Reference Form - 2012 - WEG S.A.
Version: 1
Contents
1. Persons responsible for the content of the form
1.1 - Representation and identification of the persons responsible for the content of the form
1
2. Independent auditors
2.1/ 2.2 – Independent auditor’s identification and fees
2.3 - Other relevant information
2
3
3. Select financial information
3.1 - Financial information
4
3.2 - Non-accounting measurements
5
3.3 - Events subsequent to the latest financial statements
6
3.4 - Policy on allocation of net income
7
3.5 - Payment of dividends and retained earnings
9
3.6 - Declaration of dividends to the retained earnings account or reserves
10
3.7 - Level of indebtedness
11
3.8 - Obligations according to nature and maturity
12
3.9 - Other relevant information
13
4. Risk factors
4.1 - Description of risk factors
14
4.2 - Comments on expected changes in exposure to risk factors
23
4.3 - Legal, administrative or arbitration proceedings not subject to confidentiality and relevant
33
4.4 - Legal, administrative or arbitration proceedings not subject to confidentiality, whose opposing parties are
39
officers, former officers, controlling shareholders, former controlling shareholders or investors
4.5 - Relevant confidential proceedings
40
4.6 - Repetitive or related legal, administrative or arbitration proceedings not subject to confidentiality and
41
are relevant in the aggregate
4.7 - Other relevant contingencies
42
4.8 - Rules of the country of origin and of the country in which the securities are held in custody
43
5. Market risk
5.1 -Description of the major market risks
44
Reference Form - 2012 - WEG S.A.
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Contents
5.2 - Description of the market risk management policy
46
5.3 - Significant changes in the major market risks
48
5.4 - Other relevant information
49
6. Issuer’s background
6.1 / 6.2 / 6.4 – Issuer’s formation, term and date of registration with the Brazilian SEC (CVM)
50
6.3 - Brief history
51
6.5 - Major corporate events at the issuer, subsidiaries or affiliates
53
6.6 - Information on filings for bankruptcy based on significant amounts or filings for in-court or out-of-court
56
Reorganizations
6.7 - Other relevant information
57
7. Issuer’s activities
7.1 - Description of activities performed by the issuer and its subsidiaries
58
7.2 - Information on business segments
62
7.3 - Information on products and services within the business segments
67
7.4 - Clients that account for more than 10% of total net revenue
74
7.5 - Relevant impacts of government regulation on activities
75
7.6 - Relevant revenues from abroad
78
7.7 - Impacts of foreign regulation on activities
79
7.8 - Significant long-term relations
80
7.9 - Other relevant information
81
8. Economic group
8.1 - Description of the economic group
82
8.2 - Organizational chart of the economic group
84
8.3 - Restructuring operations
85
8.4 - Other relevant information
89
9. Material assets
9.1 - Relevant non-current assets - other
90
9.1 - Relevant non-current assets / 9.1.a – Property, plant and equipment
91
Reference Form - 2012 - WEG S.A.
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Contents
9.1 - Relevant non-current assets / 9.1.b – Patents, trademarks, licenses, permits, franchises and
92
technology transfer contracts
9.1 - Relevant non-current assets / 9.1.c – Equity interest held
95
9.2 - Other relevant information
104
10. Officers’ comments
10.1 - General financial and equity position
105
10.2 - Operating results and financial position
116
10.3 - Material effects that events have caused or are expected to cause on the financial statements
122
10.4 - Significant changes in accounting practices – Qualification and emphasis of matter paragraphs in the
125
auditor’s report
10.5 - Critical accounting policies
126
10.6 - Internal controls for preparation of financial statements – Level of effectiveness and deficiency
133
and recommendations in the auditor’s report
10.7 - Allocation of funds from public offerings referring to distribution and any misappropriations
134
10.8 - Relevant items not disclosed in the financial statements
135
10.9 - Comments on items not disclosed in the financial statements
136
10.10 - Business plan
137
10.11 - Other aspects with material impact
139
11. Forecasts
11.1 - Forecasts disclosed and assumptions
140
11.2 - Monitoring of and changes in forecasts disclosed
141
12. General meeting and management structure
12.1 - Description of the management structure
142
12.2 - Rules, policies and practices relating to general meetings
147
12.3 - Dates and newspapers of publication of information required by Law No. 6404/76
149
12.4 - Rules, policies and practices relating to the Board of Directors
150
12.5 - Description of the arbitration clause for resolution of conflicts by means of arbitration
163
12.6/8- Composition and professional experience of the Board of Directors and Supervisory Board
164
12.7 - Composition of statutory committees and of audit, financial and compensation committees
183
12.9 - Existence of marital relationship, common law marriage or kinship up to the second degree to the issuer’s
managing officers, subsidiaries and controlling shareholders
184
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Contents
12.10 - Relationships involving subordination, service delivery or control between managing officers and
185
subsidiaries, controlling shareholders and others
12.11 - Agreements, including insurance policies, for payment or reimbursement of expenses incurred by
186
managing officers
12.12 - Other relevant information
188
13. Management compensation
13.1 - Description of the compensation policy or practice, including for non-statutory officers
196
13.2 - Total compensation paid to the Board of Directors, Executive Board and Supervisory Board
199
13.3 - Variable compensation paid to the Board of Directors, Executive Board and Supervisory Board
202
13.4 - Stock-based compensation plan for the Board of Directors and Executive Board
204
- Number of shares, units of interest and other convertible securities held by members of the Board of
13.5 Directors and Supervisory Board – by body
211
13.6 - Stock-based compensation paid to Board of Directors and Executive Board
212
13.7 - Information on outstanding options held by the Board of Directors and Executive Board
213
13.8 - Stock options exercised and granted referring to stock-based compensation of the Board of Directors
214
and Executive Board
13.9 - Information required to understand the data disclosed in items 13.6 to 13.8 – Stock and options pricing
215
method
13.10 - Information on private pension plans granted to the Board of Directors and Executive Board
217
13.11 - Highest, lowest and average individual compensation paid to the Board of Directors, Executive Board and
218
Supervisory Board
13.12 - Mechanisms for compensation or termination benefits for managing officers in case of removal from
219
office or retirement
13.13 - Rate of total compensation referring to members of the Board of Directors and Supervisory Board who are 220
related to controlling shareholders
13.14 - Compensation paid to members of the Board of Directors and Supervisory Board, grouped by body,
221
for any reason other than the office held by them
13.15 - Compensation paid to members of the Board of Directors and Supervisory Board recognized in the
222
income statement of direct or indirect controlling shareholders, of companies under common control and
of subsidiaries
13.16 - Other relevant information
228
14. Human Resources
14.1 - Description of human resources
236
14.2 - Material changes - Human resources
238
14.3 - Description of the employee compensation policy
239
Reference Form - 2012 - WEG S.A.
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Contents
14.4 - Description of the relationship between the issuer and unions
240
15. Control
15.1 / 15.2 - Shareholding position
243
15.3 - Capital distribution
291
15.4 - Shareholders’ structure
292
15.5 - Shareholders’ agreement filed at the issuer’s head office or of which the controlling shareholder is part
293
15.6 - Significant changes in interests held by the controlling group members and managing officers of the issuer 294
15.7 - Other relevant information
295
16. Transactions with related parties
16.1 - Description of the issuer’s rules, policies and practices regarding transactions with related parties
296
16.2 - Information on transactions with related parties
297
16.3 - Identification of the measures adopted to address conflicts of interest and evidence that the transaction
299
was carried out at arm’s length or was adequately compensated
17. Capital stock
17.1 - Information on capital stock
301
17.2 - Capital stock increase
302
17.3 - Information on share splits, reverse splits and bonuses
303
17.4 - Information on capital stock decrease
304
17.5 - Other relevant information
305
18. Securities
18.1 - Stock rights
306
18.2 - Description of rules included in the bylaws that limit the voting rights of significant shareholders or that
307
require them to make a public tender offer
18.3 - Description of exceptions and suspension clauses relating to equity or political rights included in the
308
Bylaws
18.4 - Volume of trading operations and highest and lowest quoted price of securities traded
309
18.5 - Description of other securities issued
310
18.6 - Brazilian markets where the securities are admitted to trading
311
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Contents
18.7 - Information on each class and type of securities admitted to trading on external markets
312
18.8 - Public offerings made by the issuer or third parties, including controlling shareholders and
313
affiliates and subsidiaries involving the issuer’s securities
18.9 - Description of the public tender offerings made by the issuer referring to third party shares
18.10 - Other relevant information
314
315
19. Repurchase plans/treasury securities
19.1 - Information on repurchase plans for the issuer’s shares
316
19.2 - Changes in the treasury securities values
317
19.3 - Information on treasury securities on the closing date of the latest year
318
19.4 - Other relevant information
319
20. Trading policy
20.1 - Information on the securities trading policy
320
20.2 - Other relevant information
321
21. Policy on disclosure of information
21.1 - Description of internal rules, regulations or procedures on disclosure of information
322
21.2 - Description of the policy on disclosure of material fact or event notice and of procedures regarding
335
maintenance of confidentiality of significant information not disclosed
21.3 - Managing officers responsible for implementation, maintenance, assessment and overview of the
336
information disclosure policy
21.4 - Other relevant information
337
22. Extraordinary business
22.1 - Acquisition or disposal of any significant asset that does not fall under the issuer’s normal activities
338
22.2 - Significant changes in the manner of conducting the issuer’s business
339
22.3 - Significant contracts entered into between the issuer and its subsidiaries not directly related to operating
340
activities
22.4 - Other relevant information
341
Reference Form - 2012 - WEG S.A.
Version: 1
1.1 - Representation and identification of the persons responsible for the form
Person responsible for the content of the form
Harry Schmelzer Junior
Position
Chief Executive Officer
Person responsible for the content of the form
Laurence Beltrão Gomes
Position
Investor Relations Officer
The above officers hereby represent that:
a. They have reviewed this Reference Form;
b. All the information included herein complies with the terms of CVM Ruling No. 480,
especially articles 14 to 19;
c. This set of information represents a true, accurate and complete view of the issuer’s
economic and financial condition, the risks underlying its activities and the securities
issued thereby.
Page 1 of 393
Reference Form - 2012 - WEG S.A.
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2.1/2.2 – Independent auditor’s identification and fees
Is there an independent auditor?
YES
CVM code
471-5
Type of independent auditor?
Domestic
Trade/Corporate name
Ernst & Young Terco Auditores Independentes S.S
CPF/CNPJ
61.366.936/0010-16
Date of engagement
30/03/2011
Description of services
Audit of financial statements for 2011
Total independent auditor’s fees
Audit of financial statements for 2011 - R$ 801,100.00
Accounting and tax Public Digital Bookkeeping System (SPED)
review - R$ 30,000.00
Study on the South African tax regime - R$ 30,405.00
Legal advisory services in Brazil - R$ 105,000.00
Tax review in Portugal – R$ 5,640.00
Total - R$ 972,145.00
segregated by service
Reason for replacement
N/A
Auditor’s explanation, if any, contesting the issuer’s reason N/A
for its replacement
Name of person in charge
MARCOS ANTONIO QUINTANILHA
Date of engagement services Individual Taxpayer
Identification Number
(CPF)
03/30/2011
006.840.298-80
Address
R. Dr. Amadeu da Luz, 100, Centro, Blumenau, SC,
Brasil, CEP 89010-160, Telefone (047) 21237300
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Reference Form - 2012 - WEG S.A.
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2.3 - Other relevant information
Upon engaging external audit services, the Company seeks to maintain the
independence of the external auditors, Ernst Young Terco Auditores Independentes
("E&YT"). In 2011, in addition to financial statements audit services, E&YT provided
specific administrative advisory services and translation of the financial statements into
English, as described in items 2.1/2.2. All engaged services refer to 2011, and there
are no services to be rendered regarding future periods.
The Company and its subsidiaries adopt the formal procedure of consulting the
independent auditors so as to ensure that the services provided do not impact their
independence and the objectivity necessary to perform the independent audit services.
In this regard, E&YT issues an annual statement of independence, under the terms of
NBC TA 260, issued by Brazil’s National Association of State Boards of Accountancy
(CFC), whereby it states that, as provided for in the independence rules adopted by the
Brazilian Securities and Exchange Commission (CVM), the relation between E&YT
(and its subsidiaries and affiliates) and the Company does not impair independence.
This statement is submitted to WEG's Board of Directors. The policy of the Company
and its subsidiaries when engaging independent auditor services ensures that there
are no conflicts of interest, impairment of independence or objectivity.
Page 3 of 393
Reference Form - 2012 - WEG S.A.
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3.1 - Financial information - Consolidated
(Reais)
Fiscal year (12/31/2011)
Fiscal year (12/31/2010)
Fiscal year (12/31/2009)
Equity
3,800,112,000.00
3,454,607,000.00
3,299,739,000.00
Total assets
9,105,861,000.00
7,511,164,000.00
6,583,066,000.00
5,189,409,000.00
4,391,973,000.00
4,210,620,000.00
1,556,051,000.00
1,386,952,000.00
1,356,401,000.00
586,936,000.00
519,782,000.00
550,543,000.00
620,905,029
620,905,029
620,905,029
6.120000
0.950000
5.560000
0.840000
5.310000
0.890000
Net financial income/ interim financial
income/Insurance premium - gains
Gross profit
Net income
Number of shares, excluding treasury
shares (units)
Book value of shares (in reais - units)
Earnings per share
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Reference Form - 2012 - WEG S.A.
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3.2 - Non-accounting measurements
If the issuer disclosed over the previous fiscal year, or would like to disclose in
this form, non-accounting measurements such as EBITDA (earnings before
interest, taxes, depreciation and amortization) and EBIT (earnings before interest
and taxes), it must:
a) Inform the amount of non-accounting measurements
The Company’s EBITDA (earnings before interest, taxes, depreciation and
amortization) is calculated pursuant to the terms of CVM/SNC/SEP Circular Letter No.
01/2007. The amounts are shown on the table below:
b)
c)
Reconcile the amounts reported and the amounts resulting from the audited
financial statements.
In thousands of reais
12/31/11
12/31/10
12/31/09
(=) Gross operating income
(-) Selling expenses
(-) General and administrative expenses
(-) Profit sharing
( + ) Depreciation/amortization
(=) EBITDA
1,556,051
(508,904)
(259,483)
(93,354)
188,030
882,340
1,386,952
(434,249)
(262,724)
(84,859)
183,990
789,110
1,356,401
(408,179)
(225,288)
(76,640)
191,130
837,424
Explain why this measurement is more appropriate for a correct
understanding of the Company’s financial position and results of operations.
The Company believes that EBITDA represents supplementary information that helps
to more thoroughly understand its financial and economic condition. EBITDA is
traditionally used by financial analysts as a rough measure, although imperfect, of a
unit’s ability to generate cash. The Company does not recommend that EBITDA be
used separately from other information included in its financial statements, nor does it
believe that EBITDA is, in itself, the most appropriate measure to understand its
financial position and the results of its operations.
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Reference Form - 2012 - WEG S.A.
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3.3 - Events subsequent to the latest financial statements
Identify and comment on any event subsequent to the latest year-end financial
statements that may substantially impact them.
In January 2012, a partnership between WEG and Cestari was established, forming
WEG-Cestari Redutores e Motorredutores S.A., engaged in the production and sale of
gear reducers and motor reducers and provision of related services. This event is
described in Note 28 – Subsequent Events, in the financial statements as of December
31, 2011.
Authorization to prepare the individual and consolidated financial statements was given
at the Board Meeting held on January 30, 2012.
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Reference Form - 2012 - WEG S.A.
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3.4 - Income allocation policy
At the Board of Directors meeting held on June 21, 2011, the Income Allocation
Policy of WEG S.A. was approved, as follows:
INCOME ALLOCATION POLICY OF WEG S.A.
Previously to each General Meeting, the Board of Directors must make a
recommendation for allocation of net income recorded in the prior year, to be approved
by the Company's shareholders.
The following factors are taken into account to define the allocation of funds:
(i) The current behavior and future perspectives of the Company’s current and potential
markets, in order to identify any investment opportunities;
(ii) The need for funds to maintain and expand the Company’s production capacity and
the structures that support the exploration of the investment opportunities available to
the Company;
(iii) Both own and third-party funds available to make the necessary investments, which
are either already available or that may become available in the future with reasonable
certainty;
(iv) The need for financial flexibility and soundness for maintenance of the Company’s
business and access to credit;
(v) Surplus funds are paid out to shareholders as interest on equity, in the form of
dividends.
Legislation sets out a number of conditions for allocation of income determined in the
year. WEG’s bylaws consider these limitations when calculating shareholders’ return
with payment of dividends, distributed also as interest on equity, as permitted by Law
No. 9249/95. According to the bylaws, WEG dividends are defined as follows:
Article 37 - The fiscal year ends on the last day of December of each year, when the
general inventory is taken and the annual balance sheet is prepared.
Sole paragraph – Following the General Meeting, the Board of Directors may decide on
the payment of interim dividends and/or interest on equity, in the terms of Law No.
9249/95, as well as payment of intercalary dividends, provided the balance sheet is
prepared pursuant to current legislation.
Article 38 – After the deductions established in article 189 of the Brazilian Corporation
Law and after the deduction, limited to 10% (ten percent) of net income, of
management profit sharing (article 190 of Corporation Law), net income for the year will
be allocated as follows:
a) 5% (five per cent) to the legal reserve, not exceeding 20% (twenty per cent) of total
capital;
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Reference Form - 2012 - WEG S.A.
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3.4 - Income allocation policy
b) an amount, when necessary and properly justified by management, to the provision
for contingencies and to the unrealized earnings reserve, as legally determined;
c) a minimum 25% (twenty five percent) of net income adjusted pursuant to article 202
of the Corporation Law will be distributed as dividends and/or interest on equity, in the
form of Law No. 9249/95, allocated to dividends;
d) Retained earnings, when properly justified by management, to finance the capital
budget approved by the General Meeting and reviewed annually; e) any balance
remaining after the above deductions shall be distributed to the shareholders in the
form of dividends.
Sole paragraph – Based on Law No. 9249/95, the Board of Directors shall decide on:
a) the interest on equity amount to be paid or credited to shareholders, in kind, fully or
partially; and
b) attribution and deduction, from the mandatory dividend, of the interest paid or
credited to shareholders for purposes of interest on equity.
WEG has followed the procedure below in connection with shareholder return:
(i) Dividends are declared on a half-yearly basis, based on income determined at June
30 and December 31 of each year;
(ii) Also, interest on equity is declared on a quarterly basis, to be attributed to the
dividends paid for all legal purposes, pursuant to applicable legislation;
(iii) The earnings declared are paid twice a year.
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Reference Form - 2012 - WEG S.A.
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3.5 - Payment of dividends and net income retained
(Reais)
Fiscal year (12/31/2011)
Fiscal year (12/31/2010)
Fiscal year (12/31/2009)
Adjusted net income
Paid dividends in relation to adjusted
net income
Rate of return in relation to the
issuer’s equity
Total dividends paid
586,936,000,00
519,782,000.00
550,543,000.00
57.760000
58.950000
54.500000
15.450000
15.050000
16.680000
339,030,724.57
306,434,894.00
300,039,361.36
Net income retained
273,389,000.00
239,967,000.00
223,412,000.00
04/24/2012
04/26/2011
04/27/2010
Date of approval or retention
Net income retained
Mandatory dividends
Common
Common
Common
Common
Interest on equity
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
Amount
Payment of
dividends
86,856,704.06
60,179,288.00
03/14/2012
08/17/2011
47,442,737.51
51,092,178.86
42,367,637.27
51,092,178.87
08/17/2011
03/14/2012
08/17/2011
03/14/2012
Amount
Payment of
dividends
Amount
Payment of
dividends
66,436,838.11
08/11/2010
127,285,531.00
03/10/2010
101,207,520.00
03/16/2011
71,027,075.00
08/12/2009
29,064,787.25
08/12/2009
10,899,295.21
32,697,885.65
29,064,787.25
03/10/2010
08/12/2009
03/10/2010
31,410,489.70
08/11/2010
36,523,825.23
36,523,825.23
34,332,395.73
08/11/2010
03/16/2011
03/16/2011
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3.6 - Declaration of dividends to the retained earnings account or reserves
Inform if in the last three fiscal years dividends were declared to the retained
earnings account or if reserves were recognized in prior fiscal years.
In the last three fiscal years, the Company did not declare dividends to the retained
earnings account nor were reserves recognized in prior fiscal years.
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3.7 – Level of indebtedness
Indebtedness level
Fiscal year
Total amount of all types
of debt
Type of ratio
12/31/2011
5,199,272,000.00
Indebtedness level
Description and reason for using
another index
1.33000000
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3.8 - Obligations according to nature and maturity
Fiscal year (12/31/2011)
Type of debt
Up to 1 year
Collateralized debt
5,939,000.00
Unsecured debt
2,747,021,000.00
Total
2,752,960,000.00
1 to 3 years
11,903,000.00
2,168,868,000.00
2,180,771,000.00
3 to 5 years
2,011,000.00
202,429,000.00
204,440,000.00
Over 5 years
0.00
61,101,000.00
61,101,000.00
Total
19,853,000.00
5,179,419,000.00
5,199,272,000.00
Observations
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3.9 - Other relevant information
Proceeds in cash from distribution of income for the year ended 12/31/2012.
Type of
Fiscal year
Type of share
Payment
Approval
Amount
event
12/31/2012
Common
of dividends
Interest on
Board of Directors’
stockholders equity
Meeting 03/20/2012
47,442,738.61
08/15/2012
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Reference Form - 2012 - WEG S.A.
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4.1 - Description of risk factors
a) The issuer
Being a holding company may limit our dividend paying ability.
Being purely a holding company, our assets are represented only by the shares issued
by our subsidiaries, as well as by funds invested in short-term investments. We do not
perform operating activities, and all of our revenues virtually derive from our
subsidiaries. Consequently, our dividend paying ability depends primarily on receiving
dividends and other cash flows from our subsidiaries. Our corporate structure and our
subsidiaries’ consistent history record of income generation contribute to mitigating this
risk.
We may not be able to implement our growth strategy, including organic growth
or through acquisitions.
Throughout our history, WEG has consistently increased revenues and other operating
results. This growth is based both on the geographic expansion of our operations and
on the continuous introduction of new products to our existing lines.
We intend to continue expanding our activities not only in the segments and industries
where we operate but also by tapping into market growth opportunities not yet
exploited. However, we may not be able to achieve future growth rates similar to those
obtained in the past. The operating results in recent years or periods are not a
guarantee or an indication of our future performance. Moreover, deploying our
business strategies and achieving of our goals depend on circumstances that may or
may not exist regardless, in part, of our efforts. If we are unable to grow at a
satisfactory pace, our financial results could be adversely impacted.
The growth of our business has required in the past and will continue to require in the
future substantial investments in internal control systems and in the expansion and
adjustment of our administrative, technical, operational and financial resources. This
continuous business growth and expansion into new markets will require new
investments, as well as adjustments to our resources, and, thus, depend substantially
on our ability to implement and manage the expansion of these resources. If we are
unable to manage the expansion of these resources or fail to succeed in developing
new projects and ventures and in our management, our operating results may be
adversely impacted.
Our exposure to the Brazilian market of electrical and electronic equipment may
limit our future growth.
We believe we are leaders in the Brazilian industry of electric motors, with our market
share exceeding 80% in some segments. This leading position hinders the growth of
our sales by increasing our market share and makes the increase of our sales in the
Brazilian market depend on:
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4.1 - Description of risk factors
•
the growth of national economy, which increases the market demand for our
products and services;
•
entering new segments of similar businesses;
•
developing new products, which largely depends on the success of our research
and development program.
One or several of these factors may evolve to adversely impact our future growth and,
consequently, adversely affect our ability to generate revenues and operating results.
Our expansion strategy in the international market depends on the infrastructure and
environment for the development of foreign trade.
To continue growing, we must win markets with product lines for segments where our
share is low, which requires:
•
Exchange rates to be at levels that favor exports;
•
Governments to invest in infrastructure, enabling Brazilian exports to grow and
flow;
Ability to face competition in international markets and to win new clients in these
markets; and
The absence of non-tariff barriers and import restrictions in countries to which we
export or will export our products.
•
•
One or several of these factors may evolve to adversely impact our future growth and,
consequently, adversely affect our ability to generate revenues and operating results.
Our future results may be impacted by changes in the world’s economic scenario.
For the years ended December 31, 2009, 2010 and 2011, 40%, 39% and 44%,
respectively, of our gross operating revenues derived from international sales.
Because of this, and considering our internationalization strategy, our revenues depend
not only on the performance of the Brazilian economy but also on the economic
performance of other countries where we operate and which represent important
markets for our products. Thus, for instance, any economic downturn in North America
or Europe, markets that respectively accounted for 34% and 24% of our gross external
operating revenues for the year ended December 31, 2011, may cause the demand for
our products to drop in these markets and adversely affect us.
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Current operations and expansion of our international subsidiaries involve special
challenges that we may not overcome. Our failure to meet these challenges could
adversely affect us.
We have international subsidiaries and intend to continue expanding our international
operations. We face certain risks related to business in international markets, as
follows:
• Extensive regulations and oversight, tariffs and other trade barriers;
• Reduced intellectual property protection;
• Difficulties in implementing controls and procedures for preparation of financial
reports and statements;
• Hiring employees and managers from our foreign operations;
• Potential adverse tax consequences; and
• Limitations on foreign remittances of funds, including remittance of dividends.
Additionally, we must adapt to and comply with laws and regulations of foreign
governments and regulatory authorities in each country where we operate. We cannot
ensure that we will succeed in marketing our products in international markets. We may
also face difficulties in managing our international operations due to, among other
things, adverse competitive conditions, foreign risk management, emergence of new
competitors in a domestic market, cultural and language differences, and political and
economic instability. Any of these factors may adversely affect us.
We are subject to risks arising from our concentrated activities in Jaraguá do Sul
(Santa Catarina state, or SC).
Our operating activities are concentrated in the city of Jaraguá do Sul (SC), which
hosts our principal manufacturing unit and research and product development labs.
Should any natural disaster, operational errors, strikes, damage to property and
equipment or environmental damages occur in Jaraguá do Sul, our production lines
could be interrupted. We have other manufacturing units both in Brazil and abroad that
could, if necessary, partially and temporarily meet production requirements to meet the
demand for products. The interruption of production in Jaraguá do Sul may adversely
affect us, even if it is offset by other units.
Losses or other liabilities not covered by our insurance policies may result in additional
costs in our operations.
We have insurance policies of different types, whether or not required by law, such as
insurance covering third party liability and property damage.
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The occurrence of losses or other liabilities that may not be covered by such policies or
that exceed the sums insured therein may result in unexpected additional costs, and
this could adversely affect us.
We are subject to risks related to the use of our products.
Our business exposes us to potential liability risks related to damage to third parties
(civil liability for personal injury and property damage) and indirect damages (loss of
profits) arising from any failures in our products. For illustration purposes, our highvoltage electric motors are used on offshore oil rigs and in the production lines of large
steel companies. Our low-voltage electric motors, in turn, are used by major
manufacturers of consumer durables as components for the manufacture of household
appliances in general. A failure in the operation of any of these motors may result in
losses to our clients or to those acquiring the appliances, and trigger the corresponding
obligation to pay for the damages caused, if it is determined that we are responsible for
the original malfunction.
In addition to incurring expenses normally arising from damages, settlement
agreements or defense costs, we may also be exposed to damages to our image as a
result of civil liability claims.
We have a Product Liability insurance policy that covers direct damages (personal
injury and property damage) caused to third parties. We cannot guarantee that this
insurance coverage will be sufficient to protect us from losses arising from civil liability,
replacement of products and other complaints.
Additionally, we established a provision for product warranty arising from
manufacturing defects for a definite period of time (warranty period), based on
historical occurrences, but it may not be sufficient to cover all expenses incurred with
these events.
We cannot ensure that civil liability claims or losses caused by faulty products or that a
number of complaints brought against us will not have an adverse indirect impact on
us, such as for example, loss of market share.
Our business segment is subject to risks related to logistics and transportation
structure in Brazil.
The Brazilian transportation infrastructure has been facing several problems, including,
but not limited to, saturation, lack of investments in the expansion and uphaul of port
and airport infrastructure, high cost of specialized workforce, high tax burden on such
operations, and the poor state of repair of roads and vehicle fleets. In addition, the
constant strikes and lockouts of civil servants and private entities linked to the
transportation segment represent obstacles to be overcome by national producers and
exporters.
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4.1 - Description of risk factors
Most of our clients are located far from our production and distribution centers. In order
to get our products delivered to our national and international clients, we use Brazilian
highways and ports. We export our products through such ports as São Francisco do
Sul and Itajaí (both in Santa Catarina state, or SC), which are located respectively 60
km and 90 km away from our main manufacturing unit in Jaraguá do Sul (SC).
These and other factors related to the Brazilian transport infrastructure may impact our
ability to distribute our production, and adversely affect our operating results and
financial position.
b) The direct or indirect controlling persons or group
We are indirectly controlled by a group of persons linked to the Company’s founders,
whose interests may prevail over the interests of other shareholders.
At December 31, 2011, 51% of our capital was owned by WEG Participações e
Serviços S.A., which, in turn, is controlled by the founders of the WEG Group and their
families. Thus, these people have sufficient powers to approve or reject matters that,
whether required by law or our bylaws, must be submitted for the shareholders’
consideration, including:
• election and removal of most members of the board;
• dividend distribution;
• establishment of business guidelines and strategies; and
• approval of mergers, spin-offs and takeovers and disposal of part or the totality of our
assets.
In June 2007, the Company joined the “Novo Mercado” (New Market), a special market
segment of BM&F Bovespa (São Paulo Stock Exchange) that sets standards and
procedures for corporate governance and protection of minority shareholders. As part
of the Novo Mercado, the controlling shareholders have limited capacity to approve
certain matters. Nonetheless, we cannot ensure that the interests of the controlling
shareholders will converge with those of the minority shareholders.
c) The shareholders
Our shares have low liquidity in the secondary market, which may hinder their sale and
reduce their price.
Currently, the market for trading the shares issued by WEG has limited liquidity. We
cannot ensure that this market will develop to be sufficiently active and liquid in the
future. Thus, investors may face difficulties in trading these shares or be forced to trade
them for different prices than those that could be obtained in more liquid markets.
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The somewhat volatile and illiquid Brazilian securities market may substantially
limit investors’ ability to trade shares for the price and at the time they want.
Investing in securities traded in emerging markets such as Brazil often involves higher
risks as compared to other global markets, and these investments are generally
considered more speculative in nature. The Brazilian securities market is substantially
smaller, less liquid, more concentrated and can be more volatile than major securities
markets worldwide. There is also a significantly greater concentration in the Brazilian
securities market as compared to the major securities markets in the United States, for
example. These factors may limit the ability of investors to trade shares for the price
and at the time they want.
d) Subsidiaries and affiliates
The risks relating to our subsidiaries are the same as those relating to the Company.
e) The suppliers
The change in the price of commodities used by the machinery and equipment
industry in international markets may affect the sales of the industry as a whole
as well as our sales in particular.
The main raw materials used by the machinery and equipment industry are
international commodities such as copper and steel plate, with the price of many of
these commodities being pegged to the U.S. dollar and thus subject to price
fluctuations in international markets, even indirectly. These commodities may represent
as much as 40% of the final cost of some of our products. If the price of these
commodities substantially increases in the future, we may not be able to pass such
cost increases on to our clients at competitive prices. Also, a passed-on price increase
may reduce our sales volume and therefore our profit margin, which may adversely
affect us.
f) The clients
Given the diversity of clients, we do not envision risks relating to the Company's clients.
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g) The economic segments in which the issuer operates
Increased competition in the sector in which we operate may adversely affect us.
We operate in highly competitive markets. Our main competitors are international
groups with global presence, technological capacity, recognized brands in Brazil and
abroad, and access to financial markets and capital markets at competitive costs. In
addition, we may face fiercer competition with new entities being incorporated or
existing companies being consolidated and with our competitors gaining increased
market share, which may adversely affect us.
The market for our products is characterized by evolving technologies and developing
industries. The ability to successfully overcome the sector’s consolidation, to enhance
and develop our existing products, to continuously develop innovative products, to
continuously shorten our delivery time, to cut our costs and tailor our products to
clients’ needs, and to outgrow our competitors, either by acquiring new businesses or
through our organic growth, impact the demand for our products. Moreover,
competitors may develop technologies or products that turn our products obsolete or
less marketable, or even operate more efficiently than us. Increased competition,
including by foreign companies and/or companies with more investment capital than
us, increased output capacity of our competitors, and increased competition may
adversely affect us.
The performance of the consumer durable goods sector is highly influenced by
fluctuations in economic activity levels.
The performance of the durable goods sector, such as household appliances and small
equipment in general, is strongly influenced by the economic performance. For the year
ended December 31, 2011, sales to the durable goods sector, especially white goods,
accounted for 10% of our gross operating revenues. Fluctuations in the Brazilian
economy may adversely impact the performance of the durable goods sector in general
and, consequently, our operating results and financial position.
The performance of the capital goods sector is strongly influenced by the level
of investments.
The performance of the capital goods sector in general, and of machinery and heavy
equipment in particular, is significantly influenced by the level of investments made by
both the private sector and the public sector. For involving high value-added goods, the
capital goods sector also depends on having access to long-term credit granted by
national and international private and public financial institutions, and by multilateral
agencies. The capital goods industry is usually one of the first to be affected by
economic crises and one of the last to react after an economic upturn.
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The fall in investments made in the country and the lack of long-term credit could
adversely impact local economy and affect our operating results and financial position.
Industrial automation activities depend on high technology to develop and
perform high complexity projects.
The industrial automation segment is subject to rapid and continuous technological
breakthroughs. Our performance in this segment depends on our ability to continue
enhancing our products and offering our clients innovative solutions that respond to
rapid changes in technological standards and market expectations in general. If we are
unable to anticipate and develop breakthroughs, or to suit our products to new
technological standards, we may be adversely affected.
We may not be able to develop or acquire new technologies on a timely and sufficient
basis to remain competitive in this market in the future, which could adversely affect
us. Furthermore, the development of new products and technologies involves the risk
of delay in introducing new products to the market, thus generating significant costs.
h) The regulation applicable to the sectors in which the issuer operates
We are subject to strict environmental requirements and limitations.
We are subject to stringent environmental protection laws and regulations in the
various countries in which we operate. In addition, the waste generated by our factories
is subject to strict pollutant waste disposal rules and procedures. Failure to comply with
environmental laws and regulations of various countries in which we operate may lead
to the imposition of remedial requirements and trigger a variety of administrative, civil
and criminal enforcement measures, also on a retrospective basis. The violation of any
environmental law or regulation or of any contractual obligation may adversely affect
us.
Moreover, changes in environmental laws or regulations may increase the related costs
of compliance, reducing the amount of resources available for the payment of
expenses, investments and development of other activities. Any such reduction in
resources may also adversely affect us.
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i) The foreign countries where the issuer operates
The economic and political conditions in the countries where we operate may adversely
affect us.
We operate and we intend to expand our operations outside Brazil. As a result, we are
subject to risks concerning the countries where we operate or we may come to
operate, especially emerging countries like India, China and Latin American countries.
These risks include, among others, the economic, political, social, judicial and legal
condition in these countries, which may be highly unstable. For the year ended
December 31, 2011, 44% of our consolidated gross revenues derived from our
businesses outside Brazil, including the operations of foreign manufacturing
subsidiaries. We expect the rate of our external revenues to increase substantially in
the future, which may increase the risk of negative impacts on our operations and
results.
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The Company continuously reviews the risks to which it is exposed and which may
adversely affect its business, financial position and results of operations. We
continuously monitor changes in the political and business scenarios that may
influence our activities, by monitoring key performance indicators.
The Company developed a Corporate Risk Management Policy that consolidates all
the different practices, procedures and policies specific to the various areas. This effort
seeks to provide the Company with a broader and more general view of the risk
exposure, having been approved by the Board of Directors at the Meeting held on April
24, 2012. The policy is shown below:
CORPORATE RISK MANAGEMENT POLICY OF THE WEG
GROUP/AFFILIATES/SUBSIDIARIES
1 OBJECTIVE
Formally establish corporate risk management at WEG in conformity with:
•
•
•
The best international practices;
The standards defined by regulatory agencies in Brazil and abroad;
The specific features of the activities conducted by WEG.
This Corporate Risk Management Policy establishes guidelines, responsibilities and
limits that will guide the actions taken by the departments and sections, commissions
and committees when performing the risk controls, with observance of the limits
defined by the Board of Directors.
Application of this policy results in the SGRCW (WEG Corporate Risk
Management System).
2 CORPORATE RISK MANAGEMENT COMPONENTS
2.1 NATURE OF RISKS The model considers:
•
•
Pure risks – involve the possibility of loss only
Speculative risks – involve the possibility of gain or loss
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2.2 RISK MANAGEMENT
This implies identifying, analyzing, assessing, communicating and addressing the
RISK, in addition to monitoring effectiveness of the controls applied.
•
•
•
•
•
•
Identify – What risk categories or classes are present in the environment?
Analyze – What are the consequences and likelihood of occurrence of the events?
Assess – In what way/how many objectives could be impacted?
Communicate – How, who and when should I communicate about the
assessment?
Treat – What treatment is required?
Monitor – How effective is the treatment adopted?
2.3 SEVERITY OF RISK
The risk severity is classified into levels, as follows:
SEVERITY OF RISK
Negligible
Moderate
Critical
Catastrophic
No impact
Low impact and with mitigating measures available in the short term
Average impact and with mitigating measures available in the medium and long term
High impact and with scarce or unavailable mitigating measures
2.4 FREQUENCY OF RISKS
This is obtained through historical data of past events.
Factor
1
2
3
4
Frequency
Unlikely
Remote
Occasional
Likely
Description
Low likelihood of occurrence (0% to 5% chance).
There are controls in place that correct the major vulnerabilities identified and
make the occurrence of an incident unlikely or there is no history of
occurrence of related incidents.
The likelihood of occurrence is possible(6% to 15% chance).
There are controls in place that correct some vulnerabilities identified and reduce
the chance of occurrence of an incident or an incident has occurred within the
past year.
The likelihood of occurrence is probable (16% to 30% chance).
The controls in place do not correct all vulnerabilities identified, making the
occurrence of an incident probable, or an incident has occurred within the last
six-month period.
The likelihood of occurrence is highly probable (above 31% chance).
There are no controls in place, making the occurrence of an incident almost
certain, or there have been various occurrences within the last six-month period.
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2.5 RISK MATRIX (FREQUENCY X SEVERITY) Classification of risk with
weighting of frequency and severity.
RISK MATRIX
Frequency
Severity
•
•
Negligible
Moderate
Critical
Catastrophic
Likely
Low
Medium
Very high
Very high
Occasional
Very low
Low
High
Very high
Remote
Very low
Very low
Low
High
Unlikely
Very low
Very low
Low
Medium
High and very high: The manager in charge of the process must submit a
proposal/action plan to one of the Commissions listed in item 2.8, within 15 days of
identification of the risks, for approval/escalation.
Medium: The manager in charge of the process must submit a proposal/action plan
to one of the Commissions listed in item 2.8.2, within 45 days of identification of the
risks, for approval/escalation.
• Low and very low: An action is not required.
The manager in charge of the process must submit a proposal to the Commission
containing the following:
•
•
•
Result of the analysis of risks identified and the level of severity and frequency;
Treatment selected for each type of risk;
Proposed actions with persons in charge and deadlines.
2.6 TREATMENT OF RISKS
There are four possible alternatives to treat the risk identified:
Treatment
Definition
Eliminate activities, processes, etc., with a view to avoiding the risk entirely.
Avoid
Reduce
Implement controls to reduce the frequency or impact of the risk.
Share
Share the risk with a partner willing to assume it (insurance company, supplier, client
etc.).
Accept
Monitor and the maintain the current level of frequency and impact.
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2.7 RISK CATEGORIES
The risk categories are segregated into four groups, which were identified pursuant to
WEG operations. The categories are as shown below:
2.7.1 Strategic
Implies the capacity to anticipate, protect and/or adapt to changes that could impact
WEG's strategic direction.
2.7.2 Finance
Implies the capacity to raise and/or maintain financial resources for WEG's strategic
direction.
2.7.3 People
Implies the capacity to attract, develop, retain and have human resources available for
WEG's strategic direction.
2.7.4 Processes
Implies the capacity to use available resources efficiently and effectively for WEG's
strategic direction.
2.8 RISK CLASSES
Risk classes are factors to which WEG is exposed and where such risks will be
observed considering that the cause is tied to such classes.
These factors may originate externally or internally, as below:
CATEGORIES
CLASSES
Political
Macroeconomic
New Business Strategies
People Safety
External Liquidity
Credit
Logistics and Supplies
Information Security
Environmental
New Business Strategies
Discontinued Production
Ethical Conduct
Internal Human Resources
People Safety
Legal
Controllership
Credit
Strategic
●
●
Finance
People
Processes
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
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CATEGORIES
CLASSES
Strategic
Liquidity
Supply
Logistics and Supplies
Sales and Marketing
Technology
Information Security
Environmental
Social
Finance
People
●
●
Processes
●
●
●
●
●
●
●
●
2.8.1 Political
EXTERNAL: Arising from exposure to risks of war, internal conflicts (strikes, riots, civil
commotions), legal instability, legislative/regulatory instability.
Category: Strategic
Forum: General Management
2.8.2 Macroeconomic
EXTERNAL: Arising from exposure to risks from the macroeconomic environment and
their effects on variables, such as exchange rates, interest rates, prices of
commodities, among others.
Category: Strategic
Forum: Financial Risk Management Committee
2.8.3 Environmental
EXTERNAL: Effects from possible natural disasters on the resources used by WEG to
achieve its strategic direction.
Category: Strategic
Forum: General Management
INTERNAL: Effects caused by WEG on the environment and on the surrounding
communities and society as a whole.
Category: Processes
Forum: Commission for Quality Management Process and Social-Environmental
Sustainability
2.8.4 Social
INTERNAL: Arising from impacts resulting from the organization’s actions on the
surrounding community’s life conditions, such as housing, school education, health,
employment, income, among others.
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Category: Strategic
Forum: Commission for Quality Management Process and Social-Environmental
Sustainability
2.8.5 Ethical Conduct
INTERNAL: Arising from non-compliance with the ethics code or flaws in the provisions
thereof.
Category: People and Processes
Forum: Ethics Code Management Commission
2.8.6 New Business Strategy
EXTERNAL: Information on investment opportunities (greenfield or brownfield projects,
partnerships, acquisitions and divestitures).
Category: Strategic
Forum: General Management
INTERNAL: Arising from incomplete/incorrect assessment (due diligence) of
transactions with other companies that could lead to unexpected liabilities or
contingencies (labor, environmental, patents, debts with suppliers and governments
etc.).
Category: Processes
Forum: Controllership Commission
2.8.7 Controllership
INTERNAL: Arising from incorrect or incomplete control procedures that could generate
unexpected liabilities or financial statements that do not adequately reflect the
Company’s position.
Category: Processes
Forum: Controllership Commission
2.8.8 Credit
EXTERNAL: Arising from the clients’ inability to settle their obligations in a timely
manner.
Category: Finance
Forum: Credit Commission
INTERNAL: Arising as a result of procedures from incorrect or incomplete analyses of
credits granted to prospects or clients that could generate unexpected contingent
liabilities.
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Category: Processes
Forum: Credit Commission
2.8.9 Liquidity
EXTERNAL: Arising from the lack of loan facilities in the financial market to cover
obligations in a timely manner.
Category: Finance
Forum: Financial Risk Management Committee
INTERNAL: Financial market having insufficient/incomplete information to grant loans
or adoption of incorrect procedures or incomplete analyses regarding cash flow.
Category: Processes
Forum: Financial Risk Management Committee
2.8.10 Legal
INTERNAL: Arising from:
Non-observance of applicable legal provisions;
Incorrect or diverse interpretation from the legal authorities; non-application of
applicable legal provisions;
Disregard of the interrelationships between the various legal provisions (optimum
local/optimum general).
Category: Processes
Forum: Controllership Commission
2.8.11 Discontinued Production
INTERNAL: Arising from the failure or absence of resources, production equipment and
tools, impacting the production capacity.
Category: Processes
Forum: Maintenance Commission
2.8.12 Supply
INTERNAL: Arising from incorrect or incomplete technical and legal analyses or from
acceptance of contract provisions to supply products and services that expose the
Company to civil liability claims, or from internal control failures in accepting
agreements (e.g., having no conditions or being un able to meet the delivery term,
subject to fine).
Category: Processes, Finance and People
Forum: Supply Risk Committee
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2.8.13 Logistics and Supplies
EXTERNAL: Absence or failure of resources in the supply chain.
INTERNAL: Arising
contingencies).
from
incorrect
procedures
or
planning
(e.g.,
suppliers’
Category: Processes
Forum: Integrated Chain Management Commission
2.8.14 Sales and Marketing
INTERNAL: Arising from incorrect decisions referring to position of products, prices,
advertising and promotion.
Category: Processes
Forum: Marketing Commission
2.8.15 Human Resources
INTERNAL: Incapacity to attract, develop, have available and retain human resources
for the Company’s performance.
Category: People
Forum: People Management Process Commission
2.8.16 People Safety
EXTERNAL: Arising from exposure of employees, in performing their duties, to hostile
environments, putting their physical integrity at risk.
Category: People
Forum: Corporate Administrative Commission
INTERNAL: Arising from an inadequate work environment where accidents or
occupational diseases may occur.
Category: People
Forum: Health and Security Committee
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2.8.17 Information Security
EXTERNAL and INTERNAL: Arising from:
Lack of integrity or suppression of information; Information confidentiality failure;
Unavailability of IT services (systems and infrastructure);
INTERNAL:
Inadequate use of information technology resources. Category: Processes
Forum: Information Technology Commission
2.8.18 Technological
INTERNAL: Arising from incapacity to develop, absorb and retain knowledge to monitor
the technological progress in products, services and production processes.
Category: Processes
Forum: Product Development Commissions
2.9 GOVERNANCE
The SGRCW will adopt the governance already established, comprised of
commissions, committees and Executive Board meetings.
General Guidelines: Controllership Commission
Specific Topics: Committees and Commissions
Operational Management: Insurance & Risk Department
General Management
Committees and
Commissions
Insurance and Risk
Department
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2.9.1 Controllership Commission
Manages, monitors and proposes changes to the SGRCW, according to the WEG’s
environment, needs and strategic direction.
2.9.2 Committees and Commissions
In addition to creating specific risk management processes for each business aspect,
the Committees and Commissions must apply them when analyzing the proposals
received and identify opportunities for improvement of the SGRCW.
2.9.3 Insurance & Risk Department:
Coordinates the improvement of the risk management process within the organization.
The area is responsible for:
•
•
•
Performing a critical analysis of the risk management process;
Recommending measures for improvement through assessment of criteria,
functions, responsibilities and resources for its execution;
Consolidating information and reporting WEG's risk level.
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4.3 - Legal, administrative or arbitration proceedings not subject to confidentiality and relevant
SUMMARY REPORT ON LEGAL AND ADMINISTRATIVE PROCEEDINGS
c) Filing date
Suit
a) Court
d) Parties to the suit
b) Level
Defendant
1
Compensation for
and
suffering
property damage
2
Tax notice
3
pain 2nd Civil Court – São
and Sebastião do Caí
(RS) Judicial District
Plaintiff
Lower court
10/30/2007
WEG Indústrias S/A Química
Cláudio Vogel Filho & Cia. Ltda.
Higher court
12/20/2007
National Social Security Institute (INSS)
Compensation for pain 36th Civil Court and suffering, aesthetic Rio de Janeiro (RJ)
damage and property
damage
Judicial District
Higher court
09/18/2006
WEG Exportadora S.A.
merged by WEG
Equipamentos Elétrico
S.A. and WEG Indústrias
S.A.
WEG Indústrias S/A Química
4
Common Compensatory 5th Civil Court Damages/Punitive Action Divinópolis (MG)
combined with request for Judicial District
interim relief
Lower court
10/30/2007
WEG Equipamentos
Elétricos S/A, Biochamm
Cald. e Equip.Ind. Ltda. and
TGM Turbinas Ind.e Com.
Ltda.
Divigusa Indústria e Comércio
Ltda.
5
Labor claim
37th Labor Court of
Belo Horizonte (MG)
Higher court
02/14/2008
WEG Industrias S.A Química
Francisco Ambrósio da Silva
6
Property damage and
Compensatory damages
Tax delinquency notice
(IRPJ e CSLL)
Tax delinquency notice
(IRPJ, CSLL,
2nd Court of Novo
Horizonte (SP)
Administrative
Lower court
04/03/2012
Usina Santa Isabel
Lower court
12/06/2011
Administrative
Lower court
09/15/2011
WEG Equipamentos
Elétricos S/A
WEG Equipamentos
Elétricos S/A
Equisul Ltda
7
8
Administrative
Valdir Rosa de Oliveira, Marco
Aurélio Almeida de Oliveira,
Antonio Gomes de Oliveira,
Vaudelino Sampaio e José
Roberto da Costa
Brazilian IRS
Brazilian IRS
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SUMMARY REPORT ON LEGAL AND ADMINISTRATIVE PROCEEDINGS (Continued)
c) Filing date
Suit
9
PIS/COFINS)
Taxable profit computed as
a percentage of gross sales
a) Court
d) Parties to the suit
b) Level
Defendant
Plaintiff
Administrative
Lower court
12/08/2011
RF Reflorestadora S.A.
