IESA ÓLEO & GÁS S.A.
Financial Statements
Business years ending on December 31st 2011 and 2010
IESA ÓLEO & GÁS S.A.
Financial Statements
Business years ending on December 31st 2011 and 2010
Content
Administration Report
Balance Sheets
Financial Statements
Statement of Comprehensive Income
Statement of Shareholders’ Equity
Cashflow Statement – Indirect Method
Value Added Statement
Explanatory Notes to the Financial Statements
Auditors Report
IESA ÓLEO & GÁS S.A.
MANAGEMENT REPORT
Business Year 2011
Introduction
This report is intended to show the main activities of IESA Óleo & Gás S/A in the period from
January 1st to December 31st, 2011. It also intends to show the Company´s strong commitment to
sustainability in its projects and actions. The financial statements included herein have been
prepared in full compliance with the Corporate Law and include the Independent Auditors’ report.
The content of this publication is available on www.iesa.com.br.
Company’s Profile
IESA Óleo & Gás S/A is one of the most acknowledged and respected Brazilian companies in the
sector for implementation of projects in Brazil’s oil market not only due to the great expertise of its
engineering, procurement, construction and assembly staff, but also due to the ability in
managing integrated solutions for the clients in Oil, Gas, Petrochemical and Thermal Generation
industries. As a member of a Group with strong presence in the market for over four decades,
IESA Óleo & Gás S/A has participated in the largest recent projects in the Brazilian Oil and Gas
sector.
Headquartered in the city of Rio de Janeiro, IESA Óleo & Gás S/A has strongly performed under
EPC (Engineering, Procurement and Construction) contracts, being supported by the synergy
existing with industrial units of the Group in the State of Sao Paulo and with its two industrial
bases – one located in Macaé in the State of Rio de Janeiro, and another in Santos lowland, in
São Paulo, both specialized in the activities of maintenance, renovation and modernization of oil
and gas platforms.
The Company will escalate its activities due to the purchase in 2010 of a land measuring 360
thousand m2 in Charqueadas, Rio Grande do Sul, to build an industrial unity with capacity for
assembling up to 20 modules for oil platforms simultaneously. The construction of such facilities
in the city of Charqueadas was decided due to the logistic items offered by this Southern city,
specially the possibility of navigation to the city of Rio Grande, where there is already an oil
platform production pole.
IESA ÓLEO & GÁS S.A.
MANAGEMENT REPORT
Business Year 2011
IESA Óleo & Gás S/A/is duly prepared to develop projects of operational partnerships with
national and foreign financing agents, companies in the oil and techonolgy industries, in Built,
Operate and Transfer (BOT), Built, Operate and Owns (BOO) and Built, Leasing and Transfer
(BLT) forms, for energy industries, specially thermal generation, refining and petrochemical.
The principles of IESA Óleo & Gás S/A determine that quality, safety, environment and health in
work and social accountability must be remarkable factors and make a difference in the market,
therefore, each product or service supplied must bring all technical and managerial competence
of the company and of its staff.
The basic principles required from all the professionals of IESA Óleo & Gás are commitment to
quality, to professional respect and to the image of the company. Such principles orient the
relationship of its staff with clients, shareholders and the whole market.
The various certifications of IESA Óleo & Gás S/A – OHSAS 18001, ISO 9001, ISO 14001, SA
8000 and ISO/TS 29001 - enlarges its capabilities level and its concerns with clients, workforce
and environment.
To improve social conditions, IESA Óleo & Gás S/A fosters a number of cultural and charity
actions to the benefit of dwellers in the communities in which it operates, developing educational
programs aimed at including young people and adults in the labor market, thus reducing social
and economic differences.
The “Best Company to Work For – Rio de Janeiro and Brazil”, “Best Companies in Personnel
management” and “SESI Quality in Work” awards received in 2011, confirm that IESA Óleo &
Gás is always looking for providing its workers with the best quality of life and welfare, keeping a
pleasant working environment and a cohesive, motivated and trained team.
Comment on Operational Performance
The year of 2011 was characterized by the startup of the Gas Treatment Unit in Caraguatatuba, a
project performed under EPC contract by the Consortium Queiroz Galvão – Camargo Correa –
IESA Óleo & Gás for the client PETROBRAS. This unit will process 18 million m³/day of gas from
IESA ÓLEO & GÁS S.A.
MANAGEMENT REPORT
Business Year 2011
the fields of Santos Basin.
The operation of the Hydrodesulphurization Unit of REDUC,
constructed under EPC form by the consortium Queiroz Galvão-IESA Óleo & Gás, also started.
In 2011, QUIP, a jointly controlled society, completed the work of preparation of its headquarters’
construction site in Rio Grande – RS and consolidated the process of P-63 construction of
modules. In China, the process of construction of some P-63 modules and the conversion of the
BW Nisa vessel into hull to sustain the modules are in final stage. The final step of modules
integration in Rio Grande – RS is scheduled to start in the middle of 2012, when the converted
hull and the modules are expected to arrive from China.
The work for P55, which is also being constructed by QUIP, is about 75% completed, and the
highlight in 2011 is the arrival at Rio Grande shipyard of the hull to allow the integration to the
deck box and provide Brazil with the first Mating of the country. This process is scheduled for the
first quarter of 2012.
The final backlog for 2011 was R$ 1,6 billion (R$ 2,4 billion in 2010). Such backlog lower level is
a result of some investments of PETROBRAS being postponed for 2012, mainly the contract for
the modules for 8 replicant FPSO that are being built by Engevix and are a priority in
PETROBRAS’ strategic planning.
Based on such purchase orders and on the market perspectives – projects for construction of
new refineries, fertilizer plant, as well as platforms and modules that will be necessary for presalt, which will certainly generate new businesses – a solid performance is estimated, thus
keeping the positive expectations in the years to come.
Gross operating income was R$ 960 million, amount 18,4% higher than 2010, maintaining a
growth vertex in the annual sales thus evidencing the correct strategic targeting adopted and the
competency of delivering products and services within the deadlines stipulated and with the
quality set out by the industry.
IESA ÓLEO & GÁS S.A.
MANAGEMENT REPORT
Business Year 2011
960,2 810,7 701,9 727,0 732,1 741,9 590,0 632,7 2008
2009
Controlling Company
2010
Consolidated
2011
In million s R$
Sales expenses amounted to R$ 17,7 million, which is an increase compared to 2010, when the
amount was R$ 7 million, especially due to the increase in expenses with proposals delivered in
2011 that could not be allocated in the pertinent projects.
General and administrative expenses amounted to R$ 70,2 million, representing an increase of
27% in absolute values in relation to 2010 (R$ 56,1 million). When compared as net income
percentage, general and administrative expenses kept in the same level of the previous year,
7,7% in 2011 against 7,5% in 2010. The infrastructure working sector for oil and gas industry
have been through the shortage of qualified workforce and in this consideration the Company
maintains an aggressive policy to retain and attract new talents required for the new investments
demanded by the industry.
Shareholders’ equity showed a profit of R$ 50,4 million in 2011 against R$ 5 million in 2010. This
remarkable result is a consequence of the construction projects for the oil and gas platforms P55, P-62 and P-63, performed by the jointly controlled companies QUIP, CCI and RIG,
respectively.
IESA ÓLEO & GÁS S.A.
MANAGEMENT REPORT
Business Year 2011
IESA Óleo & Gás gross cash generation measured by EBITDA (Earnings Before Interests,
Taxes, Depreciation and Amortization) in 2011 was R$ 94,6 million against R$ 76 million in 2010,
with a margin of 10%.
100,0 76,8 82,9 10,0 14%
13%
94,6 76,0 100,00%
10,00%
10%
10%
1,0 1,00%
2008
2009
EBITDA
2010
2011
EBITDA Margin
In millions of R$
At the end of business year 2011 indebtedness was R$ 297,7 million mostly represented by
working capital operations and proper schedule of payment to the Company’s cash generation.
Social Management in 2011
Aiming at the development of the society, the company nurtures several cultural and beneficial
actions in its neighborhoods, developing educational programs with the purpose of including
young people and adults in the labor market, thus reducing social and economic differences.
Among such social programs developed in 2011, we highlight the following:
IESA ÓLEO & GÁS S.A.
MANAGEMENT REPORT
Business Year 2011
9 12,842 assistances offered at Providencia UPP (Peace Police Unit) (elementary and high
school teaching, complementary courses, improvement of professional abilities, sport
and “Knowledge Industry” in partnership with Firjan System.
9 Solidary June Party, with more than 5 thousand people, in benefit of seven institutions.
9 Pedagogic actions on STD, AIDS, Drugs and Alcoholism in public schools in the cities of
Rio de Janeiro and Macae, in partnership with NGO Pela Vidda, Social Diversity
Movement and with the Municipal Secretary of Education, benefiting more than 750
teachers and students;
9 Continuing Education courses for Barra de Macae and neighborhood dwellers, in
partnership with Barra de Macae Resident Association and Firjan System;
9 Maintenance of graduation scholarships for IESA’s workers and their children, from
daycare to university graduation, within Inepar Scholarship Program – Probein.
In 2011 IESA Óleo & Gás was offered the several awards such as:
9 February 2011 – SESI Quality in Work Award as Medium Company in Rio Grande do Sul
– 2nd place
9 March 2011 – SESI Quality in Work Award in the category Personnel management - 2nd
place in Brazil
9 August 2011 – Great Place to Work Award “Best Companies to Work for” – 5th place in
Rio de Janeiro
9 August 2011 – Great Place to Work Award “Best Company to Work for in Rio de
Janeiro”, in the categories “thank, develop and care”
9 August 2011 – Great Place to Work Award “Best Companies to Work for in Brazil”,
category “small and medium companies” – 10th place
9 August 2011 – Great Place to Work Award “Best Companies to Work for in Brazil”,
category “quality of life” – 4th place
9 August 2011 – Fifth place in the category “Mechanical and Electrical Construction” in the
Brazilian engineering ranking prepared by “O Empreiteiro” (the Entrepreneur) Magazine.
