
9,996
10,225
64
107
1,210
1,429
353
503
3,170
3,167
14,793
15,431
Accumulated
Cost
depreciation
Land and buildings
5,314,236
(1,696,028)
Equipment and installations 17,774,696
(9,128,153)
Vehicles
606,453
(404,611)
Furniture and fixtures
252,363
(163,491)
Mining rights
860,683
(70,531)
Plantations and forests
1,399,826
(264,819)
Construction in progress (ii)
2,449,636
Other
1,178,319
(545,039)
29,836,212
(12,272,672)
Consolidated
2006
2005 Net
Net
3,618,208
3,434,227
8,646,543
7,634,443
201,842
256,133
88,872
85,004
790,152
759,039
1,135,007
886,042
2,449,636
1,980,649
633,280
442,570
17,563,540
15,478,107
Annual depreciation
rates - % (*)
4
10
20
10
Até 20
Annual depreciation
rates - % (*)
0 a 10
4 a 25
10 a 25
10 a 20
(i)
(i)
4 a 33
(i) Depletion is calculated based on the extraction of mineral resources and forests, taking into consideration the estimated lives of the
reserves or the total volume of timber to be harvested from the forests.
(ii) Refers mainly to the project for the expansion and optimization of VCP’s manufacturing units, the increase in the production
capacity of CBA and projects for expansion, modernization and operating improvements in the plants of the metallurgy and cement
divisions. In addition, it includes investments of CBA for the construction of hydroelectric power plants of R$ 63,922 (2005 – R$
63,881). Management expects to obtain environmental licenses for these power plants to permit them to start generating energy in
the short to medium term. Based on the opinion of its legal advisors, management expects favorable outcomes to the environmental
lawsuits and approval of the pending licenses.
2,214,944
103
Financial Statements 2006
ANNUAL REPORT 2006 I VOTORANTIM GROUP
11Loans and Financing
Parent company
Annual financial charges
Type/purpose
at December 31, 2006
2006
2005
Foreign currency
Prepayment of export
Exchange variation + Libor + 1.72% + 5.60% to 6.73%
Advance on exchange contracts
Exchange variation + 5.28% to 5.85%
Purchases of assets
Exchange variation + Libor + 1% +1.50% to 3.42%
1030,516
939,103
Eurobonds
Exchange variation + 7.75% and 7.875%
Import financing
Exchange variation + 2% to 10%
Export credits
Exchange variation + Libor + 2.60%
Working capital (includes
Resolutions nos. 63 e 2770)
Exchange variation + 5.15% to 6.70%
5,207
5,101
Loans for onlending
Exchange variation + up to 8.16%
and TJLP + up to 11%
Other
Exchange variation + 3.00% to 4.00%
1,035,723
944,204
Local currency
Purchase of assets
National Bank for Economic and
Social Development (BNDES)
Long-term Interest Rate (TJLP) + 2.5%
to 9% 9.50% to 10.50%
Other
Long-term Interest Rate (TJLP) + 2,42% a 10,70%
1,035,723
944,204
Current
(5,207)
(7,924)
Long-term
1,030,516
936,280
12 Funds from Acceptance and Issuance of Securities and Debentures
Consolidated
2006
2005
5,975,237
47,157
2,142,924
1,317,325
354,455
251,601
7,312,299
414,639
2,050,136
1,664,430
228,936
206,803
2,826,881
881,811
4,053,197
336,104
17,304,881
4,146,022
216,064
17,121,140
3,062,855
518,777
3,581,632
20,886,513
(5,437,204)
15,449,309
1,496,928
755,339
2,252,267
19,373,407
(4,532,330)
14,841,077
Parent company
Consolidated
2006
2005
2006
2005
Maturity of the long-term portion
2007
3,240,671
2008
25,656
28,088
2,527,900
1,769,250
2009
61,831
56,177
2,148,569
2,507,942
2010
78,935
74,902
1,529,413
2,367,411
2011
231,460
228,452
3,852,228
1,631,103
2012 onwards
632,634
548,661
5,391,199
3,324,700
1,030,516
936,280
15,449,309
14,841,077
Agreements
Votorantim Participações S.A., the subsidiaries Votorantim Celulose e Papel S.A. and Votorantim International Holding N.V. and the
jointly controlled subsidiary VBC Energia S.A. entered into loan and financing agreements subject to the following main covenants: (a)
certain restrictions upon issuing new financings, (b) restrictions on certain transactions with related parties and participation in mergers
with other companies, (c) commitment to meet the volume of contracts to be in conformity with a coverage rate, (d) conformity with
financial indices, such as capitalization, interest coverage, minimum retained earnings and financial borrowing rates. In the event of
non-compliance with the conditions of these covenants and, through a notification from the financial institutions, the outstanding
balance becomes immediately due. St. Marys Cement - Canada and St. Marys Cement U.S. have loans with covenants that restrict the
payment of dividends and new financings. Additionally, the covenants have been calculated considering only the consolidated financial
statements of the industrial segment to ensure their consistency with the financial statements of prior periods. The companies are in
compliance with all the terms set forth in the covenants.
104
Consolidated
2006
Long-
Current
term
Current
Votorantim Finanças S.A.
Funds from acceptance and issuance of securities (i)
446,739
2,269,588
4,044
Debentures (ii)
107,111
3,770,220
137,742
VBC Energia S.A.