Brazilian IRS
Administrative
Lower court
12/30/2011
Brazilian IRS (INSS)
Administrative
Lower court
01/04/2012
WEG Equipamentos
Elétricos S/A, WSA and RF
WEG S/A
–
10
11
2006 – RF
Tax delinquency notice
(INSS)
Tax delinquency notice
–
Offset
of
Withholding
Income
Tax (IRRF) on interest
on equity
Brazilian IRS
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4.3 - Legal, administrative or arbitration proceedings not subject to confidentiality and relevant
SUMMARY REPORT ON LEGAL AND ADMINISTRATIVE PROCEEDINGS (Continued)
Suit e) Amounts, assets or rights involved
1
Pending an arbitration award
2
Approximately R$ 12 million
3
Pending an arbitration award
4
Approximately R$ 5 million
5
Approximately R$ 6 million
6
R$ 17 million
7
R$ 45.5 million
8
R$ 2.5 million
f) Key facts
g) Likelihood of loss:
Civil suit where the Plaintiff claims loss of profits from polyester coating
manufactured by WEG to be applied on roofs - claim for compensation for pain
and suffering, property damage, and loss of profits, plus court costs and
attorneys’ fees. No value was assigned to the claim.
The tax inspectors demand the payment of social security contributions on
compensation/salary amounts on which the company believes no such taxes
are levied.
Civil suit where the Plaintiffs claim for compensation for pain and suffering,
property damage and aesthetic damage resulting from their work as ship
painters
using WEG products. Their employer (Brasfels S/A shipyard) was impleaded
into the suit by WEG.
Civil suit where the Plaintiff claims property damage and loss of profits as a
result of alleged loss of earnings from an energy generator set comprising
turbines, boiler and generator acquired from the defendants.
Probable
Probable
Probable
Remote
Labor suit where a former agent claims an employment relationship and the
right to commission difference payments - there are procedural incidents and
civil proceedings related thereto.
The plaintiff claims property damage and loss of profits as a result of alleged
problems regarding the supply of a generator.
The Brazilian IRS claims that the profits recorded by subsidiaries abroad,
located in countries with which Brazil does not have agreements to avoid
double taxation, must be subjected to taxation by the Company in Brazil.
Probable
The Brazilian IRS claims differences in book entries and related supporting
documents.
Probable
Possible
Possible
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4.3 - Legal, administrative or arbitration proceedings not subject to confidentiality and relevant
SUMMARY REPORT ON LEGAL AND ADMINISTRATIVE PROCEEDINGS (Continued)
Suit
e) Amounts, assets or rights involved
f) Key facts
g) Likelihood of loss:
9
R$ 63 million
10
R$ 22 million
The Brazilian IRS claims that the option for taxable profit computed as aRemote
percentage of gross sales in 2006 is not correct.
The Brazilian IRS claims payment of social security tax on management’s profit Possible
sharing, open-ended private pension plan and expatriates.
11
R$ 9 million
The Brazilian IRS acknowledges the Withholding Income Tax (IRRF) credit toRemote
which we are entitled, but claims that the offset did not take place in the correct
quarter.
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4.3 - Legal, administrative or arbitration proceedings not subject to confidentiality and relevant
SUMMARY REPORT ON LEGAL AND ADMINISTRATIVE PROCEEDINGS (Continued)
i) Accrued amount, if any
Suit
1
2
3
4
5
6
7
8
9
10
h) Analysis of impact of an unfavorable outcome
Low impact, given that the coating application technology has evolved considerably from the time of the allegedR$ 565,000.00
events, and this would not significantly impact WEG’s operation in this segment, as it has little relevance to the
business.
Low impact, given that a considerable portion of the amounts under dispute, with respect to future periods, have
R$ 10,900.261.00
been covered by a judicial order and / or court deposit.
Low impact, given that the problems clearly resulted from the lack of use of Individual Protection Equipment by the R$ 1,000,000.00
Plaintiffs, i.e. even if WEG is to be condemned, this would not require changes to our products or business strategy.
.
Low impact, given that the problems resulted from failures in the equipment linked to WEG’s generator, with no
No provision
contractual joint labiality among the defendants; thus in spite of a remote unsuccessful outcome of the case for
WEG, this would not represent a significant business impact.
Low impact - we believe that the most likely scenario is the recalculation of commissions, which would amount only R$ 3,518,000.00
to part of the quantum sought. No impact on the business.
Average impact, as it will depend on technical report indicating the cause of the problem and also to determine theThe set up of provision is under analysis.
amounts involved.
Relevant, as this could impact subsequent years.
No provision, as per opinion of the outside
legal counsel.
Low impact, as they concern one-time facts and not procedures.
R$ 733,000.00
Average impact, as this concerns a specific calendar year.
No provision, as per opinion of the outside
legal counsel.
Low impact, as most of the amounts are already accrued for.
The provision regarding open-ended private
pension plan and management’s profit
sharing has been set up. In connection with
expatriates, the provision is under analysis.
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4.3 - Legal, administrative or arbitration proceedings not subject to confidentiality and relevant
SUMMARY REPORT ON LEGAL AND ADMINISTRATIVE PROCEEDINGS (Continued)
i) Accrued amount, if any
Suit
h) Analysis of impact of an unfavorable outcome
11
Low impact.
No provision, as per opinion of the outside legal counsel.
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4.4 – Legal, administrative or arbitration proceedings not subject to
confidentiality to which the opposing parties are officers, former officers,
controllers, former controllers or investors
At December 31, 2011, the Company was party to one labor claim filed by a former
officer of Trafo Equipamentos Elétricos S.A., a company whose shares were acquired
by WEG S.A. After the acquisition of shares, the plaintiff performed management duties
at the Company, but not as an officer. The suit was filed on December 14, 2011 and is
pending judgment at the first level of the 4th Labor Court of Gravataí, Rio Grande do
Sul state (RS). The plaintiff claims acknowledgment of employment relationship and
other similar rights, in the amount of R$ 5,098,670.52. The suit is not considered
relevant for performance of the Company's activities or does it adversely and
significantly affect its results. At December 31, 2011, the related provision totaled R$
212 thousand.
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4.5 - Relevant confidential proceedings
There are no relevant confidential proceedings to be discussed.
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4.6 - Repetitive or related legal, administrative or arbitration proceedings not
subject to confidentiality and relevant in the aggregate
Work-related civil claims:
At December 31, 2009, the Company was a party to 284 civil claims, mostly referring
to compensation for work-related accidents, involving the amount of R$
153,355,880.17. In some cases, we are backed by an EMPLOYER’S LIABILITY
INSURANCE POLICY. None of the claims is considered relevant to the Company’s
activities or to negatively and significantly impact its results. At December 31, 2011, a
provision of R$ 41,474 thousand was established for claims with an likely unfavorable
outcome.
Labor claims:
At December 31, 2011, the Company was a party to 520 labor claims filed with the
Labor Court, mostly referring to overtime, health hazard premium and invalidation of
two compensation systems used concurrently, involving the amount of R$
72,322,428.44. In some cases, we are backed by an EMPLOYER’S LIABILITY
INSURANCE POLICY. None of the claims is considered relevant to the Company’s
activities or to negatively and significantly impact its results. At December 31, 2011, a
provision of R$ 38,834 thousand was established for claims with a likely unfavorable
outcome.
Administrative proceedings:
At December 31, 2011, there were 09 notices against the Company, and the fines were
paid upon the lodging of appeals; therefore, provision was not necessary. In general,
the notices refer to alleged non-compliance with Regulatory Ruling No. 31 (NR-31)
issued by the Ministry of Labor by a subsidiary. These notices, however, refer to
employees from outsourced companies and such conditions were observed in
locations outside the subsidiary’s property limits. As such, with dismissal of the
administrative proceeding, the subsidiary is discussing the issue in court.
At December 31, 2011, there were also 27 administrative notices against the
Company, and the fines were paid upon the lodging of appeals; therefore, provision
was not necessary. In general, the notices refer to non-compliance with labor
legislation, with which the Company does not agree and therefore filed defense
proceedings and appeals.
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4.7 - Other relevant contingencies
There are no other relevant contingencies other than those discussed in the items
under this Chapter 4.
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4.8 - Rules of the country of origin and of the country in which the securities are
held in custody
a - limitations on the exercise of political and economic rights: N/A.
b - limitations on the circulation and transfer of securities: N/A.
c - events for cancellation of registration: N/A.
d - other issues of interest to investors: N/A.
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5.1 - Description of the major market risks
In the normal course of its business, the Company is exposed to various financial risks
underlying its activities. These risks refer mainly to adverse changes in interest and
foreign currency rates and prices of commodities, such as copper and steel. The major
financial risks are as follows:
Credit risk
Credit risk is a financial risk relating to the possibility of not receiving from our clients
amounts or credits due from the sale of our products, or of not receiving the payment of
such amounts in a timely manner.
Liquidity risk
Liquidity risk represents potential mismatched maturities of assets and liabilities. Our
general policy is to maintain adequate liquidity levels to ensure our ability to meet our
present and future obligations and to capitalize on business opportunities as they arise.
Market risk
Market risk is related to the negative impact on the value of our assets and liabilities as
a result of such factors as fluctuations in interest rates or foreign exchange rates and
prices of metal commodities, such as copper and steel. Most of our activities are
subject to market risks.
Interest rate risk
Interest rate risk arises from the timing difference in the pricing of assets and liabilities.
An increase in interest rates could raise the cost of our borrowings, reduce the demand
for our products or have a negative impact on our financial expenses and operating
results. Similarly, any increase in interest rates could also impact the yield on our
investments, with positive effects on financial income.
At December 31, 2011, 62% of our loans and financing were denominated in Brazilian
reais and subject to fluctuations in such rates as the Long-term Interest Rate (TJLP).
Currency risk
Currency risk arises from owning assets, liabilities and items denominated in or
indexed to foreign currencies. For the year ended December 31, 2011, approximately
44% of our gross operating revenue was obtained in markets other than Brazil and in
other currencies than the Brazilian real, particularly US dollars and Euros.
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5.1 - Description of the major market risks
At December 31, 2011, our debt denominated in other currencies, particularly U.S.
dollar and Euro, comprising short- and long-term financing in foreign currency, was
equivalent to R$ 1,311.8 million, or 38% of the total debt.
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5.2 - Description of the market risk management policy
Financial Risk Management Policy
Our risk management practices and procedures seek to protect against the volatility of
interest rates, foreign exchange rates and prices of metal commodities and to mitigate
the negative impacts brought by this volatility on the Company’s cash flows. The
Company formed a Financial Risk Management Committee, as an Executive Board
body, which approved a Financial Risk Management Policy.
Hedging strategy
The financial risk management strategies adopted by the Company seek to protect
against negative impacts arising from fluctuations in the market’s major variables. The
Company does not perform operations involving financial instruments for speculative
purposes or for other asset hedging purposes.
As previously mentioned, the Company seeks protection against risks involving
changes in foreign exchange rates and interest rates. The main instruments and
parameters used are as follows:
Foreign exchange risk
Almost 39% of the Company’s’ net revenues are realized in the external market and
the major currencies are the US dollar and Euro. Thus, an appreciation of the R$
(Real) against these currencies would reduce our revenues in R$. On the other hand,
38% of our gross debt is denominated in foreign currencies, particularly US dollar and
Euro. The risk of exchange rate changes on loans and financing denominated in
foreign currency arises from a possible devaluation of the R$, with a negative impact
on the principal and interest of such financing arrangements.
Foreign exchange rate gains (revenues) or losses (debt) are mitigated by management
of the net foreign exchange exposure, which could use financial instruments without
cash (Non Deliverable Forward or NDF's), short-term investments in foreign currencies
and/or through financial debt tied to foreign currencies.
Interest rate risk
The Company’s cash and cash equivalents are currently invested in Bank Deposit
Certificates (CDB) or debentures tied to Interbank Deposit Certificates(CDI) interest
rates, issued by first-tier banks and with reduced credit risk. As such, a reduction in the
CDI rate would lead to a decrease in financial income obtained from these short-term
investments.
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5.2 - Description of the market risk management policy
Approximately 31% of the financing arrangements that comprise the bank debt are tied
to the TJLP. Consequently, an increase in the TJLP would cause an increase in both
our bank debt and our debt service.
The interest rate risk on short-term investments, loans and financing is constantly
monitored. We may use non-cash financial instruments to mitigate benchmark interest
rate risks on the Company’s short-term investments and financing.
Risk management parameters
These risks are managed by the Financial Risk Management Committee, by means of
the Financial Risk Management Policy, which defined the risk factors, level of exposure
and strategies.
The Financial Risk Management Committee holds weekly meetings to monitor market
risks with members of the various areas and departments, continuously monitoring
compliance with the general limits established by the Financial Risk Management
Policy.
Adequacy of the operating structure and internal controls to check effectiveness
of the adopted policy
The Company continuously monitors its activities and internal controls with a view to
identifying potential risks, and checks these controls by means of tests performed by
the related departments and the internal auditors.
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5.3 - Significant changes in the major market risks
The Company believes that there were no significant changes in the major market risks
to which it is exposed other than the ones discussed above, and that the currently
decentralized practices and procedures satisfactorily meet its requirements for
monitoring major exposures. These practices and procedures are in line with the
Company’s organizational culture of conducting business with caution.
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5.4 - Other relevant information
In the last fiscal year, there have been no significant changes in the major market risks
or in the risk monitoring policy adopted by the Company.
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6.1 / 6.2/6.4 – Issuer’s formation, term and date of registration with the Brazilian
SEC (CVM)
Date of formation of the Issuer
09/16/1961
Formation of the Issuer
The issuer was formed as a limited
liability company and turned into a closelyheld corporation on June 7, 1965. In 1971,
the Company shares were admitted for
trade on the stock exchange.
Country of formation
Brazil
Term
Indefinite
Date of registration with the CVM
02/09/1982
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6.3 - Brief history
WEG began its activities in 1961 in the city of Jaraguá do Sul, Santa Catarina State, as
an electric motor manufacturer. The Company’s original name was "Eletromotores
Jaraguá Ltda.", later changing to “WEG”, which stands for the initials of the names of
the three founders: Werner Ricardo Voigt, Eggon João da Silva and Geraldo
Werninghaus, as the brand of the products since the very first motor produced.
WEG embraced the business strategy of building a highly qualified technical assistance
network to offer better services to clients and promote the products. The first technical
assistants were accredited still in the 1960s.
In 1968, in line with the rapid growth in motor production and lack of qualified labor in
the region, the Company created CentroWEG, a vocational school that to this day
teaches the production processes to high school students, offering access to technical
education and the opportunity of working at the Company after conclusion of the
course.
The 1970s were marked by the local market expansion and the first steps towards the
external market. In addition to acquiring the land for construction of the second
manufacturing unit and the trading of WEG shares in the stock exchange, the
Company began exporting its motors to Latin American countries. In September 1975,
the Company reached the milestone of 1 million electric motors produced,
consolidating the WEG brand in the electric equipment market.
In the 1980s, the business expansion and diversification began, with incorporation of
WEG Máquinas, specialized in the production of large-sized rotating electrical
machines, WEG Acionamentos, for production of electrical and electronic components,
and WEG Transformadores, engaged in the production of distribution equipment. In
1983, the Company entered the industrial paint and electrical insulating varnish market
with the creation of WEG Química, currently WEG Tintas. Lastly, in 1986, WEG
Automação was established to develop, produce and sell industrial automation
products and electric packages.
The consolidation of the presence in the external market continued in the 1990s, when
the distribution subsidiary in the United States was opened and a company in Belgium
was acquired.
In 1996, WEG reached 100 million CVs produced, becoming the
largest electric equipment manufacturer in Latin America.
To improve competitiveness in the external market, in 2000 the Company began
implementing manufacturing units abroad, having acquired in this same year two units
in Argentina and one in Mexico, in Portugal in 2002 and one in China in 2004. In 2006,
the Company acquired equity stake in Voltran, a Mexican manufacturer of
transformers, and created WEG Transformadores México, the first unit abroad to
manufacture products other than electric motors.
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6.3 - Brief history
In 2007, WEG acquired control of Trafo Equipamentos Elétricos S.A., manufacturer of
transformers with plants in Rio Grande do Sul and São Paulo, and of HISA Hidráulica
Industrial S.A., manufacturer of hydraulic turbines based in Santa Catarina state,
adding two new products to its portfolio.
In 2010, the Company acquired control of ZEST, a South African market leader in the
distribution and integration of electrical and electronic systems and products for
industrial use, of the Mexican Voltran and of Instrutech, a Brazilian manufacturer of
industrial and man/machine safety automation systems and products.
The year of 2011 was highlighted by new markets conquered, the Company's debut in
the wind power segment, manufacturing aerogenerators with cutting edge technology,
and acquisition of three new paint manufacturing units, two in Brazil and one in
Argentina. Furthermore, in the last quarter of the year, the Company announced its
acquisition of Electric Machinery, a more than a hundred-year old company specialized
in the production of large-sized rotating electrical machines, in addition to its entry in
the speed reducing business, through acquisition of Watt Drive in Austria and the jointventure with Cestari, in Brazil.
The WEG Group has currently manufacturing units in Brazil and abroad, operating in
five business segments: Motors, Automation, Power, Transmission & Distribution and
Paints. With over 24 thousand employees, the Company is considered one of the
world’s largest electrical equipment manufacturers.
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6.5 - Major corporate events at the issuer, subsidiaries or affiliates
a) In 2011
(i) Agreement with M. Torres Olvega Industrial Group / MTOI (Spain)
On March 3, the Company executed the Memorandum of Understanding and the
Technology Transfer Agreement with M. Torres Olvega Industrial Group (MTOI), a
group formed in 1975 engaged in the design, development and production of systems
for industrial automation processes and solutions for the aeronautics, paper and power
industries.
The technology agreement signed between MTOI and WEG will result in the formation
of a joint venture, in which both entities hold equal stakes, for production, assembly,
installation and sale of aerogenerators and supply of operation and maintenance
services in Brazil.
The production of aerogenerators will initially take place in the Jaraguá do Sul unit.
(ii) Acquisition of Pulverlux (Argentina)
On May 11, the Company executed an agreement for acquisition of control of Pulverlux
S.A., engaged in production and sale of powder coatings in Argentina, by WEG Tintas.
The opening of a new manufacturing unit in Mauá (São Paulo state - SP) and of a
distribution unit in Cabo de Santo Agostinho (Pernambuco state - PE) was also
announced.
(iii) Joint Venture with CESTARI
On October 19, 2011, an agreement of understanding entered into with CESTARI
Industrial e Comercial S.A. ("CESTARI") was announced, for development, production
and sale of gear reducers and motor reducers.
(iv) Acquisition of Watt Drive (Austria)
On November 8, the Company announced its acquisition of Watt Drive Antriebstechnik
GmbH ("Watt Drive"), an Austrian company engaged in the development and
production of gear reducers, motor reducers, frequency inverters and drive systems.
Watt Drive was established in 1972, near Vienna, Austria, and was a traditional
European player in the power transmission segment, with a manufacturing unit in
Austria and assembly units in Germany and Singapore, in addition to a broad network
of sales representatives.
With acquisition of Watt Drive, WEG now provides power transmission solutions in the
external markets, in line with the strategy of offering an increasingly broader portfolio of
products and solutions.
(v) Acquisition of Electric Machinery (USA)
On November 3, the agreement entered into with GE Energy for acquisition of Electric
Machinery ("EM") was announced. The acquisition was concluded at the end of 2011.
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6.5 - Major corporate events at the issuer, subsidiaries or affiliates
Electric Machinery, established in 1891, is located in Minneapolis (USA) and develops
and produces motors, generators and exciters, mostly intended for the global oil and
gas and power generation markets. The Company also offers a broad array of
aftermarket services, including installation, field support, parts and pieces, repair,
rewinding, rebalancing and technical support.
b) In 2010
(i) Acquisition of control of ZEST (South Africa)
On May 25, we published a Notice of Material Fact informing that we were entering into
an agreement to acquire control of ZEST Group, a South African-based company
formed by the leading distributor of electric motors in that market and by companies
specializing in assembling industrial electrical panels, in integrating products for the
assembly of generator sets and in providing electrical commissioning services.
The ZEST Group has been a partner to WEG for more than 30 years, importing and
distributing its products.
It was informed that the parties expected to complete the transaction by the end of
June 2010, once the due diligence process had been completed.
(ii) Acquisition of additional stake in Voltran S.A. de C.V. (Mexico)
On May 25, we announced our agreement with the Jimenez family for the acquisition of
control of Voltran S.A, de C.V., increasing our stake in the company to 60%.
In May 2006, WEG acquired 30% of the capital of Voltran, one of the largest
manufacturers of transformers in the Mexican market.
(iii) Acquisition of Instrutech Ltda.
On June 9, we announced that subsidiary WEG Equipamentos Elétricos S.A. entered
into an agreement to acquire Instrutech Ltda. (“Instrutech”), a Brazilian manufacturer
of industrial, commercial and man/machine safety automation systems and products.
(iv) Acquisition of Equisul Ltda.
On December 6, we announced that the subsidiary WEG Equipamentos Elétricos S.A.
entered into an agreement for acquisition of Equisul Indústria e Comércio Ltda,
engaged in the development and production of uninterruptible power supply systems,
including no-breaks, inverters, rectifiers, chargers and battery banks. Equisul was only
consolidated in the financial statements as from 2011.
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6.5 - Major corporate events at the issuer, subsidiaries or affiliates
c) In 2009
(i) Construction of a new Manufacturing Unit – City of Linhares (ES)
On August 13, we published a Notice of Material Fact informing that we were
discussing the construction of a new manufacturing unit with the state government of
Espírito Santo and the local government of Linhares. The completion of negotiations
was announced on August 21, confirming the construction of a new manufacturing unit
to expand our electric motor manufacturing activities.
For the construction of the future industrial site, WEG adopted a modular concept that
allows for the gradual and continuous increase of output capacity, thus meeting the
Company’s expansion requirements over several years. The first of these manufacturing
modules in Linhares should become operational in 2011. This modular concept has been used
by WEG in its other units in Brazil and abroad.
(ii) Merger of TRAFO shares by WEG
The Extraordinary General Meetings held by WEG S.A. and by subsidiary Trafo
Equipamentos Elétricos S.A. on December 28, 2009 approved the merger of shares
issued by TRAFO into WEG.
As a result of this merger, TRAFO became a wholly-owned subsidiary of WEG, which,
in turn, became the sole shareholder of TRAFO directly or indirectly holding all of its
shares, and continued to hold all the rights and obligations it held before the operation
was approved. TRAFO shareholders, in turn, became holders of WEG shares, based
on the approved share exchange ratio. Subsequently, on December 30, 2009, the
merger of Trafo Equipamentos Elétricos S.A. into subsidiary WEG Equipamentos
Elétricos S.A. was approved.
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6.6 - Information on filings for bankruptcy based on significant amounts or
filings for in-court or out-of-court reorganizations
There were no filings for bankruptcy based on significant amounts or filings for in-court
or out-of-court reorganizations.
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6.7 - Other relevant information
There is no other information to be provided.
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7.1 - Description of activities performed by the issuer and its subsidiaries
Activities performed by the issuer:
We believe the WEG Group to be the largest manufacturer of electrical and electronic
equipment for industrial use in Brazil and Latin America today. We also believe that we
are one of the major manufacturers of low-voltage electric motors worldwide. We
estimate that our share in the domestic market of electric motors ranges from 75% to
95%, depending on the type of motor and market segment. We manufacture some
40,000 electric motors per day and more than 40,000 different types of electric motors
per year.
The segmentation traditionally used by WEG in its communication to the market takes
into consideration the market dynamics criterion, organizing revenues into business
areas, as follows:
•
•
•
•
Electro-electronic Industrial Equipment – This segment includes low and
medium-voltage electric motors, drives & controls, industrial automation
equipment and services and maintenance services. We compete with our
products and solutions in virtually all major global markets. Electric motors and
other equipment have application in practically any industrial sector, in equipment
such as compressors, pumps and blowers, for example;
Energy Generation, Transmission and Distribution – The products in this
segment include generators for hydraulic, thermal and wind power plants,
transformers, substations, control panels and system integration services. We
have made investments in production capacity, such as our new units of
transformers in Mexico and high voltage motors in India, to expand our
operations beyond the Brazilian market, where we already have strong presence;
Electric Motors for Domestic Use - Our operation in this area is focused on the
Brazilian market, where we maintain a significant share in the market of single
phase motors for consumer durables, such as washing machines, air
conditioners, water pumps, among others; and
Paints and Varnishes - - These include liquid paints, powder coatings and
electrical insulating varnishes, focusing on industrial and marine use and
coatings for hazardous environments. These products can be used both in capital
goods and in consumer durables and semi-durables.
This segmentation is not used in WEG's internal organization, which considers
industrial aspects and divides the company into five business units: motors,
automation, power, transmission & distribution and paints & varnishes. Reconciliation
of the two forms of information is shown below:
Electro-electronic Industrial
Equipment
Generation,
Transmission and
Distribution
Electric Motors for
Domestic Use
Paints and
varnishes
Motors +
Automation
Energy + T&D
+ Automation
Motors
Paints &
Varnishes
Lines of Business
Business
Units
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7.1 - Description of activities performed by the issuer and its subsidiaries
In Brazil, our manufacturing units are located as follows:
• Jaraguá do Sul (Santa Catarina) – Manufacturing Units I and II – production of
electric motors, automation and power, in addition to corporate and administrative
activities;
• Guaramirin (Santa Catarina) – Manufacturing Unit III – production of liquid paints,
powder coatings and metallurgical activities (foundry);
• Blumenau (Santa Catarina) – Manufacturing Unit IV – production of transformers;
• Itajaí (Santa Catarina) – production of dry-type transformers and automation;
• Joaçaba (Santa Catarina) - HISA – production of hydraulic turbines;
• São José (Santa Catarina) – Equisul – production of no-breaks and UPS;
• Gravataí (Rio Grande do Sul) – production of transformers;
• São Bernardo do Campo (São Paulo) – production of high-voltage motors and
generators;
• São Paulo (São Paulo) - Instrutech – production of electronic sensors for industrial
automation;
• Manaus (Amazonas) – production of commercial electric motors;
• Linhares (Espirito Santo) – production of commercial electric motors;
• Mauá (São Paulo) – production of liquid paints;
• Monte Alto (São Paulo) – production of gear reducers and motor reducers.
Subsidiaries that develop Production Activities – The corporate purpose of our
production units abroad is to research, develop, produce, industrialize, sell, export,
import, promote and represent our products abroad, as well as to provide services
involving the assembly, installation, maintenance and technical assistance related to
our products abroad.
• WEG Equipamientos Electricos S/A (Argentina) - Promotes and sells, through a
local sales team, self-manufactured products and products from our business
segments located in Brazil, such as high- and low-voltage electric motors,
transformers and generators;
• WEG México S.A. de C.V. (Mexico) - Operates through a local sales team that
promotes and sells its products as well as all other product lines manufactured in
Brazil. Products imported from our Brazilian units are mainly electric motors for use
in home appliances and for industrial facilities in general;
• WEG Transformadores de Mexico S.A de C.V. (Mexico) and Voltran S.A. de C.V. Operate through a local sales team that promotes and sells its products as well as
all other product lines manufactured in Brazil for use in electrical installations, such
as power substations;
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7.1 - Description of activities performed by the issuer and its subsidiaries
•
•
•
•
•
•
•
WEG Euro - Indústria Elétrica S.A. (Portugal) - Operates through a local sales
team that promotes and sells its products as well as all other product lines
manufactured in Brazil. Products imported from our Brazilian units are mainly
electric motors;
WEG Nantong Electric Motors Manufacturing CO., Ltd (China) - Acquired in
November 2004, it focuses on the production of three-phase high- and lowvoltage electric motors primarily for consumers in the segments of steel, mining,
petrochemical and OEM (use in pumps, compressors and general purpose
machinery and equipment);
WEG Industries (India) Private Ltd. (India) – The project for this unit was
announced in May 2008 and start-up occurred in February 2011. It is engaged in
the production of high-voltage electric motors and generators, intended mostly for
use in infrastructure, such as irrigation and power generating pumps;
ZEST Electric Motors (Pty) Ltd. (South Africa) – The control was acquired in
May 2010, and the company operates through a local sales team that promotes
and sells its products, as well as all other product lines manufactured in Brazil
and third-party products included in complete electrical systems, for general
industrial use, such as mining, oil and gas and power generation and distribution;
Pulverlux (Argentina) – This company was acquired in May 2011 by WEG
Tintas and is engaged in the production and sale of powder coatings in
Argentina. Pulverlux operates in the segments of architecture, aluminum
sections, electrical panels, home appliances, auto parts, machinery and
equipment;
Electric Machinery (United States) – This company, whose control was
acquired in the end of 2011, develops and produces motors, generators and
exciters, mostly intended for the global oil and gas and power generation
markets. The Company also offers a broad array of aftermarket services,
including installation, field support, parts and pieces, repair, rewinding,
rebalancing and technical support;
Watt Drive (Austria) – This Austrian company, acquired in November 2011, is
engaged in the development and production of gear reducers, motor reducers,
frequency inverters and drive systems.
Subsidiaries abroad that conduct Distribution and Sales Activities – The
corporate purpose of our distribution and sales units abroad is to sell, export, import,
promote and represent products from our various business segments, as well as to
provide services involving the assembly, installation, maintenance and technical
assistance related to these products.
•
WEG Electric Corpo (United States)
•
WEG Benelux S.A. (Belgium)
•
WEG France S.A. (France)
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7.1 - Description of activities performed by the issuer and its subsidiaries
•
WEG Germany Gmbh (Germany)
•
WEG Electric Motors (UK) Ltd. (England)
•
WEG Australia Pty Ltd. (Australia)
•
WEG Ibéria S.L. (Spain)
•
WEG Scandinavia AB. (Sweden)
•
WEG Itália S.R.L. (Italy)
•
WEG Indústrias Venezuela C.A. (Venezuela)
•
WEG Chile S.A. (Chile)
•
WEG Colômbia Ltda (Colombia)
•
WEG Electric (India) PVT. Ltd. (India)
•
WEG Electric Motors Japan CO., LTD. (Japan)
•
WEG Singapore (Singapore)
•
WEG Middle East (United Arab Emirates)
•
WEG Germany NN (Russia)
Partnership - In countries where we have no subsidiaries developing industrial or
distribution and sales activities, we operate through partnerships with local distributors
and agents. Our most significant partnership abroad is with V. J. Pamensky Canada
INC. (Canada). As our partner for over 25 years, V. J. Pamensky Canada INC.
operates as a distributor of and agent for our products in the Canadian market. The
company buys our products, especially electric motors, drives, contactors, relays and
starters, and distributes them locally.
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7.2 - Information on business segments
a) Products and services sold
The chart below shows the products within our lines of business:
Services
Power
generation
Speed variation
Substations
Motors
Transformers
Electrical
components
Electrical panels
Generators
Liquid paints, powder
coatings and electrical
insulating varnishes
Industrial
automation
Electro-electronic Industrial Equipment
This includes such products as low-, medium- and high-voltage electric motors, drives,
equipment and services for industrial automation, electrical components, and
maintenance services. We believe we are one of the world leaders in low-voltage
industrial motors and we have increased our market share in integrated industrial
solutions.
The demand for this type of product is due primarily to the growing industrial production
and investments in fixed capital formation, both in Brazil and worldwide.
The consumer markets are diversified, both geographically and in terms of client type.
We have global presence in this segment, focusing most of our sales in external
markets. Our main clients in this business segment are equipment manufacturers,
commonly referred to as OEM (Original Equipment Manufacturers), of capital goods
and large industrial enterprises that invest in capacity expansion.
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7.2 - Information on business segments
Products
We develop and manufacture a wide variety of electric motors, which can be divided
into the following groups:
General Purpose Motors
Our general purpose electric motors include three-phase, single-phase, high
performance, aluminum frame, fractional and multispeed motors. These motors are
used, for example, in general industrial machinery, pumping systems, ventilation
systems, low power devices for various purposes, crushers, conveyors and machine
tools.
Special Purpose Motors
Our special purpose electric motors include motors for compressors, close-coupled
pumps, oil wells, chainsaws, inverter duty motors (with different speeds), farm duty
motors (rural use), “IEEE 841” motors (use in the petrochemical sector), motors for
centrifugal pumps, brake motors and fuel pumps.
Motors for Hazardous Environments
Our electric motors for hazardous environments are used in explosive areas (oil rigs,
fuel pumps and chemical industry in general) and include explosion proof motors,
increased safety motors and non-sparking motors.
High-Voltage Motors
These high value added electric motors are custom developed and manufactured, and
are designed for industries that require specific solutions, such as those operating in
mining, petrochemical, steel and paper and pulp segments.
In addition to electric motors, we also produce a number of electronic and
electromechanical components that protect and control these electric motors in
electrical installations in general. These components include frequency inverters,
drives, thermal magnetic molded case switches, circuit breakers, starters, pushbuttons
for control and signaling, mini circuit breakers, contactors and overload relays, timers
and electronic protectors, capacitors for power factor correction, permanent metal
polypropylene capacitors for motors and lighting and fuses.
These components may be sold separately or in simple ‘motor plus component’ sets.
However, they are usually supplied within integrated packages in the form of electrical
panels, motor control centers and oversight and control systems, including computer
network interfaces and software supervisor.
Energy Generation, Transmission and Distribution
This area includes several products such as generators for hydroelectric plants,
thermal power plants of various types and wind power plants, transformers and
substations, as well as control panels and power automation services.
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7.2 - Information on business segments
These products and systems are also considered capital goods. The difference here is
that the demand for this type of product depends primarily on the growth of diversified
investments in energy in the three sub-segments of electric power generation,
transmission and distribution, rather than on the industrial production and investments
in fixed capital formation, as the case is with the segment of industrial electrical and
electronic equipment.
Within this business segment, we focus on the Americas, using our large presence in
Brazil, which is still our most important market, as a basis for operating in the other
American countries.
Our main clients in this area are the power generation, transmission and distribution
companies, small hydroelectric power plants (PCH-I) and large industrial companies
that adopt electric power co-generation.
Products
We develop and manufacture high-voltage generators that use many different types of
fuel and the following energy sources: water, thermal and wind power.
We operate individually or in joint ventures with other companies in the supply of
equipment and complete systems for power generation. In addition, we develop and
manufacture power transformers, which can be high-voltage, industrial (or medium
voltage) and distribution transformers. These transformers are used to turn highvoltage electric power into consumable levels. We also supply electric power
substations of up to 100 MVA on a turn-key basis, covering project design and
implementation through installation and ‘go-live’.
Electric Motors for Domestic Use
This line of business includes all single-phase motors developed and manufactured for
use by manufacturers of household appliances and equipment, which includes motors
for automatic and semi-automatic washing machines, dryers, air movement motors, air
conditioning motors, inverter duty type motors for washing machines, and a wide
range of small motors for use in water pumps, lawn mowers, among others.
The consumer market is also diversified, although the market characteristics lead to a
greater concentration in large OEM (Original Equipment Manufacturers) of white goods
in general. In this segment, our operations mainly focus on Brazil or, alternatively, in
Latin America. The demand for these products depends on the increase in the
consumers’ purchasing power, credit supply and interest rates.
Paints and Varnishes
The focus of activity in this segment is only the Brazilian market and products for
industrial use. In addition, all our paint and varnish requirements for the manufacture of
our products are met by this area.
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7.2 - Information on business segments
The main products are liquid paints and powder coatings, electrical insulating
varnishes and resins. We believe we are one of the largest Brazilian manufacturers of
powder coatings and marine use paints. These products are used by the consumer
durables and capital goods industry in general, for coating and protecting components
and products.
Our major clients in the paints and varnishes segment are metallurgical companies,
shipyards, equipment and tools manufacturers and the furniture sector. These clients
usually acquire products from our other lines of business, which clearly indicates the
great synergy between this and other segments.
Given the great diversity of products, the demand in this area depends on increased
industrial output and GDP.
b)
Revenues from the segment and their share in the issuer’s net revenues
The table below shows the share of each business segment in our gross operating
revenues for the periods:
2011
Electro-electronic Industrial Equipment
Energy Generation, Transmission and Distribution
Electric Motors for Domestic Use
Paints and Varnishes
c)
2010
2009
62.2%
22.5%
9.8%
57.4%
24.3%
12.4%
48.4%
33.5%
12.2%
5.4%
5.8%
5.9%
Profits or losses from this segment and their share in the issuer’s net
income
Information not disclosed by business area.
For purposes of compliance with International Financial Reporting Standards (IFRS) on
segment information, management has defined operating and geographic segments of
the Company based on reports used internally to make strategic business decisions.
The Company's management is structured and systematized with information on
operations, considering the industry, energy, overseas and consolidated segments.
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7.2 - Information on business segments
Brazil
Manufacturing
Power
Eliminations and
adjustments
Overseas
12/31/11
12/31/10
12/31/11
12/31/10
12/31/11
12/31/10
3,131,392
2,616,471
1,320,846
1,277,789
1,990,544
1.425.015
(1.253.373)
Income before taxes and profit sharing
817,283
691,955
234,465
359,176
86,220
42,257
Depreciation/amortization/depletion
120,073
116,495
41,370
43,225
26,587
2,734,721
2,514,308
1,264,986
1,210,811
558,117
515,647
373,178
324,043
Net operating revenue
Identifiable assets
Identifiable liabilities
12/31/11
Consolidated
12/31/10
12/31/10
12/31/10
(927.302)
5.189.409
4.391.973
(371,842)
(363,423)
766,126
725,752
24,270
-
-
188,030
183,990
1,645,050
1,171,664
(221,968)
(184,664)
5,422,789
4,712,119
433,886
275,180
(193,975)
(171,627)
1,171,206
943,243
Industry: three phase and single phase motors of low and average voltage, drives & controls, industrial automation equipment, paints and varnishes.
Power: electric generators for hydraulic and thermal power plants (biomass), hydro turbines (PCHs), transformers, substations, control panels and
system integration services.
Overseas: consists of operations conducted through subsidiaries located in several countries.
The column of eliminations and adjustments includes eliminations applicable to the Company in the context of consolidated financial statements
under IFRS.
All operating assets and liabilities are presented as identifiable assets and liabilities.
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7.3 - Information on products and services within the operating segments
a) Characteristics of the production process
We adopt a highly integrated business model, internally producing various goods and
services that are used for the development of our core activities. The main
consequence of vertical integration is that we develop customized products and
manufacture them in large scale at lower costs. The vertical integration of the
production process allows:
•
•
•
•
Flexible production, reducing delivery times for customized products at the
lowest cost;
Flexible supply, which allows to quickly change product mix offerings to meet
seasonal market demands;
Control over the supply of our units, which implies more flexibility in increasing
production;
Continuous learning from all stages of our production process, with quality
gains in the final product.
Please find below a brief description of our vertically integrated production structure.
Steel Plates Center - responsible for the production of rotors and stators used in our
electric motors, including the processes of steel cutting, stamping and heat treatment.
Foundry - our foundries supply cast iron covers and frames for use in electric motors
and generators.
Machining Center - comprises the cast items machining department and the shaft
machining department. The cast items machining department performs operations
involving cutting, drilling and final preparation of frames and covers for motors and
generators. The shaft machining department produces shafts for motors and
generators from long steel bars.
Wire Manufacturing Unit - manufactures the various types of copper and aluminum
wiring used in the several motors and transformers we produce; copper and aluminum
are received in rods that are extruded and electrically insulated with varnishes and, in
some cases, paper and special plastic films.
Packaging Factory - our packaging factory produces all wood packaging used in our
various lines of products. Many of these lines require special packaging that can store
heavy goods and transport them for long distances. We have our own reforestation
areas that guarantee the continuous supply of timber.
Tooling - this unit produces some of the machines and tools (molds and devices) that
assist in increasing the productivity of our manufacturing units, allowing high flexibility
and streamlining the development of new products and/or applications. Moreover, this
department also manufactures and customizes some machines used in our production
process.
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7.3 - Information on products and services within the operating segments
Production process
Our products are manufactured according to specifications and standards of the
Brazilian Institute of Metrology, Standardization and Industrial Quality (INMETRO) and
quality certification agencies and bodies in the countries where we operate, among
which:
Underwriters Laboratories Inc. (United States), Bureau Veritas Quality
International (England), CSA International (Canada), Asociación de Normalización Y
Certificación, AC. (Mexico), Instituto Argentino de Normalización (Argentina), South
African Bureau of Standards (South Africa), PhysikalischTechnische Bundesanstalt
(Germany).
Electric motors and generators
Industrial electric motors are basically made up of the frame, stator, rotor, shaft, ring,
front and rear covers, baffle, fan and terminal box. Because we have a vertical
production structure, each of these components is produced internally. Thus, we have
total control over our factories’ supplies and process parameters, obtaining specialized
products at competitive manufacturing costs.
The production process of high-voltage electric motors for industrial use and
generators for small- and medium-sized power plants basically involves the same
stages comprising the manufacture of low-voltage electric motors and is divided into:
processing of steel plates, aluminum injection, foundry, cast items machining, shaft
machining, wire manufacturing, packaging unit and final assembly.
Transformers
Transformers may be classified according to their power and voltage, into high-voltage,
medium-voltage or distribution transformers. These products are used to turn highvoltage electric power into consumable levels. We also build electric power substations
on a turn-key basis, covering project design and implementation through installation
and ‘go-live’.
Not considering their power and voltage, our transformers can be “oil” or “dry” type
transformers according to the type of insulation used. Oil type transformers are made
up of the core, coils, connections, tanks and accessories. Dry type transformers are
made up of the core, coils, connections and accessories. In a nutshell, the
manufacturing process is divided into the following steps: (i) cutting the sheets for the
core; (ii) assembling the core; (iii) manufacturing the coils; (iv) assembling the active
part; (v) drying and tightening the active part (for oil type transformers only); (vi)
manufacturing the tank and components; (vii) closing the transformer (for oil type
transformers only); and (viii) conducting electrical tests.
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7.3 - Information on products and services within the operating segments
Command, control and protection components
We produce a wide range of electrical and electronic components for the protection,
command and control of industrial electrical machinery. These components are then
integrated in the form of panels that form industrial automation systems, power
generation systems or power substations.
The electronic products manufacturing unit is responsible for the manufacture of
frequency inverters and soft-starters. This area currently has machines for automatic
placement of components (SMD) and manual insertion lines, as well as machines for
varnishing plates and complete systems for products load testing.
Electromechanical drive components basically include thermoplastic and thermofixed
injected elements, stamped parts and silver contacts. Again, because of our vertical
structure, each of these components is produced internally. The electromechanical
drive processes and components include various stamped parts and silver contacts,
plastic injection parts and assembly.
The electrical panels manufacturing unit is responsible for stamping, painting and
assembly activities. This area includes CNC punching machines, press brakes and
phosphating and painting lines (powder coatings and liquid paints). Moreover, it also
has specific areas for assembly and testing of the panels, thus ensuring final product
quality.
Paints and varnishes We produce liquid paints and powder coatings, electrical
insulating varnishes and resins. These products are used by the consumer durables
and capital goods industry in general, for coating and protecting components and
products.
Powder coatings These are 100% solid paints formed by a balanced blend of elements
designed to protect and decorate surfaces, such as polymers, pigments, additives and
mineral fillers; after being processed, these are presented as a single substance in the
form of fine powder. This powder is applied at high temperatures. The end result is a
protective film with high chemical and physical resistance offered in various colors,
gloss levels and types of finishing.
Liquid paints These are basically made up of fillers, resins, solvents, pigments and
reagents. These elements are added to the formula according to the clients’ needs,
which is defined by the intended application, i.e. exposure to weather, bad weather and
hazardous conditions, among other factors. The production process consists of the
following steps: (i) weighing; (ii) dispersing; (iii) milling; (iv) completing; (v) adjustment
of product characteristics (color, viscosity, gloss, etc.) to the clients’ requirements; (vi)
the quality center reviews all of the paint’s characteristics (viscosity, solids, drying,
gloss, among others) and gives final approval; and (vii) packaging and identification
with the product code, lot number and expiry date, and sending of reports as requested
by the client.
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7.3 - Information on products and services within the operating segments
b) Characteristics of the distribution process
Most of our clients are located far from our production and distribution centers. In order
to get our products delivered to our national and international clients, we use Brazilian
highways and ports. Our export products are delivered mainly through São Francisco
do Sul and Itajaí ports in Santa Catarina state, which are located respectively 60 km
and 90 km away from our main manufacturing unit in Jaraguá do Sul.
c) Characteristics of the activity markets, especially:
c. 1) Share in each market
Electro-electronic Industrial equipment
The consumer markets are diversified, both geographically and in terms of client type.
We have global presence in this segment, focusing most of our sales in external
markets. Our main clients in this business segment are equipment manufacturers,
commonly referred to as OEM (Original Equipment Manufacturers), of capital goods
and large industrial enterprises that invest in capacity expansion.
Energy generation, transmission and distribution
These products and systems are also considered capital goods. The difference here is
that the demand for this type of product depends primarily on the growth of diversified
investments in energy in the three sub-segments of electric power generation,
transmission and distribution, rather than on the industrial production and investments
in fixed capital formation, as the case is with the segment of industrial electrical and
electronic equipment. Within this business segment, we focus on the Americas, using
our large presence in Brazil, which is still our most important market, as a basis for
operating in the other American countries. Our main clients in this area are the power
generation, transmission and distribution companies, small hydroelectric power plants
(PCH) and large industrial companies that adopt electric power co-generation.
Electric motors for domestic use
The consumer market is also diversified, although the market characteristics lead to a
greater concentration in large OEM (Original Equipment Manufacturers) of white goods
in general. In this segment, our operations mainly focus on Brazil or, alternatively, in
Latin America. The demand for these products depends on the increase in the
consumers’ purchasing power, credit supply and interest rates.
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7.3 - Information on products and services within the operating segments
Paints and varnishes
The focus of activity in this segment is only the Latin-American market and products for
industrial use. In addition, all our paint and varnish requirements for the manufacture of
our products are met by this area.
Net operating revenue by market - 2011
External market
44%
Domestic market
56%
Domestic market
In 2011, Net Operating Revenue in the domestic market totaled R$ 2,903.0 million, a
year-on-year increase of 9%, corresponding to 56% of our total net operating revenue.
The growth in the domestic market is a consequence of the continued recovery of the
dynamism in certain industry segments, with an emphasis on capital goods for
investments in expansion of the production capacity. We remain leaders in the
Brazilian market in all business segments in which we operate, and continue expanding
our line of products and services, with a view to offering more complete and integrated
industrial solutions.
External market
In 2011, net operating revenue in the external markets totaled R$ 2,286.4 million,
corresponding to 44% of our total net operating revenue. The year-on-year comparison
measured in Brazilian reais shows an increase of 33%. In U.S. dollars, net operating
revenue in the external market reached US$ 1,361.8 million, corresponding to a growth
of 38.6% in relation to 2010.
The good performance in external markets in 2011 is a result of the expansion in both
the traditional markets and the new markets and businesses. Acquisition in 2010 of
additional stakes in Voltran in Mexico and of control of ZEST in South Africa helped
increase revenues over the year.
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7.3 - Information on products and services within the operating segments
Even in developed markets, where the recovery of the macroeconomic dynamism is
slower, we were able to find opportunities of growth by means of a focused exploration
in interesting business niches.
We also continued branching out our manufacturing activities in the external market,
with new major acquisitions over the year: Pulverlux, an Argentine paint manufacturer;
Watt Drive, an Austrian gear reducer and motor reducer manufacturer; and Electric
Machinery, one of the most traditional manufacturers of high-voltage rotating electrical
machines in the USA.
c. 2) Market competition
Since its foundation in 1961, WEG has competed with multinational companies that
had been operating with a significant presence in Brazil. This competition was
established in the international scenario after 1970, when electric motors started to be
exported to Latin American countries.
With its vertical integration strategy, the company began to grow rapidly to promptly
meet the changing demands of the markets where it operates.
We operate in an open market and have many different types of competitors in Brazil
and abroad. We comply with regulations applicable in the countries where we
manufacture and sell our products.
d) Seasonality, if any
There are no major seasonal changes in the demand for industrial products. As
regards consumer goods components, such as motors for production of white products,
the seasonality of demand arises from the retail promotional calendar. In normal
conditions, changes in revenue are primarily due to the different number of business
days in each period. As such, revenue is concentrated in the second half of the year.
e) Major inputs and raw materials, indicating:
d. 1) description of relations with suppliers and whether they are subject to
governmental regulation or control, indicating the respective bodies and
applicable legislation
We seek to optimize our costs by choosing to partner with some suppliers in Brazil and
abroad without any exclusivity commitments or agreements. Accordingly, we have
contracts with major suppliers of copper, steel plates and silicon sheets and steel round
bars. We do not have significant inventory of raw material.
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7.3 - Information on products and services within the operating segments
We select our suppliers based on the quality and price of products, suppliers’
reputation and financial status, delivery times and product availability. Our quality
control ensures that purchased items meet the company’s specifications and the
regulatory standards of the Brazilian Association of Technical Standards (ABNT).