9 September 2011 – “150 Best Companies to Work for” Award given by “Você S/A” and
“Exame” Magazines
IESA ÓLEO & GÁS S.A.
MANAGEMENT REPORT
Business Year 2011
9 October 2011 – “The Best in Personnel Management” Award, category “100 to 500
employees”, developed by AON Hewitt and “Valor Econômico” newspaper – 2th place.
Acknowledgements
IESA Óleo & Gás S/A Management thanks its shareholders, suppliers, partners, clients and
financial institutions for their support enabling us to reach a quick process of corporate
consolidation. We thank especially our employees for their efforts and full dedication.
Executive Board of Officers
IESA Óleo & Gás S/A
C.N.P.J. M.F - Nº 07.248.576/0001-11
Balance sheets
st
Business years ending December 31 2011 and 2010
(In thousand of reais)
CONTROLLING COMPANY
Assets
Note
CONSOLIDATED
12/31/2011
12/31/2010
12/31/2011
12/31/2010
74.931
113.619
218.344
45.615
5.550
36.083
359
1.108
63.527
137.003
35.169
9.691
128.897
957
1.964
201.572
115.082
218.344
82.351
6.178
421
5.340
124.098
137.621
49.902
9.737
128.897
998
1.827
495.609
377.208
629.288
453.080
16.599
4.007
4.063
1.357
16.994
29.389
9.082
506
7
26.478
34.704
3.218
19.749
4.007
4.063
1.469
447
40.607
9.725
554
122
21.050
38.792
3.885
81.491
64.913
80.067
64.403
577.100
442.121
709.355
517.483
Current Assets
Cash and Cash Equivalent
Clients
Note Receivables
Inventories
Tax Credits
Dividend Receivables
Asset Kept for Sale
Prepaid Expenses
Other Credits
5
6
7
8
9
6
Total of Current Assets
Non-Current Assets
Long Term Receivables
Associated Companies
Note Receivable
Deferred Taxes
Other Credits
Investments
Premises and Equipment
Intangible
Total of Non-Current Assets
Total of Assets
The Explanatory Notes are part of the Financial Statements
18.1
7
16.1
6
10
11
12
IESA Óleo & Gás S/A
C.N.P.J. M.F - Nº 07.248.576/0001-11
Balance sheets
Business years ending December 31st 2011 and 2010
(In thousand of reais)
CONTROLLING COMPANY
Liabilities
Note
CONSOLIDATED
12/31/2011
12/31/2010
12/31/2011
12/31/2010
10.049
160.113
28.415
5.972
254
4.519
31.514
6.926
12.551
138.165
13.845
2.578
231
149
3.092
15.706
160.113
30.212
6.903
2.732
4.519
151.206
31.514
6.935
14.521
138.165
14.663
3.538
231
88.238
247.762
170.611
409.840
262.457
80.025
6.324
39.342
26.270
26.100
1.890
-
105.462
8.063
18.938
12.201
1.488
-
80.025
6.324
9.282
26.270
26.100
1.890
237
105.462
8.063
2.427
12.201
179.951
146.152
150.128
129.668
102.996
46.395
(4)
149.387
102.996
22.403
(41)
125.358
102.996
46.395
(4)
149.387
102.996
22.403
(41)
125.358
577.100
442.121
709.355
517.483
Current Liabilities
Suppliers
Funding and Loans
Social Liabilities
Tax and Contribution Payable
Proposed Dividends
Cost and Charges Provision
Advances on Purchases
Debentures
Other Accounts Payable
13
14
13
13
13
15
13
Total of Current Liabilities
3.101
Non-Current Liabilities
Funding and Loans
Tax and Contribution Payable
Loan with Associated Companies
Deferred Taxes
Debentures
Contingency Provisions
Other Accounts Payable
14
13
18.1
16.1
15
17
13
Total of Non-Current Liabilities
1.488
27
Shareholders' Equity
Capital Stock
Profit Reserves
Shareholders' Equity Adjustment
Total of Shareholders' Equity
Total of Liabilities
The Explanatory Notes are part of the Financial Statements
19.1
IESA Óleo & Gás S/A
C.N.P.J. M.F - Nº 07.248.576/0001-11
Financial Statements
Business years ending December 31st 2011 and 2010
(In thousand of reais)
CONTROLLING COMPANY
Note
Gross Operating Income
22
Deductions and Taxes on Sales
Net Operating Income
21
Costs of Products and Services
Gross Profit
Operating Income (Expenses)
CONSOLIDATED
12/31/2011
12/31/2010
12/31/2011
12/31/2010
741.858
732.071
960.203
810.658
(44.601)
(62.987)
(44.601)
(62.987)
697.257
669.084
915.602
747.671
(580.318)
(545.067)
(735.793)
(609.877)
116.939
124.017
179.809
137.794
9.706
(49.226)
(55.805)
(62.120)
Sale Expenses
(17.715)
(7.098)
(17.715)
(7.098)
General and Administrative
(55.236)
(48.641)
(70.289)
(56.184)
Other Income (Expenses)
22
Equity Profit/Loss
Income before Financial Expenses
and Revenue
Financial Expenses
23
Financial Revenues
23
Income before Tax on Profit
32.250
1.494
32.203
1.398
50.407
5.019
(4)
(236)
126.645
74.791
124.004
75.674
(68.293)
(43.768)
(70.265)
(45.145)
5.265
17.294
17.060
20.728
63.617
48.317
70.799
51.257
Deferred Income Tax and Contribution
16.2
(10.512)
(383)
(10.512)
(335)
Current Income Tax and Contribution
16.2
(3.281)
(7.504)
(10.463)
(10.492)
49.824
40.430
49.824
40.430
(11.670)
(10.612)
(11.670)
(10.612)
38.154
29.818
38.154
29.818
65.995.745
65.995.745
66.995.745
60.425.526
578,13
451,82
569,50
493,47
Income before Interests
Employees' Interest
Business Year Net Profit
Amount of shares at the end of the business year
Basic and diluted earnings per lot of a thousand shares - R$
The Explanatory Notes are part of the Financial Statements
IESA ÓLEO & GÁS S/A
C.N.P.J. M.F - Nº 07.248.576/0001-11
Statement of Shareholders' Equity
Business years ending December 31st 2011 and 2010
(In thousand of reais)
Surplus Reserve
Capital
Stock
st
Balances on December 31 2009
97.426
Legal
4.228
Profits
Withheld
974
Profits
available
for Shareholders
26.525
Business Year Net Profit
Other Comprehensive Income - Exchange Adjustment of Associated Company Abroad
Total of Comprehensive Income
2.442
3.128
-
118.571
962
102.996
3.128
(28.560)
(22.990)
5.190
974
18.274
(962)
(18.274)
16.239
-
Business Year Net Profit
Other Comprehensive Income - Exchange Adjustment of Associated Company Abroad
Total of Comprehensive Income
(41)
125.358
37
38.154
37
38.191
38.154
2010 Dividends
Capital Transactions with Partners
(14.162)
Legal Reserve
Withholding of Profit for Investment
Statutory Reserve
2.437
1.547
102.996
29.818
(41)
29.777
2.442
(28.560)
Legal Reserve
Statutory Reserve
As Notas Explicativas são parte integrante das demonstrações financeiras
Shareholders'
Equity
(41)
Capital Increase - 15th ESGM dated 12/20/2010
2009 Dividends
Capital Transactions with Partners
Balances on December 31 th 2011
(10.582)
Equity
Evaluation
Adjustment
29.818
Capital Increase - 14th ESGM dated 12/17/2009
Balances on December 31 st 2010
Retained
Earnings
7.627
2.521
(14.162)
(14.162)
(530)
(1.547)
36.247
(1.907)
(36.247)
36.247
-
(4)
149.387
IESA ÓLEO & GÁS S/A
C.N.P.J. M.F - Nº 07.248.576/0001-11
Statement of Comprehensive Income
Business years ending December 31st 2011 and 2010
BUSINESS YEAR NET PROFIT
12/31/2011
12/31/2010
38.154
29.818
37
(41)
38.191
29.777
Other Comprehensive Income
Exchange Adjustments of Associated Company Abroad
BUSINESS YEAR COMPREHENSIVE INCOME
The Explanatory Notes are part of the Financial Statements
IESA Óleo & Gás S/A
C.N.P.J. M.F - Nº 07.248.576/0001-11
Cash Flow Statement
Business Years Ending December 31 st 2011 and 2010
(In thousands of reais)
OPERATING ACTIVITIES
Business Year Net Income
Expenses (income) that do not affect cash and cash equivalent
Depreciations and amortizations
Gain on permanent asset disposal
Loss on permanent asset disposal
Shareholders' equity
Monetary and exchange variance
Deferred taxes
Provisions (Reversals)
Fair Value Settlement
Adjusted Net Income for the Business Year
CONTROLLING COMPANY
12/31/2011
12/31/2010
CONSOLIDATED
12/31/2011
12/31/2010
38.154
29.818
38.154
29.818
2.442
(22.423)
2.452
(50.407)
49.314
10.512
4.690
(12.165)
22.569
935
2
(5.019)
21.555
(1.163)
(32.884)
(8.817)
4.427
4.207
(22.423)
2.452
4
49.314
10.560
4.690
(12.165)
74.793
1.844
6
236
21.554
(1.211)
(32.883)
(8.817)
10.547
23.383
(10.446)
4.141
598
(493)
17.183
8.558
17.172
2.496
2.551
(1.159)
29.618
22.538
(32.449)
3.559
577
(4.859)
(10.634)
8.415
(885)
2.736
2.496
(1.131)
11.632
(2.502)
14.570
1.656
(150)
3.874
17.448
6.662
3.290
(2.034)
2.991
10.909
1.184
15.548
1.628
62.968
6.564
87.892
7.102
3.726
(1.207)
65.998
2.991
78.610
57.200
44.954
152.051
100.789
(13.310)
4.775
(1.529)
(30.399)
(16.599)
(57.062)
(38.734)
1.548
(21.055)
814
(57.427)
(13.310)
(39.271)
(19.749)
37
(72.293)
(38.734)
1.548
(23.055)
814
(41)
(59.468)
(13.950)
341.636
(294.995)
(41.830)
20.404
11.265
5.570
(29.423)
294.252
(240.390)
(23.877)
17.976
24.108
(13.950)
341.636
(294.995)
(41.830)
6.855
(2.284)
5.570
(29.987)
294.252
(240.390)
(23.877)
2.315
7.883
INCREASE (REDUCTION) IN CASH AND CASH EQUIVALENT
11.403
11.635
77.474
49.204
Cash and cash equivalents beginning balance
Cash and cash equivalents ending balance
INCREASE (REDUCTION) IN CASH AND CASH EQUIVALENT
63.528
74.931
11.403
51.892
63.527
11.635
124.098
201.572
77.474
74.894
124.098
49.204
Asset (increase) reduction
Clients
Inventories
Tax Credits
Prepaid expenses
Other credits
Liability (increase) reduction
Suppliers
Social liabilities
Tax and contribution payable
Advances on purchases
Other account payable
CASH ARISING FROM OPERATING ACTIVITIES
INVESTMENT ACTIVITIES
Asset kept for selling
Notes receivvable
Dividend received from associated companies
New investiment purchase
Payments for premises and equipment purchase
Collection arising from investment sale
Loan operations with associated companies
Exchange accumulated adjustments
FINANCING ACTIVITIES
Collection from shares issuance
Dividends payment
Funding and Loan
Funding and loan amortization - principal
Funding and loan amortization - interests
Loan with associated companies
The Explanatory Notes are part of the financial statements
IESA Óleo & Gás S/A
C.N.P.J. M.F - Nº 07.248.576/0001-11
Value Added Statement
Business Years ending on December 31 st 2011 and 2010
(In thousand of reais)
CONTROLLING COMPANY
12/31/2011
12/31/2010
CONSOLIDATED
12/31/2011
12/31/2010
INCOME
Sales of goods, products and services