Debentures (iii)
64,468
420,021
103,175
171,579
4,190,241
240,917
2005
Long-
term
222,223
1,432,151
637,678
2,069,829
(i) Funds from acceptance and issuance of securities
Liabilities related to funds from acceptance and issuance of securities represent funds in foreign and local currency raised through the
issuance of securities in the international market and with foreign banks for onlending to local customers. These liabilities fall due up
to September 2016 and bear financial charges of up to 17.10% p.a., plus exchange variation.
(ii) Debentures – Votorantim Finanças S.A.
Represented by 335,000 debentures non-convertible into shares, of public issue, issued in April 2006, in two series, placed in the market
in June 2006, in the amount of R$ 3,444,218. Only the first series contains a renegotiation clause.
The first series, comprising 135,000 debentures, with unit value of R$ 10,000, falling due in April 2016 and bearing financial charges
indexed to the average rate of interbank deposits plus 0.5% per annum, was used to generate resources for increasing the operational
limits of the issuer BV Leasing Arrendamento Mercantil S.A. The first renegotiation will take place in April 2011.
The second series, comprising 200,000 debentures, with unit value of R$ 10,000, falling due in April 2026 and subject to 100% of
the Interbank Deposit rate computed on exponential and cumulative bases, was used to increase the number of commercial leasing
transactions, which will be carried out if there is a demand for them in the market.
The third series, comprising 466,679 debentures non-convertible into shares, of public issue, issued in December 2006, in a single series,
with unit value of R$ 2,142.80, falling due in December 2011, subject to monetary restatement based on the variation of the closing
commercial selling U.S. dollar exchange rate (P-Tax 800) and remunerating interest on the nominal value of 12.0436% p.a. from the
date of issue until the maturity date. In this transaction, a premium of R$ 250,000 was received, as set forth in the debenture deed,
recorded under “Other operating income.”
At December 31, 2006, the funds obtained from debentures amount to R$ 3,877,331 (2005 – R$ 1,569,893).
(iii) Debentures – VBC Energia S.A.
Funds raised through the issue of debentures by the indirect subsidiaries VBC Energia S.A., Rio Grande Energia – RGE, CPFL Paulista,
SEMESA S.A. and BAESA – Energética Barra Grande S.A., which fall due up to 2016 and bear average annual interest based on the
Long-Term Interest Rate (TJLP) + 2.5% to 6%, subject to the following restrictions:
(a) restrictions to changes in the shareholding control of VBC;
(b) the companies are permitted to invest only in the electric energy, gas, water and sewage, telecommunications and data transmission
industries either through CPFL Energia or through a company directly or indirectly controlled by CPFL Energia;
(c) the ratio between its own capital and third-party capital at VBC of at least 40% for the former and 60% for the latter, determined
in the semi-annual financial statements, must be maintained.
(d) commitment to notify in advance debenture holders on matters to be discussed in Board of Directors’ Meetings or General
Shareholders’ Meetings concerning decisions on the issuance of shares, debentures, share options, subscription rights, or any securities
convertible into capital of VBC Energia or CPFL Energia;
(e) CPFL and RGE – debentures are subject to certain restrictions set forth in clauses that require conformity with certain financial
indices set at pre-established parameters. CPFL management understands that the company is in compliance with such restrictions
and covenants.
105
Financial Statements 2006
ANNUAL REPORT 2006 I VOTORANTIM GROUP
13 Deferred Income Tax and Social Contribution
The current portion of the provision for contingencies is recorded under “Other liabilities” in current liabilities.
In 2006, the changes in the provision for contingencies are as follows:
Deferred tax assets and liabilities refer to income tax and social contribution losses and temporary differences of income tax and
social contribution and are classified as long-term receivables and liabilities reflecting the estimate of realization based on projections
of future profitability of the respective companies. These consider the prescriptive periods and, in the case of income tax and social
contribution losses, the limit of 30% annual taxable income offset, as prescribed by current legislation.
Parent company
2006
2005
Assets
Income tax and social contribution losses
Temporary differences
Provision for contingencies
10,149
33,009
Allowance for doubtful accounts
Provision for losses on investments
1,138
1,138
Deferral of loss on swap agreements
35,413
19,588
Tax benefit on goodwill
249,409
249,408
Other provisions
17,545
313,654
303,143
Current (other credits)
Long-term
313,654
303,143
Consolidated
2006
2005
416,509
608,629
313,056
215,541
3,425
418,074
1,037,517
248,947
2,653,069
(439,429)
2,213,640
294,105
97,345
2,718
282,841
1,014,451
135,868
2,435,957
(226,888)
2,209,069
Liabilities
Deferral of gain on swap agreements
503,287
Adjustments to market value of property, plant,
and equipment of foreign subsidiary
10,512
198,848
Consolidation adjustments - (Note 2(o))
145,961
Adjustments to market value
185,028
Accelerated depreciation
44,677
Reforestation expenses
23,419
Deferral of gain on sale of shareholding
33,555
Deferral of exchange variation
33,055
139,928
Other
10,512
80,492
43,567
44,067
1,321,640
Current (other liabilities)
(261,786)
Long-term
43,567
44,067
1,059,854
496,512
214,534
274,401
15,714
31,374
33,555
48,427
1,114,517
(508,475)
606,042
14Provision for Contingencies, Tax Liabilities and Commitments
(a) Contingencies and tax liabilities under discussion
Votorantim Participações S.A. and its subsidiaries are parties to labor, civil, tax and other ongoing lawsuits and are defending these
matters in the administrative and judicial stages, which are backed by judicial deposits, when applicable. The provisions for losses
arising from these lawsuits are estimated and restated by management, supported by the opinion of its legal advisors. The status of
the provisions for tax lawsuits and other litigations is as follows:
Consolidated
Judicial deposits
Provision for contingencies
2006
2005
2006
2005
Tax
490,230
437,836
1,817,698
1,574,240
Labor and social security
53,753
30,484
289,095
162,192
Civil
14,068
19,893
178,969
112,846
Other
11,407
5,405
745
569,458
493,618
2,286,507
1,849,278
Current
(486,001)
(63,081)
Long-term
569,458
493,618
1,800,506
1,786,197
106
At December 31, 2005
Additions
Reductions
Monetary adjustment
At December 31, 2006
1,849,278
691,393
(456,660)
202,496
2,286,507
At December 31, 2006, the main lawsuits are as follows:
(i) Tax lawsuits
• Social Integration Program (PIS)/ Social Contribution on Revenues (COFINS)
The Votorantim Group has been challenging the increase in the COFINS tax rate from 2% to 3%, as well as the increase in the PIS and
COFINS calculation bases to include financial income and other non-operating income.