Major suppliers:
Copper:
•
•
•
•
•
•
•
Paranapanema (Brazil)
Ibrame (Brazil) » Steel Plates
Sistema Usiminas (Brazil)
Companhia Siderúrgica Nacional (Brazil) Steel Plates-silicon
Aperam (Brazil)
Baosteel (China)
Chinasteel (Taiwan)
Long steel
• Gerdau Group (Brazil)
• Schougang (China)
• Citic (China)
d. 2) any dependence on a few suppliers
There is no significant dependence on a few suppliers. We actively seek to diversify
our suppliers, avoiding concentration. Our main raw materials are commodity products
for which there is a wide range of suppliers in the international market.
d. 3) any price volatility
The Company operates in a competitive industry. The sales prices are largely
determined in this competitive process, which considers the fluctuations in raw material
price levels.
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7.4 - Clients that account for more than 10% of total net revenue
a) Total amount of revenue deriving from the client
There are no clients that account for more than 10% of total net revenue.
b) Operating segments impacted by revenue deriving from the client
There are no clients that account for more than 10% of total net revenue.
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7.5 - Relevant impacts of government regulation on activities
a)
Need for government permits to engage in activities and a background
information on the relations with government authorities in obtaining such
permits
The Company does not engage activities within regulated segments or which require
permits from government agencies or specific regulators. Required permits are limited
to those of a legal and general nature.
b)
The issuer’s environmental policy and related compliance costs, and, as
applicable, the costs of compliance with other environmental practices,
including adherence to international environmental protection standards
Our Corporate Environmental Policy establishes that we should ensure that the
environmental impact of our products and production processes is the lowest possible,
seeking:
•
Compliance with applicable environmental legislation;
•
Continuous improvement by establishing environmental objectives and goals;
•
Preventive measures, with a view to protecting the environment in which the
company operates;
•
Ecoefficient processes and products, preserving the natural resources.
This concern with adopting effective actions with a view to obtaining a self-sustainable
development is part of our culture since the establishment of our Group, almost 50
years ago. We make continuous investments in environmental measures that also pay
back, as they reduce marginal production costs by promoting an efficient use of raw
materials.
Environmental legislation
The Brazilian Constitution establishes that the federal and state governments have the
power to concurrently promulgate laws and publish regulations on environmental
matters. The environmental legislation of the Brazilian states in which we perform
industrial activities entails, in addition to general purpose rules, some specific
characteristics applicable to our activities.
The operating standards are established in the environmental licenses (preliminary,
installation and operating licenses) issued for each of our production units. Operating
licenses are subject to renewal and may be modified from one year to another. We
comply with the limits of our current operating licenses and do not expect to be
significantly impacted by stricter environmental requirements, if any, although there are
no guarantees in this regard.
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7.5 - Relevant impacts of government regulation on activities
Liquid effluents, solid waste and air emissions resulting from our operations comply
with all applicable laws and regulations of the states in which we perform industrial
activities. We do not anticipate significant expenditures to continue to obey existing or
proposed environmental laws and regulations. However, there is no guarantee that the
approval of more stringent environmental legislation in the future will not require
extraordinary expenditures on our part.
Air emission loads
We made significant investments over the past five years in bag filters, scrubbers,
catalytic burners for solvents and in the development of new operating procedures
designed to minimize environmental impacts associated with air emissions from our
manufacturing processes. New technologies, such as the removal of volatile organic
compounds by activated carbon, are being implemented.
Liquid effluents
Water is an important element in our overall manufacturing processes. We use water
from the rivers flowing close to our facilities and from artesian wells located in our
manufacturing units. Our manufacturing units in Jaraguá do Sul, Guaramirim,
Blumenau, São Bernardo do Campo, Linhares and Gravataí are equipped with effluent
treatment systems. The processes used for treating these effluents are physical,
chemical and biological. After being treated, the wastewater returns to the rivers, based
on the parameters established by legislation. The effluents generated by the
manufacturing process from our industrial facility # I and from part our industrial facility
# II are treated in the effluent treatment system of industrial facility # III. The
characteristics of the effluents are constantly monitored by means of chemical, physical
and biological analyses.
Solid waste
Our industrial waste recycling rate reached 70% (manufacturing units I, II and III).
Scrap from processed plates and machined cast iron parts, for instance, is reused in
our manufacturing process. Waste paper, cardboard, plastic and other metals are also
collected for recycling. Waste materials that are not recycled are disposed of in landfills
or shipped to co-processing in cement kilns. WEG has an industrial landfill that is
specific for our foundry waste. This landfill has a leachate treatment station and is
monitored through piezometers, whose water is subjected to physical, chemical and
biological tests including ecotoxicological assumptions.
Preservation of native forests
All the timber used for manufacturing or packaging our products come from planted
trees. We do not use wood from native forests. We currently own:
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7.5 - Relevant impacts of government regulation on activities
Reforestation
6,219.00 hectares
Legal reserve
2,416.60 hectares
Permanent preservation areas
818.43 hectares
Natural forests
2,054.93 hectares
The quality of the land we generally use is not good enough for other forms of farming.
Each year we plant more trees for our own future use than we cut down. Our
cultivation techniques aim at keeping our forests healthy. In occupying farming and
forestry areas, we always preserve more than 20% of native vegetation.
Environmental certification
Our manufacturing units in Jaraguá do Sul, Guaramirim, São Bernardo do Campo and
Linhares are certified in accordance with the requirements of ISO 14001. The
environmental certification requirements include (i) the establishment of an
environmental management policy, (ii) identification of environmental aspects and
impacts, (iii) legal compliance and (iv) establishment of procedures for operational
control, emergency response, communication with stakeholders, internal audits by the
Environmental Management System, critical analyses by senior management,
monitoring and measurement, addressing non-compliant issues and corrective and
preventive measures.
c)
Dependence on relevant patents, trademarks, licenses, permits, franchises, or
royalty contracts for the development of activities
Our Group’s policy is to protect our trademarks and patents in the several countries
where we operate or intend to operate. We renew our trademark registrations based on
the related dates of expiration (every 10 years). As for patents, we maintain them for
their maximum periods (15 or 20 years depending on the type of patent).
Our “WEG” flagship trademark is registered in Brazil under several specific classes at
the National Institute of Industrial Property (INPI), and is valid for use until May 2, 2019.
This term is renewable, at our request, for equal successive periods of 10 years. The
WEG trademark and other trademarks owned by the Company are under continuous
legal and administrative control, both in Brazil and abroad, where we currently have a
related authorized registration in 80 countries.
We currently own 65 patents issued or being considered in Brazil (INPI) and abroad.
Over the past three years, we filed 27 new patent applications with the INPI and
equivalent agencies abroad, mainly filed in the United States, Canada, Mexico, China
and the European Union. Our major patents refer to improvements to electric motors,
drive components, controls and industrial paints.
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7.6 - Relevant revenues from abroad
a) Client revenues attributed to the country of issuer’s main office and their
share in the issuer’s total net revenues
In millions of R$
2011
2010
2009
Net operating revenue
5,189.4
4,392.0
4,210.6
- Domestic market
2,903.0
2,670.5
2,526.4
- External market
2,286.4
1,721.5
1,684.2
b) Client revenues attributed to each foreign country and their share in the
issuer’s total net revenues
Percentage of external market revenue
Region
2011
2010
2009
North America
34%
35%
29%
Central and South America
16%
17%
15%
Europe
24%
24%
31%
Africa
16%
14%
8%
Australasia
10%
10%
16%
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7.7 - Impacts of foreign regulation on activities
WEG is subject to specific legislation in each country where it operates. In general and
similarly to what occurs in Brazil, regulations on international operations, including the
required permits, are limited to those of a legal and general nature. The Company does
not engage activities within regulated segments or which require permits from
government agencies or specific regulators.
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7.8 - Significant long-term relations
The Company annually issues the Annual Report, which consolidates the Management
Report, standardized financial information (financial statements and explanatory notes)
and the Social Report prepared in accordance with the iBase methodology. This
document may be obtained electronically from WEG’s investor relations page on the
internet, at www.weg.net/ri.
Furthermore, the Company’s first integrated sustainability report is underway, prepared
according to the Global Reporting Initiative (“GRI”), considered an international
standard for this type of publication. The publication of the first report according to the
GRI standard is expected to occur still in 2012.
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7.9 - Other relevant information
Engagement of Credit Suisse (Brazil) as “market maker”
On March 9, 2012, we made a statement to the market and to our shareholders
communicating the termination of the agreement entered into on September 17, 2010
with BTG PACTUAL CORRETORA DE TÍTULOS E VALORES MOBILIÁRIOS S.A.,
under which the latter operated as the Market Maker for common shares ON
("WEGE3"). Consequently, WEG informs the engagement of CREDIT SUISSE
(BRASIL) S.A. CORRETORA DE TÍTULOS E VALORES MOBILIÁRIOS as the new
Market Maker for its common shares ON ("WEGE3"), within the Brazilian Securities,
Commodities and Futures Exchange (BM&FBOVESPA). The agreement will be
effective for 1 (one) year, automatically renewable for equal periods if neither party
expresses its intent otherwise, aiming at promoting the liquidity of such shares.
The Market Maker’s activities are regulated by BM&F Bovespa.
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8.1 – Description of the Economic Group
a) Direct and indirect controlling shareholders
The company’s direct controlling shareholder is WPA Participações e Serviços
S.A.,
which holds a 50.87% stake in capital at 12/31/11.
b) Subsidiaries
Country
WEG Equipamentos Elétricos S.A.
WEG Tintas Ltda.
WEG Amazônia S.A.
WEG Linhares Equipamentos Elétricos Ltda.
WEG Administradora de Bens Ltda.
WEG Logística Ltda.
WEG Drives e Controls – Automação Ltda.
WEG Partner Aerogeradores S.A.
Hidráulica Industrial S.A. Ind. Com. - HISA
RF Reflorestadora Ltda.
Agro Trafo Administradora de Bens S.A.
Sensores Eletrônicos Instrutech Ltda.
Logotech Sensores Eletrônicos Ltda.
Equisul Indústria e Comércio Ltda.
WEG Equipamientos Electricos S.A.
Pulverlux S.A
EPRIS Argentina S.R.L.
WEG Chile S.A.
WEG Peru S.A.
WEG Colômbia Ltda.
WEG Indústrias Venezuela C.A.
WEG México S.A. de C.V.
WEG Transformadores México S.A. de CV
Voltran S.A. de C.V.
WEG Electric Corporation
WEG Service CO.
Electric Machinery Holding Company
WEG Overseas S.A.
WEG Scandinávia AB
WEG Germany GmbH
WEG Benelux S.A.
WATT Drive Antriebstechnik
WEG France S.A.S
WEG Ibéria S.L.
WEGeuro Ind. Electricas S.A.
WEG Itália S.R.L
WEG Electric Motors (UK) Ltd.
Zest Electric Motors (Pty) Ltd.
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Argentina
Argentina
Argentina
Chile
Peru
Colombia
Venezuela
Mexico
Mexico
Mexico
USA
USA
USA
Virgin Islands
Sweden
Germany
Belgium
Austria
France
Spain
Portugal
Italy
England
South Africa
Company’s stake (%)
at 12/31/11
Direct
Indirect
100.00
99.91
0.02
99.00
100.00
91.75
0.01
0.10
0.12
10.44
8.00
0.05
1.00
0.79
100.00
5.74
0.07
-
0.09
99.98
99.99
100.00
100.00
1.00
99.90
61.92
8.25
99.99
99.90
99.88
89.55
100.00
100.00
92.00
99.95
99.00
99.99
99.99
60.00
60.00
99.21
100.00
100.00
100.00
100.00
99.99
100.00
100.00
100.00
94.26
99.93
100.00
50.68
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8.1 – Description of the Economic Group
Company’s stake
Country
at 12/31/11
Direct
WEG Australia PTY
WEG Electric (India) Private Limited
WEG Industries (India) Private Ltd.
WEG Singapore Pte Ltd.
WEG Middle East FZE
WEG Nantong Electric Motors Manufacturing
WEG Electric Motors Japan CO Ltd.
WEG Electric CIS
Australia
India
India
Singapore
U.A.E.
China
Japan
Russia
4.99
-
Indirect
100.00
94.99
99.99
100.00
100.00
100.00
100.00
100.00
c) Issuer’s stake in group companies
Information included in item 8.1 (b).
d) Stake held by group companies in the issuer
N/A.
e) Companies under common control
N/A.
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8.3 - Restructuring operations
Operation date
Corporate event
Description of operation
11/08/2011
Disposal and acquisition of corporate control
Acquisition of Watt Drive (Austria) – On November 8, we announced the acquisition of Watt
Drive Antriebstechnik GmbH (“Watt Drive”), an Austrian company engaged in the
development and manufacturing of gear reducers, motor reducers, frequency inverters and
drive systems. Watt Drive was established in 1972, near Vienna, Austria, and was a traditional
European player in the power transmission segment, with a manufacturing unit in Austria and
assembly units in Germany and Singapore, in addition to a broad network of sales
representatives. With acquisition of Watt Drive, WEG now provides power transmission solutions in
Operation date
Corporate event
Description of operation
Operation date
Corporate event
Description of corporate event
"Other"
Description of operation
Operation date
Corporate event
the external markets, in line with the strategy of offering an increasingly broader portfolio of products
and solutions. Power transmission solutions are included in electric motors, frequency inverters and
speed reducers, improving operating performance and maximizing energy efficiency.
11/03/2011
Disposal and acquisition of corporate control
Acquisition of Electric Machinery ("EM") – On November 3, we announced the execution of the
agreement with GE Energy for acquisition of Electric machinery (“EM”). The acquisition was
concluded in the end of 2011, Electric Machinery, established in 1891, is located in Minneapolis
(USA) and develops and produces motors, generators and exciters, mostly intended for the global oil
and gas and power generation markets. The Company also offers a broad array of aftermarket
services, including installation, field support, parts and pieces, repair, rewinding, rebalancing and
technical support. Electric Machinery has an installed base of more than 5,500 units in operation and
is the leader in technological development of high value added products, such as two-pole generators
and synchronous motors with low rotation speed. The reputation earned by Electric Machinery
concerning large machines over its 100 years of existence, with high quality products and wide brand
recognition in significant market segments, such as oil and gas and power generation, will add to our
platform in Minneapolis, USA, permitting flexibility in the provision of integrated solutions in the region.
10/19/2011
Other*
Joint Venture
Joint Venture with CESTARI - On October 19, 2011, an agreement of understanding entered into with
CESTARI Industrial e Comercial S.A. ("CESTARI") was announced, for development, production and
sale of gear reducers and motor reducers. CESTARI is among the leaders in the Brazilian speed
reducer market and is located in Monte Alto, São Paulo state, where it has a vertical production
structure, with iron, bronze and aluminum casting processes, and machining in modern
computerized centers. WEG-Cestari Redutores e Motorredutores S.A. is specifically involved in
business and assets relating to production of speed reducers and motor reducers, combining these
with electric motor solutions and industrial automation systems in integrated solution packages,
known as “power transmission solutions”, for which the demand is growing as they improve operating
performance and maximize energy efficiency.
05/11/2011
Disposal and acquisition of corporate control
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8.3 - Restructuring operations
Description of operation
Acquisition of Pulverlux (Argentina) - On May 11, the Company executed an agreement for acquisition
of control of Pulverlux S.A., engaged in production and sale of powder coatings in Argentina. The
opening of a new manufacturing unit in Mauá (SP) and of a distribution unit in Cabo de Santo Agostinho
(Pernambuco state - PE) was also announced. Pulverlux operated in the segments of architecture,
aluminum sections, electrical panels, home appliances, auto parts, machinery and equipment for more
than 10 years, and when acquired, it had 42 employees, a 10,000 m2 plant in Buenos Aires and annual
billing of close to US$ 7.0 million. The new paint plant in Mauá (SP) is responding to the rise in
investments in exploitation of oil reserves in the pre-salt layer, improving logistics to serve the
Southeastern Region and increasing the production capacity of liquid paints. The Cabo de Santo
Agostinho (PE) unit, located 25 km from the Suape Port and 17 km from Recife, facilitates service in the
Northern and Northeastern regions of Brazil.
Operation date
Corporate event
Description of corporate event
"Other"
Description of operation
03/03/2011
Other*
Joint Venture
Operation date
Corporate event
12/06/2010
Disposal and acquisition of corporate control
On December 6, we announced the execution of the agreement for acquisition of Equisul Indústria e
Comércio Ltda, engaged in the development and production of uninterruptible power supply systems
UPS), including no-breaks, inverters, rectifiers, chargers and battery banks. Equisul has a manufacturing
unit in São José (Santa Catarina state) with approximately 50 employees, and should record operating
revenues of close to R$ 15 million in 2010. The company was established in 1995 and, until 1994, it
produced small and medium-sized systems. With the merger of GPL Eletroeletrônica S.A., a traditional
company in this segment, it expanded its line of products to large triphase systems With acquisition of
Equisul, WEG increased its portfolio of products and complete solutions for power systems, adding
acknowledged solutions, such as critical power, equipment that may be widely applied to IT, finance and
other sectors, and to critical industry process, such as in oil and gas exploration rigs, where interruptions
to the production process could be very costly. With the rising automation of industrial processes,
technological and commercial synergies of the UPS area with our other business segments are
increasingly important. Equisul was consolidated as from January 2011.
Description of operation
Joint Venture with MTOI - On March 3, 2011, the Company executed the Memorandum of
Understanding and the Technology Transfer Agreement with the M. Torres Olvega Industrial (MTOI)
Group for creation of a joint venture engaged in the production, assembly, installation and sale of
aerogenerators and provision of operation and maintenance services in Brazil. The M. Torres Group
was formed in 1975 to design, develop and produce systems for industrial automation processes and
solutions for the aeronautics, paper and power industries. The technology developed by MTOI permits
the direct coupling of the electric generator to the wind turbine shaft, thus not requiring the installation of
a speed multiplier, which is a competitive advantage as it reduces the number of components and,
consequently, the possibility of occurrence of operational problems and maintenance costs. This
partnership gives us the opportunity to directly participate in the wind power generation business, with
an integrated offer that includes several items of our business lines, such as generators, transformers,
frequency inverters, motors and paints.
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8.3 - Restructuring operations
Operation date
Corporate event
Description of operation
Operation date
Corporate event
Description of operation
Operation date
Corporate event
06/09/2010
Disposal and acquisition of corporate control
Acquisition of Instrutech - On June 9, we announced that subsidiary WEG Equipamentos Elétricos S.A.
entered into an agreement to acquire Instrutech Ltda. a company that develops and manufactures
electronic sensors for industrial and commercial automation and human safety. The acquisition broadened
WEG’s line of products and integrated solutions in the automation area, adding high value-added products
that were previously not offered. Instrutech was the only Brazilian manufacturer of specific man/machine
safety automation equipment. Integrated electronic sensor products and systems are widely used in
extreme working conditions, applied to machine tools, plastic injection, woodworking and packaging
machines, conveyor belts, among others.
05/25/2010
Disposal and acquisition of corporate control
(i) Acquisition of control of the ZEST Group – On May 25, we announced the acquisition of corporate
control (51%) of the ZEST Group, based in South Africa. The ZEST Group has been a partner to WEG for
more than 30 years, and has gained significant market share in all lines of business, becoming the leader
in the South-African market. The Group also owns companies specialized in the assembly of industrial
electric panels, assembly of generator sets and providing electrical commissioning services. The ZEST
Group is the twenty-fourth subsidiary abroad and, as from the third quarter of 2010, it was consolidated by
WEG. After this acquisition, the South African market which was already a significant one, with prospects
of growth above the global average, has become WEG’s base of expansion in the entire African continent.
The Company has expanded by both tapping into the vast knowledge of the markets by the ZEST Group
team and leveraging WEG’s extensive experience in power, mining and oil & gas; (ii) Control of Voltran
capital – On May 25, we also announced the acquisition of additional control of Voltran S.A. de C.V., a
Mexican manufacturer of transformers, increasing our stakes to 60%. The partnership between WEG and
the Jimenez family, controllers of Voltran, began in 2006, when 30% of the Mexican company’s capital
was acquired. The Voltran trademark is strong in the Mexican market and the partnership with WEG led
to good results, with expansion of the line of products and improved delivery capacity. The evolution of the
partnership was a natural consequence of these results, seeking to exploit the synergies with the other
WEG operations in Mexico. Also in this case, Voltran revenues began impacting the consolidated
revenues of WEG as from the third quarter of 2010.
08/01/2009
Merger
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8.3 - Restructuring operations
Description of operation
(i) On August 1, 2009, subsidiary Weg Equipamentos Elétricos S/A carried out the merger of Weg
Automação S/A and of Weg Itajaí Equipamentos Elétricos Ltda. in order to reduce operating expenses
and costs, especially as a result of the implementation of ERP (SAP system), which enables greater
integration and synergy of activities associated with the production process and material flow, and
increases the sale of industrial solutions involving the subsidiaries’ products, facilitating negotiations and
expanding competitiveness. (ii) On August 13, 2009, we published a Notice of Material Fact informing that
we were discussing the construction of a new manufacturing unit with the state government of Espírito
Santo and the local government of Linhares. The completion of negotiations was announced on August
21, confirming the construction of a new manufacturing unit to expand our electric motor manufacturing
activities. For the construction of the future industrial site, WEG adopted a modular concept that allows for
the gradual and continuous increase of output capacity, thus meeting the Company’s expansion
requirements over several years. The first of these manufacturing modules in Linhares should become
operational in 2011. This modular concept has been used by WEG in its other units in Brazil and abroad.
(iii) The Extraordinary General Meetings held by WEG S.A. and by subsidiary Trafo Equipamentos
Elétricos S.A. on December 28, 2009 approved the merger of shares issued by TRAFO into WEG. As a
result of this integration, TRAFO became a wholly-owned subsidiary of WEG, which, in turn, became the
sole shareholder of TRAFO, directly or indirectly holding all of its shares, and continued to hold all the
rights and obligations it held before the operation was approved. TRAFO shareholders, in turn, became
holders of WEG shares, based on the approved share exchange ratio. Subsequently, on December 30,
2009, the merger of Trafo Equipamentos Elétricos S.A. into subsidiary WEG Equipamentos Elétricos S.A.
was approved.
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8.4 - Other relevant information
The Company does not have other information on the Economic Group other than the
information disclosed in the previous items of this Chapter 8.
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9.1 - Relevant non-current assets - other
See items 9.1a) – b) – c)
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9.1 - Relevant non-current assets / 9.1.a – Property, plant and equipment
Description of property, plant and equipment item
Manufacturing unit in Portugal
Manufacturing unit II
Manufacturing unit III
Manufacturing unit IV
Gravataí unit
Manufacturing unit in Austria
Itajaí unit
Linhares unit
São Bernardo do Campo
Manufacturing unit in Mexico
Manufacturing unit in India
Manufacturing unit in China
Manufacturing unit in Argentina
Manufacturing unit I
Joaçaba unit
Manaus unit
Manufacturing unit in South Africa
Manufacturing unit in the USA
Country
Portugal
Brazil
Brazil
Brazil
Brazil
Austria
Brazil
Brazil
Brazil
Mexico
India
China
Argentina
Brazil
Brazil
Brazil
South Africa
United States
State
SC
SC
SC
RS
SC
ES
SP
SC
SC
AM
City
Maia
Jaraguá do Sul
Guaramirim
Blumenau
Gravataí
Markt Piesting
Itajaí
Linhares
São Bernardo Campo
Huehuetoca
Hosur
Jiangsu Province
Cordoba Province
Jaraguá do Sul
Joaçaba
Manaus
Johannesburg
Minneapolis
Type of facilities
Own
Own
Own
Own
Own
Own
Own
Own
Own
Own
Own
Own
Own
Own
Own
Own
Own
Own
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9.1 - Relevant non-current assets / 9.1.b – Patents, trademarks, licenses, permits, franchises and technology transfer contracts
Type of asset
Trademarks
Description of asset
Covered area
“WEG” trademark
registration in several
classes
80 countries where
Renewable for 10
the Company has
years
business operations
Trademarks
Registration of several
trademarks relating to
some classes
of products
Term
30 countries where Renewable for 10
years
the Company has
business operations
Patents
Wire resistant to
degradation caused by
partial discharges
Patents
Method of braking a vector United States
controlled induction
machine
Brazil
Events that may cause a loss of
rights
Failure to renew registrations,
registrations previously issued to third
parties or registrations revoked by
local authorities
Failure to renew registrations,
registrations previously issued to third
parties or registrations revoked by
local authorities
Consequence of the loss of rights
Commercial losses due to trademark recall
and marketing costs for an alternative
strategy
Commercial losses due to trademark recall
and marketing costs for an alternative
strategy
Effective until
10/07/2023
- Failure to renew registrations or
registrations revoked by local
authorities; Third-party suits claiming
registrations previously issued or
registrations cancelled by local
authorities
- Commercial losses due to possible
competition in the technological area, whether
by restraint or entry of new competitors;
- New investments in alternative technology;
Obs.: - Depends on the reason for the loss of
rights and level of competition;
- Payment of royalties;
- Legal disputes
Effective until
08/18/2020
- Failure to renew registrations or
registrations revoked by local
authorities; Third-party suits claiming
registrations previously issued or
registrations cancelled by local
authorities
- Commercial losses due to possible
competition in the technological area, whether
by restraint or entry of new competitors;
- New investments in alternative technology;
Obs.: - Depends of the reason for the loss of
rights and level of competition;
- Payment of royalties;
- Legal disputes
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9.1 - Relevant non-current assets / 9.1.b – Patents, trademarks, licenses, permits, franchises and technology transfer contracts
Type of asset
Description of asset
Covered area
Term
Events that may cause a loss of
rights
Consequence of the loss of rights
Patents
Configuration applied to cover
with built-in air deflector
Brazil
Effective until
03/11/2030
- Failure to renew registrations or registrations
revoked by local authorities;
- Third-party suits claiming registrations
Patents
Configuration applied to cover
with deflector
Brazil, Germany,
Mexico, China and
USA
Effective until
09/27/2032
- Failure to renew registrations or registrations
revoked by local authorities
- Third-party suits claiming registrations
previously issued or registrations cancelled by
local authorities;
- Commercial losses due to possible competition,
whether by restraint or entry of new competitors;
- New investments in alternative design;
- Loss of product identity;
- Payment of royalties;
- Legal disputes
Patents
Configuration applied to feet
Brazil, Germany,
Mexico, China and
USA
Effective until
09/27/2032
- Failure to renew registrations or registrations
revoked by local authorities
- Third-party suits claiming registrations
previously issued or registrations cancelled by
local authorities;
- Commercial losses due to possible competition,
whether by restraint or entry of new competitors;
- New investments in alternative design;
- Loss of product identity;
- Payment of royalties;
- Legal disputes
Patents
Configuration applied to set of
joint box
Brazil, Germany,
Mexico, China and
USA
Effective until
09/27/2032
- Failure to renew registrations or registrations
revoked by local authorities
- Third-party suits claiming registrations
previously issued or registrations cancelled by
local authorities;
- Commercial losses due to possible competition,
whether by restraint or entry of new competitors;
- New investments in alternative design;
- Loss of product identity;
- Payment of royalties;
- Legal disputes
- Commercial losses due to possible competition,
whether by restraint or entry of new competitors;
- New investments in alternative design;
previously issued or registrations cancelled - Loss of product identity;
- Payment of royalties;
by local authorities;
- Legal disputes
Page 93 of 393
Reference Form - 2012 - WEG S.A.
Version: 1
9.1 - Relevant non-current assets / 9.1.b – Patents, trademarks, licenses, permits, franchises and technology transfer contracts
Type of asset
Description of asset Covered area
Term
Events that may cause a loss of
rights
Consequence of the loss of rights
Patents
Configuration applied to front
plate
Brazil, Germany,
Mexico, China and
USA
Effective until
09/27/2032
- Failure to renew registrations or registrations
revoked by local authorities
- Third-party suits claiming registrations
previously issued or registrations cancelled by
local authorities;
- Commercial losses due to possible competition,
whether by restraint or entry of new competitors;
- New investments in alternative design;
- Loss of product identity;
- Payment of royalties;
- Legal disputes
Patents
Electric motor components
Portugal
Effective until
09/27/2032
- Failure to renew registrations or registrations
revoked by local authorities
- Third-party suits claiming registrations
previously issued or registrations cancelled by
local authorities;
- Commercial losses due to possible competition,
whether by restraint or entry of new competitors;
- New investments in alternative design;
- Loss of product identity;
- Payment of royalties;
- Legal disputes
Page 94 of 393
Reference Form - 2012 - WEG S.A.
Version: 1
9.1 - Relevant non-current assets / 9.1.c – Equity interest held
Company name
CNPJ
CVM code
Book value - % variation Market value
% variation
Agro- Trafo, Mineração, 02.810.190/0001-38
Agricultura, Pecuária e
Administradora de Bens
S.A.
Type of company
Country
Fiscal year
Dividends received (reais)
Subsidiary
Brazil
State
City
Date
Amount (reais)
SP
Issuer’s
interest
(%)
Description of activities
conducted
I
São Bernardo do Campo Mining and trade of agricultural limestone, import,
exploration, sale and purchase of agricultural
products and livestock, exploration of agropastoral activities, planting and trade of cereals,
grasses, forages, oilseeds, tubers, foliaceous,
legumes, afforestation and fruit tree plantations,
purchase, raising, breeding, fattening and sale of
cattle and other livestock in general, development
and marketing
of own or third party agro-pastoral products,
holding equity interests in other companies as a
partner, member or shareholder, even if
belonging to other economy sectors, by investing
own funds not arising from tax incentives, and
management of own property, including the sale
and lease of these properties.
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
·
12/31/2011
0.000000
0.000000
0.00:
Book value 12/31/2011
3,785,000.00
·
12/31/2010
0.000000
0.000000
0.00:
·
12/31/2009
0.000000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity
interest
Integral part of the business
Equisul Indústria e
00.668.382/0001-26
Subsidiary
Brazil
SC
São José
Manufacturing and sale of electrical and
electronic equipment, import, export and
Comércio Ltda
representation of electrical and electronic
products and components,
technical assistance services and holding equity
interests in other entities.
91.750000
0.120000
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
·
12/31/2011
0.000000
0.000000
0.00:
Book value 12/31/2011
8,000.00
·
12/31/2010
0.000000
0.000000
0.00:
·
12/31/2009
0.000000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity
interest
Integral part of the business
Page 95 of 393
Reference Form - 2012 - WEG S.A.
Version: 1
9.1 - Relevant non-current assets / 9.1.c – Equity interest held
Company name
Fiscal year
Instrutech Ltda
CNPJ
CVM code
Book value - % variation Market value
% variation
O1 .422.798/0001 -22
Type of company
Dividends
received (reais)
Subsidiary
Country
Brazil
State
City
Date
Amount (reais)
SP
São Paulo
Description of activities
conducted
Issuer’s interest
(%)
I
Sale of electronic devices, equipment
O,Ot 0000
and tools for automation and control of
industrial processes; provision of services
and project design and consulting in
electronic equipment and tools for
automation and control of industrial
processes; installation and maintenance
of electronic equipment and tools for
automation and control of industrial
processes.
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
·
12/31/2011
0.000000
0.000000
0.00: Book value 12/31/2011
0.00
·
12/31/2010
0.000000
0.000000
0.00:
·
12/31/2009
0.000000
0.000000
0,00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Integral part of the business
O,t 00000
Logotech Ltda
96.570.1 48/0001 -30
Subsidiary
Brazil
SP
São Paulo
Sale of electronic devices, equipment
and tools for automation and control of
industrial processes; provision of services
and project design and consulting in
electronic equipment and tools for
automation and control of industrial
processes; installation and maintenance
of electronic equipment and tools for
automation and control of industrial
processes.
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
·
12/31/2011
0.000000
0.000000
0.00: Book value 12/31/2011
0.00
·
12/31/2010
0.000000
0.000000
0.00:
·
12/31/2009
0.000000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Integral part of the business
Page 96 of 393
Reference Form - 2012 - WEG S.A.
Version: 1
9.1 - Relevant non-current assets / 9.1.c – Equity interest held
Company name
Fiscal year
CNPJ
CVM code
Book value - % variation Market value
% variation
RF Reflorestadora Ltda 13.772.125/000t -8t
Type of company
Dividends
received (reais)
Subsidiary
Country
Brazil
State
City
Date
Amount (reais)
SC
Araguari
Description of activities
conducted
Issuer’s interest
(%)
I
Trade and exploration of reforestation,
t 00,000000
afforestation, forestry and / or
agropastoral activities, on its behalf or on
behalf of third parties, lumber mill and
manufacturing of wooden boxes for
packaging, equity interests in other
companies, businesses and enterprises of
any nature, within and outside the country
and administrative office.
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
·
12/31/2011
0.000000
0.000000
1,300,000.00:
Book value 12/31/2011
232,948,000.00
·
12/31/2010
0.000000
0.000000
0.00:
·
12/31/2009
0.000000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Integral part of the business
0,000000
RF Reflorestadora S.A. 79.670.50t /OOOt -35
Subsidiary
Brazil
SC
Jaraguá do Sul
Production of resins in general, dyeing
materials, substances and products of
plant and chemical origin for the industry
and for scientific purposes.
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
·
23,644,000.00
12/31/2011
0.000000
0.000000
:
Book value 12/31/2011
0.00
·
12/31/2010
0.000000
0.000000
5,893,000.00 :
·
12/31/2009
0.000000
0.000000
5,325,000.00 :
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity
interest
Integral part of the business
WEG Amazônia S.A.
06.303.603/0001 -49
Subsidiary
Brazil
AM
Manaus
Production, industrial processing, trade, 0,020000
export and import of industrial,
electromechanical and electronic systems,
rotating electrical machines, machinery
and equipment in general, appliances for
production, distribution and conversion of
electrical energy, electrical material,
programmable controllers, parts and
components of machinery, appliances and
equipment in general
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
Page 97 of 393
Reference Form - 2012 - WEG S.A.
Version: 1
9.1 - Relevant non-current assets / 9.1.c – Equity interest held
Company name
CNPJ
CVM code
Fiscal year
Book value - % variation Market value
% variation
Type of company
Dividends
received (reais)
Country
State
City
Date
Amount (reais)
I
12/31/2011
7.750000
0.000000
0.00: Book value 12/31/2011
I
12/31/2010
50.000000
0.000000
0.00:
·
12/31/2009
0.000000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Integral part of the business
WEG Chile S.A.
00.000.000/0000-00
Subsidiary
Chile
Description of activities
conducted
Issuer’s interest
(%)
I
6,000.00
8,000000
Trade, export and import of industrial,
electromechanical and electronic systems,
rotating electrical machines, machinery and
equipment in general, appliances for production,
distribution and conversion of electrical energy,
electrical material, programmable controllers,
parts and components of machinery, appliances
and equipment in general.
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
·
12/31/2011
6.850000
0.000000
0.00: Book value 12/31/2011
1,669,000.00
·
12/31/2010
47.920000
0.000000
0.00:
·
12/31/2009
40.800000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Integral part of the business
WEG Colômbia Ltda.
00.000.000/0000-00
Affiliate
Colombia
Trade, export and import of industrial,
1,000000
electromechanical and electronic systems,
rotating electrical machines, machinery and
equipment in general, appliances for production,
distribution and conversion of electrical energy,
electrical material, programmable controllers,
parts and components of machinery, appliances
and equipment in general.
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
·
12/31/2011
32.680000
0.000000
0.00: Book value 10/31/2011
86,000.00
·
12/31/2010
32.650000
0.000000
0.00:
·
12/31/2009
0.000000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Page 98 of 393
Reference Form - 2012 - WEG S.A.
Version: 1
9.1 - Relevant non-current assets / 9.1.c – Equity interest held
Company name
CNPJ
CVM code
Book value - % variation Market value
% variation
Integral part of the business
WEG Drives & Controls 14.309.992/0001 -48
- Automação Ltda
Type of company
Country
Fiscal year
State
City
Date
Amount (reais)
Issuer’s interest
(%)
I
Dividends received (reais)
Subsidiary
Description of activities
conducted
Brazil
SC
Jaraguá do Sul
99,000000
Manufacturing of electronic machinery,
appliances and equipment systems for
industrial automation, including manufacturing
and sale of: machinery, equipment and
integrated systems of an electrical,
electromechanical and electronic conception,
components and devices based on digital
technique and related electronic inputs, parts,
pieces and accessories, programmable
controllers and related electronic inputs,
electromechanical and electronic components
for control, command, protection and signaling
of circuits and electrical installations in various
areas of application. Provision of assembly,
installation, maintenance and technical
assistance services relating to products,
services and electrical, electromechanical,
electronic and hydraulic systems of the
company. Development of programs for
computers and machines for treatment of
Information and related techniques (software),
structuring and preparation of data bases.
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
·
12/31/2011
0.000000
0.000000
256,000.00 :
Book value 12/31/2011
831,.000.00
·
12/31/2010
0.000000
0.000000
0.00:
·
12/31/2009
0.000000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Integral part of the business
4,990000
WEG Electric (India)
00.000.000/0000-00
Subsidiary
India
Trade, export and import of industrial,
electromechanical and electronic systems,
Private Limited
rotating electrical machines, machinery and
equipment in general, appliances for
production, distribution and conversion of
electrical energy, electrical material,
programmable controllers, parts and
components of machinery, appliances and
equipment in general.
Page 99 of 393
Reference Form - 2012 - WEG S.A.
Version: 1
9.1 - Relevant non-current assets / 9.1.c – Equity interest held
Company name
CNPJ
CVM code
Fiscal year
Book value - % variation Market value
% variation
Type of company
Dividends
received (reais)
Country
State
City
Date
Amount
(reais)
: Market value
,
12/31/2011
-4.950000
0.000000
0.00: Book value 12/31/2011
,
12/31/2010
16.670000
0.000000
0.00:
,
12/31/2009
-14.290000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Integral part of the business
WEG Electric Corpo
00.000.000/0000-00
Subsidiary
USA
Description of activities
conducted
Issuer’s interest
(%)
I
20,000.00
0,790000
Trade, export and import of industrial,
electromechanical and electronic systems,
rotating electrical machines, machinery and
equipment in general, appliances for
production, distribution and conversion of
electrical energy, electrical material,
programmable controllers, parts and
components of machinery, appliances and
equipment in general.
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
,
12/31/2011
25.260000
0.000000
0.00: Book value 12/31/2011
625,000.00
,
12/31/2010
8.240000
0.000000
0.00:
,
12/31/2009
-13.020000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Integral part of the business
WEG Equipamentos
07.175.725/0001-60
Affiliate
Brazil
SC
Jaraguá do Sul Production, industrial processing, trade, export 100,000000
Elétricos S.A.
and import of industrial, electromechanical and
electronic systems, rotating electrical machines,
machinery and equipment in general,
appliances for production, distribution and
conversion of electrical energy, electrical
material, programmable controllers, parts and
components of machinery, appliances and
equipment in general
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
,
12/31/2011
8.440000
0.000000
521 ,113,000.00:
Book value 12/31/2011
2,666,862,000.00
,
12/31/2010
-8.040000
0.000000
653,973,000.00 :
,
12/31/2009
1.740000
0.000000
392,947,000.00 :
Page 100 of 393
Reference Form - 2012 - WEG SA
Version: 1
9.1 - Relevant non-current assets / 9.1.c – Equity interest held
Company name
Fiscal year
CNPJ
CVM code
Book value - % variation Market value
% variation
Reasons for acquiring and maintaining the equity interest
Integral part of the business
WEG Equipamientos
00.000.000/0000-00
Electricos S.A.
Type of company
Country
Dividends
received (reais)
Subsidiary
State
City
Date
Amount (Reais)
Description of activities
conducted
Issuer’s interest
(%)
I
Argentina
Production, industrial processing, trade,
t 0,440000
export and import of industrial,
electromechanical and electronic systems,
rotating electrical machines, machinery and
equipment in general, appliances for
production, distribution and conversion of
electrical energy, electrical material,
programmable controllers, parts and
components of machinery, appliances and
equipment in general
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
·
12/31/2011
34.720000
0.000000
22,000.00 :
Book value 12/31/2011
4,478,000.00
·
12/31/2010
8.980000
0.000000
581,000.00:
12/31/2009
-57.640000
0.000000
0.00
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Integral part of the business
0,070000
WEG Itália S.R.L
00.000.000/0000-00
Subsidiary
Italy
Trade, export and import of industrial,
electromechanical and electronic systems,
rotating electrical machines, machinery and
equipment in general, appliances for
production, distribution and conversion of
electrical energy, electrical material,
programmable controllers, parts and
components of machinery, appliances and
equipment in general.
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
·
12/31/2011
-3.460000
0.000000
0.00:
Book value 12/31/2011
5,000.00
·
12/31/2010
0.000000
0.000000
0.00:
·
12/31/2009
0.000000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Integral part of the business
Page 101 of 393
Reference Form - 2012 - WEG SA
Version: 1
9.1 - Relevant non-current assets / 9.1.c – Equity interest held
Company name
CNPJ
Fiscal year
Book value - % variation Market value
% variation
00.000.000/0000-00
WEG Overseas S.A.
CVM code
Type of company
Dividends
received (reais)
Subsidiary
Country
State
City
Date
Amount (reais)
Description of activities
conducted
Issuer’s interest
(%)
I
Virgin Islands
(United States)
Trade, export and import of industrial,
t 00,000000
electromechanical and electronic systems,
rotating electrical machines, machinery and
equipment in general,
appliances for production, distribution and
conversion of electrical energy, electrical
material, programmable controllers, parts and
components of machinery, appliances and
equipment in general.
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
·
12/31/2011
-67.390000
0.000000
0.00: Book value 12/31/2011
20,000.00
·
12/31/2010
-16.440000
0.000000
0.00:
·
12/31/2009
96.640000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Integral part of the business
WEG Peru S.A.
00.000.000/0000-00
Subsidiary
Peru
Hosur
Trade, export and import of industrial,
0,050000
electromechanical and electronic systems,
rotating electrical machines, machinery and
equipment in general, appliances for
production, distribution and conversion of
electrical energy, electrical material,
programmable controllers, parts and
components of machinery, appliances and
equipment in general.
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
·
12/31/2011
0.000000
0.000000
0.00: Book value 12/31/2011
0.00
·
12/31/2010
0.000000
0.000000
0.00:
·
12/31/2009
0.000000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Integral part of the business
WEG Tintas Ltda.
12.006.058/0001 -21
Subsidiary
Brazil
SC
Guaramirim
Production of resins in general, dyeing
99,9t 0000
materials, substances and products of plant
and chemical origin for the industry and for
scientific purposes.
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
12/31/2011
16.920000
0.000000
9,099,000.00 :
Book value 12/31/2011
65,550,000.00
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9.1 - Relevant non-current assets / 9.1.c – Equity interest held
Company name
Fiscal year
CNPJ
CVM code
Book value - % variation Market value
% variation
Type of company
Country
Dividends received (reais)
I
12/31/2010
0.000000
0.000000
2,360,000.00 :
I
12/31/2009
0.000000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Integral part of the business
WEGeuro Ind.
00.000.000/0000-00
Subsidiary
Portugal
Electricas S.A.
State
City
Date
Amount (reais)
Description of activities
conducted
Issuer’s interest
(%)
I
Production, industrial processing, trade,
export and import of industrial,
electromechanical and electronic systems,
rotating electrical machines, machinery and
equipment in general, appliances for
production, distribution and conversion of
electrical energy, electrical material,
programmable controllers, parts and
components of machinery, appliances and
equipment in general.
- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -,
: Market value
·
12/31/2011
14.450000
0.000000
172,000.00:
Book value 12/31/2011
1,856,000.00
·
12/31/2010
-1.,040000
0.000000
0.00:
·
12/31/2009
2.380000
0.000000
0.00:
-----------------------------------------------------------------------------------------------------------------------------------------------------------Reasons for acquiring and maintaining the equity interest
Integral part of the business
5,740000
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9.2 - Other relevant information
The Company does not have other information on Relevant Assets other than the
information disclosed in the previous items of this Chapter 9.
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10.1 - General financial and equity position
(In thousands of reais, except where otherwise indicated)
a) General financial and equity position – WEG Group
WEG is a Brazilian corporation with global operations. As such, it is exposed to global
economic conditions in the ordinary course of its business.
World economic activity continued to expand over 2011, although the intensity and
speed varied significantly in the different markets. In general, emerging markets
continued to be more dynamic and have contributed to the growth of world economy.
Developed economies continued to seek solutions for structural issues.
In this regard, we observed that emerging economies have, on average, been more
robust than advanced economies. Emerging economies not only have expanded more
rapidly, but were able to keep up the previous year’s dynamism. For mature
economies, especially in Europe, economic issues have led to a slowdown.
In Brazil, GDP recorded a 2.7% growth in relation to the previous year. Although lower,
the growth was more uniform in 2011 when compared with 2010, with no highlights
from the production viewpoint. Brazilian industrial production grew 0.3% in 2011,
according to the Brazilian Institute of Geography and Statistics (IBGE). Production of
capital goods, with expansion of 3.7% over the previous year, was the category with
the best performance.
b) Capital structure and possible redemption of shares or interest units,
indicating:
At December 31, 2011, the capital structure is made up of 37% third-party capital (Total
Liabilities less Cash and Cash Equivalents) and 63% equity (Net Equity). Management
believes that the capital structure of the Company today is adequate for the market’s
current timing.
i.
Possible redemption
Management does not anticipate possible redemption of issued shares.
ii.
Calculation method for redemption price
N/A.
c) Ability to pay financial commitments undertaken
We operate in growth markets, where there are ample investment opportunities with
attractive returns. This situation requires that we have financial flexibility to seize such
investment opportunities without an excessive rise in the exposure to financial risks.
Accordingly, we work to preserve access to resources and sources of liquidity, while
maintaining a sound capital structure. Furthermore,
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10.1 - General financial and equity position
we work closely with agencies such as Brazilian Development Bank (BNDES), the
Studies and Projects Finance Organization (FINEP) and the International Finance
Corporation (IFC), which are important sources of capital for long-term investments.
In 2011, we took advantage of the opportunity arising from the devaluation of the
Brazilian currency to raise new short-term financing in foreign currency to fund foreign
trade operations and to manage financial exposure to foreign exchange. Cash funds
are invested in first-tier banks and usually in local currency.
At December 31, 2011, cash equivalents and short-term investments totaled R$
3,212.3 million, of which R$ 2,931.6 million is classified as current and R$ 280.6 million
as non-current. Gross financial debt amounted to R$ 3,457.7 million, of which 49% is
classified as current and 51% as non-current. At the end of 2011, WEG’s net debt
totaled R$ 245.5 million.
CASH EQUIVALENTS AND INVESTMENTS
- Short term
- Long term
FINANCING
- Short term
- In Reais
- In other currencies
- Long term
- In Reais
- In other currencies
Net cash (debt)
December 2011
3,212,250
2,931,615
280,635
3,457,728
1,701,435
585,687
1,115,748
1,756,293
1,560,712
195,581
(245,478)
December 2010
2,552,996
2,552,996
2,418,943
1,018,995
476,599
542,395
1,399,948
1,209,687
190,260
134,053
Investments in Brazil
CDBs and LFs are remunerated at the rates of 100% to 106% of the CDI (100% to
106% of the CDI at December 31, 2010).
Investments abroad
Certificates of deposits issued by foreign financial institutions are remunerated as
follows:
•
•
In Euros subject to interest ranging from 0.65% to 1.7% p.a., in the original
amount of EUR 3,052, with balance of R$ 7,430;
In US dollars subject to interest ranging from 0.02% to 0.5% p.a., in the original
amount of US$ 9,334, with balance of R$ 17,611;
•
In currency of origin subject to interest ranging from 3.9% to 19.5% p.a., with
balance of R$ 12,461;
•
NDF - Non Deliverable Forwards in the amount of R$ 1,700.
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10.1 - General financial and equity position
d) Sources of funds used for working capital and capital expenditures
The Company uses the following sources of funds for investment projects:
•
•
•
•
To finance acquisition and construction of fixed assets in Brazil, we use our
cash generation capacity and loans from BNDES and other development
agencies, mostly in local currency;
To finance foreign subsidiaries’ working capital, we use financing in the
respective currencies of each country.
To finance foreign trade operations, we use advance on exchange contracts
(ACC), foreign currency financing type, taking advantage of the natural hedge
and continuously monitoring the financial exposure to foreign exchange;
For investments in research and development activities, we use specific lines of
credit from the Financing Agency for Studies and Projects (FINEP).
e) Sources of funds for working capital and capital expenditures intended to be
used as a means of covering liquidity shortfalls.
The Company controls its future working capital requirements, avoiding the need to
enter into emergency financing agreements to cover unexpected liquidity shortfalls,
which always implies higher costs. Moreover, the Company has access to preapproved
standby lines of credit from the main banks with which it does business, and these lines
may be used at any time.
f) Indebtedness and debt characteristics, further describing:
i.
relevant loan and financing agreements:
At December 31, 2011, cash (cash equivalents and short and long-term investments)
totaled R$ 3,212.3 million and gross financial debt amounted to R$ 3,457.7 million,
resulting in a net debt position of R$ 245,5 million (net cash of R$ 134.1 million at
December 31, 2010). Cash is substantially invested in local currency, in investments
pegged to the CDI, with first-tier banks.