Other income (expenses)
Doubtful credits provision
INPUT PURCHASED FROM THIRD PARTIES
Costs of products, goods and services sold
Materials, energy, third-party services and other
GROSS VALUE ADDED
Depreciation and amortization
NET VALUE ADDED
776.039
741.858
34.196
(15)
(361.194)
(111.572)
(249.622)
414.845
(2.784)
412.061
733.651
732.071
1.580
(340.829)
(205.580)
(135.249)
392.822
(689)
392.133
994.336
960.203
34.148
(15)
(505.003)
(232.848)
(272.155)
489.333
(4.617)
484.716
(399.396)
(259.244)
(140.152)
412.842
(1.597)
411.245
VALUE ADDED RECEIVED ON TRANSFER
Equity Accounting Income
Financing Income
TOTAL VALUE ADDED AVAILABLE FOR DISTRIBUTION
55.672
50.407
5.265
467.733
22.314
5.019
17.295
414.447
17.056
(4)
17.060
501.772
19.415
(236)
19.651
430.661
246.002
200.525
30.518
14.959
100.292
87.574
3.323
9.395
83.285
68.293
14.992
38.154
38.154
467.733
240.230
219.868
7.209
13.153
97.336
69.052
7.509
20.775
47.063
43.768
3.295
29.818
29.818
414.447
267.513
218.414
33.504
15.595
107.741
95.023
3.323
9.395
88.364
70.252
18.112
38.154
38.154
501.772
251.377
223.888
14.005
13.484
100.597
72.207
7.615
20.775
48.869
43.836
5.033
29.818
29.818
430.661
VALUE ADDED DISTRIBUTION
PERSONNEL
Payroll
Benefits
FGTS (Government Severance Indemnity Fund for Employees)
TAXES, LEVIES AND CONTRIBUTIONS
Federal
State
Local
THIRD PARTIES CAPITAL REMUNERATION
Interests
Rentals
OWN CAPITAL REMUNERATION
Profits Available for Shareholders
TOTAL VALUE ADDED DISTRIBUTION
The Explanatory Notes are part of the financial statements
812.238
810.658
1.580
-
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
NOTE 1 – OPERATIONAL CONTEXT
IESA Óleo & Gás S.A. is a close company, which acts of incorporation dated 03/04/2005 are filed
with JUCERJ under n.º 33.3.0027555-0. It is registered with CNPJ – Roll of Corporate Taxpayers
under n.º 07.248.576/0001-11 and headquartered in the city of Rio de Janeiro – RJ, at Rua Mayrink
Veiga, 09, 14th floor, part, zip code 20090-050.
The main business of the Society is the rendering of services and the supply of materials to oil, gas,
chemical and petrochemical industries, with the purpose of giving complete solutions by means of
EPC (Engineering, Procurement and Construction) projects, developing from the engineering and
consultancy studies and projects to the performance of maintenance, construction and assembling
services and technical assistance.
NOTE 2 – GROUNDS FOR THE PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements of the Society as well as of its associated company comprise:
a) Individual Financial Statements of the Controlling Company
The individual financial statements of the controlling company were carried out and are submitted
pursuant the accounting practices in force in Brazil, in full compliance with Act nº 11.638/07 and
Act nº 11.941/09, and statements issued by CPC - Comitê de Pronunciamentos Contábeis
(Accounting Standards Committee) and approved by CFC - Conselho Federal de Contabilidade
(Brazilian self-regulating body of the accountancy profession) and by CVM (Brazilian Securities
Commission). The individual financial statements show the evaluation of the investments on
associated companies using the equity method, according to the Brazilian law in force. Thus,
they are not in accordance with the IFRS, which request such evaluations in the separate
financial statements of the controlling company by the cost or by the fair value.
b) Consolidated Financial Statements
The consolidated financial statements were prepared and are being submitted in accordance with
the accounting international standards (IFRS) issued by International Accounting Standard Board
- IASB and also according to the accounting practices in force in Brazil, in full compliance with
Act nº 11.638/07 and Act nº 11.941/09, and statements issued by CPC - Comitê de
Pronunciamentos Contábeis (Accounting Standards Committee) and approved by CFC Conselho Federal de Contabilidade (Brazilian self-regulating body of the accountancy profession)
and by CVM (Brazilian Securities Commission).
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
As there is no difference between the consolidated shareholders’ equity and the consolidated income
to be assigned to the shareholders of the controlling company, both in the consolidated financial
statements prepared according to the IFRS and the accounting practices in use in Brazil, and
between the shareholders’ equity and the income of the controlling company showed on the
individual financial statements prepared according to the accounting practices in use in Brazil, the
Society chose to submit both the individual and consolidated financial statements in a single set of
documents.
NOTE 3 – SUMMARY OF THE MAIN ACCOUNTING POLICIES
3.1 Grounds for Consolidation
The consolidated financial statements include the financial statements of IESA Óleo & Gás S.A. and
its associated companies, where the control is shared with the other shareholders, described below:
Associated Companies
QUIP S.A.
RIG OIL & GAS INC.
CCI OIL & GAS CONTRACTORS INC.
% Participating Interest
12/31/2011
12/31/2010
13,25%
13,25%
16,66%
30,00%
-
The criteria used in the consolidation are those provided by Act Lei Nº 6.404/76 with the amendments
provided by Act nº 11.638/07 and Act nº 11.941/09, from which we emphasize the following:
a) Elimination of the balances of the asset and liability accounts deriving from the transactions
between the societies included in the consolidation;
b) Elimination of the investments on the associated societies in the proportion of their
respective assets.
c) Elimination of revenues and expenses deriving from businesses with the societies included
in the consolidation; and
d) Standardization of the accounting policies and procedures used by the societies included in
these consolidated financial statements to meet the controlling company standards, aiming at
a presentation in a uniform classification and measurement basis.
3.2 Classification of Current and Non Current Items
In Balance Sheets, assets and liabilities not yet due or expected to occur within the next 12 months
are classified as current items and those with due date or expected to occur after 12 months are
classified as non current items.
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
3.3 Compensation among Accounts
As a general rule, in financial statements, neither assets and liabilities nor income and expenses are
compensated one with another, except if such compensation is requested or allowed by any Brazilian
accounting statement or rule and it reflects the essence of the transaction.
3.4 Transactions in Foreign Currencies
The items in these financial statements are measured in Real (R$) functional currency, which is the
currency of the main economic environment of the society’s business and in which currency most of
its transactions is made, and they are presented in that same currency.
Transactions in other currencies are converted to the functional currency as per CPC 02 instructions
– Effects of Changes in Exchange Rate and Financial Statements Conversion. Financial items are
converted at the closing rates and non financial items at the rates at the date of the transaction.
.
3.5 Cash and Cash Equivalent
Cash and cash equivalent include cash with the company, demand bank deposits and short term
high liquidity cash investments with original three month maturity or less.
3.6 Financial Assets
The financial assets of the company are classified under the following categories: measured at fair
value through profit or loss, loans and receivables and available for sale. The classification depends
on what the financial assets were purchased for. The classification of the financial assets is defined
by the administration in their initial recognition.
(a) Financial assets measured at fair value through profit or loss
The financial assets measured at fair value through profit or loss are those that are kept for
negotiation. A financial asset is classified under this category if it was mainly purchased for a short
term sale. Assets in this category are classified as current assets.
(b) Loans and receivables
Loans and receivables are non derivative financial assets with fixed or determinable payments that
are not quoted in an active market. They are included as current assets, except for those with
maturity term over 12 months after the issuing of the balance sheets (that are classified as non
current assets). The loans and receivables of the Group include “trade receivables and other account
receivables” and “cash and cash equivalent”.
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
(c) Financial assets available for sale
Financial assets available for sale are non derivative assets, which are designated in this category or
that are not classified in any other category. They are included in non current assets, unless the
board of directors intend to dispose the investment within 12 months after the date of the balance
sheets.
Recognition and measurement:
Regular purchases and sales of the financial assets are recognized in the date of the negotiation –
that is, when the Company undertakes to purchase or to sell the asset. Investments are at first
recognized at fair value, plus the costs of the transaction for all financial assets that are not measured
at fair value through profit or loss. Financial assets measured at fair value through profit or loss are,
initially, recognized at fair value and the costs of the transaction are charged to the financial
statement.