• Value-added Tax on Sales and Services (ICMS)
The Company has been challenging the constitutionality of the inclusion of ICMS in the COFINS calculation basis, as well as
defending the maintenance of the ICMS credit on purchases of raw materials for the manufacturing of tax-free paper and utility
and consumer goods.
The Company filed a lawsuit to obtain the court recognition of the ICMS credits arising from purchases of materials for use and consumption,
in observance of the principle of non-cumulativeness, free of the restrictions imposed by Supplementary Law No. 92/97.
• Excise Tax (IPI)
The Company is defending its entitlement to recover IPI credits arising from the acquisition of inputs, raw materials, intermediary products
and packaging materials used in the manufacturing of products which are tax-free, non-taxed and/or subject to a zero rate tax.
The Company is defending the right to IPI credits arising from the purchase of inputs which are exempt, non-taxed and/or taxed at a
zero rate, as well as the right to offset the IPI amounts unduly paid, in observance of the principle of non-cumulativeness.
(ii) Labor and civil lawsuits
These mainly refer to lawsuits filed by former employees and employees from outsourced companies claiming the payment of indemnity
on dismissals, health hazard bonus, risk premium, overtime, “in itinere” hours (overtime while in commuter transportation), as well as civil
lawsuits referring to indemnity claims by former employees or employees from outsourced companies based on alleged occupational
diseases, labor accidents, material and moral damages.
(b) Possible losses
The Votorantim Group is a party to other tax, civil and labor lawsuits arising in the normal course of its businesses and whose loss risk
is regarded as possible, totaling R$ 1,442,128 at December 31, 2006.
(c) Commitments
(i) The main guarantees pledged by Votorantim Participações S.A. and its subsidiaries to related companies are summarized below:
Letter of guarantee issued by Machadinho Energética S.A. to BNDES
Intermediation in financing agreement with BNDES of Campos Novos Energia S.A.
Intermediation in financing agreement with BNDES of BAESA – Energética Barra Grande S.A.
Intermediation in financing agreement with BNDES of Machadinho Energética S.A.
Consolidated
2006
2005
402,000
402,000
1,080,496
1,080,496
300,000
300,000
76,200
76,200
(ii) Cimento Rio Branco S.A. and St. Marys Cement Inc. have supply agreements with steel mills for the purchase of slag, which mature
in 2011 and 2023, respectively.
(iii) VCP entered into long-term take-or-pay agreements with EKA Chemicals, Air Liquide Brasil, Air Products Gases Industriais and
Specialty Minerals do Brasil for the supply of chemical products for a nine to fourteen-year period. These agreements contain termination
clauses for noncompliance with basic terms and conditions and discontinuation of supply. Contractual obligations do not exceed
R$ 81,215 in 2006 (2005 – R$ 82,650).
(iv) CBA has contracts for the purchase of electric energy and fuel oil subject to the following restrictions:
107
Financial Statements 2006
ANNUAL REPORT 2006 I VOTORANTIM GROUP
• Minimum consumption of electric energy from Companhia Energética de São Paulo - CESP of 284 MW, as follows: 147 MW/year
until 2011 and 137 MW/year up to 2005. The latter provides, as from January 2006, for the extension of the maturity to December
2011, with a reduction to 110 MW/year.
(v) At December 31, 2006, Votorantim Participações S.A. and its subsidiaries have estimated future investments of R$ 1,586,380 (2005
– R$ 968,410) for the construction of plants, either independently or through consortia, where the future disbursement estimated by
the Votorantim Group is 17% in 2007, 35% in 2008 and the remaining up to 2010.
15Shareholders’ Equity
(a) Capital
At December 31, 2006, fully subscribed and paid-up capital comprises 5,380,878,973 (2005 - 5,303,163,986) nominative common
shares, in the amount of R$ 12,380,538. In February 2006, a capital increase of R$ 268,328 was made by the shareholder Hejoassu
Administração S.A., through the transfer of the following assets: (i) 50 common shares issued by Votorantim Investimentos LatinoAmericanos S.A., at the book value of R$ 123,799 and (ii) 50 common shares issued by Votorantim Cimentos Américas S.A. at the book
value of R$ 144,529.