Gross debt is divided as follows, according to maturity:
Short-term transactions, totaling R$ 1,701.4 million (49% of total), represented by the
short-term portion of loans taken out with BNDES and other development agencies,
mostly in local currency, and transactions related to operating activities (trade finance)
in foreign currency and by working capital financing of foreign subsidiaries in the
respective currencies of each country.
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10.1 - General financial and equity position
•
Long-term transactions, totaling R$ 1,756.3 million (51% of total), substantially
represented by financing taken out with BNDES and other development agencies,
mostly in local currency, and, to a lesser extent, by working capital financing of
foreign subsidiaries in the respective currencies of each country. The term of the
long-term portion is 26.7 months.
According to the benchmark currencies, the total debt can be divided into:
•
•
Denominated in Reais, totaling R$ 2,146.0 million (62% of total), mostly
represented by financing taken out with BNDES and other development agencies.
The weighted average cost of debt denominated in Reais is approximately 6.9%
p.a. Fixed contracts are indexed mostly to the Long-term Interest Rate (TJLP). The
term of the portion denominated in Reais is 19.8 months.
Denominated in US dollars, Euros and other currencies, totaling R$ 1,311.8 million
(38% of total), mainly represented by trade finance transactions (advances on
foreign exchange contracts - ACC) conducted in Brazil and working capital loans
taken out by foreign subsidiaries in their local currencies. The term of the portion
denominated in foreign currencies is 11 months.
The following table describes the debt characteristics:
Type
IN BRAZIL
SHORT TERM
Working capital (ACC’s)
Working capital
Working capital
Working capital
Working capital
NDF – Non Deliverable
Forwards
Fixed assets
Other
LONG TERM
Working capital
Fixed assets
Working capital
Fixed assets
Working capital
Working capital
Export prepayment
Other
OVERSEAS
SHORT TERM
Working capital
Annual charges
Interest 0.9% to 3.9% p.a. (+) FX
TJLP (+) 1.4% to 5.0% p.a.
Interest of 1.6% to 9.0% p.a.
US$ (+) 1.4% to 1.8% p.a.
US dollar (+) Libor (+) 3.25% p.a.
Foreign exchange variation
TJLP (+) 1.0% to 5.0% p.a.
Sundry
TJLP (+) 1.4% to 6.8% p.a.
UFIR (+) 1.0% to 4.0% p.a.
Interest of 4.0% to 9.0% p.a.
TJLP (+) 1.0% to 5.0% p.a.
US$ (+) 1.4% to 1.8% p.a.
US dollar (+) Libor (+) 3.25% p.a.
Foreign exchange variation
Sundry
EURIBOR (+) 0.6% to 3.5% p.a.
CONSOLIDATED
12/31/11
12/31/10
1.204.287
596,087
247,694
330,505
15,868
6,335
760,349
276,411
388,700
82,560
4,801
67
310
5,939
1,549
1.732.781
812,841
55,016
678,941
13,914
56,241
40,642
75,004
182
5,340
2,470
1,311,643
488,272
41,500
662,216
17,700
59,876
41,655
424
497.148
176,198
258,646
40,524
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10.1 - General financial and equity position
Type
Working capital
Working capital
Working capital
Working capital
Working capital
LONG TERM
Working capital
Working capital
Working capital
Working capital
TOTAL SHORT TERM
TOTAL LONG TERM
ii.
Annual charges
LIBOR (+) 0.9% to 4.5% p.a.
90% of PBOC (4.5% to 5.0%) p.a.
BBSY (+) 1.3% to 1.5% p.a.
JIBAR (+) 3.5% p.a.
Interest 0.8% to 17.2% p.a.
90% of PBOC (4.5% to 5.0%) p.a.
BBSY (+) 1.3% to 1.5% p.a.
JIBAR (+) 3.0% to 3.5% p.a.
Interest 5.0% to 11.7% p.a.
CONSOLIDATED
12/31/11
12/31/10
94,921
72,358
50,965
8,059
30,900
18,277
14,058
144,164
105,370
23.512
88,305
11,900
51,079
309
302
9,390
32,338
1,913
4,586
1.701.435
1,018,995
1.756.293
1,399,948
(cont.) other long-term business with financial institutions,
N/A.
iii.
(cont.) debt subordination levels,
All the financing agreements have the same seniority levels.
iv.
•
(cont.) any restrictions regarding:
indebtedness ratios and limitations on new indebtedness - Some of the
Company’s agreements with BNDES and IFC impose minimum requirements on:
Capitalization (net equity/total assets)
Net debt/EBITDA ratio
Current liquidity (current assets/current liabilities)
•
•
•
•
dividend distribution - The financing agreement with IFC determines that the
Company may not pay cash dividends if there are contract installments in default.
disposal of assets - The financing agreement with IFC determines that the
Company may not dispose of assets (i) that represent more than 10% of the
consolidated assets at the end of the year prior to the event or if (ii) the value of
consolidated assets is lower than 50% of the consolidated assets at March 31,
2010.
issuance of new securities - The financing agreements in place do not include
clauses that impose limits on the issuance of securities by the Company.
disposal of corporate control - The financing agreements in place do not include
clauses that impose limits on the disposal of the Company’s corporate control.
v. Limitations on the use of current financing arrangements
The Company has access to pre-approved standby lines of credit from the main banks
with which it does business, and these lines may be used at any time.
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10.1 - General financial and equity position
vi. Significant changes in each line item of the financial statements
Review of balance sheet accounts
Position at December 31, 2011 as compared to December 31, 2010
(i) Current assets
At December 31, 2011, current assets amounted to R$ 5,867,061, representing an
increase of R$ 1,073,052 or 22.4% over the amount recorded at December 31, 2010 of
R$ 4,794,009. In relation to total assets, current assets remained at 64%, the same
proportion as at December 31, 2010. The major changes in current assets were as
follows:
Cash and cash equivalents
The line item “Cash and cash equivalents”, amounting to R$ 2,931,615 at December
31, 2011, increased by R$ 378,619 or 15% over the amount recorded at December 31,
2010 of R$ 2,552,996. This positive change results from cash generated from
operating activities and new financing obtained in the period.
In relation to total
assets, cash and cash equivalents accounted for 32% at December 31, 2011, as
compared to 34% for December 31, 2010.
Trade accounts receivable
The line item “Accounts receivable”, amounting to R$ 1,307,692 at December 31, 2011
increased by R$ 262,980 or 25% over the amount recorded at December 31, 2010 of
R$ 1,044,712. This positive change results from increase in the client financing
requirements for the period, with increase in business activities. In relation to total
assets, at December 31, 2011, trade accounts receivable represented the same 14%
recorded for December 31, 2010.
Inventories
The line item “Inventories”, amounting to R$ 1,362,314 at December 31, 2011
increased by R$ 353,362 or 35% over the amount recorded at December 31, 2010 of
R$ 1,008,952. This change results from the natural increase in the need for
investments in turnover in the period, with increase in business activities. In relation to
total assets, inventories accounted for 15% at December 31, 2011, as compared to
13% for December 31, 2010.
(ii) Non-current assets
At December 31, 2011, non-current assets amounted to R$ 3,238,800, representing
36% of total assets, a positive variation of R$ 521,645 or 19% over the amount
recorded at December 31, 2010 of R$ 2,717,155. In relation to total assets, non-current
assets remained at 36%, the same proportion as at December 31, 2010. The major
changes in non-current assets were as follows:
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10.1 - General financial and equity position
Property, plant and equipment
The line item “Property, plant and equipment”, amounting to R$ 2,445,760 at
December 31, 2011 increased by R$ 50,185 or 2% over the amount recorded at
December 31, 2010 of R$ 2,395,575. This change results from investments in capacity
expansion, net of effects of write-off of depreciation and depletion recorded in the
period. In relation to total assets, property, plant and equipment accounted for 27% at
December 31, 2011, as compared to 32% for December 31, 2010.
Intangible assets
“Intangible assets” amounted to R$ 360,222 at December 31, 2011, representing an
increase of R$ 176,227 or 96% in relation to the amount recorded at December 31,
2010 of R$ 183,995. The variation is a result of goodwill on acquisitions. In relation to
total assets, intangible assets accounted for 4% at December 31, 2011, as compared
to 2% for December 31, 2010.
(iii) Current liabilities
Current liabilities totaled R$ 2,752,960 at December 31, 2011, representing an
increase of R$ 814,157 or 42% over the amount recorded at December 31, 2010 of R$
1,938,803. In relation to total liabilities, current liabilities accounted for 30% at
December 31, 2011, compared to 26% at December 31, 2010. The major changes in
current liabilities were as follows:
Suppliers
The line item “Suppliers”, amounting to R$ 298,195 at December 31, 2011 increased
by R$ 55,895 or 23% over the amount recorded at December 31, 2010 of R$ 242,300 .
This change was a natural consequence of the increase in business activities in the
period. In relation to total liabilities, suppliers accounted for 3% at December 31, 2011,
corresponding to the same percentage as at December 31, 2010.
Financing and short-term debts
The line item “Financing and short-term debts”, amounting to R$ 1,701,435 at
December 31, 2011 increased by R$ 682,440 or 67% over the amount recorded at
December 31, 2010 of R$ 1,018,995. This change results from new short-term
financing raised to cover the need for working capital investments, taking advantage of
the attractive conditions offered by the market. In relation to total liabilities, Financing
and short-term debt accounted for 19% at December 31, 2011, as compared to 14%
for December 31, 2010.
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10.1 - General financial and equity position
Dividends and interest on equity payable
The line item “Dividends and interest on equity”, amounting to R$ 2,804 at December
31, 2011 decreased by R$ 60,636 or 96% over the amount recorded at December 31,
2010 of R$ 63,440. This variation results from the change in the way dividends
proposed are recorded, now part of Equity. In relation to total liabilities, the account
was no longer representative at December 31, 2011 in relation to the 1% recorded at
December 31, 2010.
(iv) Non-current liabilities
Non-current liabilities totaled R$ 2,446,312 at December 31, 2011, representing an
increase of R$ 417,787 or 21% over the amount recorded at December 31, 2010 of R$
2,028,525. In relation to total liabilities, non-current liabilities continued representing the
same 27% observed at December 31, 2010. The major changes in non-current
liabilities were as follows:
Financing and long-term debts
The line item “Financing and long-term debts”, amounting to R$ 1,756,293 at
December 31, 2011 increased by R$ 356,345 or 25% over the amount recorded at
December 31, 2010 of R$ 1,399,948. This change results from new net financing
obtained. In relation to total liabilities, Financing and long-term debts accounted for
19% at December 31, 2011, representing the same percentage as at December 31,
2010.
(v) Net equity
Net equity totaled R$ 3,906,589 at December 31, 2011, an increase of R$ 362,753 or
10% over the amount recorded at December 31, 2010 of R$ 3,543,836. This growth
was mainly due to net income generated in the year, net of allocations.
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10.1 - General financial and equity position
Position at December 31, 2010 as compared to December 31, 2009
(i) Current assets
At December 31, 2010, current assets amounted to R$ 4,794,009, representing an
increase of R$ 820,851 or 21 % over the amount recorded at December 31, 2009 of R$
3,973,158. In relation to total assets, current assets increased from 60% at December
31, 2009 to 64% at December 31, 2010. The major changes in current assets were as
follows:
Cash and cash equivalents
The line item “Cash and cash equivalents”, amounting to R$ 2,552,996 at December
31, 2010 increased by R$ 425,879 or 20% over the amount recorded at December 31,
2009 of R$ 2,127,117. This positive change results from cash generated from
operating activities and new long-term financing obtained in the period. In relation to
total assets, cash and cash equivalents accounted for 34% at December 31, 2010, as
compared to 32% for December 31, 2009.
Trade accounts receivable
The line item “Accounts receivable”, amounting to R$ 1,044,712 at December 31, 2010
increased by R$ 134.576 or 15% over the amount recorded at December 31, 2009 of
R$ 910,136. This change results from increase in the client financing requirements for
the period, with increase in business activities. In relation to total assets, trade
accounts receivable accounted for 14% at December 31, 2010, which is the same
percentage recorded for December 31, 2009.
Inventories
The line item “Inventories”, amounting to R$ 1,008,952 at December 31, 2010
increased by R$ 250,836 or 33% over the amount recorded at December 31, 2009 of
R$ 758,116. This change results from the natural increase in the need for investments
in turnover in the period, with increase in business activities. In relation to total assets,
inventories accounted for 13% at December 31, 2010, as compared to 12% for
December 31, 2009.
(ii) Non-current assets
At December 31, 2010, non-current assets amounted to R$ 2,717,155, representing
36% of total assets, with a positive variation of R$ 107,247 or 4% over the amount
recorded at December 31, 2009 of R$ 2,609,908. In relation to total assets, non-current
assets increased from 36% at December 31, 2009 to 40% at December 31, 2010. The
major changes in non-current assets were as follows:
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10.1 - General financial and equity position
Property, plant and equipment
The line item “Property, plant and equipment”, amounting to R$ 2,395,575 at
December 31, 2010 increased by R$ 124,382 or 5% over the amount recorded at
December 31, 2009 of R$ 2,271,193. This change results from investments in capacity
expansion, net of effects of write-off of depreciation and depletion recorded in the
period. In relation to total assets, property, plant and equipment accounted for 32% at
December 31, 2010, as compared to 35% for December 31, 2009.
Intangible assets
“Intangible assets” amounted to R$ 183,995 at December 31, 2010, representing an
increase of R$ 55,135 or 43% in relation to the amount recorded at December 31, 2009
of R$ 128,860. The variation is a result of goodwill on acquisitions. In relation to total
assets, intangible assets accounted for 2% at December 31, 2010, corresponding to
the same percentage recorded for December 31, 2009.
(iii) Current liabilities
Current liabilities totaled R$ 1,938,803 at December 31, 2010, representing an
increase of R$ 240,242 or 14% over the amount recorded at December 31, 2009 of R$
1,698,561. In relation to total liabilities, current liabilities accounted for 26%,
corresponding to the same percentage for December 31, 2009. The major changes in
current liabilities were as follows:
Suppliers
The line item “Suppliers”, amounting to R$ 242,300 at December 31, 2010 increased
by R$ 53.521 or 28% over the amount recorded at December 31, 2009 of R$ 188.779.
This change was a natural consequence of the increase in business activities in the
period. In relation to total liabilities, suppliers accounted for 3% at December 31, 2010,
corresponding to the same percentage as at December 31, 2009.
Financing and short-term debts
The line item “Financing and short-term debts”, amounting to R$ 1,018,995 at
December 31, 2010 increased by R$ 123.110 or 14% over the amount recorded at
December 31, 2009 of R$ 895,885. This change results from new short-term financing
raised to cover the need for working capital investments. In relation to total liabilities,
Financing and short-term debt accounted for 14% at December 31, 2010, as compared
to 14% for December 31, 2009.
Dividends and interest on equity payable
The account “Dividends and interest on equity payable” recorded a balance of R$
63,440 at December 31, 2010, representing an increase of R$ 26,591 or 72% in
relation to the amount recorded at December 31, 2009 of R$ 36,849. This variation
results from the change in the form of recording dividends declared but not effectively
paid above the minimum legal limit of 25% of adjusted net income. In relation to total
liabilities, this item accounted for 1% at December 31, 2010 and 2009.
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10.1 - General financial and equity position
(iv) Non-current liabilities
Non-current liabilities totaled R$ 2,028,525 at December 31, 2010, representing an
increase of R$ 471,306 or 30% over the amount recorded at December 31, 2009 of R$
1,557,219. In relation to total liabilities, non-current liabilities increased from 24% at
December 31, 2009 to 27% at December 31, 2010. The major changes in non-current
liabilities were as follows:
Financing and long-term debts
The line item “Financing and long-term debts”, amounting to R$ 1,399,948 at
December 31, 2010 increased by R$ 423,300 or 43% over the amount recorded at
December 31, 2009 of R$ 976,648. This change results from the Company’s longer
debt profile and raising of new financing. In relation to total liabilities, Financing and
long-term debts accounted for 19% at December 31, 2010 as compared to 15% for
December 31, 2009.
(v) Net equity
Net equity totaled R$ 3,543,836 at December 31, 2010, an increase of R$ 216,550 or
7% over the amount recorded at December 31, 2009 of R$ 3,327,286 . This growth
was mainly due to net income generated in the year, net of allocations.
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10.2 - Operating results and financial position
(In thousands of reais, except where otherwise indicated)
(a) Position at December 31, 2011 as compared to December 31, 2010
Operating revenue
In 2011, consolidated Net Operating Revenue totaled R$ 5,189.4 million, representing
an increase of 18.2% in relation to the previous year. In relation to the previous years,
the major business areas showed a growth. For the industrial electrical and electronic
equipment and paints & varnishes areas, revenues grew in 2011 following the good
performance already observed in the previous year. An upturn was observed for power
generation, transmission and distribution (GTD) equipment, reversing the fall in
revenues recorded in the previous year. A fall in relation to 2010 revenues was only
felt in the household motors area.
The highlights in each of the areas are shown below:
Electro-electronic Industrial equipment – Revenues grew by 29%, with expansion of
the business in the different markets, despite the industrial production in Brazil and
abroad showing a trend towards stability or slow growth. In our operations, we seek
opportunities in industrial segments that have their own dynamism, not directly
impacted by the general macroeconomic environment, such as the oil and gas industry
in Brazil. We also continue expanding our line of business in all markets, aggregating
new products and services or increasing the scope of our offerings in the external
markets, providing more customized products where we are already traditional
equipment suppliers. In addition, we included new products to our business, such as
power transmission solutions (gear reducers and motor reducers), always bearing in
mind the concept of supplying a broad range of products and services to our clients.
Energy generation, transmission and distribution (GTD) equipment – net
operating revenue for this business area grew 15% over 2010. In 2011, the
performance of this segment, considered "long-cycled”, is a result of new orders made
in 2010, but only converted into revenues when effectively delivered to end clients,
over 2011. Incoming orders are already back to normal, meaning less variations in
future periods. Energy generating equipment (G) is focused on renewable and
distributed energy sources, such as small hydroelectric plants and thermal plants
fueled by biomass. In 2011, we announced the joint-venture with MTOI, which will
enable us to offer complete solutions also to the wind power market. However, we are
already reaping benefits from the significant rise in investments in wind power in our
Transmission & Distribution (TD) business unit, supplying transformers and complete
power substations for wind projects.
Electric motors for domestic use – This segment is considered “short-cycled”, i.e.,
changes in market conditions are rapidly felt on sales and revenues. We observed a
10% fall in net operating revenue in relation to 2010, considered a high comparison
basis. Basically speaking, market conditions have been positive in 2011, with
expansion in employment, income and credit.
Paints and varnishes – we seek to serve the same clients we have in other business
areas, maximizing the return of our sales efforts. The positive conditions of the
Brazilian industry and our expansion to Latin America permitted the growth of our net
operating revenue by 12% in relation to the previous year.
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10.2 - Operating results and financial position
Domestic market
Net operating revenue in the domestic market totaled R$ 2,903.0 million, a year-onyear increase of 9%, corresponding to 56% of our total net operating revenue. The
growth in the domestic market is a consequence of the continued recovery of the
dynamism in certain industry segments, with an emphasis on capital goods for
investments in expansion of the production capacity. We remain leaders in the
Brazilian market in all business segments in which we operate, and continue expanding
our line of products and services, with a view to offering more complete and integrated
industrial solutions.
External market
Net operating revenue in the external markets totaled R$ 2,286.4 million,
corresponding to 44% of our total net operating revenue.
The year-on-year
comparison measured in Brazilian reais shows an increase of 33%. In U.S. dollars,
net operating revenue in the external market reached US$ 1,361.8 million,
corresponding to a growth of 38.6% in relation to 2010.
The good performance in external markets in 2011 is a result of the expansion in both
the traditional markets and the new markets and businesses. Acquisitions made in
2010 referring to additional stakes in Voltran in Mexico and control of ZEST in South
Africa helped increase revenues over the year. Even in developed markets, where the
recovery of the macroeconomic dynamism is slower, we were able to find opportunities
of growth by means of a focused exploration in interesting business niches. We also
continued branching out our manufacturing activities in the external market, with new
major acquisitions over the year: Pulverlux, an Argentine paint manufacturer; Watt
Drive, an Austrian gear reducer and motor reducer manufacturer; and Electric
Machinery, one of the most traditional manufacturers of high-voltage rotating electrical
machines in the USA.
Cost of goods sold
Cost of goods sold totaled R$ 3,633.4 million, representing 70% of net operating
revenue (68% in 2010), generating gross margin of 30%, a minor reduction in relation
to the previous year.
The major impacts on cost of goods sold are described below:
•
The high volatility of foreign exchange rates and of the prices of major raw
materials at the beginning of the year, with increases that could not be
transferred with the necessary speed and intensity. Over the year, such
pressures were mitigated, due to fall in such volatility and because of the active
management of sales costs and prices. Despite the devaluation of the Brazilian
real in the last quarter, the annual average was an appreciation of 5% in
relation to the US dollar.
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•
The beginning of production of electric motors in the manufacturing units of
Linhares, Espírito Santo and in Hosur, India, with a consequent negative impact
on dilution of fixed costs during the production’s ramp-up process. This effect is
being gradually overcome with the growth in production and consequent use of
the production capacity of the new units.
Selling, general and administrative expenses
Consolidated Selling, General and Administrative expenses totaled R$ 768.4 million,
representing 14.8% of net operating revenue (R$ 697.0 million in 2010, representing
15.9% of net operating revenue). In relation to the previous year, operating expenses
increased by 10% in absolute terms, but presented a relative reduction of 1.1
percentage points with a strong performance achieved mainly on administrative
expenses, seeking higher operational efficiency.
EBITDA
As a result of the effects presented above, EBITDA reached R$ 882.3 million
(calculated according to the methodology defined by CVM through Circular Letter No.
01/07), with a growth of 12% on the 2010 result. The EBITDA margin was 17%, one
percentage point below the prior-year EBITDA.
Financial income and expenses
Financial income totaled R$ 499.6 million (R$ 348.5 million in 2010) and financial
expenses reached R$ 396.6 million (R$ 225.4 million in 2010). As such, total financial
income was of R$ 103.0 million (R$ 123.1 million in 2010). We should stress that the
volatility of foreign exchange rates in the second half of the year led to a short-term
impact on financial expenses referring to sales financing in the external market. Such
impact is entirely offset by the appreciation of receivables in foreign currencies, but the
positive effect only takes place over time.
Net income
As a result of the effects discussed above, consolidated net income attributed to WEG
S.A. shareholders totaled R$ 586.9 million, representing an increase of 13% on the R$
519.8 million recorded in 2010. The return on capital was of 17% in 2011 (15.8% in
2010) and net margin reached 11.3% (11.8% in 2010).
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(b) Position at December 31, 2010 as compared to December 31, 2009
Gross operating revenue
In 2010, consolidated Gross Operating Revenue totaled R$ 4,391,973 million,
representing an increase of 4.3% in relation to the previous year. The recovery of the
dynamism in each of the different business segments, however, was not uniform. We
observed healthy growth rates in the industrial electrical and electronic equipment,
household motors and paints & varnishes areas. The GTD area (equipment for the
power industry), however, was sensitive to the weak performance of inflow of new
orders in 2009.
The highlights in each of the areas are shown below:
Electro-electronic industrial equipment – with the recovery of the pace of industrial
production, both in Brazil and overseas, and the consequent expansion of investment
in the production capacity, a 12% increase in net operating revenue was observed for
this segment when compared to 2009. Most of our overseas business is concentrated
in this area, conducted in currencies other than the real. Accordingly, despite the good
performance, the appreciation of the Brazilian currency does not enable comparison,
thus explaining the relatively lower increase.
Energy generation, transmission and distribution (GTD) equipment – in this area,
we observed a year on year fall of 24% in gross operating revenue. This segment is
considered “long-cycled”, as effects of changes in the basic demand are slowly
transferred to sales and revenues, and our performance in this segment is focused on
certain market niches. Our power generation segment is strictly focused on sources
that enable renewable and distributable generation of power, such as small
hydroelectric plants and thermal plants fueled by biomass. As mentioned, the negative
performance of GTD in 2010 is a consequence of the low number of new orders in
2009, when the international crisis led to reduced investments. As for sales, measured
by the inflow of new orders, an upturn occurred during the year, particularly regarding
transmission and distribution products. Impacts of such upturn should be more evident
in 2011.
Electric motors for domestic use – This business area maintained a good
performance over the year, recording a growth of 24% in net operating revenue in
relation to 2009, even with the gradual withdrawal of consumption incentives in the
form of tax reductions. This area, however, is considered “short-cycled”, i.e., changes
in market conditions are rapidly felt on sales and revenues. Nevertheless, market
conditions have been positive, with expansion in employment, income and credit,
stimulating the market.
Paints and varnishes - The positive conditions of the Brazilian industry permitted the
growth of our net operating revenue by 20% in relation to the previous year for this
business line. This positive behavior is within our expectations, as we seek to serve the
same clients we have in other business areas.
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10.2 - Operating results and financial position
Domestic market
Net operating revenue in the domestic market totaled R$ 2,670,443, a year-on-year
increase of 5.7%, corresponding to 61% of our total net operating revenue. The growth
in the domestic market is a consequence of the recovery of economic activities, with
positive impacts on demand for durable goods and capital goods for investments in
expansion of the production capacity.
Over the past 50 years, we paved our way to leadership in all Brazilian market
segments in which we operate, with continuous expansion of our product and service
lines.
We are leaders in the production of electric equipment such as motors,
transformers, generators and, over the years, have progressed towards offering
complete and integrated industrial solutions.
External market
Net operating revenue in the external markets totaled R$ 1,721,530, corresponding to
39% of our total net operating revenue. Comparison of the figures in reais shows
growth of 2.2% on the previous year. In U.S. dollars, net operating revenue in the
external market reached US$ 892.9 million, corresponding to a growth of 15.7% in
relation to 2009.
In 2010, we continued expanding our international activities. Our share in the Mexican
transformer market increased, with acquisition of additional interest in our affiliate
Voltran, one of the leaders in such market. We also acquired control of ZEST, leader in
the sale of electrical and electronic products for industrial use in South Africa. In
addition to the mentioned acquisitions, we continued expanding our industrial
operations overseas. In 2010, we built manufacturing units in India, adding to our
manufacturing units in Argentina, Mexico, Portugal and China.
Our products are currently distributed in more than 100 countries in the five continents,
with direct presence in the major global markets. We seek to diversify our geographic
presence, maintaining consistent growth rates in the external market and avoiding
effects of any changes in the economic cycle of each country.
Cost of goods sold
Cost of goods sold totaled R$ 3,005,021 in 2010, representing 69.4 % of net operating
revenue (67.8% in 2009), generating gross margin of 31.6%, a reduction of 0.6
percentage points in relation to the previous year.
The major impacts on cost of goods sold are described below:
•
•
Change in the combination of products sold, increasing the number of products
with less value added, with a consequent a rise in transformation costs and a
fall in the dilution of fixed costs. This is an expected effect, as the recovery of
the demand usually occurs more rapidly for less developed markets and
products. We have observed a gradual recovery of the demand for more
developed products and markets.
Appreciation of the Brazilian currency has put pressure on our margins by
increasing costs in reais in relation to those denominated in other currencies.
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We endeavor to minimize these pressures by combining our global policy on purchase
of input products and our currency hedge policy.
Selling, general and administrative expenses
Consolidated selling, general and administrative expenses totaled R$ 696,973,
representing 15.9% of net operating revenue in 2010. In relation to the previous year’s
amount of R$ 633,467, operating expenses increased by 10% in absolute terms, but
with a relative reduction of only 0.9 percentage points in relation to net operating
revenue. Similarly to cost of goods sold, the effects of changes in the combination of
products explain the negative variations in operating expenses.
EBITDA
As a result of the effects presented above, EBITDA reached R$ R$ 789,110 (calculated
according to the methodology defined by CVM through Circular Letter No. 01/07), with
a fall of 5.8% on the 2009 result. The EBITDA margin was 18%, which is 1.9
percentage point below the prior-year EBITDA margin.
Financial income and expenses
Financial income totaled R$ 348,471 (R$ 383,468 in 2009) and financial expenses
reached R$ 225,356 (R$ 272,149 in 2009). As such, total financial income was of R$
123,115 (R$ 111,319 in 2009).
Net income
As a result of the effects discussed above, consolidated net income attributed to WEG
S.A. shareholders totaled R$ 519,782, representing an decrease of 5.6% on the R$
550,543 recorded in 2009. The return on capital was of 15.8% in 2010 (17.9% in 2009).
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10.3 - Material effects that events have caused or are expected to cause on the
financial statements
(In thousands of reais, except where otherwise indicated)
a) Introduce or dispose of a business segment. N/A.
b) Constitute, acquire or dispose of ownership interest.
Acquisition of Electric Machinery (USA)
On November 3, the agreement entered into with GE Energy for acquisition of Electric
Machinery ("EM") was announced. The acquisition was concluded at the end of 2011.
Electric Machinery, established in 1891, is located in Minneapolis (USA) and develops
and produces motors, generators and exciters, mostly intended for the global oil and
gas and power generation markets. The Company also offers a broad array of
aftermarket services, including installation, field support, parts and pieces, repair,
rewinding, rebalancing and technical support. Electric Machinery has an installed base
of more than 5,500 units in operation and is the leader in technological development of
high value added products, such as two-pole generators and synchronous motors with
low rotation speed.
The reputation earned by Electric Machinery concerning large machines over its 100
years of existence, with high quality products and wide brand recognition in significant
market segments, such as oil and gas and power generation, will add to our platform in
Minneapolis, USA, permitting flexibility in the provision of integrated solutions in the
region.
Acquisition of Watt Drive (Austria)
On November 8, the Company announced its acquisition of Watt Drive Antriebstechnik
GmbH ("Watt Drive"), an Austrian company engaged in the development and
production of gear reducers, motor reducers, frequency inverters and drive systems.
Watt Drive was established in 1972, near Vienna, Austria, and was a traditional
European player in the power transmission segment, with a manufacturing unit in
Austria and assembly units in Germany and Singapore, in addition to a broad network
of sales representatives.
With acquisition of Watt Drive, WEG now provides power transmission solutions in the
external markets, in line with the strategy of offering an increasingly broader portfolio of
products and solutions. Power transmission solutions are included in electric motors,
frequency inverters and speed reducers, improving operating performance and
maximizing energy efficiency.
Joint Venture with CESTARI
On October 19, 2011, an agreement of understanding entered into with CESTARI
Industrial e Comercial S.A. ("CESTARI") was announced, for development, production
and sale of gear reducers and motor reducers.
CESTARI is among the leaders in the Brazilian speed reducer market and is located in
Monte Alto, São Paulo state, where it has a vertical production structure with iron,
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financial statements
bronze and aluminum casting processes, and machining in modern computerized
centers.
WEG-Cestari Redutores e Motorredutores S.A. is specifically involved in business and
assets relating to production of speed reducers and motor reducers, combining these
with electric motor solutions and industrial automation systems in integrated solution
packages, known as “power transmission solutions”, for which the demand is growing
as they improve operating performance and maximize energy efficiency.
Joint Venture with MTOI
On March 3, 2011, the Company executed the Memorandum of Understanding and the
Technology Transfer Agreement with the M. Torres Olvega Industrial (MTOI) Group for
creation of a joint venture engaged in the production, assembly, installation and sale of
aerogenerators and provision of operation and maintenance services in Brazil.
The M. Torres Group was formed in 1975 to design, develop and produce systems for
industrial automation processes and solutions for the aeronautics, paper and power
industries. The technology developed by MTOI permits the direct coupling of the
electric generator to the wind turbine shaft, thus not requiring the installation of a speed
multiplier, which is a competitive advantage as it reduces the number of components
and, consequently, the possibility of occurrence of operational problems and
maintenance costs.
This partnership gives us the opportunity to directly participate in the wind power
generation business, with an integrated offer that includes several items of our
business lines, such as generators, transformers, frequency inverters, motors and
paints.
Acquisition of Pulverlux (Argentina)
On May 11, the Company executed an agreement for acquisition of control of Pulverlux
S.A., engaged in production and sale of powder coatings in Argentina. The opening of
a new manufacturing unit in Mauá (São Paulo state - SP) and of a distribution unit in
Cabo de Santo Agostinho (Pernambuco state - PE) was also announced.
Pulverlux operated in the segments of architecture, aluminum sections, electrical
panels, home appliances, auto parts, machinery and equipment for more than 10
years, and when acquired, it had 42 employees, a 10,000 m2 plant in Buenos Aires
and annual billing of close to US$ 7.0 million.
The new paint plant in Mauá (SP) is responding to the rise in investments in
exploitation of oil reserves in the pre-salt layer, improving logistics to serve the
Southeastern Region and increasing the production capacity of liquid paints. The Cabo
de Santo Agostinho (PE) unit, located 25 km from the Suape Port and 17 km from
Recife, facilitates service in the Northern and Northeastern regions of Brazil.
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financial statements
New manufacturing unit in India
In the course of 2010, the Company also built a new manufacturing unit in Hosur, state
of Tamil, India. This unit, which began operating in the beginning of 2011, produces
high-voltage electric motors and power generators.
With this trailblazing venture, the Company produces high-voltage equipment abroad,
seeking to take advantage of the opportunity arising from the rapid expansion of the
Indian market.
Another unprecedented aspect is that this is a greenfield project, designed and
executed to meet the requirements of WEG standards from start-up.
New manufacturing unit in Linhares (ES)
In August 2009, we announced the conclusion of negotiations with the state
government of Espírito Santo and the local government of Linhares for installation of a
new manufacturing unit for production of electric motors.
For construction of this industrial site, WEG is adopting the same modular concept
used in other manufacturing units in Brazil and abroad, which allows for the gradual
and continuous increase of output capacity, thus meeting the Company’s expansion
requirements over several years. The first of these production modules in Linhares
began operating in 2011. Projected investment for this phase is of R$ 160 million over
the coming 4 to 6 years.
The project is being implemented in a region subject to tax incentive by the Supervisory
Authority for Development of the Northeast (SUDENE).
c) Unusual events or operations
N/A.
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10.4 - Significant changes in accounting practices – Qualification and emphasis
of matter paragraphs in the auditor’s report
a) Significant changes in accounting practices N/A.
b) Significant effects from changes in accounting practices. N/A.
Qualification and emphasis of matter paragraphs in the auditor’s report.
The independent auditor issued an opinion with the following observations:
Emphasis of a matter
As described in Note 2, the individual financial statements were prepared in
accordance with accounting practices adopted in Brazil. In the case of
WEG S.A., such practices differ from IFRS applicable to separate financial statements
only in connection with valuation of investments in subsidiaries, affiliates and jointlycontrolled subsidiaries by the equity pickup method, which, under IFRS, would be at
cost or fair value.
Other matters
Statements of value added
We have also audited the individual and consolidated statements of value added (SVA)
for the year ended December 31, 2011, prepared under the responsibility of the
Company’s management, the presentation of which is required by Brazilian
Corporation Law for publicly held companies, and as supplementary information under
IFRS, whereby no SVA presentation is required. These statements have been subject
to the same auditing procedures previously described and, in our opinion, are
presented fairly, in all material respects, in relation to the overall financial statements.
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10.5 Critical accounting policies
Preparation of the financial statements requires the use of certain accounting
estimates, supported by management’s assessments and judgment. These estimates
took into account the experience of past and current events, assumptions relating to
future events and other objective and subjective factors. Significant items subject to
such estimates and assumptions include:
•
•
•
•
•
•
credit risk analysis to determine the allowance for doubtful accounts;
review of the economic useful lives of property, plant and equipment items and
their recovery in operations;
measurement of fair value of financial instruments;
commitments to employee benefit plans;
stock option plan transactions; and
deferred income tax asset on income and social contribution tax losses, as well
as the analysis of other risks in determining other provisions, including for
contingencies, arising out of administrative and judicial proceedings and other
assets and liabilities at the balance sheet date.
The settlement of transactions involving these estimates may result in amounts
different from those recorded in the financial statements due to uncertainties inherent
to the estimate process. These estimates and assumptions are reviewed periodically.
Authorization to prepare these financial statements was given at the board meeting
held on January 30, 2012.
The policies adopted for the consolidated and individual financial statements are as
follows:
a. Individual financial statements (Company)
The individual financial statements were prepared in accordance with accounting
practices adopted in Brazil issued by the Brazilian FASB (CPC) and are published
together with the consolidated financial statements. The individual financial statements
prepared in accordance with accounting practices adopted in Brazil, applicable to
separate financial statements, present investments in subsidiaries based on the equity
pickup method, differently from IFRS, which require valuation in subsidiaries at cost or
fair value.
b. Consolidated financial statements
The consolidated financial statements were prepared and are presented in accordance
with accounting policies adopted in Brazil, which comprise accounting pronouncements
issued by the Brazilian FASB (CPC) and CVM rules, which are in conformity with
international accounting standards issued by IASB.
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10.5 - Critical accounting policies
I. Consolidation basis
The subsidiaries financial statements are prepared for the same period as the
Company’s reporting period, using consistent accounting policies. All unrealized
balances, revenues, expenses, gains and losses arising from transactions between
Group companies included in consolidation are eliminated.
The subsidiaries’ financial statements are included in consolidation as from their
acquisition date, based on the related agreements.
P&L for the period and comprehensive income are attributed to the Company’s
shareholders and non-controlling interest holders of consolidated companies. Losses
are allocated to non-controlling interest holders, even if resulting in a negative balance.
II. Business combinations
When acquiring a business, the Company analyzes the financial assets and liabilities
assumed, in order to classify and allocate them according to the contractual terms,
economic circumstances and applicable conditions, in up to one year after the
acquisition date. If the business combination is conducted in stages, the fair value on
the date of acquisition of the shareholding interest previously held in the capital of the
acquired company is reassessed at fair value on the acquisition date, and any impacts
are recognized in P&L.
Goodwill is initially measured as the excess of the consideration transferred in relation
to net assets acquired (identifiable assets and assumed liabilities). If the consideration
is lower than the fair value of net assets acquired, the difference is recognized as a
gain in P&L.
After initial recognition, goodwill is measured at cost, less any accumulated impairment
losses. For impairment test purposes, goodwill acquired in a business combination is,
as of acquisition date, allocated to each Company’s cash generating unit expected to
benefit from such combination synergy, regardless of other assets or liabilities of the
acquired company being attributed to these units.
When goodwill is part of a cash generating unit and a portion thereof is disposed of,
goodwill related to the portion sold is to be included in the cost of the operation upon
computing gains or losses from disposal. Goodwill of this transaction is computed
based on amounts proportional to the portion sold in relation to the cash generating
unit.
III. Foreign currency translations
a. Functional currency of Group companies
The consolidated financial statements are presented in reais (R$), which is also the
functional currency of the Company and its Brazilian subsidiaries.
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10.5 - Critical accounting policies
The functional currencies of foreign subsidiaries are determined considering the main
economic environment in which they operate, and when they differ from the financial
statements' reporting currency, they are converted into reais at the financial statements
base date.
b. Transactions and balances
Transactions in foreign currency are recorded at the functional currency’s exchange
rate in force on the transaction date. Monetary assets and liabilities denominated in
foreign currency are translated into the functional currency at the exchange rate in
effect at the financial statements base date. All differences are posted to P&L. Nonmonetary items measured based on the historical cost in foreign currency are
translated at the exchange rate in force on the initial transaction dates. Non-monetary
items measured at fair value in foreign currency are translated at the exchange rate in
force on the date in which the fair value was determined.
c. Translation of Group company balances
Assets and liabilities of the foreign subsidiaries are translated into reais at the
exchange rate in force at the balance sheet dates, and the corresponding income
statements are translated at the monthly average exchange rate.
Exchange rate
differences arising from the referred to translation are recorded separately in equity.
Upon sale of a subsidiary abroad, the accumulated deferred amount recognized in
equity referring to such subsidiary abroad is posted to P&L.
IV. Cash and cash equivalents
These include cash in checking accounts and short and long-term investments. They
are recorded at cost plus earnings accrued up to the period’s closing date, based on
the rates agreed upon with financial institutions, not exceeding market or realization
value. Investments maturing within 365 days have immediate liquidity.
V. Trade accounts receivable
These correspond to receivables from clients for the sale of products or provision of
services in the normal course of activities, stated at present and realization values. The
allowance for doubtful accounts was calculated considering the analysis of credit risks,
which takes into account the percentage of overdue trade notes, market liquidity and
credit level, being sufficient to cover losses on amounts receivable.
VI. Inventories
Inventories are valued and stated at average production of acquisition cost, considering
the present value, when applicable. Costing of inventories occurs by absorption, using
the weighted moving average.
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Provisions for: (i) realization; (ii) slow-moving inventories; and (iii) obsolete inventories
are set up when deemed necessary by management. Imports in progress are shown at
the accumulated cost of each import.
VII. Related parties
Transactions for purchase and sale of inputs and products are carried out under
conditions and terms similar to transactions with unrelated parties.
VIII. Property, plant and equipment
Property, plant and equipment items are valued at acquisition and/or construction cost,
plus interest capitalized during the construction period, when applicable.
Property, plant and equipment are presented net of the related depreciation expenses,
except in the case of plots of land, which are not depreciated. They include costs
incurred from loans taken out during the construction, uphaul and expansion of the
manufacturing units.
Expenditures on repair and maintenance that do not significantly extend the useful lives
of the related assets are recorded as expenses when incurred. Gains and losses on
disposals are determined by comparing the result of sales with the net book value,
recognized in P&L.
Depreciation is calculated by the straight-line method and considers the economic
useful life of the assets, subject to periodic reviews to adjust the depreciation rates.
IX. Intangible assets
These are valued at acquisition cost, less amortization and any impairment losses, as
applicable. Intangible assets with finite useful lives are amortized over the period they
are expected to yield future economic benefits. Goodwill based on expected future
profitability, without a finite useful life, was amortized until December 31, 2008, and is
subject to impairment testing on an annual basis or whenever there is any indication of
impairment.
X. Measurement of assets at recoverable value
Property, plant and equipment, intangible assets and other non-current assets, when
applicable, are annually measured at the recoverable value by means of future cash
flows. The assumptions considered are sales growth rates at the conservative level of
90% of the budget, margins equivalent to those obtained in the prior fiscal year and
discount rates that represent expected returns. At December 31, 2011 no reduction
was determined on such assets.
XI. Provisions for contingencies
Provisions are recognized when the Company and its subsidiaries have a present or
not formalized obligation arising from past events, the settlement of which is expected
to result in an outflow of funds and a reliable estimate of the amount is possible.
Provisions are reviewed periodically, with observance of their nature and grounded on
the opinion of the Company’s lawyers.
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10.5 - Critical accounting policies
XII. Dividends and interest on equity capital
Payment of dividends and interest on equity capital is recognized as liabilities based on
the minimum dividends, pursuant to the Company’s articles of incorporation. Any value
above the minimum required amount is only recognized as a liability when approved by
the shareholders at the General Shareholders’ Meeting or the Board of Directors’
Meeting.
XIII. Present value adjustment
Assets and liabilities arising from short-term operations, when
adjusted to present value based on discount rates that reflect
valuations. The discount rate used was the Interbank Deposit
Adjustment to present value was calculated on a pro rata daily
beginning of each transaction.
significant, were
the best market
Certificate (CDI).
basis, as of the
XIV. Pension plan
The Company sponsors a pension plan structured as variable contribution. Costing of
the plan is established by the projected unit credit method. The actuarial commitments
associated with pension and postretirement benefit plans are accrued based on annual
independent actuarial calculations prepared in accordance with the projected credit unit
method, net of the plan’s underlying assets, with the corresponding costs being
recognized during the employees’ working life. Actuarial assumptions used include
estimated medical assistance cost increases, biological and economic scenarios, as
well as historical data of costs incurred and employees’ contributions.
XV. Financial instruments
The Company’s financial instruments include:
a.
Cash and cash equivalents: Stated at market value, which corresponds to the
book value.
b.
Short-term investments: The market value is reflected in the balance sheet
amounts. Short-term investments are classified as held for trading.
c.
Trade accounts receivable: These are recognized at realization value by the
effective interest rate method, classified as loans and receivables.
d.
Suppliers: These are recognized at amortized cost by the effective interest rate
method, classified as receivables.
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e.
Loans and financing: The main purpose of this financial instrument is to
generate funds to finance the Company's expansion programs and meet any
short-term cash flow needs.
•
Loans and financing in local currency – these are classified as financial liabilities
not measured at fair value, and are recorded at their restated amounts according
to contractual rates. Market values of such loans correspond to their book values,
as they concern financial instruments with exclusive characteristics arising from
specific financing sources.
•
Loans and financing in foreign currency – these are obtained to support the
working capital of commercial transactions in Brazil and subsidiaries abroad, and
are restated pursuant to contractual rates.
f.
NDF - "Non Deliverable Forwards": Classified as derivative financial instruments
and recorded based on the market price.
XVI. Stock option plan
Statutory officers of the Company and subsidiaries in Brazil are granted stock options
that may only be exercised after the related vesting period. Options are measured at
fair value at the granting date, using the Black-Scholes-Merton pricing model, and are
recognized as expenses, under other income (expenses), in P&L for the year, against
capital reserve in equity, as the time periods to exercise the options are realized.
XVII. Government subsidies and assistance
Government subsidies are recognized when there is reasonable certainty that the
benefit will be received and that all related conditions will be met. When the benefit
refers to an expense item, it is recognized systematically as revenue over the benefit
period in relation to costs whose benefit it is intended to offset. When the benefit
refers to an asset, it is recognized as deferred revenue and posted to P&L in equal
amounts over the expected useful life of the corresponding asset. In the case of nonmonetary benefits, the item and the benefit are recorded at the nominal values and
reflected in P&L over the expected useful life of the item, in annual and equal
installments.
XVIII. Revenue recognition
Revenue from sale of products is recognized in P&L when all risks and rewards of
ownership of the products are transferred to the buyer and it is likely that economic
benefits will flow to the Company. Service revenue is recognized in P&L upon
realization.
XIX. Taxes
a. Income and social contribution taxes – current and deferred
Current and deferred taxes are determined pursuant to legislation in force in the
countries in which the Group operates, generating taxable revenues.
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b. Other taxes
Revenues, expenses and assets are recognized net of sales taxes, except when: (i)
sales taxes incurred on the purchase of goods or services are not recoverable from the
tax authorities, in which case sales taxes are recognized as part of the asset
acquisition cost or of the expense item, as applicable; (ii) amounts receivable and
payable are presented together with sales taxes; and (iii) net sales taxes, recoverable
or payable, are included as component of the amounts receivable or payable in the
balance sheet.
XX. Earnings per share - basic and diluted
Basic earnings per share is calculated by dividing income attributable to Company
shareholders by the weighted average number of common and shares issued in the
period. Diluted earnings per share is calculated by adjusting the weighted average
number of outstanding common shares assuming all potential common shares that
would cause the dilution.
XXI. New pronouncements not yet effective
Management has been following up on pronouncements that: (i) have already been
issued but are only effective as from January 01, 2012; and (ii) are under analysis by
regulatory agencies and are of public knowledge, having concluded that none of these
pronouncements should significantly impact the Company’s financial statements.
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10.6 - Internal controls for preparation of financial statements – Level of
effectiveness and deficiency and recommendations provided in the auditor’s
report
We considered that the accounting and internal control system adopted by the
Company is consistent with its type of activity and volume of transactions.
a) Level of efficiency of such controls, with indication of any deficiencies and
related corrective measures
The accounting and internal control system is sufficiently reliable to ensure that the
financial statements are free of material misstatement. Internal controls are mostly
performed on a systemic basis, using the SAP integrated information system, and are
considered adequate for the prevention or detection of fraud or errors.
The Company has made substantial investments in information systems, having
implemented advanced systems – such as the "Enterprise Resource Planning (ERP)" –
that allow the quality collection, management and analysis of accounting and business
information. Additionally, the Company has internal audit systems and procedures
designed to validate and streamline business processes.
b) Deficiencies of and recommendations for the internal controls included in the
independent auditors’ report
The Company receives a management letter as a result of the regular review process
by independent auditors. The recommendations contained therein are regularly
analyzed aiming at the constant improvement of internal controls.
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10.7 - Allocation of funds from public offerings referring to distribution and any
misappropriations
The Company did not make public offerings.
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10.8 - Relevant items not disclosed in the financial statements
The Company published its financial statements in February 2012 including relevant
information until that date. There have been no other relevant items to be disclosed to
date.
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10.9 - Comments on items not disclosed in the financial statements
N/A.
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10.10 - Business plan
Our business plan is based on factors that foster long-term growth in demand for our
products. We believe that these factors are structural and will continue to be present,
with higher or lower intensity in the coming years. The factors are described below:
•
•
•
The rising demand for industrial equipment (electric motors, automation
systems and equipment and related products) that offer more energy and
industrial efficiency. This growing demand arises from the industries’ search for
increased productivity and reduced operating costs;
Growing concern over the environmental impacts of traditional means of
generating electricity makes the use of renewable energy sources such as
small hydroelectric plants, thermal plants fueled by biomass and wind power
plants, increasingly attractive, boosting demand for generators, transformers
and automation systems and equipment.
Also, the use of digitally controlled sensing equipment and systems is
increasing in all phases of power generation, transmission, distribution and
consumption. Our traditional electric products are more intrinsically connected
with broader electronic systems, in systems referred to generically as smart
grid.