The financial assets are retired when the rights to receive investment cash flows on maturity or have
been transferred; in this last case, once the Group has significantly transferred all the risks and
benefits of the ownership. Financial assets available for sale and financial assets measured at fair
value through profit or loss are then recorded by the amortizated cost, using the effective interest rate
method.
Gains or losses arising from variations in the fair value of the financial assets measured at fair value
through profit or loss are showed in the financial statements in the period they happen.
Variations in the value of the securities classified as available for sale are separated into variations in
the amortizated cost and the variations in the fair value of the security. Variations in the amortizated
cost are recognized in the evaluation of profit/loss. Variations in the fair value are recognized in
assets. When securities classified as available for sale are sold or suffer loss (impairment), the
accumulated adjustments of the fair value, recognized in the assets, are included in the financial
statements.
Company evaluates, at the balance sheets date, if there is any actual evidence that a financial asset
or a Group of financial assets is devaluated (impairment). In the case of securities available for sale,
a significant or drawn-out decrease of their fair value below their cost value is considered an
indication that such securities are devaluated. If there is any of these evidences regarding the
financial assets available for sale, the cumulative loss is retired from the assets and is recognized in
the financial statements.
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
3.7 Trade Receivables
Trade receivables correspond to amounts to be received from clients due to sales of products or
performance or services during the ordinary activities of the Company.
Trade receivables are initially recognized at their fair value and then measured by the amortizated
cost using the effective interest rate method minus the impairment provision (loss in credit collection).
Generally in practice they are recognized at the billed value adjusted to present value and adjusted
by impairment provision, if necessary.
3.8 Inventories
Inventories are reported at the purchasing cost of services in progress, net of recovered taxes and at
no higher prices than those of the market prices.
3.9 Investments
Permanent investments on associated companies and under joint control are evaluated by equity
method.
3.10 Premises and Equipment
Reported by their historical purchasing, formation or construction cost, less their accumulated
depreciation. Subsequent costs are included in the asset accounting value or recognized as a
separate asset, as appropriate, only when it is likely to flow future economic benefits associated to
the item and that the cost of the item can be safely measured. Accounting value of replaced items or
parts is retired. All other repairs and maintenance are recorded in contra account to the result of the
business year, when incurred.
Land is not depreciated. Depreciation of other assets is calculated using the straight-line method
during the estimated service life.
As provided in CPC 27, approved by CVM Deliberation nº. 583/09, the society hired a specialized
company to revise the estimated terms of service life, of the residual value and of the depreciation
methods of all its assets. The company based this analysis on the expectation on the use of the
goods, and an estimate regarding the service life of the assets, as well as their residual value,
according to previous experience with assets, with no change in the practices used so far.
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
3.11 Intangible
Intangible assets purchased are measured by their cost at the moment of its initial recognition. After
the initial recognition, the intangible assets are shown by their cost, less the accumulated
amortization and losses of recoverable value.
Intangible assets are amortized during the economic service life time and evaluated in relation to loss
by reduction in the recoverable value whenever there is an indication of loss in the economic value of
the asset.
3.12 Non Financial Assets Impairment
Assets that have an undefined service life are not subject to amortization and are tested yearly for
impairment. Assets subject to depreciation or amortization are revised to check impairment whenever
events or changes in the circumstances indicate that the accounting value may not be recoverable.
A loss by impairment is recognized by the value to which the accounting value surpass its
recoverable value. This last one is the higher value between the fair value of an asset minus the sale
costs and the value in use.
For purposes of impairment evaluation, assets are grouped in the lowest levels for which there are
cash flows that can be separately identified (Cash-Generating Units). Non financial assets that have
suffered impairment are revised to check a possible reversion of the impairment at the date of
submitttal of the financial statements.
3.13 Accounts Payable to Suppliers
Accounts payable to suppliers are liabilities to be paid for goods or services that were purchased
from suppliers in the ordinary course of business and that are, initially, recognized at fair value and
then measured by the amortizated cost using the effective interest rate method. In practice, they are
generally recognized at the value of the corresponding invoice, adjusted to present value, when
relevant.
3.14 Funding and Loans
Funding and loans are recognized initially at fair value, net from the incurred costs of the transaction
and then they are demonstrated by the amortizated cost. Any difference between the obtained
values (net from the costs of the transaction) and the redemption value (payments) is recognized in
the financial statements during the period in which the loans are in force, using the effective interest
rate method.
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
3.15 Provisions
Provisions are recognized when the Company has a constructive obligation, safely estimated, as a
result of previous events; it is possible that resource liberation is necessary to settle the obligation.
The probability that the Company will settle a series of similar obligations is determined taking into
account the class of the obligations as a whole. A provision is recognized even if the probability to
settle related to any individual item included in the same class of obligations is small.
The provisions are measured by the present value of the expenditures necessary to settle the
obligation, using a rate before tax, which reflects the current evaluations of the market about the time
value of money and the specific risks of the obligation. The increase in the amount of the obligation
due to the time elapsed is recognized as financial expense.
3.16 Income Tax and Social Contribution
Fiscal expenses during the period comprise current and deferred income tax. The tax is recognized in
the financial statements, except for the proportion related to items directly recognized in assets. In
this case, tax is also recognized in assets.
The charge of current income tax is calculated based on the fiscal law promulgated, at the balance
sheets date. The board of directors from time to time evaluate the positions taken by the Company in
the income tax returns in what concerns such situations in which the relevant fiscal regulations allow
interpretation. Provisions are made, when appropriate, based on the amounts to be paid to fiscal
authorities.
Deferred income tax and social contribution recorded in non current assets or in non current liabilities
derive from temporary differences originated from revenues and expenses recorded in the profit/loss
statement, however, temporarily added or removed in the taxable income and social contribution
determination.
3.17 Leasing
Financial leasing is a type of lease in which substantial transfer of the risks and benefits related to the
ownership of an asset occurs. The ownership title may be transferred or not. Operational leasing is a
leasing that does not conform to financial leasing.
Financial leasing are recorded as assets and liabilities similarly to financing operations in amounts
equal to the fair value of the leased asset or, if lower, to the present value of the minimum payments
of the leasing, each of them determined in the beginning of the leasing. The payments of the leasing
are separated between financial charge recorded in the loss/profit statement and reduction of the
outstanding liability.
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
Payments of the operational leasing installments are recognized as expenses on a linear basis during
the term of the leasing.
3.18 Benefits to Employees
The company recognizes a liability and an expense deriving from profit-sharing program duly
approved by the trade union and that takes into account quality and productivity goals and the profit
to be determined to the Company’s shareholders after certain adjustments.
3.19 Income Determination
Income is determined under the accrual basis and includes the recognition of the profit/loss of the
turnkey and supply, construction contracts, taking into consideration the percentage of the stages of
project performance based on the relation existing between the updated estimated income and the
estimated costs and incurred costs, according to the rules applicable to CPC 17 (IAS 11).
Expenses and costs are recognized when there is an asset reduction or a liability record and they
can be reasonably measured.
3.20 Sales Income Recognition
Sales income includes the fair value of the consideration received or to be received for the trading of
products and services in the ordinary course of the Company activities. Income is shown net from
taxes, returns, discounts and abatements and also after exclusion of the sales between companies of
the Society.
Company recognizes income when:
(i) income value can be measured safely;
(ii) future economic benefits are likely to flow for the society; and
(iii) when specific criteria have been met for each of the Company activities. The amount of the
income is not considered as safely measurable until all contingencies related to the sale are solved.
The company bases its estimates on historical experiences, taking into account the type of client, the
type of transaction and the specifications of each sale.
3.21 Dividends
Dividends distribution for the Company’s shareholders is only provided as liability in the date it is
approved by shareholders in a General Meeting.
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
3.22 Accounting Estimates and Judgment
The preparation of financial statements requires the board of directors to base on estimates to record
certain transactions that affect assets and liabilities, revenues and expenses, as well as the
disclosure of information on data of the financial statements of the Company. The final result of such
transactions and information, when actually realized, may differ from theses estimates.
The accounting policies and areas that require a higher degree of judgment and use of estimates in
the preparation of the financial statements are:
a) doubtful credits that are initially provided and then recorded as loss after all the possibilities of
recovery are exhausted;
b) service life and residual value of premises and equipment and intangible;
c) impairment of the premises and equipment and intangible;
d) expectation for realization of tax credits for deferred income tax and social contribution;
e) contingent liabilities that are provisioned according to the expectation of realization, obtained and
measured together with the counseling of the Society.
The company revises the estimates and assumptions at least quarterly and/or annually.
NOTE 4 – FINANCIAL INSTRUMENT RISK MANAGEMENT
To comply with CVM Deliberation n.º 604, dated November 19th 2009 that approved CPC Technical
Statements n.ºs. 38, 39 e 40, and CVM Instruction 475, dated December 17th 2008, the Company
revises the main asset and liabilities financial instruments, as well as the criteria for their valuation,
assessment, classification and risks related to them, as shown below:
(a)
Receivables: Cash and cash equivalent, accounts receivable and other current assets, which
amounts approach those realized at the balance sheets date, are classified as receivables.
(b)
Measured at fair value through profit or loss: Investments are classified as cash equivalent
due to their high liquidity and to the fact that they can be immediately converted to a known
amount of cash, being measured at fair value through profit or loss.
(c)
Derivatives: The Company has operations with derivative instruments called Swap Contracts
recorded at the financing and loan account. The counterparty of such swaps is the institution
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
providing the loan and is referred to in 100% of the CDI (Interbank Deposit Certificate)
combined with pre-established interest rates, varying from 10% to 10,50%. These contracts
amounts a reference value of R$ 11.598 on December 31st 2011 and the effects of the gains
and losses realized on these contracts, in the amount of R$ 519 in losses, were recorded in the
net loss/income.
(d)
Other financial liabilities: Funding and loans, balances kept with suppliers and other current
liabilities are classified in this group. Funding and loans are not indexed with subsidized rates;
all operations were made using market rates.