(b) Interest on own capital
In compliance with Law No. 9249/95, the Company’s management approved the payment of interest on own capital to its shareholders,
included in the minimum mandatory dividend amount. Pursuant to tax legislation, interest on own capital of R$ 488,028 (2005 –
R$ 43,889) was recorded in financial expenses. However, for the purposes of these financial statements, interest on own capital is
being presented as appropriation of net income for the year.
(c) Dividends
Shareholders are assured of the right to receive mandatory dividends of 10% of adjusted net income, as set forth in Article 202
of Law 6404/76.
The proposal for dividends recorded in the Company’s financial statements, subject to approval at the Shareholders’ General
Meeting, is as follows:
Net income for the year
Appropriation to legal reserve (5%)
Minimum mandatory dividend calculation basis
Proposed dividends (R$ 90.70 per share)
Interest on own capital (R$ 100.77 per share)
Percentage on adjusted profit
2006
4,337,983
(216,899)
4,121,084
542,242
488,028
1,030,270
25%
2005
2,433,071
(121,654)
2,311,417
533,966
43,889
577,855
25%
(d) Advances for future capital increase
Advances for future capital increase of R$ 2,712,210, received from the parent company Hejoassu Administração S.A., were used to
pay up capital in 2005.
16Private Pension Plan
(a) Defined contribution plan
The companies of the industrial segment are sponsors of private pension plans managed by Fundação Senador José Ermírio de
Moraes (FUNSEJEM), a private non-profit closed pension fund, which is available to all employees of Votorantim Participações
S.A. and its subsidiaries. Under the regulations of the fund, the contributions from employees to FUNSEJEM are matched based
on their remuneration. For employees whose remuneration is lower than the limits established by the regulations, the Company
matches the contributions that represent up to 1.5% of their monthly remuneration. For employees whose remuneration exceeds
the limits, the Company matches the contributions of employees that represent up to 6% of their monthly remuneration.
Voluntary contributions may also be made to FUNSEJEM.
In 2006, the contributions made to FUNSEJEM by Votorantim Participações S.A. and its subsidiaries totaled R$ 19,636
(2005 – R$ 21,102).
(b) Defined benefit
(i) The status of the defined benefit plans and other medical and post-retirement plans is as follows:
Consolidated
2006
Supplementary
Other post-
Pension
retirement
retirement plans
plans
plans
Total
Projected benefit liabilities
624,656
20,219
70,926
715,801
Plan assets
550,716
550,716
Plan deficit
73,940
20,219
70,926
165,085
Actuarial adjustments not amortized
(32,670)
(158)
(14,143)
(46,971)
Increase in liabilities upon adoption of CVM No. 371
Net liability
41,270
20,061
56,783
118,114
Current
(15,124)
Long-term
102,990
2005
Total
846,487
566,497
279,990
(109,506)
(6,543)
163,941
(13,561)
150,380
The net liability is recorded under “Other liabilities”.
(ii) The main assumptions used by the actuaries are:
Percentage
2006
2005
Other
Other
Pension post-retirement Pension
post-retirement
plans
plans
plans
plans
Discount rate
5.2 e 11.3
6.25 e 11.3
5.0 e 11.3
6.25 e 11.3
Expected rate of return on assets
7.0 e 17.1
11.3
7.0 e 17.1
11.3
Future salary increases
3.5 e 7.1
7.1
3.5 e 7.1
7.1
Capacity factor – medical assistance
6.5
7.5
(e) Prior-year adjustments
The Company accounted for the adjustment to market value of the financing portfolio, with contra entry to “Retained earnings,” as
established in article 186 of Law No. 6404/76, in the amount of R$ 379,343, net of tax effects, of the indirect subsidiary BV Financeira
S.A. – C.F.I. in the parent company Votorantim Participações S.A., as a result of the change in the calculation methodology criteria.
(f) Retained earnings
The allocation of the remaining balance in “Retained earnings” will be decided on at the Ordinary General Meeting.
108
109
Financial Statements 2006
ANNUAL REPORT 2006 I VOTORANTIM GROUP
17Derivative Financial Instruments
Votorantim Participações S.A. and its subsidiaries carry out transactions involving derivative financial instruments, operating in organized
and over-the-counter markets, for the purpose of managing market risk in a manner appropriate to the policy of each business unit
of the group.
In the financial segment, the management of market risk is carried out in a centralized manner, by business unit, adopting the following
procedures: (a) monitoring of the alignment of positions and risks with the limits established by the Risks Committee and legal limits;
(b) integrity of the pricing of assets and derivatives; (c) evaluation of market risk on the Value at Risk method and by the simulation
of scenarios; and (d) follow-up of the daily results with back-tests.
The policy for the management of market risks also considers the use of derivative financial instruments to mitigate risks on the
positions, in order to meet the demand of counterparties and as a means of reversing positions during periods of high fluctuations.
The operations comply with the limits established by the Committee and those imposed by legislation, after the analysis of credit and
liquidity risks, when applicable, if involving policies of liquidity and credit and resolutions of the mentioned committee.
The criteria for pricing of assets and derivatives are defined by the risk management area, which considers the prices and rates officially
disclosed by ANDIMA and BM&F, as well as the calculations of option premiums and other risks, according to conventional and tested
methodologies. All phases of the operations are subject to internal audit verifications, as well as the internal control procedures defined
and monitored by a specific and independent area, appropriate to the level of transactions and risks involved.