We are absolute leaders in the Brazilian electric motor market, and have significant
positions in all business segments in which we operate in the domestic market. This
has been built over time by continuously expanding and enhancing the technology
content of our line of products, keeping to our strategy of offering complete and
integrated industrial solutions.
In addition, we operate globally with product distribution to more than 100 countries
across five continents and direct operations in more than 20 of the major global
markets and industrial operations in Brazil, Argentina, Mexico, Portugal and China. In
the course of 2010, we announced the acquisition of industrial operations in South
Africa, with acquisition of the Zest Group, and increase in the ownership interest in
Voltran, which manufactures transformers in Mexico. In the beginning of 2011, our
new electric motor plan in India began operating and at the end of the year, we
acquired companies that increased our production About 10% of our current
production takes place in the units abroad.
This geographic presence has allowed us to continually grow in external markets,
minimizing the impacts of economic changes in each country or region. We continue to
actively seek new opportunities in the various global markets and we expect to
maintain our standard of business performance both in terms of revenue growth and
the result of operations.
Investments
Considering the nature of the equipment and facilities we use in our production
process, we have great flexibility in managing the investment program based on actual
demand.
Thus, we seek to optimize active capacity by accelerating or delaying
investments, and thus maximizing the return on invested capital.
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Year 2011
Capital expenditures for the expansion and uphaul of output capacity amounted to R$
187.9 million in 2011, 90% of which was allocated to industrial and other facilities in
Brazil, and the remaining amount to the production units and other subsidiaries abroad.
Capital expenditures for the expansion of output capacity in 2011 were less than in the
previous year in view of the start-up of two new manufacturing units;
•
•
WEG Linhares, where we are building a new manufacturing unit as part of the
long-term project for production, initially, of electric motors and that should
receive additional investments in the coming years for vertical production of a
broad line of products;
WEG India, our first manufacturing unit in this country, engaged in the
production of high-voltage equipment for industrial and infrastructure
application.
Year 2010
Capital expenditures for the expansion of output capacity amounted to R$ 233 million
in 2010, 60% of which was allocated to industrial and other facilities in Brazil, and the
remaining amount to the production units and other subsidiaries abroad.
Capital expenditures for the expansion of output capacity in 2010 increased gradually
with improvement of demand conditions in the year.
Year 2009
Capital expenditures for the expansion of output capacity amounted to R$ 226,3 million
in 2009, 72% of which was allocated to industrial and other facilities in Brazil, and the
remaining amount to the production units and other subsidiaries abroad.
Given the slackened demand we faced in 2009, the investment program was managed
with a view to avoiding the expansion of idle capacity.
2012 Forecast
Our capital budget for 2011 includes the following investments (in millions of reais):
Investments
Property,
plant
and
expansion/overhaul)
Current (working capital)
Total investments
equipment
(plant
(millions of
reais)
293.7
328.4
622.1
These investments will be financed with the Capital Budget Reserve and with funds to
be raised from financial institutions in Brazil and abroad.
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10.11 – Other aspects with material impact
The Company does not have other information on the Comments of the Executive
Board other than the information disclosed in the previous items of this Chapter 10.
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11.1 - Forecasts disclosed and assumptions
The Company did not make forecasts regarding its operating or financial performance
for the next years.
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11.2 - Monitoring of and changes in forecasts disclosed
The Company did not make forecasts regarding its operating or financial performance
for the next years and, as such, there has been no monitoring or changes thereto.
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12.1 – Description of the management structure
a. Duties of each body and committee:
Board of Directors
The Board of Directors shall have the power to:
a. establish the general guidelines for the Company’s business;
b. review and express an opinion on Executive Board proposals to be submitted to the
General Meeting;
c. submit to the General Meeting the proposed allocation of net income for the year,
pursuant to Article 38 of the Company’s Bylaws;
d. propose changes in the Bylaws of the General Meeting;
e. elect and remove the Company’s Officers and define their duties, as well as
approve the Company's organization chart;
f.
appoint an alternate Officer in case of absence, temporary incapacity or vacancy of
office, notwithstanding the provisions of article 31 of the Company’s Bylaws;
g. oversee the management activities performed by the Executive Board and express
an opinion on the Management Report and Executive Board Accounts;
h. call General Meetings;
i.
express a previous opinion on the below procedures to be performed by the
Executive Officers when amounts and/or periods exceed the limits imposed by the
Board of Directors:
i. any intercompany loan, loan and/or financing agreements to be executed by
the Company and/or its subsidiaries with credit financial institutions;
ii. acquisition, sale and/or any kind of encumbrance on the Company’s fixed
assets; and
iii. setting credit limits to costumers.
j.
authorize the Company to provide associates, affiliates or subsidiaries with
sureties, collaterals and other guarantees of any amounts;
l.
approve the assignment, transfer, and acquisition of any license rights to
trademarks, patents, industrial production processes and technologies;
m. appoint and terminate independent auditors;
n. distribute among members of the Board of Directors and the Executive Board the
global compensation and bonuses determined at the General Shareholders’
Meeting;
o. authorize investments and shares in other companies or ventures in Brazil and
abroad;
p. approve the Executive Board strategic plan and operating budgets;
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q. approve plans for expansion and diversification of activities, as well as for opening
and closing branches, agencies or offices;
r. authorize the acquisition of the Company’s shares to cancel or keep them in
treasury for later disposal;
s. resolve any issues not addressed in these Bylaws, and which legally do not fall
within the authority of the General Meeting or the Supervisory Board;
t. decide on the execution of loan agreements between the Company and:
i. its Controlling Shareholder;
ii. its subsidiaries; and
iii. affiliates in which the Company’s share is less than 75%;
u. approve the issuance of simple unsecured nonconvertible debentures, and
authorize the issuance of any credit instruments for raising funds, such as bonds,
notes, commercial papers, and others commonly used on the market, also deciding
on the conditions for issuance and redemption;
v. establish the list of three institutions to be submitted to the General Meeting to
prepare the appraisal report on the Company’s shares for purposes of public
offerings, pursuant to Chapters XII and XIII of these Bylaws.
w. Submit the General Stock-Option Plan for its managing officers, according to
paragraph 3 of article 168, Law No. 6404/76, to approval in the General
Shareholders’ Meeting.
x. Express a favorable or unfavorable opinion on any public offering to acquire shares
issued by the Company, through a previously grounded report, disclosed within no
longer than 15 (fifteen) days after the public notice on public offering for share
acquisition is published, which is required to include at least: (i) convenience and
opportunity of the public offer for acquisition of shares as to interest of all
shareholders and to liquidity of marketable securities owned thereby; (ii) the impact
of the public offer for acquisition of shares on interest of the Company; (iii) strategic
plans disclosed by the offering party in relation to the Company; (iv) other matters
considered relevant by the Board of Directors and information required by
applicable rules established by CVM.
Supervisory Board
The powers of the Supervisory Board are established by the Brazilian Corporations
Law, as follows:
a. oversee, by any of its members, the acts of the managing officers and ensure that
they comply with their legal and statutory duties;
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b. express an opinion on the annual management report, including supplementary
information deemed necessary or useful for deliberation at a general meeting;
c. express an opinion on any management proposals to be submitted to a general
meeting, regarding changes in capital stock, issuance of debentures or subscription
bonuses, investment plans or capital budgets, dividend distribution, transformation,
merger, consolidation or carve-outs;
d. report, by any of its members, any error, fraud or criminal acts it may discover to
the administrative bodies, and, if these fail to take the necessary steps to protect
the company’s interests, to a general meeting suggesting an appropriate course of
action;
e. call the annual general meeting should the administrative bodies delay doing so for
more than one month, and an extraordinary general meeting whenever serious or
urgent matters occur, including the matters it may deem necessary in the
meetings’ agenda;
f. review, at least on a quarterly basis, the trial balance sheet and other financial
statements regularly prepared by the company;
g. review the financial statements for the fiscal year and express an opinion thereon;
h. perform such duties during liquidation, bearing in mind the special provision which
regulate liquidations.
b. Date the supervisory board is established, if not permanent, and committees
are set up
The Company’s Supervisory Board operates on a permanent basis. The Company has
set up no committees.
c. Performance evaluation mechanisms for each body or committee.
Compensation of the Board of Directors and Executive Board (WEG Group)
Fixed compensation
Members of the Board of Directors and Executive Board are remunerated based on
specific legislation, statutory determinations and market standard. On establishing the
individual amount to be paid monthly to each member, the Board of Directors
considers: their responsibilities; time they dedicate to their duties; their competence
and professional reputation, and the market price for their services. Such
compensation varies according to specific duties and responsibilities inherent in each
position. Compensation also considers market surveys and the Organization's strategic
alignment.
Variable compensation
The members of the Board of Directors and Executive Board also receive variable
compensation pegged to the Company’s achieving goals and to performance
indicators. This type of compensation allows coherent and transparent profit sharing,
as well as alignment of the Company’s, Managing Officers’ and shareholders’ interests,
in accordance with the best management and corporate governance practices.
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12.1 – Description of the management structure
Variable compensation is based on profit sharing and is defined in article 38 of the
bylaws, which limits its maximum amount, pursuant to legal limitations, to 10% (ten
percent) of net income, not exceeding annual managing officers’ compensation,
whichever is less (paragraph 1, article 152, Brazilian Corporations Law).
Profit sharing is calculated on consolidated net income, with percentage ranging from
0.0% to 2.5%, according to the performance indicator "activity P&L after profit sharing
and taxes on capital invested " provided that at least 10% in 2012 (12% in 2011).
Capital invested is total working assets and liabilities and fixed assets.
Compensation of the Supervisory Board
Compensation of members of the Supervisory Board complies with the provisions set
forth in paragraph 3 of article 162 of Law No. 6404/76. It shall be fixed in the General
Meeting that elects the Supervisory Board members, as proposed by the Board of
Directors, and shall not be less than 10% of the average compensation paid to each
Officer, excluding benefits, representation allowances and shares in profits. In addition,
all lodging and transportation expenses are refunded, provided that they are related to
performance of duties of the position to which they have been elected.
In General Meeting held on April 26, 2012, minimum monthly individual amount of R$
5,550.00 (R$ 5,375.00 in 2011) was established.
d. Regarding the executive board members, their duties and individual powers
The Chief Executive Officer is assigned with the following duties, among others:
a. Pursue the Company’s institutional representation and guide its general activities;
b. establish policies for the development of the Company and its subsidiaries;
c. approve the Company’s and its subsidiaries’ strategic plans, budgets and
investments, subjecting them to ratification by the Board of Directors;
d. guide, coordinate and oversee Officers’ activities;
e. call and preside at meetings held by the Executive Board; and
f. ensure faithful compliance with these Bylaws, and decisions taken in the General
Meeting and by the Board of Directors.
In addition to an ordinary vote, the Chief Executive Officer shall also be entitled to the
casting vote to break any deadlocks in decisions within the authority of the Executive
Board.
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12.1 – Description of the management structure
The Investor Relations Officer shall:
a. represent the Company before the CVM and other capital market entities and
financial institutions;
b. enforce the rules issued by CVM applicable to the Company; and
c. manage the investor relations policy.
Other Officers shall:
a. replace one another in the event of absence or incapacity; and
b. perform executive duties and powers they are assigned with for purposes of
planning, developing and managing the business of the Company and its
subsidiaries.
e. Performance evaluation mechanisms for member of the board of directors,
committees and executive board.
According to the Board of Directors’ Bylaws (see item 12.4 of this Form), it is
incumbent upon the Board of Directors to "formally assess performance results of the
Company, of the Board itself and of each member of these bodies" (article 5, item vi).
In addition, "at the end of each year, the Board of Directors, based on Chairperson’s
proposal, shall take decisions on: ( ... ) b) formal assessment of the performance
results of the Company, Executive Board and each officer individually." (Article 9)
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12.2 – Rules, policies and practices relating to general meetings
a) Call Period
The Company seeks to publish the public notice to call general meetings with
appropriate notice, however observing the time limit set forth in the Articles of
Incorporation or in legislation.
b) Powers and authority
The General Meetings have their powers vested by current legislation. In addition to
the issues within its authority, as defined by current legislation and the Bylaws, the
Special General Meeting shall also have the power to discuss:
• the cancellation of the company’s registration with the CVM;
• delisting from “Novo Mercado”;
• appointment of the institution or specialized firm that will determine the Company’s
economic value for purposes of public tender offers defined in Chapters XII and XIII
of these Bylaws, based on the list of three entities submitted by the Board of
Directors.
For deliberations on the matters dealt with in the previous paragraph, a minimum
quorum, as defined in the São Paulo Exchange (BOVESPA) “Novo Mercado” Listing
Rules, shall be observed.
c) Physical or electronic addresses where the documents relating to the general
meeting will be available to shareholders for review
The documents relating to the General Meeting are available to shareholders at the
Company’s registered office, Avenida Prefeito Waldemar Grubba, 3300, Jaraguá do
Sul/SC, and on our internet website in the Investor Relations area, www.weg.net/ri.
d) Identification and management of conflicts of interest.
The Company, its shareholders, management and members of the Supervisory Board
undertake to resolve, through arbitration pursuant to the BOVESPA Market Arbitration
Chamber Rules, any and all disputes or controversies that may arise among them,
particularly relating to or resulting from the application, validity, effectiveness,
interpretation, breach and related effects, of the provisions contained in Brazilian
Corporations Law, the Company’s Bylaws, the rules issued by the National Monetary
Council, by the Central Bank of Brazil and by the CVM, as well as other rules
applicable to the operation of capital markets in general, in addition to those included in
the Novo Mercado Listing Rules, in the Novo Mercado Participation Agreement and the
Arbitration Rules of the Market Arbitration Chamber.
e) Powers of attorney required of management for the exercise of voting rights
The Company’s management encourages direct exercise of the voting right by
attendance in General Meetings. Notwithstanding, some managing officers may
occasionally represent other shareholders as attorneys in these Meetings.
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12.2 – Rules, policies and practices relating to general meetings
f) Formalities required for acceptance of powers of attorney granted by
shareholders, indicating if the issuer accepts such documents granted by
shareholders by in electronic format
To attend General Meetings and deliberate, as set forth in article 11 of the Bylaws,
shareholders are required to identify themselves and produce proof of their status as
shareholders, through a document provided by the depository institution. For purposes
of deliberation, any changes in shareholdings on the date of the General Meeting will
be disregarded.
Also according to paragraph 10 of article 11, "the Company will review the
representation documents required of shareholders on the basis of good faith,
assuming that the stated representations are true. Except for cases where the power of
attorney, if applicable, and proof of share custody, when the Company’s records list
those shares as being owned by the custodian, fail to be provided, no other formal
irregularity, such as presentation of copy of documents, or lack of authentication of
copies, will result in preventing the vote by a shareholder whose regular documentation
is doubted." In its paragraph 20, "in the event of the preceding paragraph, votes of the
challenged shareholder will be computed as usual. However, the Company, within no
longer than 5 (five) working days after the General Meeting, should notify the
challenged shareholder that, through definitive pieces of evidence later obtained, it was
demonstrated that: a) the challenged shareholder was not properly represented in the
General Meeting, or b) the shareholder was not holder, on the General Meeting date, of
the reported number of shares. In such cases, regardless of a new General Meeting
taking place, the Company will disregard the votes of the challenged shareholder, who
will be liable for any loss or damage that their actions may have caused."
No specific mechanism was implemented for the acceptance of powers of attorney
granted by electronic means.
g) e-Forums and websites available on the internet to receive and share
shareholders’ comments on general meetings’ agendas
No e-forums or page on our worldwide network of computers were implemented to
receive and share feedback from shareholders on meeting agendas.
h) Live video and/or audio conferencing of general meetings
No live broadcast of video and/or audio of meetings was implemented.
i) Mechanisms designed to include shareholders’ proposals on the agenda
There are no specific mechanisms to allow for inclusion in the agenda of proposals
made by shareholders, but formal requests can be forwarded to the Board of Directors,
which will study the proposals and, as the case may be, incorporate them into the
Meeting agenda, if the matter is deemed relevant.
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12.3 – Dates and newspapers of publication of information required by Law No.
6404/76
Fiscal year
Publication
12/31/2011
Financial Statements
12/31/2010
12/31/2009
Newspaper - State
DOESC – Santa Catarina State Gazette – Santa
Catarina
Newspaper – Correio do Povo de Jaraguá do
Sul – Santa Catarina
Newspaper - Valor Econômico de São Paulo/SP
– São Paulo
Dates
02/16/2012
02/16/2012
02/16/2012
Call notice for the Annual General
Meeting that reviewed the DOESC – Santa Catarina State Gazette – Santa
financial statements
Catarina
03/26/2012
03/27/2012
03/28/2012
Newspaper – Correio do Povo de Jaraguá do
Sul – Santa Catarina
03/23/2012
03/24/2012
03/27/2012
Newspaper - Valor Econômico de São Paulo/SP
– São Paulo
03/23/2012
03/26/2012
03/27/2012
DOESC – Santa Catarina State Gazette – Santa
Financial Statements
Catarina
02/24/2011
Newspaper – Correio do Povo de Jaraguá do
Sul – Santa Catarina
02/24/2011
Newspaper - Valor Econômico de São Paulo/SP
– São Paulo
02/24/2011
Call notice for the Annual General
Meeting that reviewed the DOESC – Santa Catarina State Gazette – Santa
financial statements
Catarina
03/28/2011
03/29/2011
03/30/2011
Newspaper – Correio do Povo de Jaraguá do
Sul – Santa Catarina
03/26/2011
03/29/2011
03/30/2011
Newspaper - Valor Econômico de São Paulo/SP
– São Paulo
03/26/2011
03/29/2011
03/30/2011
Minutes of the Annual General
Meeting that reviewed the DOESC – Santa Catarina State Gazette – Santa
financial statements
Catarina
06/06/2011
Newspaper – Correio do Povo de Jaraguá do
Financial Statements
Sul – Santa Catarina
02/25/2010
Newspaper - Valor Econômico de São Paulo/SP
– São Paulo
02/25/2010
Call notice for the Annual General
Meeting that reviewed the DOESC – Santa Catarina State Gazette – Santa
financial statements
Catarina
03/26/2010
03/29/2010
Newspaper – Correio do Povo de Jaraguá do
Sul – Santa Catarina
03/26/2010
03/29/2010
03/30/2010
Newspaper - Valor Econômico de São Paulo/SP
– São Paulo
03/26/2010
03/29/2010
03/30/2010
Minutes of the Annual General
Meeting that reviewed the DOESC – Santa Catarina State Gazette – Santa
financial statements
Catarina
04/27/2010
Newspaper – Correio do Povo de Jaraguá do
Sul – Santa Catarina
04/27/2010
Newspaper - Valor Econômico de São Paulo/SP
– São Paulo
04/27/2010
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12.4 - Rules, policies and practices relating to the Board of Directors
a. timing of meetings
Pursuant to article 9 of the Board of Directors’ bylaws, at each year end, the Board of
Directors is to deliberate on the annual general meetings schedule, based on
chairperson’s proposal. The sole paragraph of the same article defines that timing of
meetings will be determined so as to ensure effectiveness of Board’s work, and that at
least 11 (eleven) annual general meetings are expected to take place.
In addition, the Board of Directors shall hold special meetings whenever such meetings
are called by the Chairperson, at grounded request of any of the Board members.
b. shareholders’ agreement provisions imposing any restriction or limitation on
the exercise of voting rights by board members
The Company’s bylaws provides for a shareholders’ agreement.
The shareholders’ agreements duly filed with the Company’s registered office and
ruling on the acquisition and sale of shares, the preemptive right to acquire shares and
the right to vote shall always be recognized by the Company.
Duties and responsibilities arising under such agreements will extend to third parties,
as long as such agreements have been duly filed with the Company’s registration
books and on share certificates, if any, subject to Article 118 of the Corporations Law.
The Company shall not file a shareholders’ agreement establishing the exercise of
controlling powers, as long as its signatories have not subscribed to the Controlling
Shareholders’ Consent referred to in the São Paulo Exchange (BOVESPA) “Novo
Mercado” Listing Rules.
c. Rules to identify and manage conflicts of interest
The Board of Directors’ Bylaws provides for how to identify and manage different
situation in which there are conflicts of interests:
Article 3, which sets general guidelines for Board’s work, has in item (ix) "prevent and
manage conflicts of interests or differences of opinions, so that the Company's interest
always prevails."
Article 19, which deals with how to deliberate at Board meetings, provides for, in its first
paragraph, that "The minutes will be written with clarity, record all decisions made, the
abstention of votes due to conflict of interests, responsibilities and deadlines. They
shall be signed by all present and submitted to formal approval."
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Finally, article 20, which deals with selection and appointment of people to join the
candidate sheet(s) for submission to the election in the General Meeting, which shall
consider, among their criteria (item iv), "the director should also be exempt from conflict
of fundamental interests (not manageable, not occasional or situational, whether
permanent or expected to be permanent) and constantly alert to matters of
organization, in addition to understand that their duties and responsibilities are
comprehensive and not restricted to Board meetings. In meeting held on June 21,
2011, the Board of Directors decided to approve the BOARD OF DIRECTORS’
BYLAWS, as follows:
WEG S.A. BOARD OF DIRECTORS’ BYLAWS
1 Subject matter of the bylaws
Article 1 -
These Bylaws ("Bylaws") govern how the Board of Directors of WEG
S.A. ("Board") is expected to work, and Committees and Commissions
advising it, as well as the relationship between the Board and other
social bodies, in light of the Articles of Incorporation ("Articles of
Incorporation ") and prevailing legislation.
2 Mission of the Board of Directors
Article 2 -
The Board's mission is to preserve and add value to the Company’s
assets, leveraging return on Shareholders’ investments, in light of the
Company's values, purposes and beliefs.
3 Scope of work and Objectives
Article 3 -
The Board is to set general guidance on the Company's business and
decide on strategic matters, according to powers and authority
established in prevailing legislation and in the Company’s Articles of
Incorporation. The Board's work is based on the following guidelines:
(i) promoting and observing the business purpose of the Company and
its subsidiaries;
(ii) monitoring how business and executive board’s activities are
conducted, how people and risks are managed, within an organizational
structure based on prudence and effective control.
(iii) sustain shareholders’ interest, without losing sight of other
stakeholders;
(iv) maintaining the Company’s ability to continue as a going concern,
from a long-term sustainable perspective, incorporating economic,
social, environmental and good corporative governance considerations
when defining businesses and operations;
(v) preserving reliability of financial and strategic information and ensure
that financial controls and risk management systems be appropriate and
effectively adopted;
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(vi) adopting a nimble management structure, comprising qualified and
unblemished reputation professionals;
(vii) formulating guidelines to manage the Company and its subsidiaries,
which should be reflected on annual budget;
(viii) ensure that strategies and guidelines be effectively implemented by
the executive board, however, without interfering in operational matters;
and
(ix) preventing and managing conflicts of interests or differences of
opinions, so that the Company's interest always prevails.
4 Powers of the Board of Directors
Article 4 -
The Board of Directors, pursuant to article 142 of Law No. 6404/76 and
the Company's Articles of Incorporation, is responsible for:
(i) setting general guidance on the Company’s business;
(ii) electing and unseating Company officers and assigning them duties,
in light of the Bylaws;
(iii) overseeing officers’ management, examining, at any time, the
Company's books and papers, requesting information on agreements
entered into or about to be entered into, and any other works;
(iv) calling a General Meeting whenever deemed convenient, or in
specific cases set forth in article 132 of Law No. 6404/76;
(v) expressing an opinion on management report and executive board
accounts;
(vi) expressing a previous opinion on works and agreements, whenever
required by the Bylaws;
(vii) deciding, whenever authorized by the Bylaws, on issue of shares or
subscription warrant;
(viii) authorizing disposal of non-current assets, setting
encumbrances and provide guarantees to third-party obligations;
up
(ix) appointing and terminating independent auditors;
(x) reviewing and expressing an opinion on Executive Board proposals
to be submitted to the General Meeting;
(xi) submitting to the General Meeting the proposed allocation of net
income for the year, pursuant to Article 38 of the Company’s Bylaws;
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(xii) proposing statutory changes in the General Meeting;
(xiii) appointing an alternate Officer in case of absence, temporary
incapacity or vacancy of office, notwithstanding the provisions of article
31 of the Company’s Bylaws;
(xiv) overseeing Executive Board management;
(xv) expressing a previous opinion on the below procedures to be
performed by the Executive Officers when amounts and/or periods
exceed the limits imposed by the Board of Directors:
any intercompany loan, loan and/or financing agreements to be
executed by the Company and/or its subsidiaries with credit financial
institutions;
acquisition, sale and/or any kind of encumbrance on the Company’s
fixed assets; and
setting credit limits to customers.
(xvi) authorizing the Company to provide associates, affiliates or
subsidiaries with sureties, collaterals and other guarantees of any
amounts;
(xvii) approving the assignment, transfer, and acquisition of any license
rights to trademarks, patents, industrial production processes and
technologies;
(xviii) distributing among members of the Board of Directors and the
Executive Board the global compensation and bonuses determined at
the General Shareholders’ Meeting;
(xix) authorizing investments and shares in other companies or ventures
in Brazil and abroad;
(xx) approving the Executive Board strategic plan and operating
budgets;
(xxi) approving plans for expansion and diversification of activities, as
well as for opening and closing branches, agencies or offices;
(xxii) authorizing the acquisition of the Company’s shares to cancel or
keep them in treasury for later disposal;
(xxiii) resolving any issues not addressed in these Bylaws, and which
legally do not fall within the authority of the General Meeting or the
Supervisory Board;
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(xxiv) deciding on the execution of loan agreements between the
Company and:
its Controlling Shareholder;
its subsidiaries; and
affiliates in which the Company’s share is less than 75%.
(xxv) approving the issuance of simple unsecured nonconvertible
debentures, and authorizing the issuance of any credit instruments for
raising funds, such as bonds, notes, commercial papers, and others
commonly used on the market, also deciding on the conditions for
issuance and redemption;
(xxvi) establishing the list of three institutions to be submitted to the
General Meeting to prepare the appraisal report on the Company’s
shares for purposes of public offerings, pursuant to Chapters XII and XIII
of these Bylaws;
(xxvii) submitting the General Stock-Option Plan for its managing
officers, according to paragraph 3 of article 168, Law No. 6404/76, to
approval in the General Shareholders’ Meeting.
Article 5 -
In addition to the powers set forth I legislation and Bylaws, it is also
incumbent upon the Board of Directors to:
(i) approve the risk management policy and monitor implementation
thereof;
(ii) ensure that the executive board develop reliable internal controls;
(iii) approve share negotiation and information disclosure policy, and
monitor implementation thereof;
(iv) setting committees, assigned specifically to analyze and provide
recommendation on certain matters, approve corresponding bylaws and
appoint members;
(v) approve the Company’s Code of Ethics and its own Bylaws;
(vi) formally assess performance results of the Company, of the Board
itself and of each member of these bodies;
(vii) establish policies and practices aligning compensation of the
Executive Board and Board of Directors with the Company’s long-term
interests and goals;
(viii) oversee relationship between executive members and other
stakeholders;
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(ix) decide on engagement of specialists and experts for better advisory
services on matters subject to their decision;
(x) analyze financial statements;
(xi) oversight and accountability of the financial function;
(xii) ensure that internal audit work properly and that the independent
auditor assess, through own review, the practices of the Executive Board
and internal audit;
(xiii) set, with the independent auditor, the work schedule and fees
agreement;
(xiv) always have an updated succession plan of the CEO and all other
key personnel of the Company;
(xv) adopt and monitor good corporate governance practices, as well as
effectiveness of their processes, and propose updates and
improvements, whenever necessary;
(xvi) prepare and update the Company’s corporate governance
guidelines and governance documents (Bylaws, Codes and Policies);
(xvii) select those who, having complied with legal requirements set forth
in the Company's Bylaws, may join the candidate sheet(s) for
submission to the election in the General Meeting;
(xviii) select and appoint people to hold office as a Director, to replace
any vacant positions, until the following General Meeting;
5 Responsibilities of the Board of Directors
Article 6 -
In addition to the responsibilities set forth in the applicable legislation
and imposed by applicable regulation and Bylaws, every director is
required to:
(i) Prepare in advance to attend Board meetings, with a review of the
documents made available, and actively and diligently participate in such
meeting;
(ii) maintain confidentiality of any and all Company information to which
they have access in virtue of their performing their duties, require the
same confidential treatment from all professionals advising them, and
use such information solely to perform their duties as directors, under
penalty of being charged with the event contributing to undue disclosure
thereof;
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(iii) refrain from intervening, alone or in conjunction with a third party, in
any business with the Company, its subsidiaries and affiliates, its
controlling shareholder and between the Company and subsidiaries and
affiliates of the managing officers and controlling shareholder, as well as
other companies which, with any of these persons, integrate the same
implied or legal group, except upon prior approval and specific Board;
(iv) represent, prior to deliberation, that, for whatever reason, they have
particular or conflicting interest with the Company’s as to certain matters
submitted to their appreciation, and refrain from any discussions or
voting; and
(v) ensure that good corporate governance practices be adopted by the
Company.
6 Chairperson of the Board of Directors
Article 7 -
According to the Bylaws, duties of the chairperson include:
(i) call and chair Board meetings; and (ii) chair General Meetings of the
Company.
Article 8 Without prejudice to the aforementioned assignments
and others assigned by applicable legislation and Bylaws, duties of the
chairperson include:
(i) ensure effectiveness and good performance of the body;
(ii) ensure effectiveness of the monitoring and assessment system, by
the Board, the Company the Director themselves, Executive Board and
of each member of these bodies;
(iii) align Board activities with interests of the Company, its shareholders
and other stakeholders;
(iv) organize and coordinate the meeting agenda, having heard the other
directors and, as the case may be, the CEO and other officers;
(v) coordinate the activities of other directors;
(vi) call Board meetings, communicating venue, date, time and agenda
to the directors and any other attendants;
(vii) organize the agenda of matters to be addressed, based on
directors’ requests and consultations with officers;
(viii) ensure that directors receive complete and timely information on
items included in the meeting agenda;
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(ix) assign a person to be in charge of
a. acting as the secretary of the meeting, preparing and issuing the
corresponding minutes and other documents in appropriate book,
and collect signatures of all directors attending it, in addition to
recording attendance of any guests;
b. monitoring topics addressed and time used in Board Meeting
discussions, and presenting periodic assessment reports; and
c. file the minutes and decisions taken by the Board with relevant
bodies, and publish them through official press body and in widelyread newspaper, as the case may be.
(x) submit directors' compensation apportionment proposal to the Board;
(xi) proposing the annual corporate calendar to the Board. Such
calendar shall necessarily define the dates for the following events:
a.
b.
c.
d.
e.
f.
g.
Board of Directors’ Meetings;
Disclosure of the annual financial statements and consolidated
financial statements, both in Portuguese and in English;
Disclosure of the Standard Financial Statements (DFP) and
Quarterly Information (ITR), both in Portuguese and in English;
Disclosure of the Reference Form;
General and, as the case may be, special meetings;
Public meetings with analysts;
Conference calls on results.
(xii) organize, in conjunction with the CEO, when the election for a new
Board member will be, an integration and training program for the new
director, which allows them to familiarize with the activities of and obtain
information on the organization.
7 Standards of Operation of the Board of Directors
7.1. Board of Directors' Meeting
7.1.1. Annual calendar of general meetings
Article 9 -
At the end of each year, the Board of Directors, based on Chairperson’s
proposal, shall take decisions on:
a. annual calendar of general meetings;
b.
formal assessment of the performance results of the Company,
Executive Board and each officer individually.
Sole paragraph - Timing of general meetings will be determined so as to
ensure effectiveness of Board’s work, and that at least 11 (eleven)
annual general meetings are expected to take place.
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7.1.2. Call for special meetings
Article 10 – The Board of Directors shall hold special meetings
whenever such meetings are called by the Chairperson, at grounded
request of any of the Board members. Such call shall communicate:
Date, start and end times, venue and matters to be included in meeting
agenda.
Sole paragraph – Should Chairperson not respond to the request of any
director, within 15 (fifteen) days, remain inert, silent or even be impeded,
the meeting may be called directly by at least two directors.
7.1.3. Venue
Article 11 – Board meetings, whether general or special meetings, will be held
preferablyat the Company’s head office.
7.1.4. Attendance by third parties
Article 12 -
the Chairperson, on their own initiative or at the request of any director,
may call directors and/or Company’s staff to attend meetings and
provide clarifications or information on the matters in the agenda.
7.1.5. Submission of documentation
Article 13 -
The Chairperson, or whoever is assigned thereby, shall submit
information on the matters to be discussed in the meeting within no
longer than 7 (seven) days prior each Board meeting.
Sole paragraph – Matters submitted to Board appreciation will be
communicated with a proposal and/or opinion expressed by the
Company’s Executive Board or relevant bodies and legal report,
whenever required for matter review.
7.2. Voting System and Agenda
7.2.1. Agenda
Article 14 -
The Chairperson, supported by the secretary, will prepare the meeting
agenda, having heard the other directors, CEO and, as the case may be,
other officers and coordinators of specialized committees.
Paragraph One – If two directors insist on including a certain matter in
the agenda, even if previously rejected, the chairperson is required to
include it.
Paragraph two – Directors are required to express their opinions in
writing. Such opinions are to be received by the Company within no
longer than two days after Chairperson’s decision of not including the
proposal in the meeting agenda is known, in which case the Chairperson
should once again call directors.
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Paragraph three – The agenda and the documentation required to
allocate each matter set out therein will be submitted to each director at
least one week prior to the meeting date. In the event of a special
meeting, given the urgency of the call, the Chairperson will be required
to set the minimum period within which the agenda and documents
should be submitted.
7.2.2. Order of items
Article 15 -
If minimum quorum has been achieved, agenda items will be set out as
follows:
(i) opening;
(ii) initial clarifications by chairperson;
(iii) Reading the agenda to be submitted to vote briefly and
uninterruptedly;
(iv) presentation, discussion, submission of proposals and voting of
agenda matters, in the order proposed by the Chairperson;
(v) presentation of proposals, reports and communications of directors.
Sole paragraph – If unanimously agreed by Board members, the
Chairperson may include significant matters in the agenda for
deliberation, even if not included in the original agenda.
7.2.3. Discussion, deliberation and minutes
Article 16 -
Once discussions are over, the Chairperson will collect votes of each
director.
Article 17 -
In the event of a tie, the Chairperson will exercise the casting vote.
Article 18 -
Sessions will be suspended or ended, whenever circumstances require
it, at the request of any director and with Board approval.
Sole paragraph – Should the session be suspended, it is incumbent
upon the Chairperson to arrange a date, time and venue for it to
continue, and no new call of the directors will be needed.
Article 19 -
Matters and resolutions approved in Board meetings will be valid if they
have a majority vote of attending members, recorded in the minutes,
recorded in the Minute Book of Board meetings, and whenever they
contain resolutions designed to produce effects before third parties, their
statements will be filed with and published in the Commercial Registry.
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Paragraph one – The minutes will be written with clarity, record all
decisions made, the abstention of votes due to conflict of interests,
responsibilities and deadlines. They shall be signed by all present and
submitted to formal approval.
Paragraph two – Directors who disagree with how the Company’s
business is conducted or in relation to any acts proposed should make
sure that such disagreement is recorded in the minutes.
8 Qualification of Directors
Article 20 -
Selection and appointment of people to join the candidate sheet(s) for
submission to the election in the General Meeting shall always consider
the following criteria:
(i) formation of the Board should consider the creation of an
environment that enables directors to freely express themselves, seeking
diversity of experiences, qualifications and behavior styles so that the
Board has the skills required to carry out its duties;
(ii) as a board, directors should have skills such as:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
experience in taking part in other Boards of Directors;
experience as a senior executive;
experience in change management and crisis management;
experience in risk identification and control;
experience in people management;
knowledge of finance;
knowledge of accounting;
knowledge of law;
1. knowledge of the organization’s business;
knowledge of the domestic and external markets;
contacts of the Company's interest.
(iii) Individually, candidates are expected to have:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
alignment with the organization’s values;
ability to stand for their point of view based on own judgment;
availability;
motivation;
strategic view;
knowledge of the best Corporate Governance practices;
ability to work in a team;
ability to read and understand managerial, accounting and
financial reports;
understand the basics of corporate legislation;
perception of the organization’s risk profile.
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(iv) The director should also be exempt from conflict of fundamental
interests (not manageable, not occasional or situational, whether
permanent or expected to be permanent) and constantly alert to matters
of organization, in addition to understand that their duties and
responsibilities are comprehensive and not restricted to Board meetings.
9 Vacancy
Article 21 –
Vacancy of a Board member office may arise due to dismissal,
resignation, death, incapacity proven, disability or other events set forth
in law.
Article 22 –
In case of vacancy due to dismissal, resignation, death, incapacity
proven, disability or loss of office or other cases provided for by law, the
Board shall meet within thirty (30) days after the event and elect a
substitute to complete the term of the replaced member.
Paragraph one – Resignation is announced in written communication to
the Board, henceforth becoming effective before the company, and
prevailing before third parties after the filing of the resignation document
with the commercial registry and publication, which may be done by the
resigning member.
Paragraph two – In case of resignation due to disagreement on
Company’s business is conducted or in relation to a proposed act, the
director shall record in writing the reasons which led to their resignation
in a statement to be sent to the Chairperson, with a request that this is
communicated to all Board members.
10 Communication between the Board of Directors and the Executive Board
Article 23 -
To facilitate and organize communication between directors and officers,
questions and requests for information Board members shall be
addressed to the Company’s CEO.
11 Specialized Committees
Article 24 -
The Board may establish committees or working groups with defined
objectives, such as audit, compensation, finance and governance,
among others. Committees shall adopt own bylaws approved by the
Board.
12 Interaction with the Independent Auditor
Article 25 -
The Board will meet with the independent auditor at least every six
months to review the financial statements, significant accounting
practices and judgments and independent auditor’s reports.
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Article 26 -
The Council shall approve in advance the services to be provided by the
independent auditor auditing the Company other than the audit of the
financial statements. Other services provided by the independent auditor
and the percentage in relation to fees for the financial statements audit
services will be disclosed.
Article 27 -
The Board of Directors is expected to formally express an opinion
regarding the statement of independence of independent auditor.
13 Interaction with the Supervisory Board
Article 28 -
The Board of Directors will hold periodic meetings with the Supervisory
Board, if and when this is working, to address matters of common
interest.
Article 29 -
The Chairperson will provide clarifications and information requested by
the Supervisory Board regarding its overseeing role.
14 Miscellaneous
Article 30 -
Omissions of this Bylaw, questions regarding interpretation and possible
changes of its provisions will be decided in Board meeting, as provided
for in this Articles of Incorporation and Bylaws.
Article 31 -
These Bylaws will be effective on the date they are approved by the
Board of Directors and will be filed at the Company’s head office.
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12.5 Description of the arbitration clause for resolution of conflicts by means of
arbitration
The Company, its shareholders, management and members of the Supervisory
Board undertake to resolve, through arbitration pursuant to the BOVESPA
Market Arbitration Chamber Rules, any and all disputes or controversies that
may arise among them, particularly relating to or resulting from the application,
validity, effectiveness, interpretation, breach and related effects, of the
provisions contained in Brazilian Corporations Law, the Company’s Bylaws, the
rules issued by the National Monetary Council, by the Central Bank of Brazil
and by the CVM, as well as other rules applicable to the operation of capital
markets in general, in addition to those included in the Novo Mercado Listing
Rules, in the Novo Mercado Participation Agreement and the Arbitration Rules
of the Market Arbitration Chamber.
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12.6 /8 - Composition and professional experience of the Board of Directors and Supervisory Board
Name
Age
CPF (National Register of Individuals)
Occupation
Other Offices and Duties Performed in Issuer
Laurence Beltrão Gomes
41
585.750.140-72
Industrial
Part of the Executive Board of holding WEG S.A.
Part of the Executive Board of subsidiary WEG Equipamentos Elétricos S.A.
Part of the Executive Board of subsidiary WEG Linhares Equipamentos Elétricos Ltda.
Part of the Executive Board of subsidiary WEG Logística Ltda.
Part of the Executive Board of subsidiary WEG Amazônia S.A.
Part of the Executive Board of subsidiary WEG Administradora de Bens Ltda.
Part of the Executive Board of subsidiary WEG Drives & Controls - Automação Ltda.
Part of the Executive Board of subsidiary WEG Tintas.
Part of the Executive Board of subsidiary Logotech Ltda.
Part of the Executive Board of subsidiary Instrutech Ltda.
Part of the Executive Board of subsidiary Equisul Ltda.
Hilton José da Veiga Faria
54
290.640.319-91
Industrial
Part of the Executive Board of holding WEG S.A.
Part of the Executive Board of subsidiary WEG Equipamentos Elétricos S.A
Part of the Executive Board of subsidiary WEG Linhares Equipamentos Elétricos Ltda.
Part of the Executive Board of subsidiary WEG Logística Ltda.
Part of the Executive Board of subsidiary WEG Amazônia S.A.
Part of the Executive Board of subsidiary WEG Administradora de Bens
Ltda.
Part of the Executive Board of subsidiary WEG Drives & Controls - Automação Ltda.
Part of the Executive Board of subsidiary WEG Tintas Ltda.
Part of the Executive Board of subsidiary Logotech Ltda.
Part of the Executive Board of subsidiary Instrutech Ltda.
Part of the Executive Board of subsidiary Equisul Ltda.
Sérgio Luiz Silva Schwartz
51
383.104.659-04
Industrial
Part of the Executive Board of holding WEG S.A.
Part of the Executive Board of subsidiary WEG Equipamentos Elétricos S.A.
Part of the Executive Board of subsidiary WEG Linhares Equipamentos Elétricos Ltda.
Part of the Executive Board of subsidiary WEG Logística Ltda.
Part of the Executive Board of subsidiary WEG Amazônia S.A.
Part of the Executive Board of subsidiary WEG Administradora de Bens Ltda.
Part of the Executive Board of subsidiary WEG Tintas Ltda.
Siegfried Kreutzfeld
56
294.190.859-53
Industrial
Management body
Election date
Elective Office Held
Investiture Date
Term of Office
Appointed by Controlling
Shareholder
Executive Board only
12 – Investor Relations Officer
01/20/2012
01/20/2012
2 years
Yes
Executive Board only
Officer
04/24/2012
04/24/2012
2 years
Yes
Executive Board only
11 – Vice-Chief Executive Officer / Supervisory
Officer
01/20/2012
2 years
01/20/2012
Yes
Executive Board only
Officer
01/20/2012
01/20/2012
2 years
Yes
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Name
Age
CPF (National Register of Individuals)
Occupation
Other Offices and Duties Performed in Issuer
Part of the Executive Board of holding WEG S.A.
Part of the Executive Board of subsidiary WEG Equipamentos Elétricos S.A.
Part of the Executive Board of subsidiary WEG Linhares Equipamentos Elétricos Ltda.
Part of the Executive Board of subsidiary WEG Amazônia S.A.
Part of the Executive Board of subsidiary RF Reflorestamento Uda.
Sinésio Tenfen
57
293.669.689-53
Industrial
Part of the Executive Board of holding WEG S.A.
Part of the Executive Board of subsidiary WEG Equipamentos Elétricos S.A.
Part of the Executive Board of subsidiary Hidráulica Industrial S.A. Ind. e Com. - "HISA"
Part of the Board of Directors of subsidiary Hidráulica Industrial S.A. Ind. e Com. - "HISA"
Umberto Gobbato
60
160.589.760-49
Industrial
Part of the Executive Board of holding WEG S.A.
Part of the Executive Board of subsidiary WEG Equipamentos Elétricos S.A.
Part of the Executive Board of subsidiary WEG Drives & Controls - Automação Uda.
Part of the Executive Board of subsidiary Logotech Ltda.
Part of the Executive Board of subsidiary Instrutech Ltda.
Part of the Executive Board of subsidiary Equisul Ltda.
Wilson José Watzko
53
352.366.129-34
Industrial
Part of the Executive Board of holding WEG S.A.
Part of the Executive Board of subsidiary WEG Equipamentos Elétricos S.A.
Part of the Executive Board of subsidiary RF Reflorestadora Ltda.
Part of the Executive Board of subsidiary WEG Linhares Equipamentos Elétricos Ltda.
Part of the Executive Board of subsidiary WEG Logística Ltda.
Part of the Executive Board of subsidiary WEG Amazônia S.A.
Part of the Executive Board of subsidiary WEG Administradora de Bens
Ltda.
Part of the Executive Board of subsidiary WEG Drives & Controls - Automação Uda.
Part of the Executive Board of subsidiary WEG Tintas Ltda..
Part of the Executive Board of subsidiary Logotech Ltda.
Part of the Executive Board of subsidiary Instrutech Ltda.
Part of the Executive Board of subsidiary Equisul Ltda.
Carlos Diether Prinz
51
489.859.459-04
Industrial
Part of the Executive Board of holding WEG S.A.
Part of the Executive Board of subsidiary WEG Equipamentos Elétricos S.A.
Management body
Election date
Term of Office
Appointed by Controlling
Shareholder
Elective Office Held
Investiture Date
Executive Board only
Officer
01/20/2012
01/20/2012
2 years
Yes
Executive Board only
Officer
01/20/2012
01/20/2012
2 years
Yes
Executive Board only
Officer
01/20/2012
01/20/2012
2 years
Yes
Executive Board only
Officer
01/20/2012
01/20/2012
2 years
Yes
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Name
Age
CPF (National Register of Individuals)
Occupation
Other Offices and Duties Performed in Issuer
Luis Gustavo Lopes Iensen
54
271.090.540-04
Industrial
Part of the Executive Board of holding WEG S.A.
Part of the Executive Board of subsidiary WEG Equipamentos Elétricos S.A.
Antônio Cesar da Silva
57
304.467.599-53
Industrial
Part of the Executive Board of holding WEG S.A.
Part of the Executive Board of subsidiary WEG Equipamentos Elétricos S.A.
Part of the Executive Board of subsidiary WEG Linhares Equipamentos Elétricos Ltda.
Part of the Executive Board of subsidiary WEG Logística Ltda.
Part of the Executive Board of subsidiary WEG Amazônia S.A.
Harry Schmelzer Junior
53
444.489.619-15
Industrial
Part of the Executive Board of holding WEG S.A.
Part of the Executive Board of subsidiary WEG Equipamentos Elétricos S.A.
Part of the Executive Board of subsidiary WEG Linhares Equipamentos Elétricos Ltda.
Part of the Executive Board of subsidiary WEG Logística Ltda.
Part of the Executive Board of subsidiary WEG Amazônia S.A.
Part of the Executive Board of subsidiary WEG Administradora de Bens
Ltda.
Part of the Executive Board of subsidiary WEG Tintas Ltda.
Wandair José Garcia
53
627.849.007 -20
Industrial
Part of the Executive Board of holding WEG S.A.
Part of the Executive Board of subsidiary WEG Equipamentos Elétricos S.A.
Décio da Silva
55
Management body
Election date
Elective Office Held
Investiture Date
Executive Board only
Officer
01/20/2012
01/20/2012
2 years
Yes
Executive Board only
Officer
01/20/2012
01/20/2012
2 years
Yes
Executive Board only
10 – Chief Executive Officer /
Supervisory Officer
01/20/2012
2 years
01/20/2012
Yes
Executive Board only
Officer
01/20/2012
01/20/2012
2 years
Yes
04/24/2012
2 years
04/24/2012
Yes
04/24/2012
2 years
04/24/2012
04/24/2012
04/24/2012
Yes
2 years
Yes
Board of Directors only
20 - Chairperson of the Board of
344.079.289-72
Industrial
Directors
Part of the Board of Directors of subsidiaries WEG Equipamentos Elétricos S.A, RF Reflorestadora Ltda., WEG Amazônia S.A.
Board of Directors only
Nildemar Secches
63
27 – Independent Member
(Effective)
589.461.528-34
Industrial
Board of Directors only
Martin Werninghaus
51
22 - Member (Effective)
485.646.309-82
Businessperson
Term of Office
Appointed by Controlling
Shareholder
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Name
Age
Management body
CPF (National Register of Individuals)
Occupation
Elective Office Held
Other Offices and Duties Performed in Issuer
Part of the Board of Directors of subsidiaries WEG Equipamentos Elétrico S.A., RF Reflorestadora Uda., WEG Amazônia S.A.
Miriam Voigt Schwartz
49
Board of Directors only
514.080.829-34
Businessperson
22 - Member (Effective)
Part of the Board of Directors of subsidiaries WEG E quipamentos Elétricos S.A., RF Reflorestadora Uda., WEG Amazônia S.A.
Moacir Rogério Sens
68
Board of Directors only
019.552.339-34
Businessperson
22 - Member (Effective)
Douglas Conrado Stange
66
Board of Directors only
006.287.949-91
Industrial
22 - Member (Effective)
Wilson Pinto Ferreira Junior
53
Board of Directors only
012.217.298-10
Industrial
27 – Independent Member (Effective)
Dan loschpe
46
Board of Directors only
439.240.690-34
Business Manager
27 – Independent Member (Effective)
Alidor Lueders
63
Supervisory Board
114.466.179-04
Businessperson
43 - (Effective) Elected by Controlling Shareholder
Members of the Supervisory Board do not hold other jobs than those for which they were appointed in the Company.
Eduardo Grande Bittencourt
74
Supervisory Board
003.702.400-06
Accountant
43 - (Effective) Elected by Controlling Shareholders
Members of the Supervisory Board do not hold other jobs than those for which they were appointed in the Company.