(e)
Fair value: Fair values of the financial instruments are equal to the accounting values.
(f)
Financial instrument management risk: The Company performs the management of rate,
Exchange, credit and liquidity exposure risks in its operations with financial instruments that are
within the policies of its business.
Interest rate risks
The purpose of the interest rate management policy is to minimize possible impacts caused by
fluctuations of interest rates indexed to the financial instruments of the society. For this, the
Company uses the strategy of diversifying its operations, supporting its financial instruments with
fixed and variable rates.
The Company performed sensitivity analysis for adverse scenes, deteriorating the variable rates
(CDI) in up to 25% (Julgamento da Administração), which would result in an increase of the financial
expenses during the period in an amount of about R$ 2.921.
Exchange rate risks
On December 31st 2011 the Company had an exchange exposure of US$ 10,9 million, which is
detailed in the table “Sensitivity Analysis of the Exchange Rate Exposure” of this Explanatory Note.
Credit and price formation risks
The characteristic of the services and supplies performed by IESA Óleo & Gás S.A. is that of major
projects, most of them with medium and long term construction stages, paid according to events
performed, thus reducing the credit risks. All prices are adjusted annually, according to a contractual
formula.
Sensitivity Analysis of the Financial Instruments
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
In order to show the risks that may generate significant losses to the company, we submit herein, as
determined by CVM in its instructions nºs 475 and 550/08, a demonstration of the sensitivity analysis
of the financial instruments with associated risk to the exchange rate variation (high dollar risk).
Demonstrative Table for Exchange Rate Variation Exposure
Description
12/31/2011
Scene I
Scene II
Scene III
R$ Thousand
R$ Thousand
R$ Thousand
R $ T ho us .
Liabilities
Bank Debts
20.555
16.614
25.363
30.171
Net Exposure- R$ Thousand
20.555
16.614
25.363
30.171
Net Exposure - US$ Thousand
10.958
10.958
10.958
10.958
1,52
2,31
2,75
Dollar Rate
1,88
NOTE 5 – CASH AND CASH EQUIVALENT
CASH AND CASH EQUIVALENT
Controlling Company
C ash
Banks Demand Deposit
Banks Demand Deposit-Foreign C urrency
Inv estments
T otal of Cash and Cash Equivalents
Consolidated
12/31/2011
56
2.349
12/31/2010
83
1.778
12/31/2011
58
12.508
12/31/2010
84
2.079
72.526
74.931
61.666
63.527
2.960
186.046
201.572
3.691
118.244
124.098
The investments are supported by bank deposit certificates (CDB) and Compromised Operations,
and their income is pegged to Interbank Deposit Certificate (CDI).
NOTE 6 – CLIENTS AND OTHER CREDITS
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
Controlling Com pany
Consolidated
12/31/2011
12/31/2010
12/31/2011
12/31/2010
7.729
25.829
9.192
26.447
Unbilled Trade Receiv ables (a)
43.987
54.486
43.987
54.486
Credits w ith Consortia (b)
56.729
56.688
56.729
56.688
Trade receiv ables
Supplies (c)
Trade receivables
Div idend Receiv ables (d)
Adv ances
Current Portion
Labor Appeals
Judicial Deposits
5.174
113.619
137.003
36.083
263
Total of Trade Receiv ables
Total of Other Account Receiv ables
General Total
115.082
137.621
1.108
1.180
5.340
1.306
150.810
138.446
120.422
138.927
13
5
1.344
Other Credits
Non Current Portion
5.174
70
5
1.345
60
2
54
57
1.357
7
1.469
122
113.619
137.003
115.082
137.621
38.548
1.450
6.809
1.428
152.167
138.453
121.891
139.049
a) The balance of unbilled trade receivables refer to contracts in which the installments are
recognized under accrual basis according to the work progress. This procedure does not change
the receiving terms settled in the contracts with clients, which follow the expenditure progress
schedules.
b) Credits with consortia represent values receivable regarding the results deriving from the work in
which the Society participates together with other partners in EPC (Engineering, Procurement
and Construction) contracts related to platforms, refineries and gas plant industries. The
realization of such values is as follows: Consortia pay the associated corporations a monthly
central administration fee and from times to times they provide income distributions. The
breakdown of the balance on 12/31/2011 is as follows:
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
%
Profit/Loss Balance
Consortia
Assets Liability
Equity
Incom e Profit/Loss
Consórcio CII - Ipojuca Rnest Interligações
55.855
42.348
13.507
146.921
13.507
40,0%
(261)
5.142
Consórcio QI - Reduc HDS
238.007
24.278
213.729
310.141
53.576
35,0%
(56.182)
18.623
Consórcio QI - Reduc Plangás
143.368
22.408
120.960
266.935
(64.389)
35,0%
(36.123)
6.213
30.969
3.632
(14.756)
35,0%
(10.597)
242
5.869
24,5%
(111)
1.327
152.110
17,5%
(24.832)
24.713
Consórcio QI - Rev ap
30.969
Consórcio QGGI - Comperj HDT
10.940
5.071
Consórcio UTGCA - Caraguatatuba
456.002
172.886
Consórcio Odebei - Plangas
162.886
1.237
5.869
283.116 1.004.789
Interest Distribution
Receiv.
161.649
21.627
14.297
15,0%
(24.433)
(186)
Consórcio Odebei - Flare
46.129
46.129
8.636
914
15,0%
(6.877)
42
Consórcio Marlim Leste
188.071
188.071
18
15,0%
(27.639)
572
(187.055)
56.688
On Decem ber 31st 2010
1.332.227
268.228
Consórcio CII - Ipojuca Rnest Interligações
105.338
72.350
32.988
215.091
19.481
40,0%
29.809
43.004
Consórcio QI - Reduc HDS
207.481
26.852
180.629
74.308
(33.101)
35,0%
(56.426)
6.794
Consórcio QI - Reduc Plangás
142.272
24.268
118.004
38.990
(2.956)
35,0%
(39.340)
1.961
745
(30.222)
30.967
(3)
35,0%
(10.596)
242
18.364
19.595
(1.231)
56.024
(7.100)
24,5%
5.385
5.083
Consórcio UTGCA - Caraguatatuba
412.698
102.860
309.838
252.528
26.723
17,5%
(21.426)
32.796
Consórcio Odebei - Plangas
162.886
1.237
161.649
15,0%
(24.433)
(186)
46.129
15,0%
(6.877)
42
15,0%
460
567
(123.444)
90.303
Consórcio QI - Rev ap
Consórcio QGGI - Comperj HDT
Consórcio Odebei - Flare
Consórcio Marlim Leste
On Decem ber 31 2011
st
46.129
1.063.999 1.762.681
716
3
713
1.096.629
216.943
879.686
161.146
(22)
636.941
3.022
c) Represent resource supplies to the consortia to make their financial and economic activities
feasible, especially Consórcio CII – Ipojuca Interligações – Rnest, Consórcio QI – Reduc Plangás,
Consórcio QGGI – Comperj HDT.
d) Refer to dividends proposed by the associated company Rig Oil & Gas Inc. and that were received
during January 2012.
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
NOTE 7 – NOTE RECEIVABLES
Controlling Com pany
12/31/2011
Sale of CBD shares (a)
Real state sales (b)
Alberto Dav i Matone
Other inv estments
80.143
5.524
7.787
Total of Note Receivables
222.351
Current Portion
218.344
Non Current Portion
12/31/2010
128.897
4.007
(a) Refer to the amounts receivable for the sale of 86.659 ordinary shares of Companhia Brasileira de Diques
to Inepar Administração e Participações, maturing up to 12 months.
(b) Amounts receivable for the sales of Macae, Sao Vicente and Mage plants to Inepar S/A Ind. Construções,
as part of the plan for centralization of real states in the controlling company.
NOTE 8 - INVENTORIES
Services in progress
Imports in progress
Advances to suppliers
Inputs and Materials
Total of Inventories
Controlling Company
12/31/2011 12/31/2010
21.826
30.087
7.473
16.316
45.615
5.082
35.169
Consolidated
12/31/2011 12/31/2010
21.826
30.087
5.295
5.811
38.914
14.004
16.316
82.351
49.902
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
NOTE 9 – TAX CREDITS
I MPOS TOS A RECUPERAR
ICMS (Value-added tax on sales&serv ices)
PIS (Employ ees' Profit Participation Program)
COFINS (Social Security Financing Tax )
IRRF (Withheld Income Tax )
CSLL (Social Contribution)
IRPJ Income Tax Negative Balance
CSLL Social Contrib. Negative Balance
INSS Withheld
Controlling Company
12/31/2011 12/31/2010
286
169
503
1.331
2.318
6.137
603
1.007
1.068
38
556
215
216
188
Consolidated
12/31/2011 12/31/2010
404
195
587
1.331
2.692
6.137
6
603
1
1.007
1.068
38
556
215
225
189
NOTE 10 - INVESTIMENTS
Controlling Com pany
Consolidated
12/31/2011
12/31/2010
12/31/2011
12/31/2010
16.994
5.878
447
450
Inv estments on Associated Societies
Premises for inv estment
20.600
Total of Investm ents
16.994
26.478
20.600
447
21.050
10.1 Investments on Associated Societies
The following investments on associated societies are recognized in the financial statements of the
controlling company, where the control is shared, evaluated by the net asset of the invested
societies, according to the participation in each company.
12/31/2011
5.878
I nitial Balance
Investment purchase
Shareholders' equity
Participation in Profits
Comprehensive Income
Received dividends
Balance on December 31
1.529
st
12/31/2010
2.711
-
50.407
37
(40.857)
5.019
(41)
(1.811)
16.994
5.878
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
Associated Companies
Name
Net
asset
Profit/
Loss
%
Interest
Investment
Amount
Equity
Assets
Liabilities
736.321
1.595
737.916
695.356
309
695.665
40.965
1.286
42.251
39.660
(699)
38.961
13,25%
35,00%
5.428
450
5.878
5.255
(236)
5.019
808.914
1.144.605
86.119
1.703
2.041.341
807.976
1.039.860
77.744
427
1.926.007
938
104.745
8.375
1.276
115.334
215.277
102.006
3.433
(10)
320.706
16,66%
13,25%
30,00%
35,00%
156
13.879
2.513
447
16.994
35.865
13.516
1.030
(4)
50.407
st
On December 31 2010
QUIP S.A.