The derivative financial instruments may be summarized as follows:
Parent company
Consolidated
2006
2005
2006
2005
Assets - (Note 3(a))
Financial segment
Differential receivable on swap agreements
1,694,192
2,692,652
Forward transactions
149,815
55,416
Premiums paid on options agreements
64,702
35,740
Industrial segment
Differential receivable on swap agreements
200,304
1,908,709
2,984,112
Liabilities
Financial segment
Differential payable on swap agreements
462,375
693,865
Forward transactions
160,978
60,420
Premiums received on options agreements
65,177
49,840
Amounts payable on box options transactions
1,766,220
2,182,928
Shared energy segment
Differential payable on swap agreements
10,830
Industrial segment
Differential payable on swap agreements
104,155
57,614
622,050
294,767
104,155
57,614
3,087,630
3,281,820
18Non-Operating Income (Expenses), Net
(a) Parent company
Mainly represented by gain on investments of R$ 235,751.
(b) Consolidated
In December 2006, Companhia Luz e Força Santa Cruz was sold to CPFL Energia S.A. for R$ 203,000. The gain recorded was
R$ 124,765. Additionally, there were gains on tax lawsuits of R$ 61,479 and other gains on investments of R$ 134,024.
In 2005, non-operating income substantially refers to the gain on the sale of Empresa Brasileira de Filmes Flexíveis Ltda. and
Nordesclor S.A., in the amount of R$ 139,088, and dividends received from investments stated at cost, in the amount of
R$ 39,880.
19 Subsequent Events
(a) Votorantim Metais Zinco S.A. purchased, at an auction held on March 16, 2007 in Bogota, Colombia, a 52% interest in the
capital of Colombian steel company Acerías Paz del Rio S.A., whose production capacity is 340 thousand metric tons of long
and flat steel per annum.
This acquisition, together with the 700 thousand metric tons/annum which will be achieved with the ongoing projects at the
Barra Mansa steel unit, will make it possible for the Steel Business to exceed the mark of one million metric tons per annum.
(b) On January 2, 2007, Votorantim Celulose e Papel S.A. (VCP) transferred a portion of its assets and liabilities, resulting in total
net assets of R$ 925,829, to form a new wholly owned subsidiary named LA Celulose e Papel Ltda. This company was formed as a
result of the agreement entered into between VCP and International Paper on September 19, 2006, whose purpose is the swap of
industrial and forest assets between these two companies.
In accordance with the mentioned agreement, VCP will transfer to International Paper the pulp and paper production unit located
in the municipality of Luiz Antonio (state of São Paulo) as well as the forest base of this unit. International Paper, on the other hand,
will transfer to VCP the assets of a pulp plant under construction, with all the corresponding rights, in the amount of
US$ 1.150 billion (equivalent to R$ 2,458,700), as well as land and planted forests, located on the outskirts of Três Lagoas
(state of Mato Grosso do Sul).
This plant is expected to become operational in January 2009 and will have capacity of 1.1 million tons per annum.
In the consolidated financial statements, the notional amounts of the transactions involving derivative financial instruments are
R$ 1,723,788 (2005 – R$ 1,266,583) for swap transactions, R$ 74,860 (2005 – R$ 13,198,381) for futures transactions and R$ 934,938
(2005 – R$ 800,267) for options transactions.
110
111
SOCIAL INDICATORS
ANNUAL REPORT 2006 I VOTORANTIM GROUP
IBASE 2006
1 – Basis of Calculation
2006 Value (in thousand reais)
2005 Value (in thousand reais)
28,977,896
23,675,920*
Operating result (OR)
6,184,781
3,613,174
Gross payroll (GPR)
1,819,472
1,463,924
Net income (N)
2006
% of GP
91,013
5.00%
0.31%
486,110
26.72%
Private Pension Plan
23,136
Health
Occupational safety and health
Food
Obligatory social charges
Education
Culture
Professional training and development
Day care or stipend for day care
Profit sharing
Others
Total – Internal social indicators
% of NR Value (thousand)
% of NR
75,931
5.19%
0.40%
1.68%
421,400
28.79%
2.22%
1.27%
0.08%
20,518
1.40%
0.11%
89,505
4.92%
0.31%
73,366
5.01%
0.39%
24,085
1.32%
0.08%
17,897
1.22%
0.09%
3,361
0.18%
0.01%
4,056
0.28%
0.02%
278
0.02%
0.00%
180
0.01%
0.00%
16,827
0.92%
0.06%
18,090
1.24%
0.10%
1,306
0.07%
0.00%
804
0.05%
0.00%
114,815
6.31%
0.40%
77,508
5.29%
0.41%
64,156
3.53%
0.22%
52,009
3.55%
0.27%
914,592
50.27%
3.16%
761,758
52.04%
4.01%
% of OI
% of OI
% of NR
Education
14,991
0.24%
0.05%
13,310
0.37%
0.07%
Culture
12,502
0.20%
5,032
0.08%
0.04%
11,683
0.32%
0.06%
0.02%
3,677
0.10%
0.02%
145
0.00%
0.00%