Hayton Jurema da Rocha
54
Supervisory Board
45 – (Effective) Elected by Minority Common
153.667.404-44
Economist
Shareholders
Members of the Supervisory Board do not hold other jobs than those for which they were appointed in the Company.
lIário Bruch
61
Supervisory Board
069.088.619-53
Businessperson
46 - (Deputy) Elected by Controlling Shareholder
Members of the Supervisory Board do not hold other jobs than those for which they were appointed in the Company.
Election date
Investiture Date
Term of Office
Appointed by Controlling
Shareholder
04/24/2012
04/24/2012
2 years
Yes
04/24/2012
04/24/2012
04/24/2012
04/24/2012
04/24/2012
04/24/2012
04/24/2012
04/24/2012
04/24/2012
04/24/2012
2 years
Yes
2 years
Yes
2 years
No
2 years
Yes
Next General Meeting
Yes
04/24/2012
04/24/2012
Next General Meeting
Yes
04/24/2012
Next General Meeting
04/24/2012
No
04/24/2012
04/24/2012
Next General Meeting
Yes
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Name
Age
Management body
Election date
CPF (National Register of Individuals)
Other Offices and Duties Performed in Issuer
Eduardo da Gama Godoy
395.416.650-04
Occupation
Elective Office Held
Investiture Date
Term of Office
Appointed by Controlling
Shareholder
48
Accountant
Supervisory Board
46 - (Deputy) Elected by Controlling Shareholder
04/24/2012
04/24/2012
Next General Meeting
Yes
04/24/2012
Next General Meeting
04/24/2012
No
Members of the Supervisory Board do not hold other jobs than those for which they were appointed in the Company.
Supervisory Board
Marcelo Adolfo Moser
57
48 - (Deputy) Elected by Minority Common
Shareholders
217.282.409-72
Economist
Members of the Supervisory Board do not hold other jobs than those for which they were appointed in the Company.
Professional Experience / Statement of criminal convictions, if any
Laurence Beltrão Gomes - 585.750.140-72
Educational Background:
• 1995 – Bachelor or Economics - Universidade Federal do RS/ UFRGS
• 2005 – Master Degree in Business Administration - Universidade Federal do RS/UFRGS
Professional Experience:
With WEG Group Companies:
• Appointed CFO and Investor Relations Officer in 2010
With Other Companies (previously):
• 1993 to 1995 - Trainee - Banco Bozano, Simonsen S/ A - RS
• 1996 to 1998 – Finance Supervisor - Avipal Group (Eleva S/A) - RS
• 1998 to 1999 – Treasury Sales Manager - Banco ABN Amro S/A - SP
• 1999 to 2006 – Finance Manager - SLC Participações S/ A - RS
• 2006 to 2010 – CFO and Investor Relations Officer - SLC Agrícola S.A.
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Hilton José da Veiga Faria - 290.640.319-91
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Educational Background:
• 1981 – Bachelor of Mechanical Engineering - UFSC
• 1990 – Graduate Degree in Human Resources - INPG/SP
• 1990 – Graduate Degree in Industrial Management - ESAG/SC
• 1999 – Business Management - European University Professional Experience:
With WEG Group Companies:
• 1981 to 1987 – Head of Inspection, Quality Planning and Support to CCO
• 1992 to 2005 – Head of Support to CCO and TOC, Manager of the Training and Development Department, Industrial Relation, HR
• 2005 to 2010 – International Sales Manager, Client Services and Technology
• 2010 to 2012 - Manager of the Training and Development Department
• Currently – Human Resources Officer
With Other Companies (previously):
• 1987 to 1991 – Manager of the Training Department, Head of Quality Control, Quality Planning and Technical Support - Cerãmica Portobello
With Other Companies (currently):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Sérgio Luiz Silva Schwartz - 383.104.659-04
Educational Background:
• 1990 – Bachelor of Accounting Sciences - Universidade Regional de Joinville/SC
• 1994 – Graduate Degree in Managerial Practices - UDESC.
• 1999 - MBA in Executive Team Management - FGV.
• 2003 - MBA in Business Logistics - FGV
Professional Experience:
With WEG Group Companies:
• 1991 to 1993 – Manager of the Supply Department
• 1993 to 2002 – Manager of the Sales Planning Department
• 2002 to 2004 – Chief Logistics Officer
• 2004 to 2007 – Chief Operating Officer
• 2007 to 2010 – Vice-Chief Executive Officer and International Officer
• Currently – Vice-Chief Executive Officer and DFO
With Other Companies (previously):
Nil
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Siegfried Kreutzfeld - 294.190.859-53
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Educational Background:
• 1974- Electrical Engineering - FEJ - Faculdade de Engenharia de Joinville
• 1988 – Graduate Degree in Business Administration - FERJ - Fundação Educacional Regional Jaraguá
• 1990 – Graduate Degree in Advertising and Marketing FAE - FERJ
• 1993 – Graduate Degree in Industrial Administration - FERJ - Fundação Educacional Regional Jaraguá
• 1996 – Graduate Degree in Rotating Electrical Machines - UFSC - Universidade Federal de Santa Catarina
• 1998 – Master Degree in Rotating Electrical Machines - UFSC - Universidade Federal de Santa Catarina
Professional Experience:
With WEG Group Companies:
• 1979 to 1982 – Electrical Engineer – Electrical Projects
• 1982 to 1991 – Head of Electrical Engineering Area
• 1991 to 1992 - Product Research and Development Coordinator
• 1992 to 1995 - Product R&D Coordinator for Product Engineering
• 1995 to 2001 - Product Research and Development Manager
• 2001 to 2004 - Single-phase Motors Engineering Manager
• 2004 to 2008 - Chief Engineering Officer
• Currently - Chief Operating Officer for the Motors Unit
With Other Companies (previously):
• 1986 - 1988 – Veterinarian / Livestock Department Manager
• Currently – Forestry Officer
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Sinésio Tenfen - 293.669.689-53
Educational Background:
• 1979 – Bachelor of Electrical Engineering - Faculdade de Engenharia FEJ
• 1987 – Graduate Degree in Business Administration - Escola Superior de Administração e Gerência – ESAG
Professional Experience:
With WEG Group Companies:
• 1979 to 1982 - Project Designer of Synchronous and Direct Current Electric Machines
• 1982 to 1984 - Head of Synchronous and Direct Current Electric Machines Project and Application Area
• 1984 to 1986 – Head of the Sales Area
• 1986 to 1998 – Sales Department Manager
• 1998 to 2003 - Energy Business Center Manager
• 2004 to 2006 – Chief Operating Officer
• 2007 to 2010 – Chief Technical/Sales Officer
• Currently - Chief Operating Officer for the Energy Unit
With Other Companies (previously):
• 1978 to 1979 – Technical and Mechanical Design Professor - FESC - Joinville/SC
• 1979 to 1979 – Electrical and Architectural Project Designer - S.W.K. Engenharia e Empreendimentos Ltda. - Joinville/SC
With Other Companies (currently):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Umberto Gobbato - 160.589.760-49
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Educational Background:
• 1974 – Electronic Engineering, Universidade Federal do Rio Grande do Sul
• 1984 - Graduate Degree in Industrial Automation, Universidade de Brasília
• 1998 - MBA Executive STC - Fundação Dom Cabral/J. L. Kellog Graduate School of Management
Professional Experience:
With WEG Group Companies:
Since 1991, Chief Operating Officer of Weg Automação
With Other Companies (previously):
• 1972 to 1975 - Cia Riograndense de Telecomunicações, Porto Alegre/RS
• 1976 to 1977 - General Electric do Brasil, Rio de Janeiro/RJ
• 1978 to 1982 - Nuclebrás Engenharia, Rio de Janeiro/RJ
• 1983 to 1991 - Ministério da Ciência e Tecnologia, Brasília/DF
With Other Companies (currently):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Wilson José Watzko - 352.366.129-34
Educational Background:
• 1976 – Accounting Technician
• 1981 – Teaching Degree – Social Studies - UNERJ (SC)
• 1985 – Bachelor of Economics
• 1988 – Graduate Degree in Business Administration (SC)
• 1990 – Graduate Degree in Business Administration (PR)
• 2002 – Master Degree in International Economic and Social Affairs - UMINHO
Professional Experience:
With WEG Group Companies:
• 1985 to 1986 – Auditor in the Audit Department
• 1986 to 1990 – Economist in the Financial Planning Department
• 1990 to 1991 – Administrative Department Manager
• 1991 to 2010 – Controllership Department Manager, accountant of WEG S.A. and WEG Group
• Appointed Chief Controllership Officer in February 2010
With Other Companies (previously):
• 1998 to 1999 – Member of the Supervisory Board of Perdigão S.A.
• 2006 to 2007 – Member of the Supervisory Board and Audit Committee of Perdigão S.A.
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Carlos Diether Prinz - 489.859.459-04
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Educational Background:
• 1984 - Bachelor of Electrical Engineering - Universidade Federal de SC/UFSC
• 1987 - Graduate Degree in Business Administration - Escola Superior de Administração e Gerência/ SC2000 - Graduate Degree in Force Transformers - FURB/SC
Professional Experience:
With WEG Group Companies:
• 1985 to 1986 - Trainee
• 1986 to 1987 - Budgeter
• 1987 to 1989 – Head of the Sales Area
• 1989 to 2006 – Manager of the Sales Department
• 2006 to 2010 – Executive Officer
• Currently - Chief Operating Officer
With Other Companies (previously):
Nil
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Luis Gustavo Lopes Iensen - 271.090.540-04
Educational Background:
• 1980 - Bachelor of Mechanical Engineering - Universidade Federal de Santa Maria/UFSM
• 1992 – Graduate Degree in Business Administration - Escola Superior de Administração e Gerência – ESAG
Professional Experience:
With WEG Group Companies:
• 1981 to 1983 - Mechanical Engineer in the Control Department
• 1983 to 1987 - Head of Area in the Inspection Department I/II
• 1987 to 1990 - Manager of the Quality Control Department
• 1990 to 1993 - Manager of the Product Engineering Department
• 1993 to 1994 - Manager of the Quality Control Department
• 1994 to 2003 – Manager of the Sales Department
• 2004 to 2006 – Executive Officer of WEG Portugal
• 2007 to 2008 – Chief Regional Officer for Asia, in China
• 2009 to 2011 - Chief Regional Officer for Europe, in Germany
• Currently – Chief International Officer, in Brazil
With Other Companies (previously):
Nil
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Antônio Cesar da Silva - 304.467.599-53
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Educational Background:
• 1984 - Bachelor of Business Administration - Universidade Regional de Joinville - UNIVILLE
• 2003 - MBA in Management Skills - Universidade do Estado de SC-UDESC
Professional Experience:
With WEG Group Companies:
• 1976 to 1980 – Budget Area
• 1981 to 1983 - Head of the Treasury Department
• 1984 to 1985 – Manager of the Finance Department
• 1986 to 1988 – Branch Manager
• 1989 to 2003 – Manager of the Sales Department
• 2004 to 2010 – Chief Sales Officer
• Currently – Chief Sales and Marketing Officer
With Other Companies (previously):
Nil
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Harry Schmelzer Junior - 444.489.619-15
Educational Background:
• 1982 - Bachelor of Electrical Engineering - FEJ -Faculdade de Engenharia Joinville/SC
• 1987 - MBA in Business Administration - ESAG / UDESC
Professional Experience:
With WEG Group Companies:
• 1981 to 1982 - Started as a Trainee
• 1982 to 1983 - Worked in the Application of Electrical Machines Sector
• 1983 to 1985 – Head of Technical Sales
• 1985 to 1986 – Head of Application of Processes
• 1986 to 1991 – Sales Manager of WEG Acionamentos
• 1991 to 1992 – Chief Sales Officer of WEG Acionamentos
• 1992 to 2005 – Chief Operating Officer of WEG Acionamentos
• 2005 to 2006 – Chief Operating Officer of WEG Motores
• 2006 to 2007 – Chief Regional Officer for Europe - WEG Exportadora
• Currently –Chief Executive Officer
With Other Companies (previously):
Nil
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Wandair José Garcia - 627.849.007-20
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Educational Background:
1996 – Bachelor of Business Administration - Faculdade Moraes Junior / Rio de Janeiro, RJ
2003 - MBA in Managerial Skills - Universidade do Estado de Santa Catarina (UDESC) / Florianópolis, SC
2005 – Master Degree in Production Engineering - Universidade Federal de Santa Catarina (UFSC) / Florianópolis, SC
2007 – Managerial Development Program - FGV/EAESP
Professional Experience:
With WEG Group Companies:
• 1999 – Officer assistant
• 1999 to 2012 – Information System Manager
• Currently – Chief Information Technology Officer
With Other Companies (previously):
• 1981 to 1982 – Programming Trainee for CIA. Cervejaria Brahma
• 1982 to 1983 – Programmer for CIA. Cervejaria Brahma
• 1983 to 1987 – Technical Support Analyst for CIA. Cervejaria Brahma
• 1987 to 1995 – Head of Technical Support for Fleischmann Royal Nabisco
• 1995 to 1997 – Technology and Infrastructure Manager for Fleischmann Royal Nabisco
• 1997 to 1999 – Information System Manager for Fleischmann Royal Nabisco
With Other Companies (currently):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Décio da Silva - 344.079.289-72
Educational Background:
• Bachelor of Mechanical Engineering - Universidade Federal de SC/UFSC
• Bachelor of Business Administration - FURJ - Joinville/SC
• INSEADE – Advanced Management Program - Fundação Dom Cabral/lnseade (Brazil/France)
Professional Experience:
With WEG Group Companies:
• 1979 to 1979 - Quality Control Assistant
• 1980 to 1980 - Head of the Quality Control Area
• 1980 to 1982 – Manager of the Manufacturing Department
• 1982 to 1985 - - Manager of the Electromechanical Department
• 1985 to 1986 – Chief Production Officer
• 1986 to 1988 - Chief Regional Officer WEG (SP)
• 1988 to 1989 – Chief Sales Officer
• 1989 to 2007 - Chief Executive Officer
• Beginning 2008 – Chairperson of the Board of Directors
With Other Companies (previously):
• 2008 to 2010 – Member of the Board of Directors of Algar Group
With Other Companies (currently):
• Member of the Board of Directors of BRF - Brasil Foods S.A.
• Member of the Board of Directors of lochpe Maxion S.A.
• Chairperson of the Board of Directors of Oxford S.A.
• Member of the Board of Directors of TECSIS Tecnologia e Sistemas Avançados S.A.
• Officer of WPA Participações e Serviços S.A.
• Chairperson of the Board of Directors of WPA Participações e Serviços S.A.
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
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Nildemar Secches - 589.461.528-34
Educational Background:
• Bachelor of Mechanical Engineering – USP, São Carlos
• Graduate Degree in Finance – PUC, Rio de Janeiro
• PhD in Economics – Unicamp, Campinas
Professional Experience:
With WEG Group Companies:
• Former Chairperson of the Board of Directors
• Currently – Member of the Board of Directors
With Other Companies (previously):
• Chief Executive Officer of current BRF - Brasil Foods S.A. and Officer of BNDES
With Other Companies (currently):
• Chairperson of the Board of Directors of BRF - Brasil Foods S.A.
• Member of the Board of Directors of Ultrapar Participações S/A.
• Member of the Board of Directors of lochpe Maxion S/A.
• Member of the Board of Directors of Suzano Papel e Celulose S.A.
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Martin Werninghaus - 485.646.309-82
Educational Background:
• Bachelor of Economics - Fundação Educacional e Regional de Joinville/SC
• Graduate Degree in Business Administration - Escola Superior de Administração e Gerência – ESAG
Professional Experience:
With WEG Group Companies:
• 1984 to 1986 – Head of the Sales Support Area
• 1986 to 1988 – Sales Manager - WEG Transformadores
• 1988 to 1991 - Chief Regional Officer WEG S.A. - SP
• 1991 to 1998 – Chief Operating Officer of WEG Transformadores
• 1998 to 2002 - Chief Production Officer of WEG Motores
• 2002 to 2004 – Chief Operating Officer of WEG Euro (Portugal)
• 2004 to 2006 – Chief Operating Officer of WEG Química
• Currently – Member of the Board of Directors
With Other Companies (previously):
Nil
With Other Companies (current):
• Member of the Board of Directors of WPA Participações e Serviços S.A.
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Miriam Voigt Schwartz - 514.080.829-34
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Educational Background:
• Bachelor of Dentistry - Universidade Federal de SC - UFSC
• Graduate Degree in Pediatric Dentistry – Associação Odontológica do Norte do Paraná
Professional Experience:
With WEG Group Companies:
• Currently – Member of the Board of Directors
With Other Companies (previously):
• Officer of WPA Participações e Serviços S.A.
With Other Companies (current):
• Family Committee Coordinator of WPA Participações e Serviços S.A.
• Dentist
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Moacir Rogério Sens - 019.552.339-34
Educational Background:
• Bachelor of Mechanical Engineering - Universidade Federal de SC/UFSC
Professional Experience:
With WEG Group Companies:
• 1968 to 1969 - Project Designer of Machines and Tools
• 1969 to 1972 - Head of the Quality Control Department
• 1972 to 1974 - Head of the Production Control Planning Department
• 1974 to 1975 - Manager of the Engineering Division
• 1975 to 1977 - Manager of Manufacturing Plant # III
• 1977 to 1978 - Manager of the Technology Division
• 1978 to 2006 - Chief Technical Officer of WEG Group
• 1986 to 1991 – Chief Operating Officer of WEG Automação
• 1994 to 2005 – Chief Operating Officer of WEG Motores
• Since 2007 – Member of the Board of Directors
With Other Companies (previously):
Nil
With Other Companies (current):
• Member of the Board of Directors of Intelbrás S.A.
• Chairperson of the Board of Trustees of Fundação CERTI - Centro de Referência de Tecnologias Inovadoras.
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Douglas Conrado Stange - 006.287.949-91
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Educational Background:
• Bachelor of Business Administration - Fundação Universitária de Joinville/SC
• Graduate Degree in Business Administration - Escola Superior de Administração e Gerência - Florianópolis/SC
Professional Experience:
With WEG Group Companies:
• 1967 to 1970 – Office Assistant
• 1970 to 1974 – Head of the Costs and Budget Area
• 1974 to 1978 – Manager of Planning, Budget, Costs and Finance
• 1978 to 1979 - Manager of the Cost Accounting Division
• 1979 to 1984 – Chief Control Officer
• 1984 to 1994 – Chief Operating Officer of WEG Motores
• 1994 to 2007 – Chief Operating Officer of WEG Exportadora
• 2007 to 2008 – Chief Operating Officer of WEG Motores
• Since 2009 – Member of the Board of Directors
With Other Companies (previously):
• Sound Operator - Radio Jaraguá/SC
• Managing-Partner of Eletro Produtos Wersta / Jaraguá do Sul/SC
• Chairperson of the Board of Directors of TRAFO Equipamentos Elétricos S.A.
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Wilson Pinto Ferreira Junior - 012.217.298-10
Educational Background:
• Bachelor of Business Administration - Universidade Mackenzie
• Bachelor of Electrical Engineering - Escola de Engenharia da Universidade Mackenzie
• Graduate Degree in Occupational Safety Engineering - Universidade Mackenzie
• Graduate Degree in Marketing - Fundação Getúlio Vargas
• Graduate Degree in Electric Power Distribution Management - Swedixh Power Co.
• Master Degree in Engineering - Universidade de São Paulo – USP
Professional Experience:
With Other Companies (previously):
• Chairperson of the Board of Directors of Operador Nacional do Sistema Elétrico (ONS)
• Chairperson of the Board of Directors of Bandeirante Energia S.A.
• Chief Executive Officer of Rio Grande Energia S.A.
• Chief Executive Officer of Associação Brasileira de Distribuidores de Energia Elétrica (ABRADEE)
With Other Companies (currently):
• Chairperson of the Board of Directors of Operador Nacional do Sistema Elétrico (ONS)
• Chief Executive Officer of CPFL Energia Group and subsidiaries
• Vice-Chief Executive Officer of Associação Brasileira de Infra-Estrutura e Indústria de Base (ABDIB)
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Dan loschpe - 439.240.690-34
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Educational Background:
• Bachelor of Journalism - Universidade Federal do Rio Grande do Sul (UFRGS)
• Graduate Degree in Marketing - Escola Superior de Propaganda e Marketing de SP (ESPM)
• MBA – Amos Tuck School, Dartmouth College (EUA)
Professional Experience:
With Other Companies (previously):
• Marketing Department of RBS
• Sales and Marketing Area - lochpe-Maxion S.A.
• Summer Internship - Procter e Gamble (Chile)
• New Business Development Area - lochpe-Maxion S.A.
• Chief Operating Officer of the Agricultural Machine Division of lochpe-Maxion S.A.
• Chief Executive Officer of AGCO do Brasil.
• Chief Operating Officer - lochpe-Maxion S.A. With Other Companies (current):
Chief Executive Officer of lochpe-Maxion S.A.
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Alidor Lueders - 114.466.179-04
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12.6 /8 - Composition and professional experience of the Board of Directors and Supervisory Board
Educational Background:
• Bachelor of Law - FURB - Blumenau/SC
• Graduate Degree in Business Administration – ESAG
• Graduate Degree in Advanced Management Program (PGA) - France
• CTE and INSEAD - The European Institute of Business Administration
• MBA in Business Administration (FURB-INPG)
• Board of Directors Certification (IBGC)
• Supervisory Board Certification (IBGC)
Professional Experience:
With WEG Group Companies:
• 1971 to 1979 – Manager of the Legal and Systems Audit Department
• 1979 to 2010 - Chief Administrative/Finance and Investor Relations Officer. Held positions as Assistant Director, Control Officer, Chief Operating Officer of WEG
Transformadores
With Other Companies (previously):
• Former Law Professor
• Chief Executive Officer of União Saúde Ltda
• Member of the Board of Directors of HISA S.A. (subsidiary of WEG S.A.)
• Member of the Supervisory Board of Fras-Le S.A.
• Advisory Services on Corporate Governance to M. Abuhad Participações S.A./Neogrid Software S.A.
• Member of the Board of Directors of Lunender Têxtil Ltda
• Advisory Services on Corporate Governance to Leardini Pescados Ltda
• Vice-Chief Executive Officer of WEG Seguridade Social
With Other Companies (currently):
• Member of the Board of Directors of Zen S.A.
• Member of the Supervisory Board of Marisol S.A.
• Member of the Board of Directors of Frigorífico Riosulense S.A.
• Vice-Chairperson of the Board of Directors of Dudalina S.A.
• Member of the Board of Directors of Tuper S.A.
• Member of the Board of Directors of Dancor S.A.
• Member of the Board of Trustees of WEG Seguridade Social
• Member of the Advisory Board of Lunender Têxtil Ltda
• Member of the Advisory Board of Zanotti S.A.
• Member of DPL Assessoria Empresarial Ltda
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Eduardo Grande Bittencourt - 003.702.400-06
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12.6 /8 - Composition and professional experience of the Board of Directors and Supervisory Board
Educational Background:
• Bachelor of Accounting Sciences - Faculdade de Ciências Econômicas do RS
• Graduate Degree in Business Administration - Universidade Federal do RS
Professional Experience:
With Other Companies (previously):
• Former Managing Partner of Handel, Bittencourt & Cia Auditores Independentes
• Former auditor of Treuhabd Auditores Ltda (currently KPMG Peat Marwick)
• Chairperson of the Special Independent Committee of TRAFO Equips. Elétricos S.A.
• Member of the Board of Directors of TRAFO Equipamentos Elétricos S.A.
• Member of the Board of Directors of CP Eletrônica S.A.
• Member of the Supervisory Board of Tupy S.A.
• Member of the Supervisory Board of Banco do Brasil S.A.
• Member of the Supervisory Board of Brasil Telecom Participações S.A.
• Member of the Supervisory Board of Ligth S.A.
• Member of the Supervisory Board of Lojas Americanas S.A. With Other Companies (current):
• Member of the Supervisory Board of Santos Brasil Participações S.A.
• Member of the Supervisory Board of Santos Brasil S.A.
• Member of the Supervisory Board of Bematech S.A. Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Hayton Jurema da Rocha - 153.667.404-44
Educational Background:
• Bachelor of Economics - Universidade Federal de Alagoas
• MBA in Business Management - Universidade Federal de Pernambuco
• Corporate Governance - Faculdade de Economia e Administração - USP
• Graduate Degree in Marketing - IAG/ PUC RJ
Professional Experience:
With Other Companies (previously):
• Member of the Board of Trustees of Sebrae/BA
• Member of the Board of Trustees of Cassi-Brasília (DF)
• Member of the Board of Directors of Coelba-BA
• Member of the Board of Directors of Paranapanema/RJ
• Personnel Management Officer - Banco do Brasil
• Member of the Board of Trustees of Sebrae/BA
• State Chief Operating Officer - Banco do Brasil
• Governing Chief Operating Officer - Banco do Brasil
• Chief Executive Officer or Cassi Caixa de Assistência dos Funcionários do Banco do Brasil
With Other Companies (currently):
Member of the Supervisory Board of CELESC
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
lIário Bruch - 069.088.619-53
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12.6 /8 - Composition and professional experience of the Board of Directors and Supervisory Board
Educational Background:
• Bachelor of Finance Administration
• Graduate Degree in Accounting Services Quality Management
Professional Experience:
With Other Companies (previously):
Nil
With Other Companies (current):
• Member of the Supervisory Board of Marisol S.A.
• Accountant and Administrative Manager of Menegotti Indústrias Metalúrgicas Ltda.
• Managing Partner and Accountant of Bruch Contabilidade e Assessoria S/C Ltda. Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Eduardo da Gama Godoy - 395.416.650-04
Educational Background:
• Bachelor of Accounting Sciences - Faculdade Porto Alegrense - FAPCCA-RS
• Bachelor of Business Administration - Faculdade Porto Alegrense - FAPCCA-RS
Professional Experience:
With Other Companies (previously):
• Member of the Supervisory Board of Marisol
• Member of the Supervisory Board of Trafo Componentes Elétricos S.A. With Other Companies (current):
• Partner Auditor of HB Audit - Auditores Independentes S.S.
• Partner Accountant of Godoy Empresarial Serviços Contábeis
• Member of the Supervisory Board of Padtec S.A.
• Member of the Supervisory Board of IdeiasNet S.A.
• Member of the Supervisory Board of Officer Distribuidora S.A
• Member of the Supervisory Board of Instituto Cultural Brasileiro Norte Americano
• Deputy Member of the Supervisory Board of TPI Triunfo Participações e Investimentos S.A.
• Deputy Member of the Supervisory Board of Brasil Telecom S.A.
• Deputy Member of the Supervisory Board of Tegma Gestão e Logística S.A.
• Deputy Member of the Supervisory Board of Ondontoprevprev
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Marcelo Adolfo Moser - 217.282.409-72
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12.6 /8 - Composition and professional experience of the Board of Directors and Supervisory Board
Educational Background:
• Bachelor of Economics - Faculdade de Ciências Políticas e Econômicas Cândido
• MBA in Advanced Finances - FIPECAFI - USP
• Corporate Governance - FIPECAFI - USP
• Graduate Degree in International Finances –IBMEC
Professional Experience:
With Other Companies (previously):
• Member and Vice-President of Brazilian American Merchanat Bank - BAMB
• Officer of BB Securities Ltd. With Other Companies (currently):
• Officer and Executive Officer of Banco do Brasil Leasing CO.
• Member of the Supervisory Board of BB Viena AG
• Member of the Supervisory Board of BB Turismo Ltda.
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Page 182 of 347
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Version: 1
12.7 - Composition of statutory committees and of audit, financial and
compensation committees
Justification for noncompletion of the table-format information:
The Company’s Board of Directors have no audit, risk, financial, compensation or any
other statutory committees formally set. All matters are introduced and discussed in the
Board of Directors’ Meetings.
Page 183 of 347
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12.9 - Existence of marital relationship, common law marriage or kinship up to the second degree to the issuer’s
Business name of issuer, subsidiary or
Name
National Register of
Individuals (CPF)
controlling shareholder
Type of kinship with the officer of the
National Register of
Legal Entities (CNPJ) issuer or subsidiary
514.080.829-34
WEG S.A.
84.429.695/0001-11
383.104.659-04
WEG S.A.
84.429.695/0001-11
Title
Officer of issuer or subsidiary
Miriam Voigt Schwartz
st
Spouse (1 degree kinship)
Member of the Board of Directors
Related party
Sérgio Luiz Silva Schwartz
Vice-Chief Executive Officer
Notes
Page 184 of 347
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Version: 1
12.10 - Relationships involving subordination, service delivery or control
between managing officers and subsidiaries, controlling shareholders and
others
Justification for noncompletion of the table-format information:
The Company has had no relationships involving subordination, service delivery or
control for the past 3 fiscal years between the Company’s officers and the Company’s
direct or indirect subsidiaries, direct or indirect controlling shareholder, Company’s
suppliers, customers, debtors or creditors.
Page 185 of 347
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Version: 1
12.11 – Agreements, including insurance policies, for payment or reimbursement
of expenses incurred by the officers
The Company took out an D&O (Directors and Officers) insurance policy from Itaú
Seguros S.A, effective from February 6, 2012 to February 6, 2013. This type of
insurance provides for payment or reimbursement of expenses incurred by officers,
arising from repair or certain damage caused to third parties or the Company itself.
Information on this policy, including coverage and premium paid, is as follows:
Insured
WEG S/A
Maximum amount insured (LMG)
R$ 51,750,000.00
Maximum amount insured by coverage (Total payable as insurance by coverage
corresponding to one or more contingent events by coverage)
1
2
3
4
5
6
7
8
9
10
Pain and Suffering
Expenses with Properties and Freedom
(i) Suit expenses
(ii) Bail and Legal Bond Costs
(iii) Locking an Unavailability of Properties
Damage to Reputation
Pollution
(i) Derivative Suit
(ii) Cost of Defense
(iii) Pure Financial Loss
(iv) Other Losses
Improper Labor Practices
Crisis
New Subsidiaries
Period Extension to Insured People who are Retired
Claim filed by another Insured Party
Claim filed by an Outside Company or Entity
Fines and Penalties
(i) Cost of Defense
(ii) Pecuniary Penalty
Civil Liability for Loss and Injury
12
Tax Liability
13
Errors and Omissions
14
Franchise deductible
Managerial Liability - (i) Individuals
Managerial Liability - (ii) Reimbursement to Company
Company’s Liability for Open Capital Market
Claim
Premium
Retroactive Date Limit
Continuity Date
Coverage
LMG
LMG
LMG
LMG
LMG
LMG
LMG
LMG
40% of LMG
LMG
R$ 862,500.00
30%
LMG
LMG
LMG
11
LMG
LMG
LMG
LMG
LMG
ZERO
ZERO
R$ 34,500.00
R$ 131,754.59
UNLIMITED
02/06/2010
GLOBAL
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Version: 1
12.11 – Agreements, including insurance policies, for payment or reimbursement
of expenses incurred by the officers
Specific Clauses
1. Specific Clause for Pollution-related Claims;
2. Specific Clause for Coverage of Inability to Continue as an
Officer - Sublimit of USD 1,000,000.00
3. Specific Clause for Specific Matter Exclusion – Sanctioning
Process that generated the Conduct Adjustment Term already
existing against officers Décio da Silva, Alidor Luerdes, Martin
Weminghaus and Ana Teresa do Amaral Meirelles filed by CVM
Page 187 of 347
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Version: 1
12.12 - Other relevant information
Enrollment with ABRASCA (Publicly-Held Company’s Auto Regulation and Good
Practices) Code
The Company states that it enrolled with ABRASCA (Publicly-Held Company’s Auto
Regulation and Good Practices) Code on August 15, 2011 and that it adopts the
principles and rules set forth in the referred to Code, which is available on the
Institution’s website, at:
http://www.abrasca.org.br/download/Codigo _ Abrasca _de _ Autorregulacao. pdf
General Meetings Held
Over the past three years, the Company held general and special meetings as follows:
Type
Meeting date
Attendance
General/Special meeting
04/27/2010 at 16:00
Attendance: 83% of Capital
Special meeting
02/22/2011 at 16:00
Attendance: 75% of Capital
General/Special meeting
04/26/2011 at 16:00
Attendance: 82% of Capital
General/Special meeting
04/24/2012 at 16:00
Attendance: 86% of Capital
Page 188 of 347
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Version: 1
12.12 - Other relevant information
The Company reports information on managing officers of its subsidiaries.
a) Board of Directors of Hidráulica Industrial S.A. Ind. e Com. - HISA
Name
Age
Occupation
National
Register of
Individuals
(CPF)
Elective Office
Held
Date of
Election
Date of
Investiture
Term of
Office
Sinésio Tenfen
57
Industrial
293.669.689-53
Chairperson
03/31/11
03/31/11
02 years
Jorge Leo Pechlet Ritter V.Tennenberg
70
Businessperson
003.161.309-82
Vice-Chairperson
03/31/11
03/31/11
02 years
Eduardo de Nóbrega
49
Industrial
042.357.178-80
Member
03/31/11
03/31/11
02 years
a. Part of the Executive Board of holding WEG S.A., subsidiaries WEG Equipamentos Elétricos S.A. and Hidráulica Industrial S.A. Ind. e Com. - HISA
b. Part of the Executive Board of subsidiary WEG Equipamentos Elétricos S.A.
Appointed
by
Controlling
Shareholder
Yes
No
Yes
Other
Offices
1
2
b) Executive Board of other WEG Group Companies
Name
Age
Occupation
National Register of
Individuals (CPF)
Aldo Felipe Manke
50
Industrial
557.653.949-49
Alessandro Augusto Hernandez
40
Industrial
140.330.458-05
Alfredo Ângelo Moretti
54
Industrial
487.824.599-91
Eduardo de Nóbrega
49
Industrial
042.357.178-80
Fernando Cardoso Garcia
51
Industrial
026.483.378-30
Helcio Makoto Morikossi
51
Industrial
022.622.258-69
Jorge Tennenberg
37
Industrial
801.525.549-04
Luis Alberto Tiefensee
55
Industrial
215.804.990-15
Milton Oscar Castella
57
Industrial
293.685.109-20
Reinaldo Richter
55
Industrial
292.181.609-15
Reinaldo Stuart Junior
51
Industrial
481.802.549-68
Ronaldo Klitzke
59
Industrial
292.294.309-78
1 Part of the Executive Board of subsidiary WEG Equipamentos Elétricos S.A.
2 Part of the Executive Board of subsidiary RF Reflorestadora Ltda.
3 Part of the Executive Board of subsidiary WEG Linhares Equipamentos Elétricos Ltda.
4 Part of the Executive Board of subsidiary WEG Tintas Ltda.
5 Part of the Executive Board of subsidiary WEG Amazônia S.A.
6 Part of the Executive Board of subsidiary Hidráulica Industrial S.A. Ind. e Com. - "HISA"
Elective Office
Held
Officer
Officer
Officer
Officer
Officer
Officer
Officer
Officer
Officer
Officer
Officer
Officer
Date of
Election
Date of
Investiture
Term of
Office
Elected by
Controlling
Shareholder
Other
Offices
12/21/11
12/28/11
12/21/11
12/21/11
12/28/11
12/21/11
03/25/09
12/21/11
12/21/11
12/21/11
12/21/11
12/21/11
12/21/11
12/28/11
12/21/11
12/21/11
12/28/11
12/21/11
03/25/09
12/21/11
12/21/11
12/21/11
12/21/11
12/21/11
01/22/14
01/22/14
01/22/14
01/22/14
01/22/14
01/22/14
01/22/12
01/22/14
01/22/14
01/22/14
01/22/14
01/22/14
C.A.
C.A.
C.A.
C.A.
C.A.
C.A.
C.A.
C.A.
C.A.
C.A.
C.A.
C.A.
1
1
1, 3 and 5
1
1
1
6
1, 2, 3 and 5
1 and 3
4
1
2
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12.12 - Other relevant information
c) Résumé of each managing officer.
Board of Directors of Hidráulica Industrial S.A. Ind. e Com. - HISA
SINÉSIO TENFEN - Chairperson
Educational Background:
• 1979 – Bachelor of Electrical Engineering - Faculdade de Engenharia FEJ
• 1987 - Graduate Degree in Business Administration - Escola Superior de Administração e Gerência
Professional Experience:
With WEG Group Companies:
• 1979 to 1982 - Project Designer of Synchronous and Direct Current Electric Machines
• 1982 to 1984 - Head of Synchronous and Direct Current Electric Machines Project and Application Area
• 1984 to 1986 – Head of the Sales Area
• 1986 to 1998 – Sales Department Manager
• 1998 to 2003 - Energy Business Center Manager
• 2004 to 2006 – Chief Operating Officer
• 2007 to 2010 – Chief Technical/Sales Officer
• Currently – Unit Officer
With Other Companies (previously):
• 1978 to 1979 – Technical and Mechanical Design Professor - FESC - Joinville/SC
• 1979 to 1979 – Electrical and Architectural Project Designer - S.W.K. Engenharia e Empreendimentos
Ltda - Joinville/SC
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
JORGE LEO PECHLER RITTER von TENNENBERG - Vice-Chairperson
Educational Background:
• 1960 – Accounting Technician
Professional Experience:
With WEG Group Companies:
• 1970 to 2002 – Administrative Officer of subsidiary Hidráulica Industrial S.A. -"HISA"
Currently – Vice-Chairperson of the Board of Directors of Hidráulica Industrial S.A. – “HISA”
With Other Companies (previously):
Nil
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
EDUARDO DA NÓBREGA - Member
Educational Background:
• 1979 – Mechanical Technician - Escola Técnica Federal de São Paulo
• 1987 – Bachelor of Industrial/Mechanical Engineering - Universidade Braz Cubas
• 1989 – Graduate Degree in General Management – Faculdades Metropolitanas Unidas
Professional Experience:
With WEG Group Companies:
• 2010 to 2010 – Industrial Manager
• Currently – Industrial Director
With Other Companies (previously):
• 1981 to 1988 – Process Technician of Industriais Villares S.A.
• 1989 to 1992 – Process Engineer of Industriais Villares S.A.
• 1993 to 1994 – Process Engineer of Gevisa S.A.
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12.12 - Other relevant information
• 1995 to 1998 – Methods and Processes Supervisor of Gevisa S.A.
• 1999 to 1999 – Production and Material Manager of Gevisa S.A.
• 2000 to 2003 – Industrial Manager of Gevisa S.A.
• 2004 to 2007 – Industrial Officer of Gevisa S.A.
• 2008 to 2009 – Chief Operations Officer of Alstom Hydro Energia Brasil Ltda
With Other Companies (current):
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Executive Board of other WEG Group Companies
ALDO FELIPE MANKE - Officer
Educational Background:
• 1984 - Bachelor of Electrical Engineering - Universidade Federal de SC/UFSC
• 1999 – Graduate Degree in Material Management – FURB/SC
• 2000 – Graduate Degree in Power Transformers - Fundação Fritz Muller
Professional Experience:
With WEG Group Companies:
• 1992 to 1995 – Head of the Sales Department
• 1995 to 1998 – Head of Supply Department
• 1998 to 1999 – Executive Assistant
• 1999 to 2005 – Manager of the Technical Department
• 2005 to 2010 – Manager of the Export Sales Department
• Currently – Chief Industrial Director
With Other Companies (previously):
• 1984 to 1988 - Mannesmann Demag Ltda.
With Other Companies (current):
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
ALESSANDRO AUGUSTO HERNANDEZ - Officer
Educational Background:
• 1994 – Bachelor of Electrical Engineering - Escola de Engenharia de Mauá - IMT
• 2001 MBA in Management - FGV
Professional Experience:
With WEG Group Companies:
• 2000 to 2001 - Substation Business Center Manager
• Currently – Chief Sales Officer
With Other Companies (previously):
Nil
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
ALFREDO ANGELO MORETTI - Officer
Educational Background:
• 1983 – Bachelor of Electrical Engineering - Faculdade de Engenharia de Joinville/FEJ
• 1996 – Graduate Degree in Quality and Productivity Management - Fundação Educacional Regional de
Jaraguá do Sul
• 1997 – Graduate Degree in Rotating Electrical Machines - Universidade Federal de Santa Catarina
• 1999 - Graduate Degree in Materials Management - Universidade Regional de Blumenau/FURB
• 2003 – Master Degree in Business Administration - Universidade Federal do Rio Grande do Sul
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12.12 - Other relevant information
Professional Experience:
With WEG Group Companies:
• 1984 to 1986 – Engineer in Maintenance Area
• 1987 to 1995 – Head of the Maintenance Area
• 1996 to 2000 - Head of the Quality Control Area
• 2001 to 2004 - Manager of the Production Department
• 2005 to 2006 - Manager of the Training Department
• Currently – Chief Production Officer
With Other Companies (previously):
• 1996 to 2008 - Professor of Materials Management - UNERJ - Jaraguá do Sul/SC
• 2010 to 2011 – Vice-President of Community Affairs of Associação Comercial e Industrial de Jaraguá do Sul - ACIJS
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
EDUARDO DE NÓBREGA - Officer
Educational Background:
• 1979 – Mechanical Technician - Escola Técnica Federal de São Paulo
• .1987 – Bachelor of Industrial/Mechanical Engineering – UBC – Universidade Braz Cubas
• •1989 – Graduate Degree in General Management – FMU – Faculdades Metropolitanas Unidas
Professional Experience:
With WEG Group Companies:
• 2010 to 2010 – Industrial Manager
• Currently – Chief Industrial Director
With Other Companies (previously):
• 1981 to 1988 – Process Technician of Industriais Villares S.A.
• 1989 to 1992 – Process Engineer of Industriais Villares S.A.
• 1993 to 1994 – Process Engineer of Gevisa S.A.
• 1995 to 1998 – Methods and Processes Supervisor of Gevisa S.A.
• 1999 to 1999 – Production and Material Manager of Gevisa S.A.
• 2000 to 2003 – Industrial Manager of Gevisa S.A.
• 2004 to 2007 – Industrial Officer of Gevisa S.A.
• 2008 to 2009 – Chief Operations Officer of Alstom Hydro Energia Brasil
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
FERNANDO CARDOSO GARCIA - Officer
Educational Background:
• 1984 – Bachelor of Electrical Engineering - Faculdade de Engenharia de Barretos
• 1994 – Graduate Degree in Administration - FERJ - Fundação Educacional Regional Jaraguaense
• 1996 - Graduate Degree in Managerial Practices - Escola Superior de Administração e Gerência ESAG
• 1999 – Graduate Degree in Advanced Business Management - European University
• 2007 - CEO Program – Strategy and Organization Leadership - Universidad Adolfo Ibanez Chile
Professional Experience:
With WEG Group Companies:
• 1985 to 1988 – Sales Analyst
• 1989 to 1995 – Head of the Sales Area
• 1996 to 2001 – Manager of the Sales Department
• 2001 to 2003 – Branch Officer - WEG Venezuela
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12.12 - Other relevant information
• 2003 to 2010 – Branch Officer - WEG Chile
• 2010 to 2011 – Branch Officer - WEG Mexico
• Currently – Chief Sales Officer
With Other Companies (previously):
• 1984 – Inspector of CREA (Regional Engineering and Architecture Board)
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
HELCIO MAKOTO MORIKOSSI - Officer
Educational Background:
• 1983 – Mechanical Engineering - Escola de Engenharia Mauá
• 2005 - Dom Cabral
Professional Experience:
With WEG Group Companies:
• 1989 to 1991 – Sales Coordinator - Banweg
• 1991 to 1992 – Sales Analyst
• 1992 to 1993 – Management Assistant
• 1993 to 1993 – Head of Automation Sales Area
• 1993 to 1994 – Executive Assistant
• 1994 to 1995 – Sales Manager - Banweg
• Currently – Chief Sales Officer
With Other Companies (previously):
Nil
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
JORGE TENNENBERG - Officer
Educational Background:
• 1992 – Mechanical Technician - Escola Técnica Tupy
• 1998 – Mechanical and Production Engineering - Universidade do Oeste de Santa Catarina - UNOESC
Professional Experience:
With WEG Group Companies:
• Since 1999 – Officer of subsidiary Hidráulica Industrial S.A. "HISA"
With Other Companies (previously):
• 1993 to 1998 – Production Supervisor - Glassul Ltda
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
LUIS ALBERTO TIEFENSEE - Officer
Educational Background:
• 1978 – Bachelor of Mechanical Engineering - Universidade Regional Integrada Santo Angelo-RS
• 1988 - Graduate Degree in Business Administration - Escola Superior de Administração e Gerência
• 2003 - MBA in Business Management - Centro Universitário de do Sul - UNERJ
Professional Experience:
With WEG Group Companies:
• 1980 to 1982 - Engineer in the Tooling Area
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12.12 - Other relevant information
• 1983 to 1988 - Head of the Tooling Area
• 1989 to 1993 - Manager of the Industrial Engineering Department
• 1994 to 1996 – Manager of the Tooling Department
• 1997 to 1999 - Manager of the Stamping Department
• 2000 to 2001 – Manager of the Tooling Department
• 2002 to 2006 – Chief Production Officer
• Currently – Chief Industrial Director
With Other Companies (previously):
• 2008 to 2009 – Secretary Director of Associação Comercial e Industrial de Jaraguá do Sul - ACIJS
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
MIL TON OSCAR CASTELLA - Officer
Educational Background:
• 1979 - Electrical Engineering - FEJ - Faculdade de Engenharia de Joinville/SC
• 1994 - Graduate Degree in Managerial Practices - Escola Superior de Administração e Gerência
• 1996 – Graduate Degree in Rotating Electrical Machines - UFSC
Professional Experience:
With WEG Group Companies:
• 1980 to 1984 – Project Analyst
• 1984 to 1985 – Head of the Synchronous and DC Machines Project Area
• 1985 to 1990 - Head of the Electric Projects Area
• 1990 to 1992 - Manager of the Quality Control Department
• 1992 to 2008 - Engineering and Industrial Motors Manager
• Currently – Chief Engineering Officer
With Other Companies (previously):
Nil
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
NOTE: No additional information available.
REINALDO RICHTER - Officer
Educational Background:
• 1983 – Bachelor of Accounting Sciences - UNIVILLE -Joinville/SC
• 1987 - Graduate Degree in Business Administration - Escola Superior de Administração e Gerência
• 2005 – Development Program for Executives – PDE – Fundação Dom Cabral
Professional Experience:
With WEG Group Companies:
• 1981 to 1985 – Administrative Assistant
• 1985 to 1986 – Head of Personnel Department
• 1986 to 1991 – Sales / Administrative Manager
• 1991 to 1992 – Administrative Department Manager
• 1992 to 1995 – Manager of the Sales Department
• 1995 to 2007 – Manager of the Sales Department
• 2007 to 2010 – Paint Unit Officer
• Currently – Chief Operating Officer
With Other Companies (previously):
Nil
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
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Reference Form - 2012 - WEG A
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12.12 - Other relevant information
Nil
NOTE: No additional information available.
REINALDO STUART JUNIOR - Officer
Educational Background:
• 1982 - Mechanical Engineering - Universidade Federal de SC/UFSC
• 1994 - Graduate Degree in Managerial Practices - Escola Superior de Administração e
Gerência
• 2005 – Master Degree in Mechanics - Universidade Federal de SC/UFSC
Professional Experience:
With WEG Group Companies:
• 1983 to 1987 - Head of the Quality Department
• 1988 to 1989 – Executive Assistant - Quality
• 1989 to 1996 – Quality Manager
• 1996 to 1998 - Manager of the Quality Department
• 1998 to 2006 – Manager of the Technical Department
• Currently – Chief Industrial Director
With Other Companies (previously):
Nil
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
NOTE: No additional information available.
RONALDO KLITZKE- Officer
Educational Background:
• 1972 – Accounting Technician
• 1978 – Bachelor of Veterinary Medicine I UDESC
• 1988 - Graduate Degree in Business Administration / ESAG
• 2001 - MBA in Corporate Management, Marketing and Finance / INPG
Professional Experience:
With WEG Group Companies:
• 2010 to 2010 – Industrial Manager
• Currently – Chief Industrial Director
With Other Companies (previously):
• 1986 - 1988 – Veterinarian / Livestock Department Manager
• Currently – Forestry Officer
With Other Companies (current):
Nil
Criminal convictions over the past 5 years:
Nil
NOTE: No additional information available.
Page 195 of 347
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Version: 1
13.1 - Description of the compensation policy or practice, including for nonstatutory officers
Description of compensation policies and practices regarding the Board of
Directors, statutory and non-statutory executive board members, the
Supervisory Board, and the audit, risk, financial and compensation committees
a) Objectives of the compensation policy or practice
The Company's compensation policy for its managing officers aims to attract and retain
qualified professionals, with skills and profile appropriate to the business characteristics
and needs.
Board of Directors and Executive Board – compensation aims to reward the duties
performed by each member, on continuing and developing the corporate businesses
under their responsibility, as well as attaining the results and performance achieved by
the Company.