QUEBEC - Constr.Mont.Transp. Estrut.Ltda
st
On December 31 2011
RIG Oil & Gas
QUIP S.A.
CCI - Oil & Gas Contractor Inc
QUEBEC - Constr.Mont.Transp. Estrut.Ltda
Acquisition of CCI Oil & Gás
In May 2011 IESA Oleo & Gás acquired 30% of the capital stock of CCI Oil & Gás Contractors Inc, a
company organized jointly with Camargo Correa to the performance of the contract for modules
construction, conversion, integration and commissioning of Platform P-62, FPSO type (floating,
production, storage and offloading) to be installed at Roncador Field, in Campos Basin.
Quip S/A Split-off
During the Extraordinary General Meeting dated November 30, 2011, the shareholders of the
associated company Quip S/A approved the split-off the company in favor of its own shareholders.
The split portion then reversed to its shareholders was the investment on RIG OIL & GAS in the
amount of R$ 861, appraised by its respective accounting values The above mentioned split-off
process was subject to analysis of GWM Auditores e Consultores, as per award dated November 30,,
2011.
The net inventory split-off of the associated company Quip S/A was distributed among its
shareholders in the proportion of their respective participations, thus IESA Óleo & Gás absorbed
13,25% of the split-off net inventory, representing 2.650 shares of the company RIG Oil & Gás, a
company organized for the construction of Platform P-63, which client is Petrobras Netherlands.
In the 20º EGM of November 30 2011, IESA Óleo & Gás’ shareholders deliberated about the
approval of the Split-Off of the associated company Quip S/A and the absorption of the split-off net
inventory.
In December 2011 IESA Óleo & Gás purchased from UTC Engenharia and from Estaleiro Atlântico
Sul 682 shares of RIG Oil & Gás for the amount of R$ 43,05 per share, thus, IESA Óleo & Gás
currently owns 3.332 shares, increasing its interest for 16,66%.
NOTE 11 – PREMISE AND EQUIPMENT
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
PREMISES AND EQUIPMENT
Plots
CONTROLLING COMP.
of Land
Depreciation annual rates
Buildings Machines
Im prov.
& Equip
2%
4 to 20%
Software
Facilities Furniture
2%
10%
Leased
Current
Vehicles Hardware Hardware Prem ises
5 to 20% 10 to 20%
Total
20%
On Decem ber 31 st 2010
Cost
6.800
Accum.Dep. & Impairment
19.860
3.132
628
1.466
3.281
2.077
(1.186)
(551)
(377)
(476)
(7)
(1.080)
2.581
251
990
3.274
997
638
251
Net accounting value
6.800
18.674
Initial balance
6.800
18.674
2.581
990
3.274
997
65
13.625
56
1.448
1.902
(18.739)
(290)
(177)
(369)
(561)
(67)
(136)
(467)
(1.336)
369
254
(17)
95
(107)
316
15.609
167
828
4.148
1.027
Additions
Retirements
(6.800)
Depreciation
Depreciation w rite off
Final balance
638
499
38.381
(3.677)
499
34.704
638
499
34.704
46
6.990
24.132
(499)
(27.357)
(852)
(64)
(3.000)
910
620
6.990
6.990
29.389
On Decem ber 31 st 2011
Cost
Accum.Dep & Impairment
Plots
CONSOLIDATED
of Land
Depreciation rates
1.186
16.467
628
1.345
4.729
3.127
684
(1.186)
(858)
(461)
(517)
(581)
(2.100)
(64)
15.609
167
828
4.148
1.027
620
Buildings Machines
Im prov.
2% a 10%
& Equip.
4 a 20%
Software
Facilities Furniture
Leased
6.990
10%
5%
5 a 20%
20%
638
29.389
Current
Vehicles Hardware Hardware Prem ises
2%
35.156
(5.767)
Total
On Decem ber 31 st 2010
Cost
6.800
Accum.Dep. & Impairment
23.815
5.393
628
2.197
3.281
3.161
(4.345)
(1.224)
(377)
(680)
(7)
(1.611)
1.123
47.036
4.169
251
1.517
3.274
1.550
638
1.123
38.792
251
38.792
(8.244)
Net accounting value
6.800
19.470
Initial balance
6.800
19.470
4.169
1.517
3.274
1.550
638
1.123
3.796
16.927
338
1.448
2.742
46
7.579
32.876
(18.739)
(290)
(177)
(499)
(27.357)
(1.483)
(803)
(67)
(228)
(467)
(1.501)
369
254
(17)
95
(107)
315
3.413
20.257
167
1.545
4.148
2.254
Additions
Retirements
Depreciation
Depreciation w rite off
Final balance
(6.800)
(852)
(64)
(4.613)
909
620
8.203
8.203
40.607
On Decem ber 31 st 2011
Cost
Accum.Dep & Impairment
8.872
22.030
628
2.358
4.729
5.051
684
(5.459)
(1.773)
(461)
(813)
(581)
(2.797)
(64)
Methodology used to determine the new depreciation calculation
52.555
(11.948)
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
The basis for determination of the new depreciation calculation was the Company’s policy that
demonstrates the new service life and the residual percentage for each item of the fixed assets of the
evaluated units. The Company established a new service life for each family of items according to
the assumptions, criteria and elements of comparison mentioned below:
¾
¾
¾
¾
¾
¾
Assets renovation policy;
Expectation of the company based on the experience of the companies of the group;
Information concerning the economic environment;
Accounting information and asset control;
Technical specifications; and,
Assets maintenance policy.
In the determination of the service life estimate policy, the criteria used by expert were maintenance
conditions of the assets, technological evolution, assets renovation policy, and the company’s
expectations based on the market experience with similar assets.
Residual value and service life of the assets and the depreciation methods were revised at the end of
the business year and there was no adjustment to apply.
During the business year of 2011 the Company did not find the existence of indicators that certain
fixed assets could be over the recoverable value and, consequently, there was no need for any
provision for loss of recoverable value of fixed assets.
On December 31st 2011 the amount of R$ 1.265 (R$ 246 on December 31st 2010) referring to fixed
assets depreciation was charged to “costs of products and services” and the amount of R$ 1.735
(R$ 578 on December 31st 2010) to “general and administrative expenses”.
Due to several financing contracts, which debit balance on December 31st 2011 amounted R$ 18.246,
fixed assets of the Company, such as computer equipment, software rights of use licenses and real
states are under statutory lien.
NOTE 12 – INTANGIBLE
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
Leased
Controlling Com pany
Software
software
Im plem entation
Current ERP
of New Processes
Im plem entation
Total
1.258
447
3.235
On Decem ber 31st 2010
Cost
258
Accum.Amort. & Impairment
Accounting net value
Initial Balance
Additions
1.272
50
(67)
308
1.272
1.191
308
1.272
5.634
460
Retirements
(447)
Transfers
1.647
Amortization
(257)
(17)
447
3.218
1.191
447
3.218
68
1.200
7.362
(389)
(836)
(1.647)
(127)
(156)
(540)
Amortization w rite offs
(110)
(11)
(1)
(122)
Final Balance
6.775
1.594
713
9.082
Cost
7.092
1.732
937
9.761
Accum.Amort. & Impairment
(317)
(138)
(224)
(679)
Accounting net value
6.775
1.594
713
9.082
On Decem ber 31st 2011
Leased
CONSOLIDATED
Software
Im plem entation
Current ERP
of New Processes
Im plem entation
Total
1.272
1.258
447
4.475
software
st
On Decem ber 31 2010
Cost
1.498
Accum.Amort. & Impairment
(523)
(67)
(590)
Accounting net value
975
1.272
1.191
447
3.885
Initial Balance
975
1.272
1.191
447
3.885
Additions
5.763
460
68
1.200
7.491
Retirements
(480)
Transfers
1.647
(389)
(869)
(1.647)
Amortization
(377)
(127)
(156)
(660)
Amortization w rite offs
(110)
(11)
(1)
(122)
Final Balance
7.418
1.594
713
9.725
8.428
1.732
937
11.097
(1.010)
(138)
(224)
(1.372)
7.418
1.594
713
9.725
On Decem ber 31st 2011
Cost
Accum.Amort. & Impairment
Accounting net value
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
On December 31st 2011 the amount of R$ 679 (R$ 111 on December 31st 2010) was recorded as
“general and administrative expenses”.
NOTE 12.1 – IMPAIRMENT
Annually or whenever an indication of loss exists, the Company conducts the recoverability tests of
accounting balance of intangible, fixed assets and other non-current assets in order to determine if
these assets were impaired.
These tests are conducted in accordance with the Technical Statement CPC 01 – Reduction to the
Recoverable Value of Assets.
On December 31st 2011 the company conducted recoverability tests for intangible, fixed assets and
other non current assets and established no loss due to impairment.