230
0.01%
0.00%
79
0.00%
0.00%
105
0.00%
0.00%
4,617
0.07%
0.02%
4,965
0.14%
0.03%
Total contributed to society
37,366
0.60%
0.13%
33,969
0.94%
0.18%
Taxes (except payroll taxes)
6,064,626
98.06%
20.93%
3,157,056
87.38%
16.63%
Total – External social indicators
6,101,992
98.66%
21.06%
3,191,025
88.32%
16.81%
Health and sanitation
Sport
Hunger relief and food security
Others
% of NR Value (thousand)
2005
31.514
30.572
Nº of employees hired in the period
6.121
6.383
Nº of outsourced employees
13.562
13.869
Nº of trainees
Nº of women working at the Company
% of GP
Value (thousand)
3 - External Social Indicators 2006
Nº of employees at year end
Nº of employees over 45
2005
Value (thousand)
2 – Internal Social Indicators 5 - Employee composition indicators % of management positions occupied by women
711
555
4.757
4.579
4.824
4.124
13,00%
11,00%
Nº of black employees working at the Company
5.565
6.064
% of management positions occupied by blacks
5,00%
8,00%
534
525
2006
Targets for 2007
ND
ND
Nº of employees with disabilities
6 - Relevant information regarding the exercise of corporate citizenship
Ratio between highest and lowest compensation
in the Company
Total number of work accidents
The Company’s social and environmental
projects were defined by:
1.281
( x ) Top-level
( ) Top-level
executives and midexecutives
level management
( x ) Top-level
The Company’s safety and cleanliness standards
executives and midin the workplace were established by:
level management
( ) all employees
Investments related to the Company’s
production/operation
Investments in external programs and/or projects
Total invested in the environment
As to the establishment of yearly targets to
minimize waste, consumption in general relating to
production/operation and as to increasing efficiency in
the use of natural resources, the Company
112
Value (thousand)
% of OI
217,912
3.52%
% of NR Value (thousand)
0.75%
199,029
% of OI
% of NR
5.51%
1.05%
6,879
0.11%
0.02%
12,891
0.36%
0.07%
224,791
3.63%
0.78%
211,920
5.87%
1.12%
( x ) does not establish targets
( ) attains 0 to 50% of targets
( ) attains 51 to 75% of targets
( ) attains 76 to 100% of targets
* 2005 amount reclassified due to changes in the criteria to estimate net revenues.
( x ) does not establish targets
( ) attains 0 to 50% of targets
( ) attains 51 to 75% of targets
( ) attains 76 to 100% of targets
( ) all employees
( x ) Top-level
( ) all + Cipa executives and midlevel management
( ) all employees
( ) all employees
( ) all + Cipa
( ) will follow
ILO rules
( ) will encourage
and follows
ILO rules
Concerning freedom of association of trade unions,
the right to collective bargaining and employee
representation in unions, the Company:
( x ) does not
interfere
The Company’s pension plan covers:
( ) Top-level
( ) Top-level
executives and midexecutives
level management
( x ) all employees
( ) Top-level
( ) Top-level
executives and midexecutives
level management
( x ) all employees
The profit-sharing program covers:
( ) Top-level
( ) Top-level
executives and midexecutives
level management
( x ) all employees
( ) Top-level
( ) Top-level
executives and midexecutives
level management
( x ) all employees
When selecting suppliers, the ethical,
environmental and social responsibility
standards adopted by the Company:
( ) are not
taken into
consideration
( x ) are suggested
( ) are required
( ) will not
be taken into
consideration
( ) does not get
involved
( x ) supports
( ) organizes and
encourages
( ) will not get
involved
( x ) will support
( ) will organize
and support
Total number of consumer complaints
and criticism:
with the company
44.857
with Procon
9
taken to Court with the company
37
ND
with Procon
ND
taken to Court
ND
% of complaints solved or responded to:
with the company
98%
with Procon
100%
taken to Court with the company
35%
ND
with Procon
ND
taken to Court
ND
As to employee volunteer work, the Company:
( ) follows ILO ( ) encourages and
rules
follows ILO rules
Total added value to be distributed (in thousand of reais): In 2006: 16,291,243
4 – Environmental Indicators
ND
( x ) Top-level
( ) Top-level
executives and midexecutives
level management
37.23% government
8.29% shareholders
Distribution of added value:
( x ) will not
interfere
( x ) will be
( ) will be required
suggested
In 2005: 10,442,937
30.2% government
8% shareholders
11.17% employees
16.3% employees
22.64% third parties
25.7% third parties
20.68% retained earnings
19.7% retained earnings
113
ANNUAL REPORT 2006 I VOTORANTIM GROUP
CORPORATE INFORMATION
Hejoassu Administração S.A.
Votorantim Participações S.A.