Supervisory Board – Compensation aims to reward the legal and statutory duties
performed by each member. No variable compensation is applicable to the Supervisory
Board.
b) Breakdown of compensation
b.i.) Description of compensation elements and objectives of each thereof
Compensation of the Board of Directors and Executive Board
Fixed compensation - Members of the Board of Directors and Executive Board are
remunerated based on specific legislation, statutory determinations and market
standard. On establishing the individual amount to be paid monthly to each member,
the Board of Directors considers: their responsibilities; time they dedicate to their
duties; their competence and professional reputation, and the market price for their
services. Such compensation varies according to specific duties and responsibilities
inherent in each position. Compensation also considers market surveys and the
Organization's strategic alignment.
Variable compensation – Members of the Board of Directors and Executive Board also
receive variable compensation pegged to the Company’s achieving goals and to
performance indicators. This type of compensation allows coherent and transparent
profit sharing, as well as alignment of the Company’s, Managing Officers’ and
shareholders’ interests, in accordance with the best management and corporate
governance practices.
Compensation of the Supervisory Board
Compensation of members of the Supervisory Board complies with the provisions set
forth in paragraph 3 of article 162 of Law No. 6404/76. It shall be fixed in the General
Meeting that elects the Supervisory Board members, as proposed by the Board of
Directors, and shall not be less than 10% of the average compensation paid to each
Officer, excluding benefits, representation allowances and shares in profits. In addition,
all lodging and transportation expenses are refunded, provided that they are related to
performance of duties of the position to which they have been elected.
Page 196 of 347
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13.1 - Description of the compensation policy or practice, including for nonstatutory officers
In General Meeting held on April 26, 2011, minimum monthly individual amount of R$
5,375.00 was established. In Special and General Meeting held in 2012, minimum
monthly individual amount established was R$5,550.00.
b.ii.) Percentage of each compensation element
In 2011, fixed compensation of the Board of Directors corresponded to 63% of total
compensation, average, where as variable compensation accounted for 37%. Fixed
compensation of the Executive Board in 2011 accounted for 72%, whereas variable
compensation corresponded to 23% of total compensation. Compensation of the
Supervisory Board is 100% fixed.
b.iii.) methodology to calculate and adjust each compensation element
Fixed compensation – As previously discussed, in order to establish the individual
amount to be monthly paid, responsibilities, time dedicated to duties, professional
reputation and competence, and value of services in the market are considered. The
Company periodically engages a specialized company to conduct a compensation
survey.
Variable compensation – variable compensation is based on profit sharing and is
defined in article 38 of the bylaws, which limits its maximum amount, pursuant to legal
limitations, to 10% (ten percent) of net income, not exceeding annual managing
officers’ compensation, whichever is less (paragraph 1, article 152, Brazilian
Corporations Law).
b.iv.) justification if compensation breakdown
Balance between fixed and variable components of Managing Officers’ compensation
seeks to, at the same time, attract and retain talents and encourage creation of value
for the Company by sharing risks and results.
c)
key performance indicators
compensation element
considered
when
determining
each
The Board of Directors annually establishes the criterion for profit sharing among
managing officers (Executive Board and Board of Directors).
Profit sharing is calculated on consolidated net income, with percentage ranging from
0.0% to 2.5%, according to the performance indicator "activity P&L after profit sharing
and taxes on capital invested " provided that at least 10% in 2012 (12% in 2011).
Capital invested is total working assets and liabilities and fixed assets.
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13.1 - Description of the compensation policy or practice, including for nonstatutory officers
d)
Compensation structure to reflect evolution of performance indicators
As previously discussed, total compensation of Managing Officers seeks to, at the
same time, attract and retain talents and encourage creation of value for the Company
by sharing risks and results. As also discussed previously, fixed compensation is based
on factors such as experience and market conditions, whereas variable compensation
is pegged to specific goals of return on capital. Ongoing evolution of the Company’s
operational standard is considered in setting annual return goals pegged to variable
compensation.
e)
Alignment of compensation policy or practice with issuer’s short-,
medium- and long-term interests
Variable compensation of member of the Board of Directors and Executive Board is
pegged to achieving goals and performance indicators, aligns interests of these
members with the Company’s with respect to value creation, and is in line with the best
management and corporate governance practices.
f)
existence of compensation supported by direct or indirect subsidiaries,
controlled or controlling companies
Managing officers receive their compensation from both WEG S.A., controlling
company, and subsidiary WEG Equipamentos Elétricos S.A. Information on
compensation obtained from the controlling company is stated in items 13.2 to 13.14,
whereas information on compensation received from the subsidiary is stated in item
13.15.
g)
Existence of any compensation or benefit linked to any corporate event,
such as issuer’s selling its shareholding control
Not applicable.
Page 198 of 347
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Version: 1
13.2 - Total compensation paid to the Board of Directors, Executive Board and
Supervisory Board
Total compensation expected for current financial year 12/31/2012 –
Annul Values
Board of Directors Statutory Executive Board
Number of members
7.66
12.00
Fixed annual
compensation
Fees
1,500,000.00
750,000.00
Direct/indirect benefits
0.00
0.00
Participation in
committees
0.00
0.00
Other
0.00
0.00
Description of other fixed
compensation
Variable compensation
Bonus
0.00
0.00
Profit sharing
1 ,500,000.00
700,000.00
Meeting attendance
0.00
0.00
Commissions
0.00
0.00
Other
0.00
0.00
Description of other
variable compensation
Post-employment
benefits
0.00
0.00
Termination benefits
0.00
0.00
Stock-based
compensation
0.00
0.00
Only compensation
Only compensation
Notes
received from
received
WEG S.A.
from WEG S.A.
Total compensation
3,000,000.00
1,.450,000.00
Total compensation for financial year 12/31/2011 – Annul Values
Board of Directors Statutory Executive Board
Number of members
7.00
11 .00
Fixed annual
compensation
Fees
1,124,000.00
577,000.00
Direct/indirect benefits
0.00
1,000.00
Participation in
committees
0.00
0.00
Other
0.00
0.00
Supervisory Board
3.00
Total
22.66
200,000.00
0.00
2,450,000.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2,200,000.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Only compensation
received
from WEG S.A.
200,000.00
0.00
4,650,000.00
Supervisory Board
3.00
Total
21 .00
229,000.00
0.00
1 ,930,000.00
1 ,000.00
0.00
0.00
0.00
0.00
Page 199 of 347
Reference Form - 2012 - WEG A
Version: 1
13.2 - Total compensation paid to the Board of Directors, Executive Board and
Supervisory Board
Description of other fixed
compensation
Variable compensation
Bonus
Profit sharing
Meeting attendance
Commissions
Other
Description of other
variable compensation
Post-employment
benefits
Termination benefits
Stock-based
compensation
0.00
647,000.00
0.00
0.00
0.00
0.00
332,000.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
979,000.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Only compensation
Only compensation
Notes
received from
received
WEG S.A.
from WEG S.A.
Total compensation
1 ,771 ,000.00
91 0,000.00
Total compensation for financial year 12/31/2010 – Annul Values
Board of Directors Statutory Executive Board
Number of members
7.00
11 .17
Fixed annual
compensation
Fees
1 ,052,000.00
528,000.00
Direct/indirect benefits
35,000.00
0.00
Participation in
committees
0.00
0.00
Other
0.00
0.00
Description of other fixed
compensation
Variable compensation
Bonus
0.00
0.00
Profit sharing
484,000.00
243,000.00
Meeting attendance
0.00
0.00
Commissions
0.00
0.00
Other
0.00
0.00
0.00
Only compensation
received
from WEG S.A.
229,000.00
0.00
2,91 0,000.00
Supervisory Board
4.33
Total
22.50
256,000.00
0.00
1 ,836,000.00
35,000.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
727,000.00
0.00
0.00
0.00
Page 200 of 347
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Version: 1
13.2 - Total compensation paid to the Board of Directors, Executive Board and
Supervisory Board
Description of other
variable compensation
Post-employment
benefits
Termination benefits
Stock-based
compensation
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Only compensation
Only compensation
Notes
received from
received
WEG S.A.
from WEG S.A.
Total compensation
1 ,571 ,000.00
771,000.00
Total compensation for financial year 12/31/2009 – Annul Values
Board of Directors Statutory Executive Board
Number of members
7.00
7.00
Fixed annual
compensation
Fees
1 ,077,000.00
370,000.00
Direct/indirect benefits
32,000.00
0.00
Participation in
committees
0.00
0.00
Other
0.00
0.00
Description of other fixed
compensation
Variable compensation
Bonus
0.00
0.00
Profit sharing
581 ,000.00
200,000.00
Meeting attendance
0.00
0.00
Commissions
0.00
0.00
Other
0.00
0.00
Description of other
variable compensation
Post-employment
benefits
0.00
0.00
0.00
Only compensation
received
from WEG S.A.
256,000.00
0.00
2,598,000.00
Supervisory Board
3.00
Total
17.00
1 67,000.00
0.00
1 ,614,000.00
32,000.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
781 ,000.00
0.00
0.00
0.00
0.00
0.00
Termination benefits
Stock-based
compensation
Notes
Total compensation
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Only compensation
received from
WEG S.A.
1 ,690,000.00
0.00
Only compensation
received
from WEG S.A.
570,000.00
0.00
Only compensation
received
from WEG S.A.
1 67,000.00
0.00
Page 201 of 347
2,427,000.00
Reference Form - 2012 - WEG A
Version: 1
13.3 – Variable compensation paid to the Board of Directors, Executive Board
and Supervisory Board
Presentation, in table format, of variable compensation for the past three fiscal
years and forecast for current fiscal year.
Year 2009 (In thousands of R$)
Body
Number of members
Regarding profit sharing
- Lower limit defined in the compensation
plan
- Upper limit defined in the compensation
plan
- Amount defined in the compensation plan
(up to 100% fixed compensation), if goals
set are met
- Amount effectively recognized in the
income statement
Supervisory
Board of Directors
Board
7.00
3.00
Statutory
Executive
Board
7.00
Total
17.00
315
N/A
108
423
1,111
N/A
382
1,493
1,111
N/A
382
1,493
581
N/A
200
781
Year 2010 (In thousands of R$)
Body
Number of members
Supervisory
Board of Directors
Board
7.00
4.33
Statutory
Executive
Board
Total
11.17
22.50
Regarding profit sharing
- Lower limit defined in the compensation
plan
N/A
- Upper limit defined in the compensation
plan
969
N/A
487
1,456
- Amount defined in the compensation plan
(up to 100% fixed compensation), if goals
set are met
969
N/A
487
1,456
- Amount effectively recognized in the
income statement
484
N/A
243
727
Page 202 of 347
Reference Form - 2012 - WEG A
Version: 1
13.3 – Variable compensation paid to the Board of Directors, Executive Board
and Supervisory Board
Year 2011 (In thousands of R$)
Body
Number of members
Regarding profit sharing
- Lower limit defined in the
compensation plan
- Upper limit defined in the
compensation plan
- Amount defined in the compensation
plan (up to 100% fixed compensation),
if goals set are met
- Amount effectively recognized in the
income statement
Board of
Directors
Supervisory
Board
Statutory
Executive
Board
Total
7.00
3.00
11.00
21.00
-
N/A
-
-
992
N/A
510
1,502
992
N/A
510
1,502
647
N/A
332
979
Year 2012 – Proposal (In thousands of R$)
Body
Number of members
Regarding profit sharing
- Lower limit defined in the compensation
plan
- Upper limit defined in the
compensation plan
Amount defined in the compensation plan
(up to 100% fixed compensation), if goals
set are met
Amount effectively recognized in the
income statement
Board of
Directors
7.66
0.0% on net
income
2.5% on net
income
Supervisory
Board
3.00
Statutory
Executive Board
12.00
Total
22.66
N/A
0.0% on
net income
2.5% on net
income
-
2.5% on net
income
N/A
2.5% on net
income
-
-
N/A
-
-
N/A
-
Page 203 of 347
Reference Form - 2012 - WEG A
Version: 1
13.4 – Stock-based compensation plan for the Board of Directors and Executive
Board
Description of the stock-based compensation plan for the Board of Directors and
Executive Board effective last year and expected for current years:
After approval in Special General Meeting held on February 22, 2011, the Stock-Option
Plan (the "Plan"), which provides for the granting of call options, according to the
number of shares acquired by each managing officer during a period of time
established in advance. Accordingly, the number of options that may be granted is not
related to the compensation received by each managing officer and, therefore, the
Company understands that this Plan is not considered as "stock-based compensation."
However, in order to provide all information required for shareholders to exercise their
voting right, the Company states information requested by CVM Ruling No. 480/09.
The financial statements for the period ended December 31, 2011 detail options
granted under this Plan in Note 15. This was restated below for information only.
a) general terms and conditions
The Board of Directors may approve, on a semiannual basis and according the
Company’s current dividend distribution policy, Stock Option Programs ("Programs"),
wherein participants, number of options, strike price, option distribution, effective date
and other specific rules of each Program, in light of the Plan guidelines.
Upon launch of each Program, the Board of Directors will set the terms and conditions
for each Option in an Agreement of Option Grant and Other Covenants ("Agreement"),
to be executed between the Company and each Participant, referring to the Program
established by the Board of Directors. The Agreement should define at least the
following conditions:
a)
b)
c)
the number of shares Participant will be entitled to acquire through exercising the
option and the price per share, according to the Program;
the period for which the option may be exercised and deadlines for total or partial
option exercise and expiry of rights arising from the option;
any standards on any restrictions regarding assignment of shares acquired under
Plan conditions and provisions on penalties for non-compliance with such
restrictions; and
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13.4 – Stock-based compensation plan for the Board of Directors and Executive
Board
d)
any other terms and conditions required, in light of general guidelines of the Plan.
As a condition to join each Program, Participants will have to invest 20% (twenty
percent), or 40% (forty percent) or 60% (sixty percent) of their variable compensation
for the period in Company shares ("Invested Shares").
For the purposes of this Plan, the term "variable compensation" means net amount
Participants receive from the Company as Profit Sharing ("PLR"), according to the
distribution criteria and goals periodically defined by the Company.
The Company will grant each Participant with Stock Options proportionally to the
number of Invested Shares, to wit:
a)
b)
c)
Should the Participant invest 20% (twenty percent) or more, but less than 40%
(forty percent), in purchase of shares (Invested Shares), the number of options to
be granted equals the number of Invested Shares acquired by the Participant.
Should the Participant invest 40% (forty percent) or more, but less than 60% (sixty
percent), in purchase of shares (Invested Shares), the number of options to be
granted equals 1.5 (one point five) times the number of Invested Shares acquired
by the Participant.
Should the Participant invest 60% (sixty percent) or more, but less than 100% (one
hundred percent), in purchase of shares (Invested Shares), the number of options
to be granted equals twice the number of Invested Shares acquired by the
Participant.
The Board of Directors may change PLR percentages to be invested, as well as the
multiple number of Options to be granted to each Participant considering the number of
Invested Shares, upon approval of each Program. Grants established in each Program
are not necessarily equal for each participant, neither due to equity or parity, nor
divided on a pro rata basis.
Participants have 15 (fifteen) days from the date PLR is paid or credited by the
Company to acquire Invested Shares and report it to the Company.
b) main goals of the plan
The Stock Option Plan ("Plan") aims at granting Options to purchase shares issued by
WEG S.A. ("Company") to officers of the Company or its subsidiaries located in Brazil,
so as to attract, motivate and retain them, and align their interests with the interests of
the Company and its shareholders.
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13.4 – Stock-based compensation plan for the Board of Directors and Executive
Board
c) plan contribution to these goals
This Plan provides for the granting of options to purchase shares in accordance with
the number of shares acquired by each director during a fixed term. These shares are
to be held for periods ranging from two to four years before options can be exercised.
By encouraging managing officers to become long-term shareholders, the Plan helps to
align the interests of managers with those of other shareholders and the Company as a
whole.
d) plan inclusion in issuer’s compensation policy
This Plan provides for the granting of options to purchase shares in accordance with
the number of shares acquired by each director during a fixed term. Accordingly, the
number of options that may be granted is not related to the compensation received by
each managing officer and, therefore, the Company understands that this Plan is
not considered as "stock-based compensation."
Also, the Company understands that the Plan is part of the conditions that enables it to
attract, motivate and retain talents, and align their interests to those of the Company
and its shareholders.
e) alignment of the short-, medium- and long term interests of managing officers
and the issuer
As described in item c above, this Plan provides for the granting of options to purchase
shares in accordance with the number of shares acquired by each director during a
fixed term. These shares are to be held for periods ranging from two to four years
before options can be exercised. By encouraging managing officers to become longterm shareholders, the Plan helps to align the interests of managers with those of other
shareholders and the Company as a whole.
f) maximum number of shares included in the program
The maximum number of stock options to be granted by the Plan may not exceed 2%
(two percent) of total shares comprising Company’s Capital.
The Board of Directors will establish the criteria under which options will be
apportioned among Participants, whenever total options should exceed the number
herein established.
Once the Option is exercise, the Board of Directors will define whether Company's
capital should be increased through issue of new shares to be subscribed by
Participants, pursuant to article 166, item III, of Law No. 6404/76, or whether Stock
Options exercised will be settled through treasury shares, considering applicable
regulation.
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Reference Form - 2012 - WEG A
Version: 1
13.4 – Stock-based compensation plan for the Board of Directors and Executive
Board
Under the terms of article 171, paragraph 3, of Law No. 6404/76, shareholders have no
right of first refusal to exercise options arising from the Plan.
g) maximum number of options to be granted
As previously mentioned, the maximum number of stock options to be granted by the
Plan may not exceed 2% (two percent) of total shares comprising Company’s Capital.
h) conditions to acquire shares
Options may be exercised by Participants within 24 (twenty four) months from the
corresponding vesting date ("Vesting Period"). Each Option will be exercised upon the
delivery of the corresponding Option Exercise Term duly completed and signed by the
Participant.
Subject to the Policy of Trading Securities Issued by the Company, the Chief Investor
Relations Officer may, at any time, establish additional restrictions on the exercise of
Options on dates prior to Company’s disclosure of material fact notices including, but
not limited to, dates prior to the end of the fiscal year and the publication of financial
statements, dates between decisions to increase capital, dividends, bonus shares or
split and publication of the notices or announcements and other dates on which
suspension of Option exercise is recommended.
Options not exercised during the Vesting Period will be automatically cease to exist, by
operation of law, irrespective of any prior notice or indemnification. If the last date set
for option exercise during the vesting period coincides with the period in which no
marketable securities issued by the Company can be traded, under the terms of its
Policy of Material Fact Notice Disclosure or applicable legislation, the Vesting Period
will be extended to the next date arranged by the Board of Directors for options to be
exercised.
i)
Criteria to set acquisition or strike price
The strike price will be equivalent to the weighted average of the volume of the
Company’s common shares closing price traded on BM&FBOVESPA S.A.
(BM&FBOVESPA: "WEGE3"), on 20 (twenty) floors prior to the last day of the month
prior to approval of the corresponding Program.
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Version: 1
13.4 – Stock-based compensation plan for the Board of Directors and Executive
Board
The Board of Directors may, at its discretion, set discount of up to 10% (ten percent) on
the average computed, and establish that the strike price should be monetarily
restated, as from base date of its determination, based on a price index to be defined
by the Company’s Board of Directors in each Program, or even establish fixed
monetary restatement for the strike price.
j)
strike price determination criteria
Vesting Options is subject to cumulatively meeting Terms for which Invested Shares
are to be Held and grace period of each Program. Provided that the Term for which
Invested Shares are to be Held is met, options will vest in three annual equal
consecutive portions, 1/3 (one third) each, with the first portion as from the second
anniversary of the Program effective period, and other portions as from subsequent
anniversaries, as follows:
Vesting – Options
Percentage of Options Vested
(as from effective date of each Program)
Prior to second anniversary
As from second anniversary
As from third anniversary
As from fourth anniversary
0%
33.3%
66.6%
100%
The Board of Directors may, based on projections of changes in stock market
quotations of the Company’s shares, as well as other market factors, change the rules
of Vesting of Options, upon the approval of the new Programs.
k) settlement
Payment must be made in cash, upon share acquisition, as determined by the Board of
Directors in each Program, except in the event the Participant chooses to immediately
sell total or part of the shares acquired on the stock exchange, subject to the limitations
set forth in this Plan, in which case payment may be made by the Participant through
the issuance of promissory notes maturing pro-solute on the first working day
subsequent to the settlement of the transaction..
I) restrictions transfer of shares
There is no restriction on transfer of shares acquired through conversion of options
after the deadlines defined in the Plan.
m) criteria and events that, when detected, lead to suspension of, changes in or
termination of the plan
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Version: 1
13.4 – Stock-based compensation plan for the Board of Directors and Executive
Board
The Plan goes into effect immediately after its approval in the Special General Meeting
of the Company, and may be terminated, suspended or modified at any time, through a
proposal approved by the Company’s Board of Directors.
n) effects on managing officers’ rights set forth in the stock-based compensation
plan when they leave management bodies
In case of Participant Termination, all Options granted thereto yet not exercised
("Unvested Options ") will automatically cease to exist, by operation of law, irrespective
of a 30-day resignation notice or severance pay. Notwithstanding, holder will be entitled
to exercise Options vested on the date of Termination ("Vested Options"), within 30
(thirty) days, from Termination date.
For the purpose of this Plan, the term "Termination" means any event or fact that may
end the business relationship of the Option holder with the Company, except for death,
permanent disability or Special Termination. Termination includes, among others,
events of Participant voluntary termination, resignation, substitution or non-reelection
as an officer, and dismissal for cause or wrongful dismissal, either for employment
contract or service provisions.
In case of Participant Special Termination, all Vested Options may be exercised
within 12 (twelve) months from Special Termination date, through payment in cash, and
all Unvested Options may be exercised within their regular vesting rules and terms.
"Special Termination”, for the purpose of this Plan, is considered as the end of the
Participant’s career in the Company with approval of the Board of Directors, as the
case may be, at their discretion. If Special Termination is requested by the Participant,
the Board of Directors will consider the following upon assessing such request: (i)
anticipation of request, to be made at least six months in advance; (ii) any posttermination professional activity plan of the Participant, which should not include any
activity competing the those performed by the Company; (iii) other circumstances
applicable to this case. The Board of Directors will take a decision at their own
discretion and not related to rules on retirement for length of service or age, under the
terms of official social security rules (INSS) or rules for retirement supplementation of
any private plan that the Company might sponsor.
In the event Participant’s performing activities competing with those performed by the
Company is detected, the Board of Directors may render inexistent, by operation of law
and irrespective of a 30-day resignation notice or severance pay, all Unvested Options
granted to the Participant.
Page 209 of 347
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Version: 1
13.4 – Stock-based compensation plan for the Board of Directors and Executive
Board
In the event of death or permanent disability, all Unvested Options may be exercised
in advance. Vested and Unvested Options may be extended to Participants' heirs and
successors, through legal succession or will enforcement, and may be fully or partially
exercised by their heirs, successors and non-participant spouses, through payment in
cash, within 12 (twelve) months from death date.
Page 210 of 347
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Version: 1
13.5 – Number of shares, units of interest and other convertible securities held
by members of the Board of Directors and Supervisory Board – by body
Number of shares directly and indirectly held by members of the Board of
Directors, Executive Board and Supervisory Board as of 12/31/2011:
Total Shares Held
Body
(Common Shares Only)
Board of Directors – directly held
Executive Board
3,065,716
747,717
Supervisory Board
1,317,677
TOTAL
5,131,110
Page 211 of 347
Reference Form - 2012 - WEG A
Version: 1
13.6 – Stock-based compensation paid to Board of Directors and Executive
Board
Description of the stock-based compensation recognized in P&L for the past
three fiscal years and that expected for current fiscal year for the Board of
Directors and Executive Board:
As informed in item 13.4 above, the company has no stock-based compensation plan.
Options granted refer to the "Stock Option Plan."
The financial statements for the period ended December 31, 2011 detail options
granted under this Plan in Note 15.
YEAR 2009
Not applicable. The Stock Option Plan was approved in Special Meeting held on
February 22, 2011.
YEAR 2010
Not applicable. The Stock Option Plan was approved in Special Meeting held on
February 22, 2011.
YEAR 2011
Executive Board
Members
Stock options granted
Grant date
Number of options granted
Vesting period
16
15
Program
April 2011
Program
September 2011
04/06/11
09/08/11
93,006
37,894
1/3 of options as from second year
1/3 of options as from third year
1/3 of options as from fourth year
Options exercisable within no longer than
Period for which transfer of shares is restricted
06 years
06 years
There is no restriction after conversion of
stock options
Weighted average strike price:
a) outstanding at beginning of year
N/A
N/A
b ) lost during the fiscal year
N/A
N/A
c) exercised during the fiscal years
N/A
N/A
expired during the fiscal year
N/A
N/A
R$ 8.61
R$ 6.60
0.000150
0.000061
Fair value of options on grant date
Potential dilution in case all granted shares are exercised
Page 212 of 347
Reference Form - 2012 - WEG A
Version: 1
13.7 – Information on outstanding options held by the Board of Directors and
Executive Board
Description of outstanding options of the Board of Directors and Executive
Board at the end of the last fiscal year
Executive Board
Members
16
15
Program
Program
April 2011
September 2011
93,006
37,894
Unvested options
Number
Vesting date
Options exercisable within no longer than
Period for which transfer of shares is restricted
A from
A from
04/07/2013
09/09/2013
06 years
06 years
N/A
N/A
Weighted average strike price
R$ 24.34
R$ 20.45
fair value of options on the last day of
R$ 4.35
R$ 7.17
N/A
N/A
the fiscal year
Exercisable options
Page 213 of 347
Reference Form - 2012 - WEG A
Version: 1
13.8 – Options exercised and options granted related to compensation of the
Board of Directors and Executive Board
Options exercised and options granted related to compensation of the Board of
Directors and Executive Board for the past three fiscal years:
At December 31, 2011, the Company had no exercised or granted options.
Page 214 of 347
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Version: 1
13.9 - Summary description of information required to understand the data
disclosed in items 13.6 to 13.8 – Stock and option pricing
Information required to understand the data disclosed in items 13.6 to 13.8.
As informed in item 13.4 above, the Company understands that it has no stock-based
compensation plan. Options granted refer to the "Stock Option Plan."
Expenses with stock options are recorded over the vesting period.
At December 31, 2011, the amount of R$ 239 was recorded under Other P&L in the
income statement for the year against capital reserve in Equity.
Number of Shares
Program
Granted
April 2011
274,678
Vesting
Acquired Vested period
47,953
93,006
In thousands
of R$
In reais (R$)
Number of
vested
options
Strike
price
Restated
price
IPCA
Option
pricing
Option
difference
1st
31,002
21.01
23.16
30.60
7.43
2nd
31,002
21.01
24.32
32.98
8.66
31,002
21.01
25.54
35.29
9.76
3rd
Subtotal
Expenses
93,006
September 2011
274,678
19,072
37,894
Grant Total
1st
12,631
17.45
19.39
25.08
5.70
72
12,631
17.45
20.43
27.05
6.62
84
12,632
17.45
21.54
29.00
7.46
250
130,900
1,051
Weighted average fair value was determined based on the Black-ScholesMerton
method.
data and assumptions adopted in the pricing model, including the weighted
average stock price, strike price, expected volatility, option life time,
expected dividends and risk-free interest rate
Program
Vesting period
Factors:
Strike price (R$)
Option life time – in days
Current price of corresponding stock (R$)
Expected volatility in stock price (%)
Risk-free interest rate of option life time (%)
94
37,894
a) pricing model
b)
303
801
2nd
3rd
Subtotal
268
1st
21.01
755
22.10
26.33
12.79
April 2011
2nd
3rd
21.01 21.01
1.008 1.260
22.10 22.10
26.33 26.33
12.81 12.83
1st
September 2011
2nd
3rd
17.45
756
18.06
29.88
10.90
17.45
1.008
18.06
29.88
11.05
17.45
1.259
18.06
29.88
11.22
Page 215 of 347
Reference Form - 2012 - WEG A
Version: 1
13.9 - Summary description of information required to understand the data
disclosed in items 13.6 to 13.8 – Stock and option pricing
c) method used and assumptions adopted to incorporate expected effects of
anticipated exercise
Not applicable. Anticipated exercise is not applicable.
d) Determination of expected volatility
Using annual volatility, in light of the computation period, calculated on a annual basis,
(volatility for the period x v252), in which 252 is the number of working days in a year.
e) if any other option characteristic was included in its fair value determination
Vesting Options is subject to cumulatively meeting Terms for which Invested Shares
are to be Held and grace period of each Program. Provided that the Term for which
Invested Shares are to be Held is met, options will vest in three annual equal
consecutive portions, 1/3 (one third) each, with the first portion as from the second
anniversary of the Program effective period, and other portions as from subsequent
anniversaries, as follows:
Vesting – Options
Percentage of Options Vested
(as from effective date of each Program)
Prior to second anniversary
As from second anniversary
As from third anniversary
As from fourth anniversary
0%
33.3%
66.6%
100%
The Board of Directors may, based on projections of changes in stock market
quotations of the Company’s shares, as well as other market factors, change the rules
of Vesting of Options, upon the approval of the new Programs.
Page 216 of 347
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Version: 1
13.10 – Information on private pension plans granted to the Board of Directors
and Executive Board
Existing Pension Plan offered to members of the Board of Directors and
Executive Board.
The purpose of the benefit plan is to supplement post-employment benefits granted by
the government-sponsored social security system. The plan provides its members with
lifetime annuity benefits, supplementary illness benefits, supplementary disability
benefits, death annuity benefits, and lump-sum death benefits.
In thousands of R$
Body
Board of Directors
Number of members
7.00
Name of Plan
Executive Board
11.00
Benefit Plan
See item
2
Number of Board members entitled to retirement
Conditions for early retirement
13.15
50 years of age and 10 years of contribution
Updated amount of accumulated contributions made to the
pension plan until the latest fiscal year closing, less the amount of
contributions paid directly by officers
See item
4,006
13.15
Total amount of accumulated contributions made during the latest
fiscal year, less the amount of contributions paid directly by
officers
425
Early withdrawal allowed? If so, on what condition?
See item
13.15
Yes, on exiting the plan, withdrawal of the amount
equivalent to 2% for each year of service limited to
50% of the total balance.
Page 217 of 347
Reference Form - 2012 - WEG A
Version: 1
13.11 – Highest, lowest and average individual compensation paid to the Board of Directors, Executive Board and Supervisory
Board
Annual amounts
Number of members
Highest individual
compensation (reais)
Lowest individual
compensation (reais)
Average individual
compensation (reais)
12/31/2011
11.00
135,000.00
Executive Board
12/31/2010
12/31/2009
11.17
7.00
116,000.00
125,000.00
12/31/2011
7.00
350,000.00
Board of Directors
12/31/2010
12/31/2009
7.00
7.00
302,000.00
359,000.00
Supervisory Board
12/31/2010
3.67
4.33
63,000.00
59,000.00
12/31/2011
12/31/2009
3.00
56,000.00
60,000.00
42,000.00
67,000.00
113,000.00
98,000.00
112,000.00
63,000.00
40,000.00
56,000.00
83,000.00
69,000.00
81,000.00
253,000.00
224,000.00
241,000.00
62,000.00
59,000.00
56,000.00
Notes
Executive Board
Board of Directors
Supervisory Board
Page 218 of 347
Reference Form - 2012 - WEG A
Version: 1
13.12 – Mechanisms for compensation or termination benefits for managing
officers in case of removal from office or retirement
Describe contractual arrangements, insurance policies or other instruments that
support mechanisms involving compensation or termination benefits for directors or
officers in case of removal from office or retirement, indicating the financial
consequences for the Company.
Not applicable.
Page 219 of 347
Reference Form - 2012 - WEG A
Version: 1
13.13 – Rate of total compensation referring to members of the Board of
Directors and Supervisory Board who are related parties to controlling
shareholders
For the past 3 fiscal years, state the rate of total compensation of each body
recognized in the Company’s statement of income relating to members of the Board of
Directors, the Executive Board or the Supervisory Board who are related to direct or
indirect controlling shareholders, as defined by applicable accounting rules governing
this matter
YEAR
2009
2010
2011
BODY
Board of Directors
Supervisory Board
Executive Board
Board of Directors
Supervisory Board
Executive Board
Board of Directors
Supervisory Board
Executive Board
% of total compensation
35.28%
33.37%
33.58%
-
Page 220 of 347
Reference Form - 2012 - WEG A
Version: 1
13.14 – Compensation paid to members of the Board of Directors and
Supervisory Board, grouped by body, for any reason other than the office held
by them
For the past 3 fiscal years, state the amounts recognized in the Company’s statement
of income as compensation paid to the members of the Board of Directors, the
Executive Board and the Supervisory Board, grouped per body, for any reason other
than the office held by them, e.g. commissions and consulting or assistance services
provided
Not applicable.
Page 221 of 347
Reference Form - 2012 - WEG SA
Version: 1
13.15 – Variable compensation paid to the members of the Company’s Board of Directors recognized in the statement of income of
direct or indirect controlling shareholders, of companies under common control, and of the issuer’s subsidiaries
For the past 3 fiscal years, state the amounts recognized in the statement of income of direct or indirect controlling shareholders, of companies
under common control, and of the Company’s subsidiaries as compensation paid to the members of the Company’s Board of Directors, the
Executive Board and the Supervisory Board, grouped per body, specifying the reason for such compensation.
Managing officers receive their compensation from both WEG S.A., controlling company, and subsidiary WEG Equipamentos Elétricos S.A.
Information on compensation obtained from the controlling company WEG S.A. is stated in items 13.2 to 13.14, whereas information on
compensation received from the subsidiary WEG Equipamentos Elétricos S.A., as well as consolidated amounts, is stated in item 13.15.a.
Compensation received from WEG Equipamentos Elétricos S.A.
a.1) Compensation
Compensation
Annual fixed
Number of
Year
Body
Variable
Post-employment
Benefits for removal
Stock-based
members
Fees
Benefits
Total
Profit sharing
Total
benefits
of office
compensation
Total
2009
Board of Directors
Supervisory Board
4.00
N/A
481
N/A
N/A
N/A
481
N/A
166
N/A
166
N/A
N/A
N/A
N/A
N/A
N/A
N/A
647
N/A
2010
Executive Board
Total
Board of Directors
Supervisory Board
7.00
11.00
3.00
N/A
3,949
4,428
484
N/A
552
552
N/A
N/A
4,501
4,982
484
N/A
1,467
1,633
222
N/A
1,467
1,633
222
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
5,966
6,613
706
N/A
2011
Executive Board
Total
Board of Directors
Supervisory Board
11.17
14.17
3.00
N/A
5,830
6,314
449
N/A
726
726
N/A
N/A
6,556
7,040
449
N/A
1,757
1,979
259
N/A
1,757
1,979
259
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
8,313
9,019
708
N/A
Executive Board
Total
11.00
14.00
6,056
6,505
947
947
7,003
7,452
2,608
2,867
2,608
2,867
N/A
N/A
N/A
N/A
N/A
N/A
9,611
10,319
3.00
550
N/A
550
450
450
N/A
N/A
N/A
1,000
Board of Directors
2012
(amounts approved Supervisory Board
in General
Executive Board
Meeting)
Total
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
12.00
7,200
N/A
7,200
6,800
6,800
N/A
N/A
N/A
14,000
15.00
7,750
N/A
7,750
7,250
7,250
N/A
N/A
N/A
15,000
Page 222 of 347
Reference Form - 2012 - WEG SA
Version: 1
13.15 – Variable compensation paid to the members of the Company’s Board of
Directors recognized in the statement of income of direct or indirect controlling
shareholders, of companies under common control, and of the issuer’s
subsidiaries
YEAR 2009
Body
Number of members
Regarding profit sharing
- Lower limit defined in the compensation plan
- Upper limit defined in the compensation plan
- Amount defined in the compensation plan if goals
set are met
- Amount effectively recognized in the income
statement
Board of
Directors
4.00
Supervisor
y Board
-
Executive
Board
7.00
Total
11.00
47
402
402
N/A
N/A
N/A
494
3,380
3,380
541
3,782
3,782
166
N/A
1,467
1,633
Board of
Directors
3.00
Supervisor
y Board
-
Executive
Board
11.17
Total
14.17
446
446
N/A
N/A
N/A
4,446
4,446
4,892
4,892
222
N/A
1,757
1,979
Board of
Directors
3.00
Supervisor
y Board
-
Executive
Board
11.00
Total
14.00
397
397
N/A
N/A
N/A
4,468
4,468
4,865
4,865
259
N/A
2,608
2,867
Year 2010
Body
Number of members
Regarding profit sharing
- Lower limit defined in the compensation plan
- Upper limit defined in the compensation plan
- Amount defined in the compensation plan if goals
set are met
- Amount effectively recognized in the income
statement
Year 2011
Body
Number of members
Regarding profit sharing
- Lower limit defined in the compensation plan
- Upper limit defined in the compensation plan
- Amount defined in the compensation plan (up to
100% fixed compensation), if goals set are met
- Amount effectively recognized in the income
statement
Page 223 of 347
Reference Form - 2012 - WEG SA
Version: 1
13.15 – Variable compensation paid to the members of the Company’s Board of
Directors recognized in the statement of income of direct or indirect controlling
shareholders, of companies under common control, and of the issuer’s
subsidiaries
Board of
Directors
3.00
Body
Number of members
Regarding profit sharing
- Lower limit defined in the compensation plan
0.0% on
net income
2.5% on
net income
- Upper limit defined in the compensation plan
- Amount defined in the compensation plan (up to 100%
fixed compensation), if goals set are met
- Amount effectively recognized in the income statement
2.5% on
net income
-
Supervisor
y Board Executive Board
12.00
N/A
0.0% on
net income
2.5% on
net income
N/A
N/A
2.5% on
net income
-
N/A
Total
15.00
-
a.3) Pension Plan in Effect
Body
Number of members
Name of Plan
Number of Board members entitled to retirement
Conditions for early retirement
Updated amount of accumulated contributions made to the
pension plan until the latest fiscal year closing, less the
amount of contributions paid directly by officers
Total amount of accumulated contributions made during
the latest fiscal year, less the amount of contributions paid
directly by officers
Early withdrawal allowed? If so, on what condition?
3.00
11.00
Benefit Plan
9.00
50 years of age and 10 years of contribution
-
12,649
2,187
Yes, on exiting the plan, withdrawal of the amount equivalent
to 2% for each year of service limited to 50% of the total
balance.
a.4) Compensation Paid
Highest
Year
2009
2010
2011
Body
Board of Directors
Supervisory Board
Executive Board
Board of Directors
Supervisory Board
Executive Board
Board of Directors
Supervisory Board
Executive Board
Number of
members
4.00
7.00
3.00
11.17
3.00
11.00
Lowest
Compensation Compensation
291
72
1,020
592
399
98
1,134
336
463
114
1,333
494
Average
compensation
162
852
235
744
236
874
Page 224 of 347
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13.15 – Variable compensation paid to the members of the Company’s Board of Directors recognized in the statement of income of
direct or indirect controlling shareholders, of companies under common control, and of the issuer’s subsidiaries
b) Consolidated Compensation
b.1) Compensation
Compensation
Variable
Annual fixed
Year
Body
Board of Directors
Supervisionary Board
Executive Board
Members
Fees
Benefits
Total
Profit
sharing
Total
Postemployment
benefits
Benefits for
removal of
office
Stock-based
compensation
Total
7.00
3.00
7.00
1,723
167
4,317
32
N/A
552
1,755
167
4,869
747
N/A
1,667
747
N/A
1,667
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2,502
167
6,536
26.00
43.00
7,800
14,007
13,840
1,596
256
6,358
584
7,800
14,591
2,225
4,639
2,225
4,639
N/A
N/A
N/A
N/A
N/A
N/A
10,025
19,230
35
N/A
726
1,631
256
7,084
706
N/A
2,000
706
N/A
2,000
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2,337
256
9,084
761
9,382
18,353
1,507
4,213
1,507
4,213
N/A
N/A
N/A
N/A
N/A
N/A
10,889
22,566
N/A
N/A
948
-
1,588
229
7,581
8,767
906
N/A
2,940
2,283
906
N/A
2,940
2,283
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2,494
229
10,521
11,050
2009
Other Managing Officers
Total
Total, less Supervisory Board
Board of Directors
Supervisory Board
Executive Board
7.00
4.33
11.17
2010
2011
2012
(amounts
approved in
General
Meeting)
Other Managing Officers
Total
Total, less Supervisory Board
Board of Directors
Supervisory Board
Executive Board
Other Managing Officers
22.83
45.33
7.00
3.00
11.00
22.00
Total
Total, less Supervisory Board
Board of Directors
43.00
9,382
17,592
17,336
1,588
229
6,633
8,767
948
18,165
6,129
6,129
N/A
N/A
N/A
24,294
7.66
17,217
16,988
2,050
N/A
2,050
1,950
1,950
N/A
N/A
N/A
4,000
Supervisory Board
Executive Board
3.00
12.00
200
7,950
N/A
N/A
200
7,950
N/A
7,500
N/A
7,500
N/A
N/A
N/A
N/A
N/A
N/A
200
15,450
Total
22.66
10,200
N/A
10,200
9,450
9,450
N/A
N/A
N/A
19,650
Notes: The Supervisory Board was not considered in Management Compensation in the notes to financial statements.
Page 225 of 347
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Version: 1
13.15 – Variable compensation paid to the members of the Company’s Board of
Directors recognized in the statement of income of direct or indirect controlling
shareholders, of companies under common control, and of the issuer’s
subsidiaries
b.2) Variable compensation
Year 2009
Body
Number of members
Regarding profit sharing
- Lower limit defined in the compensation plan
- Upper limit defined in the compensation plan
- Amount defined in the compensation plan if goals
set are met
- Amount effectively recognized in the income
statement
Year 2010
Board of Directors
7,00
Total
43.00
N/A
N/A
N/A
602
3,762
3,762
618
4,466
4,466
1,582
9,741
9,741
747
N/A
1,667
2,225
4,639
Other Managing
Officers
22.83
Total
45.33
Board of Directors
7.00
Supervisory
Board
Executive Board
4.33
11.17
1,415
1,415
N/A
N/A
N/A
4,933
4,933
3,708
3,708
10,056
10,056
706
N/A
2,000
1,507
4,213
Body
Number of members
Regarding profit sharing
Other Managing
Officers
26.00
362
1,513
1,513
Body
Number of members
Regarding profit sharing
- Lower limit defined in the compensation plan
- Upper limit defined in the compensation plan
- Amount defined in the compensation plan if goals
set are met
- Amount effectively recognized in the income
statement
Year 2011
Supervisory
Board
Executive Board
3,00
7.00
Board of Directors
7.00
Supervisory
Board
Executive Board
3.00
12.00
Other Managing
Officers
22.00
Total
22.00
-
N/A
-
-
-
1,389
N/A
4,978
3,913
10,280
1,389
N/A
4,978
3,913
10,280
906
N/A
2,940
2,283
6,129
- Lower limit defined in the compensation plan
- Upper limit defined in the compensation plan
- Amount defined in the compensation plan (up to
100% fixed compensation), if goals set are met
- Amount effectively recognized in the income
statement
Year 2012 – Proposal approved in Special General Meeting
Body
Number of members
Regarding profit sharing
- Lower limit defined in the compensation plan
Board of Directors
7.66
Supervisory
Board
3.00
Total
Executive Board
12.00
N/A
0.0% on net income
22.66
-
0.0% on net income
- Upper limit defined in the compensation plan
N/A
2.5% on net income
- Amount defined in the compensation plan (up to 100%
fixed compensation), if goals set are met
2.5% on net income
2.5% on net income
N/A
2.5% on net income
-
- Amount effectively recognized in the income
statement
-
N/A
-
Page 226 of 347
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13.15 – Variable compensation paid to the members of the Company’s Board of
Directors recognized in the statement of income of direct or indirect controlling
shareholders, of companies under common control, and of the issuer’s
subsidiaries
b.3) Pension Plan in Effect
Body
Number of members
Board of Directors
3.00
Executive Board
11.00
Benefit Plan
9
2
50 years of age and 10 years of contribution
Name of Plan
Number of Board members entitled to retirement
Conditions for early retirement
Updated amount of accumulated
contributions made to the pension plan until
the latest fiscal year closing, less the
amount of contributions paid directly by
officers
Total amount of accumulated contributions made
during the latest fiscal year, less the amount of
contributions paid directly by officers
Early withdrawal allowed? If so, on what
condition?
Other
Managing
Officers
13
12
4,006
12,649
10,947
425
2,187
1,920
Yes, on exiting the plan, withdrawal of the amount equivalent to 2%
for each year of service limited to 50% of the total balance.
b.4) Compensation Paid
Year
Body
Highest
Lowest
Compensation
184
56
Average
compensation
357
56
Members
Board of Directors
Supervisory Board
7.00
3.00
Compensation
650
56
Executive Board
Other Managing Officers
Board of Directors
Supervisory Board
7.00
26.00
7.00
4.33
1,145
618
701
59
659
404
196
40
933
386
333
59
Executive Board
Other Managing Officers
Board of Directors
Supervisory Board
11.17
22.83
7.00
3.67
1,250
661
813
65
378
471
228
65
813
477
356
62
Executive Board
Other Managing Officers
11.00
22.00
1,468
763
555
529
956
502
2009
2010
2011
(v) - Rate of total compensation of each body recognized in the Company’s statement of income relating to
members of the Board of Directors, the Executive Board or the Supervisory Board who are related to direct or
indirect controlling shareholders
Year
Body
Board of Directors
Supervisory Board
% of total compensation
43.68
-
2009
Executive Board
Other Managing Officers
Board of Directors
Supervisory Board
49.30
-
Executive Board
Other Managing Officers
Board of Directors
Supervisory Board
52.55
-
Executive Board
Other Managing Officers
-
2010
2011
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13.16 - Other relevant information
Provide other information that the issuer may deem relevant.
STOCK OPTION PLAN OF WEG S.A.
1. OBJECTIVE OF THE PLAN
The Stock Option Plan ("Plan") aims at granting Options to purchase shares issued by
WEG S.A. ("Company") to executive board members of the Company or its
subsidiaries located in Brazil, so as to attract, motivate and retain them, and align their
interests with the interests of the Company and its shareholders.
2. PLAN MANAGEMENT
The Plan will be managed by the Board of Directors, in light of the basic terms and
conditions provided for herein.
3. OPTION
Each stock option entitles its holder to acquire one common share issued by the
Company (BM&FBOVESPA: "WEGE3"), strictly under the terms and conditions set
forth in this Plan ("Option").
4. PROGRAMS
The Board of Directors may approve, on a semiannual basis and according the
Company’s current dividend distribution policy, Stock Option Programs ("Programs"),
wherein participants, number of options, strike price, option distribution, effective date
and other specific rules of each Program, in light of the Plan guidelines.
Upon launch of each Program, the Board of Directors will set the terms and conditions
for each Option in an Agreement of Option Grant and Other Covenants ("Agreement"),
to be executed between the Company and each Participant, referring to the Program
established by the Board of Directors. The Agreement should define at least the
following conditions:
a) the number of shares Participant will be entitled to acquire through exercising the
option and the price per share, according to the Program;
b) the period for which the option may be exercised and deadlines for total or partial
option exercise and expiry of rights arising from the option;
c) any standards on any restrictions regarding assignment of shares acquired under
Plan conditions and provisions on penalties for non-compliance with such
restrictions; and
d) any other terms and conditions required, in light of general guidelines of the Plan.
5. PLAN PARTICIPANTS
Members of the Executive Board of the Company and its subsidiaries located in Brazil
are eligible for the Plan. Participants interested in joining the Program for which they
were assigned are to enter into the applicable Adhesion Term, within the term set in
each Program. Participation is always voluntary.
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13.16 - Other relevant information
6. CONDITION TO JOIN EACH PROGRAM AND OPTION GRANT
As a condition to join each Program, Participants will have to invest 20% (twenty
percent), or 40% (forty percent) or 60% (sixty percent) of their variable compensation
for the period in Company shares ("Invested Shares").
For the purposes of this Plan, the term "variable compensation" means net amount
Participants receive from the Company as Profit Sharing ("PLR"), according to the
distribution criteria and goals periodically defined by the Company.
The Company will grant each Participant with Stock Options proportionally to the
number of Invested Shares, to wit:
a) Should the Participant invest 20% (twenty percent) or more, but less than 40% (forty
percent), in purchase of shares (Invested Shares), the number of options to be
granted equals the number of Invested Shares acquired by the Participant.
b) Should the Participant invest 40% (forty percent) or more, but less than 60% (sixty
percent), in purchase of shares (Invested Shares), the number of options to be
granted equals 1.5 (one point five) times the number of Invested Shares acquired by
the Participant.
c) Should the Participant invest 60% (sixty percent) or more, but less than 100% (one
hundred percent), in purchase of shares (Invested Shares), the number of options to
be granted equals twice the number of Invested Shares acquired by the Participant.
The Board of Directors may change PLR percentages to be invested, as well as the
multiple number of Options to be granted to each Participant considering the number of
Invested Shares, upon approval of each Program. Grants established in each Program
are not necessarily equal for each participant, neither due to equity or parity, nor
divided on a pro rata basis.
Participants have 15 (fifteen) days from the date PLR is paid or credited by the
Company to acquire Invested Shares and report it to the Company.
7. TERM FOR WHICH INVESTED SHARES ARE TO BE HELD
For the Participant to exercise the right to their options under this Plan, it is an
indispensable condition that they maintain their equity position (Retention of Invested
Shares), at the following minimum levels:
a) 100% (one hundred percent) through the date Participants effectively exercise their
right to the option to acquire the first portion of shares (1/3) released;
b) 66.67% (sixty-six point sixty-seven percent) through the date Participants effectively
exercise their right to the option to acquire the second portion of shares (1/3)
released;
c) 33.33% (thirty-three point thirty-three percent) through the date Participants
effectively exercise their right to the option to acquire the third and last portion of
shares (1/3) released.