NOTE 13 – SUPPLIERS AND OTHER LIABILITIES
Controlling Com pany
Accounts Pay able to Suppliers
Accounts Pay able to Associated Companies
Consolidated
12/31/2011
12/31/2010
12/31/2011
12/31/2010
9.898
12.509
15.555
14.479
151
42
151
42
Accounts Payable to Suppliers
10.049
12.551
15.706
14.521
Social Liabilities
28.415
13.845
30.212
14.663
5.972
2.578
6.903
3.538
149
151.206
88.238
Tax Liabilities
Adv ances on Purchases
Other Accounts Pay able
Current Portion
Tax Liabiities
Loan w ith Associated Companies
6.926
3.092
6.935
3.101
51.362
32.215
210.962
124.061
6.324
8.063
6.324
8.063
39.342
18.938
9.282
2.427
237
27
15.843
10.517
Other Accounts Pay able
Non Current Portion
45.666
27.001
Total of Accounts Pay able to Suppliers
10.049
12.551
15.706
14.521
Total of Other Accounts Pay able
86.979
46.665
211.099
120.057
General Total
97.028
59.216
226.805
134.578
NOTE 14 – FUNDING AND LOANS
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
FUNDING AND LOANS
Current
Form
Working Capital
Working Capital
Advances against Exchanges
Advances against Exchanges
Advances against Exchanges
Advances against Exchanges
Fixed Assets
Financial Leasings
Costs with Financial Transactions
Medium Rate
CDI 0,40 to 1,3061% /mo
CDI + 0,40741 to 0,75% /mo
EV + 6,2% py
EV + 100% CDI
EV + 105% CDI
EV + 5,625% py
1,6% /mo
100% CDI
Securities
Promissory Note/Receivables
Chattel Mortgage
ACC
ACC
ACC
ACC
Chattel Mortgage
Chattel Mortgage
Non Current
Form
Working Capital
Working Capital
Advances against Exchanges
Fixed Assets
Financial Leasings
Costs with Financial Transactions
Medium Rate
CDI 0,40 to 1,3061% /mo
CDI + 0,40741 to 0,75% /mo
VC + 5,625% py
1,6% /mo
100% CDI
Securities
Promissory Note/Receivables
Chattel Mortgage
ACC
Chattel Mortgage
Chattel Mortgage
Total of Funding and Loans
Rates
Financial Leasings
Working Capital
Working Capital
Advances agains Exchanges
Advances agains Exchanges
Advances agains Exchanges
Permanent Asset
Controlling Company
12/31/2011
12/31/2010
140.589
91.013
4.345
2.573
30.588
17.653
13.174
1.074
628
986
577
439
(2.846)
(2.514)
160.113
138.165
Controlling Company
12/31/2011
12/31/2010
64.453
102.636
9.624
3.735
1.390
2.358
1.682
1.560
(859)
(1.092)
80.025
105.462
240.138
243.627
100% of CDI
From 100% to 150% of CDI
From 0,40% to 1,927464% /mo
Exchange variancel + 5,625% /year
Exchange variance + 6,2% /year
Exchange variance + 100% of CDI
BZTJLP + 0,4915% /mo
Controlling Company
12/31/2011
12/31/2010
By Maturity Date
Up to 12 months
From 1 to 2 years
From 2 to 3 years
From 3 to 4 years
From 4 to 5 years
159.973
59.903
17.679
2.010
574
240.138
138.165
82.567
18.163
4.108
624
243.627
Controlling Company
31/12/11
31/12/2010
By type of currency
Reais - R$
US Dollars - US$
219.583
20.555
195.386
48.241
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
NOTE 15 – DEBENTURES
1st issue
Issue
Type of
O ut st and i ng
Date
Issue
Securities
01/07/2011
Particular
6.000
Value
Annual
a t t he
Financial
issue date
60.000
Charges
12/31/2011
CDI + 6%
57.614
12/31/2010
57.614
Portion in Current
31.514
Portion in Non Current
26.100
On July 1st 2011 6,000 (six thousand) single series debentures were issued and completely
subscribed, not convertible to shares, with real guarantee, in the amount of R$ 60.000, with the
following main characteristics:
•
•
•
Scheduled Amortizations: 2% in August 2011, 4,5% in November 2011, 8,5% in February
2012, 13% in May 2012, 15,5% in August 2012, 13% in November 2012, 20% in February
2013 and 23,% in May 2013.
Final Maturity: 05/01/2013
Remuneration: remuneratory interest equivalent to 100% of the accumulated variance of the
medium daily rates of the one-day interfinance deposits (“DI Rate”), expressed in percentage
per year, based on 252 working days, calculated and informed daily by CETIP (Brazilian
Company for Assets and Derivatives) plus a predetermined rate of 6,00 % per year based on
base 252 working days.
The issue of debentures was approved in the 16th EGM, dated June 21st, 2011. The balance is fully
recorded in liabilities and was updated until December 31st 2011, considering the rates in force in the
contract.
NOTE 16 – INCOME TAX AND SOCIAL CONTRIBUTION
16.1 Deferred Taxes
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
Deferred Fiscal Asset
IRPJ
CSLL
Total
Contingency Provisions
Fiscal Loss
Unrealized Profits
Total Non Current Asset
20
2.967
8
1.068
28
4.035
372
2.987
1.076
4.063
372
Deferred Fiscal Liability
Deferred Profits on State Bodies
Costs with Fin. Transactions
Deprec. w/o Serv. Life Forecast
Fair Value on Investment Property
Chattel Mortgage
Real State Disposals
Total Non Current Liability
IRPJ CSLL
Total
IRPJ
CSLL
Total
134
506
20
2.967
8
1.068
28
4.035
134
506
2.987
1.076
4.063
Controlling Company
31/12/2011
31/12/2010
IRPJ CSLL
Total
IRPJ CSLL
6.814
933
666
5.245
50
5.606
19.314
2.456
336
240
1.888
18
2.018
6.956
9.270
1.269
906
7.133
68
7.624
26.270
IRPJ CSLL
Total
372
134
506
36
408
12
146
48
554
Consolidated
Total
5.626
874
261
2.204
5
2.027
315
94
793
2
7.653
1.189
355
2.997
7
8.970
3.231
12.201
31/12/2011
IRPJ CSLL
6.814
933
666
5.245
50
5.606
19.314
2.456
336
240
1.888
18
2.018
6.956
Total
9.270
1.269
906
7.133
68
7.624
26.270
31/12/2010
IRPJ CSLL
Total
5.626
874
261
2.204
5
2.027
315
94
793
2
7.653
1.189
355
2.997
7
8.970
3.231
12.201
Deferred income tax and social contribution are calculated on the temporary corresponding
differences between income tax and social contribution calculation bases on assets and liabilities and
the accounting values of the financial statements, determined in compliance with CVM Deliberation
n.º 599/09 and CVM Instruction n.º 371/02.
The rates of such taxes currently defined for the determination of these deferred credits, are 25% for
income tax and 9% for social contribution.
16.2 Expenses with Tax on Profit
The charges and taxes applicable to the profit accounted for in the period are given below:
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
Nominal Rate
IRPJ and CSLL calculated at nominal rate
34%
34%
34%
(17.644)
(12.798)
(20.080)
4.746
1.707
Adjustment for determination of actual rate
Fiscal Loss
Shareholders' Equity
Fiscal Incentives
Permanent Additions and Exclusions
34
154
34
(929)
3.039
(929)
Other Adjustments
IRPJ and CSLL in Loss/Profit
11
(13.793)
(7.887)
(20.975)
Deferred Tax
(10.512)
(383)
(10.512)
Current Tax
(3.281)
(7.504)
(10.463)
27%
21%
35%
Actual Rate
17 – PROVISIONS
In the course of business, Company is subject to labor and tax suits, and the suits which have a high
probability of loss are recorded in the Non Current Liabilities.
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
CONTINGENCY PROVISIONS
Labo r suits &
Controlling Company
civil actio ns
On December 31st 2010
1.349
Tax
Total
139
1.488
(139)
(139)
Filed during the business y ear
Rev ersal of Prov isions
Prov isions Used
On December 31st 2011
541
541
1.890
1.890
Labo r suits &
civil actio ns
Tax
Total
Short-Term installment
Long-Term Installment
1.349
139
1.488
On 31st December 2010
1.349
139
1.488
Short-Term installment
Long-Term Installment
1.890
1.890
On 31st December 2011
1.890
1.890
Tax and Labor Requirements
Company’s income statements are subject to the revision and eventual additional issuance by Tax
Authorities for a five year period. Other taxes, rates and charges are also subject to these conditions
pursuant to the applicable law.
Special Customs Regimen
Company obtained through Executive Declaratory Acts no. 12 and 13 as of July 6, 2009, issued by
Brazil Federal Revenue (RFB), the authorization to operate under the Warehouse Special Customs
Regimen, based on Normative Instruction 513/2005 for the construction of modules to be integrated
to floating oil and gas exploration platform P-55. This regimen allows that Brazilian and imported
materials are admitted and manufactured fully exempted from federal taxes under the condition that
such modules be destined for export.
On December 31st, 2011, Company had an amount of R$ 25.958 (R$ 23.590 on December 31st,
2010) in suspended federal taxes.
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
NOTE 18 – RELATED PARTIES
18.1 Transactions with the Controlling Company and with Associated Company
The following transactions were made with related parties:
TRANSACTIONS WITH RELATED PARTIES
IESA Projetos, Equipamentos e Montagens S/A (i)
QUIP S/A (ii)
RIG S/A (ii)
CBD (iii)
IESA Projetos, Equipamentos e Montagens S/A (i)
QUIP S/A (ii)
CONTROLLING COMPANY
Current Assets
Non Current Assets
Accounts Receivable
Loans
12/31/2011
12/31/2010
12/31/2011
12/31/2010
1
5
14.375
81
1.474
35.865
750
35.947
5
16.599
Current Liabilities
Accounts Payable
12/31/2011
12/31/2010
151
4
151
Result (Revenue)
Sales
4
Non Current Liabilities
Loans
12/31/2011
12/31/2010
39.342
39.342
18.938
18.938
Result (Expenses)
Costs
18.2 Remuneration of Key Management Personnel
In compliance with CPC 05 – Disclosure on Related Parties and as set out and approved in the
minutes of meeting, the remuneration of officers, below described, in 2011 are given below:
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
Controlling Company
12/31/2011 12/31/2010
Remuneration of Executive Officers - CLT
Remuneration of Executive Officers - Statutory
Profit Sharing Executive Officers - CLT
Profit Sharing Executive Officers - Statutory
Other Benefits
438
2.879
172
1.432
735
184
2.337
20
1.639
392
NOTE 19 – SHAREHOLDERS’ EQUITY
19.1 Capital Stock
Capital stock is R$ 102.996 represented by 65.995.745 (sixty-five million, nine hundred ninety-five
thousand, seven hundred forty-five) common shares, with voting rights, non-split towards capital and
at no par value.