Votorantim Finanças S.A. (Votorantim Finance)
Directors of Votorantim Business Units
Board of Directors
Board of Directors
President: Ademir de Araújo
José Geraldo dos Santos
Antonio Joaquim Ferreira Custódio
José Maria de Arruda Mendes Filho
José Ermírio de Moraes Neto
Chairman:
Antônio Ermírio de Moraes
Chairman:
Carlos Ermírio de Moraes
Executives responsible for the Business Unit
Antonio Sergio Monteiro da Fonseca Luis Carlos Loureiro Filho
Vice Chairman:
Ermírio Pereira de Moraes
Vice Chairman:
José Ermírio de Moraes Neto
Banco Votorantim:Marcus Olyntho de Camargo Arruda
Arnaldo Dias Andrade
Luiz Alberto Chaves
Board Members:
Carlos Ermírio de Moraes
Board Members:
Carlos Eduardo Moraes Scripilliti
Milton Roberto Pereira
Candido Shigueyuqui Hotta
Luiz Alberto Castro Santos
Clovis Ermírio de Moraes Scripilliti
Cláudio Ermírio de Moraes
Carlos Augusto Parisi
Luiz Osório Gomes Lima
Fabio Ermírio de Moraes
Clovis Ermírio de Moraes Scripilliti
Carlos Mazzaro
Marcelo Chamma
José Ermírio de Moraes Neto
Fabio Ermírio de Moraes
Carlos Roberto Paiva Monteiro
Marcelo Martins
José Roberto Ermírio de Moraes
José Roberto Ermírio de Moraes
Celso Martini
Marco Fabio Coghi
Luis Ermírio de Moraes
Cláudio Ermírio de Moraes
Cláudio Pavanello
Marcelo Strufaldi Castelli
Clovis Ermírio de Moraes Scripilliti
Chester Allen Rook
Mario Luiz Franceschi Fontoura
Maria Helena Moraes Scripilliti
Wilson Masao Kuzuhara
Votorantim Novos Negócios Ltda. (Votorantim New Business)
Family Board
Director of Legal
José Ermírio de Moraes Neto
Daniel Fritz
Miguel de Carvalho Dias
Consulting:Marcus Olyntho de Camargo Arruda
Luis Ermírio de Moraes
Eduardo Cavalcanti Maciel
Milton Flávio de Moura
Edvaldo Araújo Rabelo
Naldilei Zumpano
Erik Madsen
Nelson Teixeira
Fabio Filippos
Olair Adalberto Martins
Fabio Krzyzanowski
Paulo Henrique de Ataíde
Felipe Lima
Paulo Oliveira Motta Junior
Fernando Antonio Barros Capra
Paulo Prignolato
Fernando de Castro Reinach
Paulo Roberto Pisauro
Flavio Marassi Donatelli
Renato C. Brito de Moura
Director of Auditing: Nelson Shimada
Chairman: Clovis Ermírio de Moraes Scripilliti
Board Members:
Ana Helena de Moraes Vicintin
Ana Paula de Moraes Rizkallah
Votorantim Investimentos Industriais S.A.
Antonio Ermírio de Moraes Filho
(Votorantim Industrials Investments)
Carlos Eduardo Moraes Scripilliti
José Ermírio de Moraes Neto
Executive responsible for the Business Unit
New Business: President:
José Roberto Ermírio de Moraes
Marcos Ermírio de Moraes
Vice Presidents:
Cláudio Ermírio de Moraes
Maria Regina Ermírio de Moraes Waib
Fabio Ermírio de Moraes
Neide Helena de Moraes
Regina Helena Scripilliti Velloso
Rubens Ermírio de Moraes
114
Paulo Henrique de Oliveira Santos
Executives responsible for the Business Units
Francisco Fernandes Campos Valério Richard Olsen
Companhia Brasileira
Managing Director:
Raul Calfat
Corporate Officers:
Institute Board
Votorantim
de Alumínio: Antônio Ermírio de Moraes
Fred Fernandes
Romeu E. Cavalcanti Pessoa Filho
Votorantim Cement:
Walter Schalka
Haroldo Fleischfresser
Rômulo Fabri Miranda
Votorantim Metals:
João Bosco Silva
Jan Ihden
Sergio Almeida
Jones Belther
Valdecir Aparecido Botassini
Valdir Roque
Albano Chagas Vieira
Votorantim Pulp and
Alexandre D’Ambrosio
Paper: José Luciano Duarte Penido
Jorge Alejandro Wagner
Álvaro Luis Veloso
Votorantim Energy:
Otávio Carneiro de Rezende
José Eduardo Felgueiras Nicolau
Chairman:
José Ermírio de Moraes Neto
Vice Chairman:
Antonio Ermírio de Moraes Filho
Fabio Faria
Votorantim Chemicals
Institute Director:
Célia Maria Christofolini Picon
Gilberto Lara Nogueira
and Agribusiness: Mário Bavaresco Júnior
Luis Schiriak
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ANNUAL REPORT 2006 I VOTORANTIM GROUP
ADDRESSES OF COMPANIES OF THE VOTORANTIM GROUP IN BRAZIL
ADDRESS OF COMPANIES OF THE VOTORANTIM GROUP ABROAD
Votorantim Participações S/A
Citrovita Agroindustrial Ltda.
Votorantim Novos Negócios
St. Marys Cement Incorporated
Votorantim International North America
Votorantim Metais Peru
Rua Amauri, 255
Edifício Berrini 500
(Votorantim New Business)
55 Industrial Street
111 Continental Drive – Suite 309
Carretera Central - Km 9,5 - Desvio
01448-000 – São Paulo – SP
Praça Professor José Lannes, 40 – 16º andar
Rua Jerônimo da Veiga, 384 – 12º andar
Toronto – ON – M4G 3W9
Newark, Delaware 19713
a Huachipa
Tel.: 55 11 3704-3300
04571-100 – São Paulo – SP
04536-001 – São Paulo - SP
Canada
USA
Cajamarquilla - Lima 15
Fax: 55 11 3167-1550
Tel.: 55 11 5501-5150
Tel.: 55 11 3077-5050
Tel.: 1 416 423-1300
Tel.: 1- 302-454-8300
PO Box 430015 - Lima 43
Fax: 55 11 5501-5160
Fax: 55 11 3077-5051
Fax: 1 416 423-0889
Fax: 1- 302-454-8309
Peru
Tel.: 511 317-2200
Votorantim Cimentos Ltda.