19.2 Dividends
Minimum obligatory dividends were not provisioned, as determined by the Company’s Estatuto
Social, due to the existence of covenants clauses in financial contracts that provides that dividends
exceeding 50% of the net profit of the consolidated financial statements of the controlling company
IESA Projetos, Equipamentos e Montagens S/A are not to be declared. The destination of the 2011
result will be defined by the shareholders meeting.
NOTE 20 – PROFIT SHARING
The Company maintains a Results Leverage Program (PAR) to its employees binding to the goals
accomplishment, which parameters for the year 2010 are included in the agreement signed in
November, 2011.
NOTE 21 – SALES INCOME
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
Controlling Company
12/31/2011
12/31/2010
Consolidated
12/31/2011 12/31/2010
Resale
Services
Scrap Sale
Consortia Income
Foreign Market Sales
Intercompany Sales
Gross I ncome
215
26.581
4.026
657.968
51.286
1.782
741.858
434
165.765
815
440.524
121.431
3.102
732.071
215
26.581
4.026
657.968
271.413
434
168.867
815
440.524
200.018
960.203
810.658
( - ) Tax on Sales
(44.601)
(62.987)
(44.601)
(62.987)
Net Operating I ncome
697.257
669.084
915.602
747.671
NOTE 22 – OTHER REVENUES AND EXPENSES
Controlling Company
12/31/2011 12/31/2010
Income on Fixed Asset Sakes
Sales Income
(-) Net accounting value write off
Income/Loss on investment sale
Sales Income
(-) Net accounting value write off
Fair Value Determination
Other Revenues
Other Expenses
Other Revenues and Expenses
81.300
(59.268)
394
(430)
12.165
647
(2.594)
32.250
(7.200)
8.817
5.753
(5.840)
1.494
NOTE 23 – FINANCIAL REVENUES AND EXPENSES
Consolidated
12/31/2011 12/31/2010
81.300
(59.315)
438
(570)
12.165
647
(2.594)
32.203
(7.200)
8.817
5.753
(5.840)
1.398
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
FINANCIAL REVENUES AND EXPENSES
Controlling Company
12/31/2011 12/31/2010
Financial Expenses
Banking Expenses
Interests on Loans and Loans with Associates
Interests on other Liabilities
Exchange Variance Liabilitiies
Total of Financial Expenses
Financial Revenues
Investment revenues
Interests on other assets
Exchange variance on assets
Discount earned
Total of Financial Revenues
Consolidated
12/31/2011 31/12/2010
8.370
55.002
4.449
472
68.293
1.164
40.990
1.532
82
43.768
9.581
55.002
4.572
1.110
70.265
1.453
40.990
1.532
1.170
45.145
4.296
107
381
481
5.265
3.356
13.606
162
170
17.294
13.666
1.806
1.107
481
17.060
3.356
16.537
665
170
20.728
NOTE 24 – INSURANCE COVERAGES
The contracts determine values in technical bases that estimate enough coverage of any losses
derived from claims referring to Fixed Assets and Inventories.
On 12/31/2011 the company had insurance policies for the following risks:
¾
¾
¾
¾
¾
Loss of Profit;
Liability;
Transport;
Heavy Equipment (Trucks, Cranes)
Group Life; and
to reduce risks related to non completion of the contracts executed with clients the Company have
performance bonds that guarantee the payment of up to R$ 140 million of any contractual fines.
NOTE 25 – SECURITIES AND SURETIES
In order to exclusively secure its financial operations, Company provided nearly R$22.4 million
(market price) in fiduciary sale (note 14).
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
NOTE 26 – INFORMATION PER SEGMENT
The information per segment are submitted in accordance with CPC 22 – Information per Segment,
approved by CVM Deliberation 582/09. The Board of Officers determined the Company’s operating
segments based on the model of its strategic plan, covering the following areas:
Platforms and
Income on 12/31/2011
T otal Gross Income
Tax on Sales
C osts of Products and Serv ices
Gross Margin
Modules
CONT ROLLING COMPANY
Infrast.work in
Offshore
Infrastr.work in Gas
Refineries
Operations
Plants
T otal
122.634
440.771
87.921
90.532
741.858
(7.636)
(20.132)
(9.209)
(7.624)
(44.601)
(92.569)
(339.108)
(74.674)
(73.967)
(580.318)
22.429
81.531
4.038
8.941
116.939
CONSOLIDAT ED
Income on 12/31/2011
T otal Gross Income
Tax on Sales
C osts of Products and Serv ices
Gross Margin
Platforms and
Infrast.work in
Offshore
Infrastr.work in Gas
Modules
Refineries
Operations
Plants
340.979
440.771
87.921
90.532
960.203
(7.636)
(20.132)
(9.209)
(7.624)
(44.601)
(248.044)
(339.108)
(74.674)
(73.967)
(735.793)
85.299
81.531
4.038
8.941
179.809
NOTE 27 – COMPLEMENTARY INFORMATION – EBITDA
Controlling Com panies
12/31/2011
Net Operating Income
12/31/2010
Consolidated
12/31/2011
12/31/2010
697.257
669.084
915.602
747.671
(580.318)
(545.067)
(735.793)
(609.877)
Gross Operating Profit
116.939
124.017
179.809
137.794
(-) Ex penses w ith Sales
(17.715)
(7.098)
(17.715)
(7.098)
(-) General, Administrativ e and Operating Ex penses
(56.759)
(48.728)
(71.813)
(56.271)
2.482
880
4.315
1.788
Costs of Goods and/or Serv ices Sold
(+) Depreciation/Amortization
(+/-) Shareholders' Equity
50.407
5.019
(4)
(236)
EBITDA
95.354
74.090
94.592
75.977
14%
11%
10,33%
10,16%
% on Net Operating Income
T otal
IESA ÓLEO & GÁS S.A.
Explanatory Notes to the Financial Statements for the business years
ending on December 31st 2011 and 2010
(In thousands of reais unless otherwise indicated)
*****
BOARD OF OFFICERS:
Valdir Lima Carreiro; Irajá Galliano Andrade; José Eduardo Catelli Soares de Figueiredo; Otto
Garrido Sparenberg.
Accountant:
Gilberto Marques CPF 141.526.788-01 CRC - TC - 1SP231969/O-8-S-RJ
INDEPENDENT AUDITORS’ REPORT ON FINANCIAL STATEMENTS
The Board of Officers and Shareholders of
IESA ÓLEO & GÁS S/A
We have audited the individual and consolidated financial statements of IESA ÓLEO & GÁS
S.A., identified as Controlling Company and Consolidated respectively, which comprise the
balance sheet as of December 31st, 2011 and corresponding income statements,
comprehensive financial statements, shareholders’ equity and cash flows for the year ended
on December 31st, 2011, as well as the summary of the main accounting practices and other
explanatory notes.
Administration Responsibility on Financial Statements
The Executive Board of IESA ÓLEO & GÁS S.A. is responsible for preparing and properly
submitting the individual financial statements in accordance with the accounting practices
adopted in Brazil and for the consolidated financial statements in accordance with the
International Financial Reporting Standards (IFRS) issued by International Accounting
Standards Board – IASB, and in accordance with the accepted accounting practices in
Brazil, as well as to the internal controls set out as necessary to allow the preparation of
these financial statements free from any material misstatement, regardless if caused by
fraud or error.
Responsibility of the Independent Auditors
Our responsibility is to express an opinion on these consolidated financial statements based
on our audits conducted in accordance with Brazilian and international auditing standards.
These standards require the accomplishment of ethical demands by the auditors and that
the audit is planned and performed in order to obtain reasonable assurance about whether
the financial statements are free of any relevant distortion.
An audit includes the performance of procedures selected to evidence supporting amounts
and disclosures submitted in the financial statements. The procedures selected depend on
the auditor’s discretion, including the assessment of risks of pertinent distortion in the
financial statements regardless of being caused by fraud or error. For this risks assessment
the auditor examines the pertinent internal controls for preparation and properly submission
of financial statements of the Company to plan suitable auditing procedures for the
circumstances, but not to express an opinion on the efficacy of these internal controls of the
Company. An audit also includes assessing accounting principles and significant estimates
made by the Board of Officers, as well as evaluating the overall financial statements
presentation.
We believe that the evidence of audit obtained is suitable and sufficient to provide
reasonable basis for our opinion.
Opinion on Individual Financial Statements
In our opinion, the individual financial statements referred to above properly show, in all
pertinent aspects, the financial condition of IESA ÓLEO & GÁS S.A. as of December 31st,
2011, the performance of its operations and cash flows for the year ended on that date, in
compliance with accounting principles accepted in Brazil.
Opinion on Consolidated Financial Statements
In our opinion, the consolidated financial statements referred to above properly show, in all
pertinent aspects, the consolidated financial condition of IESA ÓLEO & GÁS S.A. as of
December 31st, 2011, the consolidated performance of its operations and consolidated cash
flows for the year ended on that date, in compliance with International Financial Reporting
Standards (IFRS) issued by International Accounting Standards Board –IASB) and
accounting principles accepted in Brazil.
Emphasis
As set out in Explanatory Note 2, the individual financial statements were prepared in
accordance with accounting principles accepted in Brazil. In the case of IESA ÓLEO & GÁS
S.A. these principles are different from IFRS, applicable to the separated financial
statements only in what concerns the assessment of investment in controlled companies
jointly by equity method, while according to IFRS this should be by cost or fair value.
Other Issues
Statements of Value Added
We have also audited the individual and consolidated value added statements (DVA) for the
year ending on December 31st, 2011, which submittal is required by the Brazilian Corporate
Law for public companies, and as supplementary information by IFRS which do not require
the DVA submittal. These statements have been submitted to the same auditing procedures
referred to above and, in our opinion, are suitably presented, in all pertinent aspects, in what
concerns the financial statements taken as a whole.
Rio de Janeiro, March 30 2012.
CARLOS A. FELISBERTO
Accountant CRC (PR) no. 037293/O-9-S-RJ
MARTINELLI Auditores
CRC(SC) nº 001.132/O-9