(Votorantim Cement)
Votorantim Química
Votorantim Internacional Brasil Ltda.
Trinity Materials, LLC
VCP - USA
Edifício Berrini 500
(Votorantim Chemicals)
(Votorantim International)
100 West Bay Street
Inner Harbor Center
Votorantim Metais Colômbia
Praça Professor José Lannes, 40 – 9º andar
Av. Dr. José Arthur Nova, 951
Edifício Berrini, 500
Suite 700
400 E. Pratt St. Suite 410
Acerías Paz del Río
04571-100 – São Paulo – SP
08090-000 – São Paulo – SP
Praça Professor José Lannes, 40 – 7º andar
Jacksonville, FL 32202
Baltimore, Maryland 21202
Carrera 8a nº 13 31 P8
Tel.: 55 11 2162-0600
Tel.: 55 11 2246-3100
04571-100 – São Paulo – SP
USA
USA
Bogotá
Fax: 55 11 2162-0630
Fax: 55 11 2246-3376
Tel.: 55 11 5501-5066
Fax: 55 11 5501-5077
Colombia
Votorantim International Europe GMBH
VCP - BELGIUM
Tel.: (57 1) 382-1730
Ballindamm 37
Koningin Astridplein 5
Fax: (57 1) 382-1776
Votorantim Metais (Votorantim Metals)
Votorantim Energia Ltda.
Praça Ramos de Azevedo, 254 – 6º andar
(Votorantim Energy)
Instituto Votorantim
20095 Hamburg
B 2018 Antwerp
01037-912 – São Paulo – SP
Praça Ramos de Azevedo, 254 – 5º andar
(Votorantim Institute)
Germany
Belgium
Tel.: 55 11 2159-3100
01037-912 – São Paulo – SP
Rua Amauri, 286 – 1º andar
Tel.: 49-40-899-7800
Fax: 55 11 2159-3628
Tel.: 55 11 2159-3200
01448-000 – São Paulo – SP
Fax: 49-40-899-7808
Fax: 55 11 2159-3624
Tel.: 55 11 3704-3334
Fax: 55 11 3167-6677
Companhia Brasileira de Alumínio
Banco Votorantim Securities Inc.
909 Third Avenue
VCP - CHINA
Fifth Floor, Suite 520
1515, Nanjing West Road, Room 1606
New York, NY 10022
Suwannee American Cement
200040 Shanghai
USA
China
Tel.: +1 (646) 495-3205
Praça Ramos de Azevedo, 254
Banco Votorantim S/A
5117 US Highway 27
01037-912 – São Paulo – SP
Av. Roque Petroni Jr., 999 – 16º andar
Brandford, Florida 32008
Tel.: 55 11 3224-7000
04707-910 – São Paulo – SP
USA
VCP - SWITZERLAND
Fax: 55 11 3224-7143
Tel.: 55 11 5185-1700
Tel.: 1- 386-935-0966
Baarerstrasse 8, 4th floor
Banco Votorantim Representative
Fax: 55 11 5185-1900
Fax: 1- 386-935-1155
6300 Zug
Office
Switzerland
1 Cornhill
Votorantim Celulose e Papel S/A
Fax: +1 (646) 495-3207
London EC3V3ND
(Votorantim Pulp and Paper)
Votorantrade N.V. Singapore Branch
Alameda Santos, 1.357
360 Orchard Road
Votorantim International Europe N.V.
England
01419-908 – São Paulo – SP
Shaw House # 19-06
Kaai 1223
Tel.: + 44 (0) 20 7743-6545
Tel.: 55 11 2138-4000
Singapore 238868
Hazopweg 6
Fax: + 44 (0) 20 7743-6546
Fax: 55 11 2138-4065
Tel.: 0065 6733 5441
Kallo, 9130 – Beveren
Fax: 0065 6733 5443
Belgium
Tel.: 32 3 570 9867
Fax: 32 3 570 9860
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117
ANNUAL REPORT 2006 I VOTORANTIM GROUP
CREDITS
General Coordination:
Malu Weber – Corporate Communications Manager – Votorantim Group
Financial Information:
Luis Felipe Schiriak – Corporate Financial Officer
Carlos Cavalcante Guimarães – Controller
Álvaro Luis Veloso – Corporate Director of Strategic Planning
Sérgio Santos – Corporate Manager of Strategic Planning
Social Balance Sheet Information:
SIS (System of Sustainability Indicators) Improvement Committee
Contributors to elaboration and approval of the Report from the Business Units:
Communication Committee of the Votorantim Group
Drafting and editing of text:
CorpBrasil Comunicação Corporativa - www.corpbrasil.com.br
Photography:
Adriano Gambarini
Howie Wright (page 27)
Translation:
Eliza Gibbons
Hispania Línguas Latinas
Printed on Lumimax Matte 150 g/m2 and Print Max 120 g/m2 coated paper (Financial
Statements) of Votorantim Pulp and Paper (VCP)
Paper manufactured from wood harvested from planted eucalyptus forests.
Preserving the environment in harmony with society.
Votorantim Group: Award for Best Corporate Communication 2006 awarded by
Aberje – Brazilian Association of Corporate Communication – São Paulo Chapter.
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