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13.16 - Other relevant information
The Participant shall authorize blocking Invested Shares for trading on the books of the
depository institution for the Company's shares during the period for which Invested
Shares are to be held.
In the event that equity position is not maintained at minimum levels specified in this
clause, the Participant will lose the right to unexercised stock options.
For the purposes of this clause, only equity positions acquired in accordance with the
Plan will be considered.
8. VESTING
Vesting Options is subject to cumulatively meeting Terms for which Invested Shares
are to be Held and grace period of each Program. Provided that the Term for which
Invested Shares are to be Held is met, options will vest in three annual equal
consecutive portions, 1/3 (one third) each, with the first portion as from the second
anniversary of the Program effective period, and other portions as from subsequent
anniversaries, as follows:
Vesting – Options
(as from effective date of each Program)
As from second anniversary
As from second anniversary
As from third anniversary
As from fourth anniversary
Percentage of Options Vested
0%
33.3%
66.6%
100%
The Board of Directors may, based on projections of changes in stock market
quotations of the Company’s shares, as well as other market factors, change the rules
of Vesting of Options, upon the approval of the new Programs.
9. EXERCISE OF OPTIONS
Options may be exercised by Participants within 24 (twenty four) months from the
corresponding vesting date ("Vesting Period"). Each Option will be exercised upon
the delivery of the corresponding Option Exercise Term duly completed and signed by
the Participant.
Subject to the Policy of Trading Securities Issued by the Company, the Chief Investor
Relations Officer may, at any time, establish additional restrictions on the exercise of
Options on dates prior to Company’s disclosure of material fact notices including, but
not limited to, dates prior to the end of the fiscal year and the publication of financial
statements, dates between decisions to increase capital, dividends, bonus shares or
split and publication of the notices or announcements and other dates on which
suspension of Option exercise is recommended.
Options not exercised during the Vesting Period will be automatically cease to exist, by
operation of law, irrespective of any prior notice or indemnification. If the last date set
for option exercise during the vesting period coincides with the period in which no
marketable securities issued by the Company can be traded, under the terms of its
Policy of Material Fact Notice Disclosure or applicable legislation, the Vesting Period
will be extended to the next date arranged by the Board of Directors for options to be
exercised.
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13.16 - Other relevant information
10.
STRIKE PRICE
The strike price will be equivalent to the weighted average of the volume of the
Company’s common shares closing price traded on BM&FBOVESPA S.A.
(BM&FBOVESPA: "WEGE3"), on 20 (twenty) floors prior to the last day of the month
prior to approval of the corresponding Program.
The Board of Directors may, at its discretion, set discount of up to 10% (ten percent) on
the average computed, and establish that the strike price should be monetarily
restated, as from base date of its determination, based on a price index to be defined
by the Company’s Board of Directors in each Program, or even establish fixed
monetary restatement for the strike price.
11.
SETTLEMENT
Payment must be made in cash, upon share acquisition, as determined by the Board of
Directors in each Program, except in the event the Participant chooses to immediately
sell total or part of the shares acquired on the stock exchange, subject to the limitations
set forth in this Plan, in which case payment may be made by the Participant through
the issuance of promissory notes maturing pro-soluto on the first working day
subsequent to the settlement of the transaction..
12.
QUANTITY LIMIT
The maximum number of stock options to be granted by the Plan may not exceed 2%
(two percent) of total shares comprising Company’s Capital.
The Board of Directors will establish the criteria under which options will be
apportioned among Participants, whenever total options should exceed the number
herein established.
Once the Option is exercise, the Board of Directors will define whether Company's
capital should be increased through issue of new shares to be subscribed by
Participants, pursuant to article 166, item III, of Law No. 6404/76, or whether Stock
Options exercised will be settled through treasury shares, considering applicable
regulation. Under the terms of article 171, paragraph 3, of Law No. 6404/76,
shareholders have no right of first refusal to exercise options arising from the Plan.
13.
NON-BINDING CONDITION
This Plan is an onerous business, solely of civil nature, and creates no obligation to
labor or social security between the Company and the Participant.
14.
NON-INTERFERENCE IN EMPLOYMENT RELATIONSHIP AND/OR OFFICE
Nothing in this Plan shall neither be construed as creating rights to the Participant,
other than those related to options, purely civil in nature, and nor grant rights to the
participants concerning the guarantee of permanence, whether as an officer or as an
employee.
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13.16 - Other relevant information
Nothing in this Plan will confer, to any Participant holding an Option, rights related to
their permanence until the end of their office, or otherwise interfere with the Company's
right to dismiss them, or the right to ensure their reelection to the position.
15.
TERMINATION
In case of Participant Termination, all Options granted thereto yet not exercised
("Unvested Options ") will automatically cease to exist, by operation of law, irrespective
of a 30-day resignation notice or severance pay. Notwithstanding, holder will be entitled
to exercise Options vested on the date of Termination ("Vested Options"), within 30
(thirty) days, from Termination date.
For the purpose of this Plan, the term "Termination" means any event or fact that may
end the business relationship of the Option holder with the Company, except for death,
permanent disability or Special Termination. Termination includes, among others,
events of Participant voluntary termination, resignation, substitution or non-reelection
as an officer, and dismissal for cause or wrongful dismissal, either for employment
contract or service provisions.
16.
SPECIAL TERMINATION
In case of Participant Special Termination, all Vested Options may be exercised within
12 (twelve) months from Special Termination date, through payment in cash, and all
Unvested Options may be exercised within their regular vesting rules and terms.
"Special Termination”, for the purpose of this Plan, is considered as the end of the
Participant’s career in the Company with approval of the Board of Directors, as the
case may be, at their discretion. If Special Termination is requested by the Participant,
the Board of Directors will consider the following upon assessing such request: (i)
anticipation of request, to be made at least six months in advance; (ii) any posttermination professional activity plan of the Participant, which should not include any
activity competing the those performed by the Company; (iii) other circumstances
applicable to this case. The Board of Directors will take a decision at their own
discretion and not related to rules on retirement for length of service or age, under the
terms of official social security rules (INSS) or rules for retirement supplementation of
any private plan that the Company might sponsor.
In the event Participant’s performing activities competing with those performed by the
Company is detected, the Board of Directors may render inexistent, by operation of law
and irrespective of a 30-day resignation notice or severance pay, all Unvested Options
granted to the Participant.
17.
DEATH AND PERMANENT DISABILITY
In the event of death or permanent disability, all Unvested Options may be exercised in
advance. Vested and Unvested Options may be extended to Participants' heirs and
successors, through legal succession or will enforcement, and may be fully or partially
exercised by their heirs, successors and non-participant spouses, through payment in
cash, within 12 (twelve) months from death date.
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13.16 - Other relevant information
18.
LIMITATION OF PARTICIPANT RIGHTS
No Participant shall have any rights and privileges of a shareholder of the Company
until Options are properly exercised and the transfer of shares under the Options is
complete.
19.
DIVIDENDS AND BONUSES
Shares acquired by Participants of the Options shall be entitled to dividends, interest
on equity and other income stated by the Company from the date of physical
settlement of exercise acquisition through the transfer of such shares to the
Participants.
20.
ADJUSTMENTS
Should there be changes in the Company’s shareholding structure, involving increase,
decrease, split, reverse split, stock dividends or similar change in the Company's
shares, the Board of Directors of the Company will be entitled the right to adjust these
modifications to Options not yet exercised by their holders.
21.
CORPORATE RESTRUCTURING
If the shareholders at Special General Meeting decide for (i) the Company's delisting
from Novo Mercado so that its shares will be listed for trading outside Novo Mercado,
or (ii) corporate reorganization in which the resulting Company is not admitted for
trading on Novo Mercado, Options will be released to be fully or partially exercised by
Participants.
The Board of Directors of the Company shall establish special rules that allow shares
under the Options to be sold at public bid to be made pursuant to the Listing Rules of
Novo Mercado of the BOVESPA and the Bylaws then in force.
22.
CONTROLLING SHAREHOLDING SALE
In case direct or indirect sale by controlling shareholders of the Company, either
through a single transaction or by means of successive operations, the number of
shares involving a change of control of the Company under the Listing Rules of Novo
Mercado of BM&FBOVESPA, the Options will be released to be fully or partially
exercised by Participants. The Board of Directors of the Company shall establish
special rules that allow shares under the Options to be sold at public bid to be made
pursuant to the Listing Rules of Novo Mercado of the B&MBOVESPA and the Bylaws
then in force.
23.
TAX LIABILITY
Participants have sole responsibility for any tax charges that may be levied upon
exercise or sale of stock options.
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13.16 - Other relevant information
24.
PLAN TERMINATION
The Plan goes into effect immediately after its approval in the Special General Meeting
of the Company, and may be terminated, suspended or modified at any time, through a
proposal approved by the Company’s Board of Directors.
25.
MISCELLANEOUS
The Board of Directors, in the interest of the Company and its shareholders, may
review the conditions of each Program, provided that the corresponding basic
principles are not changed, especially the maximum limits to share issue of the Plan,
approved in General Meeting.
The Board may also establish special treatment for special cases and situations during
the effective term of the Plan, provided that the rights already granted to Participants or
the basic principles of the Plan are not affected. Such special treatment shall not be
construed as a precedent to be requested by other Participants.
Any significant legal change regarding the regulation of joint corporations and / or tax
effects of a stock option plan may lead to it to be fully or partially reviewed, or even
suspended or terminated, at the discretion of the Board of Directors.
Other cases will be regulated by the Board of Directors.
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13.16 - Other relevant information
Provide other information that the issuer may deem relevant.
a) Statement of the “Stock Option Plan” position, disclosed in the Financial Statements as of December 31, 2011:
Number of Shares
Program
Granted
April 2011
In reais (R$)
Acquired
Vested
274,678
47,953
93,006
274,678
19,072
37,894
Subtotal
September 2011
Subtotal
Grant Total
Number of
Vested
Vesting period Options Strike price
st
1
31,002
21.01
2nd
31.002
21,01
3rd
31,002
21.01
93,006
1st
12,631
17.45
2nd
12.631
17,45
3rd
12,632
17.45
37,894
130,900
Restated
price IPCA
23.16
24.32
25.54
Option pricing
30.60
32.98
35.29
19.39
20.43
21.54
25.08
27.05
29.00
In R$
thousands
Option difference Expenses
7.43
230
8.66
268
9.76
303
801
5.70
72
6.62
84
7.46
94
250
1,051
Note: Weighted average fair value was determined based on the Black-ScholesMerton method.
c) Expenses with stock options are recorded over the vesting period.
At December 31, 2011, the amount of R$ 239 was recorded under Other P&L in the income statement for the year against capital reserve
in Equity.
Page 235 of 347
Reference Form - 2012 - WEG SA
14.1 - Description of human resources
a) headcount (total, per group based on activities performed and per geographic
location)
State
Amazônia
Classification
Administrative
Production
Services
Total Amazônia
Espírito Santo
Administrative
Production
Services
Sales
Total Espírito Santo
Services
2009
16
Year
2010
21
2011
18
291
24
331
0
0
0
0
0
0
398
74
493
4
68
27
0
99
0
238
43
299
26
909
112
1
1,048
2
0
0
40
326
0
0
33
191
3
5
34
256
107
24
497
1,237
10,189
113
30
367
1,278
10,970
102
13
405
1,087
12,444
3351
742
15,519
54
473
4406
904
17,558
50
472
4290
870
18,691
29
261
155
167
849
2,091
19,287
144
223
889
3,146
22,552
136
182
608
4010
25,066
Pernambuco
Sales
Total Pernambuco
Administrative
Production
Rio Grande dos Sul
Services
Sales
Total Rio Grande dos Sul
Administrative
Production
Santa Catarina
Services
Sales
Total Santa Catarina
Administrative
Production
São Paulo
Services
Sales
Total São Paulo
Employees abroad
Grant Total
a) number of outsourced personnel (total, per group based on activities performed and
per geographic location)
State
Amazônia
Santa Catarina
São Paulo
Rio Grande dos Sul
Grant Total
Classification
Production
Production
Production
Production
2009
146
17
0
0
163
Year
2010
127
0
0
0
127
2011
21
12
0
0
33
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14.1 - Description of human resources
c) turnover rate
The Company’s monthly turnover rate was 1.6% in 2011, 1.3% in 2010 and 2.0% in
2009.
d) issuer’s exposure to labor-related liabilities and contingencies
See item 4.6
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14.2 - Material changes - Human resources
In 2011, the Company recorded increase by approximately 11.15% in its headcount as
compared to 2010. This was due to recovery of production demand in Brazil and
resulting expansion of the production capacity, as well as acquisition of new production
units abroad.
Page 238 of 347
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14.3 - Description of the employee compensation policy
a) policy on salaries and variable compensation
WEG Group’s compensation management system seeks to establish conditions for a
fair and competitive policy that can:
• Define pay structures that can attract and retain employees.
•
•
•
•
Establish the responsibilities of each position within the organization through job
descriptions.
Determine the value of each job based on a point evaluation system.
Devise rules to ensure equitable treatment .
Establish market-consistent policies.
We adjust salary ranges whenever necessary in compliance with labor legislation and
the base date of collective bargaining agreements relating to the professional
category.
Additionally, we offer salary adjustments considering employees’ qualification,
promotion and merit, always based on their performance, level and position in the
salary range.
WEG offers its employees a profit sharing program based on the following criteria:
•
•
•
Distribution of up to 12.5% of net income, provided that minimum profitability is 10%
of net equity and based on targets being met.
Overall targets, per business unit and per department.
Distribution is based on fixed compensation of each employee
• Targets are defined annually, with early payment of part of the profits every half-year.
b) policy on benefits
WEG provides its employees with on-site meals, medical and dental assistance plans,
life insurance, private pension plan, nursery school allowance, transportation subsidy,
and school allowance for technical, graduate, post-graduate and language courses, as
well as profit sharing and other benefits.
c) features of stock-based compensation plans for employees other than
directors and officers, identifying:
There are no stock-based compensation plans for non-directors and officers.
Page 239 of 347
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14.4 - Description of the relationship between the issuer and unions
The Company seeks to have a proactive relationship with employers’ unions, which, in turn, are
in good terms with the various trade unions, always seeking to engage in conversations and
negotiations to find solutions that satisfy all the parties involved.
WEL - JARAGUÁ DO SUL
TRADE UNION: Sindicato dos Trabalhadores nas Indústrias Metalúrgicas, Mecânicas, dos
Materiais Elétricos, dos Motores Elétricos, de Equipamentos Elétricos, de Eletro Eletrônicos, de
Geradores, de Alternadores, de Implementos Agrícolas, de Máquinas, de Peças para reparação
de veículos, de Fundição e das Oficinas de Latoarias e Mecânicas de Jaraguá do Sul e Região
(Trade union of Workers in Metallurgy, Mechanical, Electrical Material industries, Electrical
Engines, Electrical Equipment, Electronic Products, Generators, Alternators for, Agricultural
Implements, Machinery, Parts for repair of vehicles, Foundry and Workshops Mechanics of
sheet metal products and Jaragua do Sul and Region) Rua João Planincheck, 157 - Bairro
Nova Brasília Jaraguá do Sul- CEP 89252-220. Phone: 047-3371-2100 or 3371-2058
WEL - BLUMENAU
TRADE UNION: Sindicato dos Trabalhadores nas Indústrias Metalúrgicas, Mecânicas e do
Material Elétrico de Blumenau (Trade Union of the Metallurgy, Mechanical and Electric Material
Industries of Blumenau). Rua: Eng. Paul Werner, 1081 Itoupava Seca. Blumenau / SC CEP:
89.030-100. Phone: 047-3323-1984 and 047-3323-4403
WEG-ITAJAÍ
TRADE UNION: Sindicato dos Trabalhadores das Indústrias Metalúrgicas, Mecânicas,
Materiais Elétricos de Itajaí (Trade Union of the Metallurgy, Mechanical, Electric Material
Industries of Itajaí) Capitão Adolfo Germano Andrade, 106, VI - Bairro Operária - Itajaí - SC CEP 88304-020. Phone: 047-3348-3505 and 3349-2675.
WEG TINTAS - GUARAMIRIM
TRADE UNION: Sindicato Trabalhadores Indústrias Químicas, Plásticos, Borrachas, Papel,
Isopor do Município de Jaraguá do Sul, Corupá, Guaramirim, Massaranduba e Schroeder
(Trade Union of Chemical, Plastics, Rubber, Paper, Styrofoam Industries in the cities of Jaragua
do Sul, Corupá, Guaramirim, Massaranduba and Schroeder). Rua José Leier, 388 - Centro Jaraguá do Sul- CEP 89251-092. Phone: 047- 3371-6407 and 047-9914-6119.
RF REFLORESTADORA - JARAGUÁ DO SUL/PLANALTO
TRADE UNION: Sindicato dos Trabalhadores nas Indústrias da Construção e do Mobiliário de
Jaraguá do Sul (Trade Union of Construction and Furniture Industries in Jaraguá do Sul). Rua
Presidente Epitácio Pessoa, 345 - Centro - Jaraguá do Sul- CEP 89251-100. Phone: 47-30550572 and 047-9992-8407.
RF REFLORESTADORA - ARAQUARI
TRADE UNION: Sindicato dos Trabalhadores nas Indústrias da Construção e do Mobiliário de
Joinville (Trade Union of Construction and Furniture Industries in Joinville). Rua Itajaí, 33 - casa
- Centro - Joinville - CEP 89201- 090. Phone: 047-3422-2304.
RF REFLORESTADORA - FAZENDAS
TRADE UNION: Federação dos Trabalhadores na Agricultura do Estado de Santa Catarina
(Federation of Agriculture Workers in Santa Catarina state). Avenida Leoberto Leal - até 805 lado ímpar, 976 - São Jose - CEP 88117- 001. Phone: 048-3246-8011
WEG AMAZONIA
TRADE UNION: Sindicato dos Trabalhadores nas Indústrias Metalúrgicas, Mecânicas e do
Material Elétrico de Manaus (Trade Union of the Metallurgy, Mechanical and Electric Material
Industries in Manaus). Avenida Duque de Caxias, 958 - Praça 14 de Janeiro Manaus - CEP
69020-141. Phone: 092-2633-4620.
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14.4 - Description of the relationship between the issuer and unions
WEL - SÃO BERNARDO DO CAMPO
TRADE UNION: Sindicato dos Metalúrgicos do ABC (Metalworkers’ Union in the ABC Region)
(São Bernardo do Campo, Diadema, Ribeirão Pires and Rio Grande da Serra). Rua João
Basso, 231 - Vila João Basso - São Bernardo do Campo - CEP 09721-100. Phone: 011-41284200
WEL-BANWEG
TRADE UNION: Sindicato dos Trabalhadores nas Indústrias Metalúrgicas, Mecânicas e do
Material Elétrico de São Paulo e Mogi das Cruzes (Trade Union of the Metallurgy, Mechanical
and Electric Material Industries in São Paulo and Mogi das Cruzes). Rua Galvão Bueno, 782 Liberdade - São Paulo - CEP 01506-000. Phone: 011-3388-1009
WEL/TRAFO - GRA V ATAI
TRADE UNION: Sindicato dos Trabalhadores nas Indústrias Metalúrgicas, Mecânicas e do
Material Elétrico de Gravataí (Trade Union of the Metallurgy, Mechanical and Electric Material
Industries in Gravataí). Rua Nestor de Moura Jardim, 525 - Salgado Filho Gravataí - CEP
94020-160. Phone: 051-3488-3937 and 051-3421-6680.
WEG LINHARES EQUIPAMENTOS ELÉTRICOS
TRADE UNION: Sindimetal – Sindicato dos Trabalhadores nas Indústrias Metalúrgicas,
Mecânicas e do Material Elétrico e Eletrônico no Estado do Espírito Santo (Trade Union of the
Metallurgy, Mechanical and Electric and Electronic Material Industries in Espírito Santo state).
Rua Antônio Aguirre, 94 - Centro – Vitória-ES. Phone: (027) 3223-0744 and (027)9926-2186.
HISA
TRADE UNION: Sindicato dos Trabalhadores nas Indústrias Metalúrgicas, Mecânicas e do
Material Elétrico de Joaçaba e Herval D'Oeste (Trade Union of the Metallurgy, Mechanical and
Electric Material Industries in Joaçaba and Herval D'Oeste). Rua Maranhão, 53, casa - Santa
Teresa, Joaçaba- CEP 89600-000. Phone: 049-3521-1569
ARWEG-SC
TRADE UNION: Sindicato do Empregado em Entidades Culturais, Recreativas, de Assistência
Social, Orientação de Formação Profissional do Estado de Santa Catarina SENALBA – SC
(Employee's Union for Cultural, Recreational, Social Assistance, Vocational Guidance Entities in
Santa Catarina State SENALBA - SC). Rua Tenente Silveira - até 249/250, 306, 30 andar Centro Florianópolis - CEP 88010-300. Phone: 048-3222-9291
INSTRUTECH
TRADE UNION: Sindicato dos Empregados Vendedores e Viajantes no Comércio do Estado de
São Paulo (Trade Union of Sellers and Travelers in São Paulo state commerce). Rua Santo
Amaro, 225 - 10 andar - Bela Vista - São Paulo- SP CEP 01315-903. Phone: 011-3116-3750
EQUISUL
TRADE UNION: Federação dos Trabalhadores Industriais do Estado de Santa Catarina
(Federation of Industrial Workers in Santa Catarina state). FETIESC. Rua 321, n. 79 - Bairro
Meia Praia, Itapema - CEP 88220-000. Phone: (47) 3268 - 5600
WEG TINTAS - MAUA
TRADE UNION: SINDIQUIM ABC – Sindicato dos Químicos do ABC (Trade Union of Chemical
Industry in ABC Region) (Sindicato Trab Inds Quim Petr Farm Tint e Vem Plast Res Sin Expl e
Sim do ABC Mauá Ribeirão Pires Rio Gde Serra) (Trade Union of Chemical, Petrochemical,
Pharmaceutical, Paint and Varnish, Plastic, Synthetic Resin, Explosive and Alike in ABC, Mauá,
Ribeirão Pires and Rio Grande da Serra). Avenida Lino Jardim - até 649/650, 40l/Bairro: Vila
Bastosl CEP: 09041-0301 SANTO ANDRÉ - SÃO PAULO. Phone: (11) 4433-58001 (11) 44369504
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14.4 - Description of the relationship between the issuer and unions
WEG TINTAS - PERNAMBUCO
TRADE UNION: SINDIQUIMICA-PE – Sindicato dos Trabalhadores nas Indústrias de
Produtos Químicas do Estado de Pernambuco (Trade Union of Chemical Product
Industries in Pernambuco state). Rua Bulhões Marques, 19, sala 203/204/Bairro: Boa
Vista - CEP: 50060-0501 RECIFE - Pernambuco. Phone: (81) 3421- 6098 1 (81)
9278-6200
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Reference Form - 2012 - WEG SA
Version: 1
15.2 – Share holding position
Shareholder
CPF/CNPJ of shareholder
Number of common shares (units)
Breakdown by class of share (units)
Class of share
Eduardo Werninghaus
007.667.789-32
Nationality-State
Common shares %
Part of the shareholders’ agreement
Number of preferred shares (units)
Number of shares (units)
Shares %
Brazilian-SC
No
238,100
0.038347%
Controlling Shareholder
Preferred shares %
Last amendment
Total number of shares (units)
Total shares %
Yes
0
0.000000%
238,100
0.038347%
0.000000%
2,400
0.000387%
0.000000%
2,907,134
0.468209%
0.000000%
40,454
0.006515%
0.000000%
48,454
0.007804%
0.000000%
2,400
0.000387%
0.000000%
1,018,000
0.163954%
0.000000%
50,000
0.008053%
Theo Werninghaus Tavares
084.072.009-21
Brazilian-SC
2,400
No
0.000387%
Yes
0
Heidi Behnke
505.049.679-91
Brazilian-SC
2,907,134
No
0.468209%
Yes
0
Davi Ricardo Behnke
041.310.259-90
Brazilian-SC
40,454
No
0.006515%
Yes
0
Daniel Ricardo Behnke
051.107.199-00
Brazilian-SC
48,454
No
0.007804%
Yes
0
Joaquim Werninghaus Tavares
072.736.389-19
Brazilian-SC
2,400
No
0.000387%
Yes
0
Sergio Luiz Silva Schwartz
383.104.659-04
Brazilian-SC
1,018,000
No
0.163954%
Yes
0
03/31/2012
Paulo Dario Paranhos Trejes
395.336.030-20
Brazilian-SC
50,000
No
0.008053%
Yes
0
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Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
Shareholder
CPF/CNPJ of shareholder
Number of common shares (units)
Breakdown by class of share (units)
Class of share
Lilian Werninghaus
435.912.999-87
Nationality-State
Common shares %
Part of the shareholders’ agreement
Number of preferred shares (units)
Number of shares (units)
Shares %
Brazilian-SC
No
12,800
0.002062%
Controlling Shareholder
Preferred shares %
Last amendment
Total number of shares (units)
Total shares %
Yes
0
0.000000%
12,800
0.002062%
0.000000%
38,454
0.006193%
0.000000%
3,302,226
0.531841%
6,394,929
1.029937%
17,000
0.002738%
6,173,300
0.994242%
316,528,027
50.978493%
125,590
0.020227%
Anne Marie Werninghaus
050.451 .569-18
Brazilian-SC
38,454
No
0.006193%
Yes
0
Diether Werninghaus
31 0.427.409-68
Brazilian-SC
3,302,226
Dabliuve Administradora Ltda
80.957.400/0001-29
No
0.531841%
Brazilian-SC
6,394,929
Yes
0
No
1.029937%
Yes
0
02/29/2012
0.000000%
Clécio Fábio Zucco
516.816.929-53
Brazilian-SC
17,000
Eggon João da Silva Administradora Ltda.
No
0.002738%
80.957.384/0001-74
No
0
No
6,173,300
WPA Participações e Serviços S.A.
0.994242%
83.489.963/0001-28
0.000000%
Yes
0
No
316,528,027
50.978493%
02/28/2011
09/30/2011
0.000000%
Yes
0
04/30/2011
0.000000%
Amelie Voigt Trejes
091.667.319-76
No
125,590
0.020227%
Yes
0
12/31/2010
0.000000%
Page 244 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
Shareholder
CPF/CNPJ of shareholder
Number of common shares (units)
Breakdown by class of share (units)
Class of share
Roseli Werninghaus
720.590.369-68
Nationality-State
Common shares %
Part of the shareholders’ agreement
Number of preferred shares (units)
Number of shares (units)
Shares %
Brazilian-SC
No
957,662
Maria Luisa Werninghaus Bernoldi
076.461.079-13
0.154236%
Brazilian-SC
Controlling Shareholder
Preferred shares %
Last amendment
Total number of shares (units)
Total shares %
Yes
0
No
0.000000%
957,662
0.154236%
Yes
2,400
0.000387%
0
0.000000%
2,400
0.000387%
Luisa Werninghaus
- - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 007.667.599-89
Brazilian-SC
No
Yes
1,784,493
Bernardo Armin Werninghaus Bernoldi
089.703.269-10
0.287402%
Brazilian-SC
2,400
0
No
0.000387%
0.000000%
1,784,493
0.287402%
0.000000%
2,400
0.000387%
0.000000%
138,154
0.022250%
0.000000%
138,154
0.022250%
0.000000%
300
0.000048%
9,963,420
1.604661%
Yes
0
Ricardo Werninghaus
043.365.399-01
Brazilian-SC
138,154
No
0.022250%
Yes
0
Mariana Werninghaus
060.449.029-19
Brazilian-SC
138,154
No
0.022250%
Yes
0
Fabio Roberto de Oliveira
751.465.849-15
Brazilian-SC
300
Voigt Schwartz Administradora Ltda
09.414.489/0001-12
No
0.000048%
Brazilian-SC
9,963,420
No
0
No
1.604661%
Yes
0
07/31/2010
0.000000%
Page 245 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
Shareholder
CPF/CNPJ of shareholder
Number of common shares (units)
Breakdown by class of share (units)
Class of share
Clica Voigt Administradora Ltda
09.420.895/0001-98
Nationality-State
Common shares %
Part of the shareholders’ agreement
Number of preferred shares (units)
Number of shares (units)
Shares %
Brazilian-SC
No
9,963,420
1.604661%
Controlling Shareholder
Preferred shares %
Last amendment
Total number of shares (units)
Yes
07/31/2010
0
0.000000%
Total shares %
9,963,420
1.604661%
0.000000%
4,537,066
0.730718%
0.000000%
38,381
0.006181%
1,730,051
0.278634%
9,963,419
1.604661%
5,993,900
0.965349%
5,955,276
0.959128%
5,747,784
0.925711%
3MR Administradora Ltda
09.420.817/0001-93
Brazilian-SC
4,537,066
No
0.730718%
Yes
0
03/31/2012
Laura Augusta da Silva
435.911.329-34
Brazilian-SC
38,381
No
0.006181%
Yes
0
EW Administradora Ltda
09.559.591/0001-06
Brazilian-SC
1,730,051
No
0.278634%
Yes
0
07/31/2010
0.000000%
Si Voigt Administradora Ltda
09.370.501/0001-34
Brazilian-SC
9,963,419
No
1.604661%
Yes
0
07/31/2010
0.000000%
Zocalo Participacoes Ltda
10.690.540/0001-06
Brazilian-SC
5,993,900
No
0.965349%
Yes
0
07/31/2010
0.000000%
Balder Participacoes Ltda
10.651.773/0001-91
Brazilian-SC
5,955,276
No
0.959128%
Yes
0
07/31/2010
0.000000%
Starp Participacoes Ltda
10.889.654/0001-71
Brazilian-SC
5,747,784
No
0.925711%
Yes
0
07/31/2010
0.000000%
Page 246 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
Shareholder
CPF/CNPJ of shareholder
Number of common shares (units)
Breakdown by class of share (units)
Class of share
Helana Participacoes Ltda
10.889.243/0001-86
Nationality-State
Common shares %
Part of the shareholders’ agreement
Number of preferred shares (units)
Number of shares (units)
Shares %
Brazilian-SC
No
5,948,469
0.958032%
Controlling Shareholder
Preferred shares %
Last amendment
Total number of shares (units)
Yes
02/29/2012
0
0.000000%
Total shares %
5,948,469
0.958032%
0.000000%
2,618,108
0.421660%
0.000000%
7,000
0.001127%
0.000000%
7,000
0.001127%
0.000000%
964,500
0.155338%
0.000000%
963,816
0.155228%
0.000000%
963,820
0.155228%
0.000000%
745,024
0.119990%
Tamaris Participacoes Ltda
10.668.402/0001-12
Brazilian-SC
2,618,108
No
0.421660%
Yes
0
07/31/2010
Renata da Silva Janssen
035.997.069-99
Brazilian-SC
7,000
No
0.001127%
Yes
0
Paula da Silva Janssen
065.548.759-05
Brazilian-SC
7,000
No
0.001127%
Yes
0
Alberto da Silva Geffert
034.304.249-50
Brazilian
964,500
Julia da Silva Geffert de Oliveira
037.581 .239-33
No
0.155338%
Brazilian-SC
963,816
Yes
0
No
0.155228%
Yes
0
Henrique da Silva Geffert
051.130.719-51
Brazilian
963,820
No
0.155228%
Yes
0
Walter Janssen Neto
248.808.509-00
Brazilian-SC
745,024
No
0.119990%
Yes
0
Page 247 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
Shareholder
CPF/CNPJ of shareholder
Number of common shares (units)
Breakdown by class of share (units)
Class of share
Zaira Zimmermann da Silva
046.818.429-58
Nationality-State
Common shares %
Part of the shareholders’ agreement
Number of preferred shares (units)
Number of shares (units)
Shares %
Brazilian-SC
No
6,996
0.001127%
Controlling Shareholder
Preferred shares %
Last amendment
Total number of shares (units)
Total shares %
Yes
0
0.000000%
6.996
0.001127%
0.000000%
7.000
0.001127%
0.000000%
75.300
0.012127%
0.000000%
126.381
0.020354%
Joana Zimmermann da Silva
058.297.959-57
Brazilian-SC
7,000
No
0.001127%
Yes
0
Kátia da Silva Bartsch
436.418.739-91
Brazilian-SC
75,300
No
0.012127%
Yes
0
Ricardo Bartsch Filho
004.860.759-23
Brazilian-SC
126,381
No
0.020354%
Yes
0
Bruna da Silva Bartsch
004.860.769-03
Brazilian-SC
126,377
No
Yes
0.020354%
0
0.000000%
126.377
0.020354%
34,470600%
0
0.000000%
214,029,690
34.470600%
0.080528%
0
0.000000%
500.000
0.080528%
OTHER
214.029.690
TREASURY SHARES – Date of last amendment:
500,000
Total
620,905,029
0
100.000000%
620.905.029
0.000000%
100.000000%
Page 248 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER / INVESTOR
3MR Administradora Ltda
Maria Conceição Werninghaus
501.886.159-20
Brazilian-SC
7,457,791
Class of share
Total
Mariana Werninghaus
060.449.029-19
118,295
Class of share
Total
Martin Werninghaus
485.646.309-82
7,457,791
Class of share
Total
Part of the shareholders’ agreement
Controlling
Shareholder
Number of preferred shares (units)
Preferred shares %
Last amendment
Total number of shares (units)
CPF/CNPJ of shareholder
09.420.817/0001-93
Total shares %
Breakdown of capital
7,457,791
49.219287
118,295
0.780713
No
No
0
0.000000
Brazilian-SC
No
No
0.780713
0
0.000000
Brazilian-SC
No
No
49.219287
0
0.000000
7,457,791
49.219287
0
0.000000
0
0.000000
49.219287
Number of shares (units)
0
Number of shares (units)
0
Number of shares (units)
0
Shares %
0.000000
Shares %
0.000000
Shares %
0.000000
OTHER
0
0.000000
Page 249 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER / INVESTOR
3MR Administradora Ltda
Ricardo Werninghaus
043.365.399-01
118,295
\
Class of share
Total
Total
15,152.172
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
CPF/CNPJ of shareholder
09.420.817/0001-93
Total shares %
Breakdown of capital
Brazilian-SC
No
No
0.780713
0
0.000000
118,295
0.780713
0
0.000000
15,152,172
100.000000
Number of shares (units)
0
100.000000
Shares %
0.000000
Page 250 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER / INVESTOR
Balder Participacoes Ltda
Décio da Silva
344.079.289-72
Brazilian-SC
13,655,156
99.999986
Part of the shareholders’ agreement Controlling Shareholder
Last amendment
Number of preferred shares (units)
Total number of shares (units) Total shares %
CPF/CNPJ of shareholder
Breakdown of capital
10.651.773/0001-91
No
Preferred shares %
No
0
Class of share
Total
Joana Zimmermann da Silva
Number of shares (units)
0
058.297.959-57
Brazilian-SC
1
0.000007
0.000000
13,655,156
99.999986
0.000000
1
0.000007
0,000000
0
0,000000
Shares %
0.000000
No
No
0
Class of share
Total
Number of shares (units)
0
Shares %
0.000000
OTHER
0
0
0,000000
I
Total
0
13,655,158
Zaira Zimmermann da Silva
100.000000
046.818.429-58
Brazilian-SC
1
0.000007
0.000000
No
13,655,158
100.000000
1
0.000007
No
0
0.000000
Class of share
Number of shares (units)
Shares %
Total
0
0.000000
Page 251 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER / INVESTOR
Clica Voigt Administradora Ltda
Cladis Voigt Trejes
514.081.639-34
Brazilian-SC
20,030,844
Class of
share
Total
Felipe Voigt Trejes
057.698.049-80
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
CPF/CNPJ of shareholder
09.420.895/0001-98
Total shares %
Breakdown of capital
20,030,844
88.958626
No
88.958626
No
0
0.000000
Brazilian-SC
No
No
5.520687
0
0.000000
1,243,095
5,520687
0.000000
0
0.000000
1,243,095
5.520687
Number of shares (units)
0
1,243,095
Class of share
Total
Part of the shareholders’ agreement
Shares %
0.000000
Number of shares (units)
0
Shares %
0.000000
OTHER
0
0
Pedro Voigt Trejes
057.698.199-01
0.000000
1,243,095
Class of share
Brazilian-SC
No
No
5.520687
0
0.000000
Number of shares (units)
Shares %
--
Total
0
0.000000
,
I
I
Total
22,517,034
100.000000
0
0.000000
22,517,034
100.000000
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Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER / INVESTOR
Dabliuve Administradora Ltda
Cladis Voigt Trejes Administradora Ltda.
08.703.890/0001-00
Brazilian-SC
79,302,024
Controlling
Shareholder
Number of preferred shares (units)
Preferred shares %
Total number of shares (units) Total shares %
CPF/CNPJ of shareholder
Breakdown of capital
80.957.400/0001-29
No
Yes
12//20/2007
0
0.000000
79,302,024
No
Yes
12/20/2007
0
0.000000
79,302,024
32.899893
0
0.000000
0
0.000000
32.899893
Class of share
Number of shares (units)
Total
0
Miriam Voigt Schwartz Administradora Ltda
08.649.305/0001-30
Brazilian-SC
79,302,024
Class of share
Total
Part of the shareholders’ agreement
Last amendment
32.899893
Shares %
0.000000
32.899893
Number of shares (units)
0
Shares %
0.000000
OTHER
0
0.000000
I
Total
241,040,370
Valsi Voigt Administradora Ltda.
08.655.197/0001-09
79,302,024
Class of share
100.000000
0
0.000000
241,040.370
Brazilian-SC
No
Yes
12/20/2007
32.899893
0
0.000000
79,302,024
Number of shares (units)
100.000000
32.899893
Shares %
--
Total
0
0.000000
Page 253 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Breakdown of shares (units)
Number of common shares (units)
CONTROLLING SHAREHOLDER / INVESTOR
Eggon João da Silva Administradora Ltda.
Decio da Silva Administradora Ltda.
08.649.347/0001-71
52,813,901
Class of share
Total
Eggon João da Silva
009.955.179-91
Nationality-State
Part of the shareholders’ agreement
Controlling Shareholder Last amendment
Common shares %
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
CPF/CNPJ of shareholder
80.957.384/0001-74
SC
No
Yes
12/20/2007
19.999999
0
0.000000
52,813,901
19.999999
No
Yes
0
0.000000
10
0.000005
SC
No
Yes
12/20/2007
19.999999
0
0.000000
52,813,901
No
Yes
12/20/2007
0
0.000000
52,813,901
Number of shares (units)
0
Shares %
0.000000
Brazilian-SC
10
0.000005
--
Class of share
Number of shares (units)
Total
0
Katia da Silva Bartsch Administradora Ltda.
08.710.197/0001-64
52,813,901
-Number of shares (units)
0
19.999999
Shares %
0.000000
19.999999
---
Class of share
Total
Shares %
0.000000
Class of share
Number of shares (units)
Total
0
Marcia da Silva Petry Administradora
08.647.713/0001-53
Brazilian-SC
52,813,901
Total shares %
Breakdown of capital
19.999999
Shares %
0.000000
Page 254 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER / INVESTOR
Eggon João da Silva Administradora Ltda.
OTHER
0
Solange da Silva Janssen Administradora Ltda.
08.680.12010001-99
52,813,901
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units) Total shares %
CPF/CNPJ of shareholder
Breakdown of capital
80.957.384/0001-74
0.000000
0
0.000000
0
SC
No
Yes
12/20/2007
0
0.000000
52,813,901
No
Yes
12/20/2007
0
0.000000
52,813,901
19.999999
0
0.000000
264,069,515
100.000000
19.999999
---
Class of share
-Number of shares (units)
0.000000
19.999999
Shares %
-Total
0
Tania Marisa da Silva Administradora Ltda.
08.649.342/0001-49
0.000000
SC
52,813,901
19.999999
---
Class of share
-Number of shares (units)
Shares %
-Total
Total
0
264,069,515
0.000000
100.000000
Page 255 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER / INVESTOR
EW Administradora Ltda
Eduardo Werninghaus
007.667.789-32
Brazilian-SC
6,013,594
Class of share
Total
Luisa Werninghaus
007.667.599-89
1
Part of the shareholders’ agreement
Controlling Shareholder Last amendment
Number of preferred shares (units)
Preferred shares %
99.999983
Number of shares (units)
0
Brazilian-SC
0.000017
Number of shares (units)
0
Total shares %
Breakdown of capital
6,013,594
99.999983
No
No
0
0.000000
No
No
0
0.000000
1
0.000017
0
0.000000
0
0.000000
Shares %
0.000000
-
-Class of share
Total
Total number of shares (units)
CPF/CNPJ of shareholder
09.559.591/0001-06
Shares %
0.000000
OTHER
0
0.000000
,
I
Total
6,013,595
100.000000
0
0.000000
6,013,595
100.000000
Page 256 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER / INVESTOR
Helana Participacoes Ltda
Ana Flavia da Silva Petry
063.432.379-25
Brazilian-SC
19,588
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units) Total shares %
CPF/CNPJ of shareholder
Breakdown of capital
10.889.243/0001-86
No
No
0
0.000000
Brazilian-SC
No
No
0.235484
0
0.000000
No
No
0
0
0.235484
---
Class of share
Total
Helena Marina da Silva Petry
063.432.389-05
-Number of shares (units)
0
19,588
Class of share
Total
Marcia da Silva Petry
508.022.759-15
99.529032
-Number of shares (units)
0
0.235484
19,588
0.235484
0.000000
8,278,994
99.529032
0.000000
0
0.000000
I
Shares %
0.000000
Brazilian-SC
---
19,588
Shares %
0.000000
Number of shares (units)
0
8,278,994
Class of share
Total
Part of the shareholders’ agreement
Shares %
0,000000
OTHER
0
0.000000
,
I
Total
8,318,170
100.000000
0
0.000000
8,318,170
100.000000
Page 257 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER / INVESTOR
Si Voigt Administradora Ltda
Dora Voigt de Assis
062.427.629-51
Brazilian-SC
430,933
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
CPF/CNPJ of shareholder
09.370.501/0001-34
Total shares %
Breakdown of capital
430,933
1.968291
No
No
0
0.000000
Brazilian-SC
No
No
8.508509
0
0.000000
1,862,833
8,508509
1,968291
---
Class of share
Total
Livia Voigt
062.427.659-77
-Number of shares (units)
0
1,862,833
Class of share
Total
Shares %
0.000000
Number of shares (units)
0
Shares %
0.000000
OTHER
0
0.000000
0
0.000000
0
0.000000
21,893,766
100.000000
0
0.00000
21,893,766
100.000000
514.080.909-53
Brazilian-SC
No
No
19,600,000
89.523200
0
0.000000
19,600,000
89.523200
,
Total
Valsi Voigt
--Class of share
-Number of shares (units)
Shares %
-Total
0
0.000000
Page 258 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Starp Participacoes Ltda
OTHER
0
Paula da Silva Janssen
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
10.889.654/0001-71
Breakdown of capital
0
0.000000
9,006
0.115485
9,006
0.115485
7,780,392
99.769030
0.000000
0
0.000000
065.548.759-05
Brazilian-SC
No
No
9,006
0.115485
0
0.000000
----
--
-
Class of share
Number of shares (units)
Shares %
Total
Renata da Silva Janssen Decker
0
0.000000
035.997.069-99
Brazilian-SC
No
No
9,006
0.115485
0
0.000000
No
No
0
0.000000
Class of share
Number of shares (units)
Shares %
--
Total
Solange da Silva Jannsen
304.390.949-68
0
0.000000
Brazilian-SC
7,780,392
99.769030
---
Class of share
-Number of shares (units)
Shares %
-Total
0
0.000000
I
Total
7,798,404
100.000000
0
0.000000
7,798,404
100.000000
Page 259 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Tamaris Participacoes Ltda
Alberto da Silva Geffert
Part of the shareholders’ agreement
Controlling Shareholder Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
10.668.402/0001-12
Breakdown of capital
1,250,615
17.079731
1,248,707
17.053674
034.304.249-50
Brazilian-SC
No
No
1,250,615
17.079731
0
0.000000
No
No
0
0.000000
No
No
0
0.000000
1,248,707
17.053674
0.000000
0
0.000000
0
0.000000
247.167.159-49
Brazilian-SC
No
No
3,574,188
48.812921
0
0.000000
3,574,188
48.812921
Class of share
Total
Henrique da Silva Geffert
051.130.719-51
1,248,707
Number of shares (units)
0
Shares %
0.000000
Brazilian-SC
17.053674
--Class of share
Total
Julia da Silva Geffert de Oliveira
Number of shares (units)
0
037.581.239-33
Brazilian-SC
1,248,707
17.053674
---
Class of share
Total
-
-Shares %
0.000000
-
-Number of shares (units)
0
Shares %
0.000000
OTHER
0
Tania Marisa da Silva
Class of share
Number of shares (units)
Shares %
--
Page 260 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Tamaris Participacoes Ltda
Tania Marisa da Silva
Part of the shareholders’ agreement
Controlling Shareholder Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
10.668.402/0001-12
Breakdown of capital
247.167.159-49
Brazilian-SC
No
No
3,574,188
48.812921
0
0.000000
3,574,188
48.812921
0
0.000000
7,322,217
100.000000
Class of share
Total
Total
7,322,217
Number of shares (units)
0
100.000000
Shares %
0.000000
Page 261 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER / INVESTOR
Voigt Schwartz Administradora Ltda
Eduardo Voigt Schwartz
010.528.409-22
Brazilian-SC
405,289
1.194231
---
Class of share
Total
Mariana Voigt Schwartz
Controlling Shareholder Last amendment
Number of preferred shares (units)
Preferred shares %
-Number of shares (units)
0
009.273.789-73
Brazilian-SC
405,289
1.194231
---
Class of share
Total
Mirian Voigt Schwartz
Part of the shareholders’ agreement
No
0
0.000000
N
o
No
0
0.000000
Total shares %
Breakdown of capital
405,289
1.194231
405,289
1.194231
Shares %
0.000000
-Number of shares (units)
0
N
o
Total number of shares (units)
CPF/CNPJ of shareholder
09.414.489/0001-12
Shares %
0.000000
514.080.829-34
Brazilian-SC
N
o
No
33,126,664
97.611538
0
0.000000
33,126,664
97.611538
Class of share
Total
Number of shares (units)
0
Shares %
0.000000
OTHER
0
0.000000
0
0.000000
0
0.000000
33,937,242
100.000000
0
0.000000
33,937,242
100.000000
,
Total
Page 262 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
WPA Participações e Serviços S.A.
Dabliuve Administradora Ltda
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units) Total shares %
CPF/CNPJ of shareholder
83.489.963/0001-28
80.957.400/0001-29
31,615,379
33.333333
---
--
Class of share
Number of shares (units)
Total
0
Eggon João da Silva Administradora Ltda
80.957.384/0001-74
31,615,379
--
Class of share
Total
0
0.000000
31,615,379
No
No
29/04/2011
0
0.000000
31,615,379
No
No
29/04/2011
0
0.000000
31,615,379
33.333333
0
0.000000
0
0.000000
I
33.333333
33.333334
Shares %
0.000000
-Number of shares (units)
0
29/04/2011
-
33.333333
---
No
Shares %
0.000000
Class of share
Number of shares (units)
Total
0
G Werninghaus Admininstradora Ltda
80.952.849/0001-02
31,615,379
No
-
33.333334
---
Breakdown of capital
Shares %
0.000000
OTHER
0
0.000000
,
I
Total
94,846,137
100.000000
0
0.000000
94,846,137
100.000000
Page 263 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Zocalo Participacoes Ltda
Bruna da Silva Bartsch
004.860.769-03
Brazilian-SC
1
0.000007
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
10.690.540/0001-06
Breakdown of capital
1
0.000007
-Class of share
Total
Kátia da Silva Bartsch
Number of shares (units)
0
No
No
0
0.000000
Shares %
0.000000
436.418.739-91
Brazilian-SC
No
No
13,559,908
99.999986
0
0.000000
13,559,908
99.999986
0.000000
0
0.000000
0
0.000000
004.860.759-23
Brazilian-SC
No
No
1
0.000007
0
0.000000
1
0.000007
Class of share
Total
Number of shares (units)
0
Shares %
0.000000
OTHER
0
Ricardo Bartsch Filho
-Class of share
Number of shares (units)
Shares %
-Total
0
0.000000
I
Total
13,559,910
100.000000
0
0.000000
13.559.910
100.000000
Page 264 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Cladis Voigt Trejes Administradora Ltda.
Cladis Voigt Trejes
514.081.639-34
79,449,654
Class of share
Total
Felipe Voigt Trejes
057.698.049-80
Part of the shareholders’ agreement
Controlling Shareholder Last amendment
Number of preferred shares (units)
Preferred shares %
99.999996
Number of shares (units)
0
1
Total shares %
CPF/CNPJ of shareholder
08.703.890/0001-00
Breakdown of capital
79,449,654
99.999996
No
Yes
0
0.000000
No
Yes
0
0.000000
1
0.000002
0
0.000000
0
0.000000
No
Yes
0
0.000000
1
0.000002
Shares %
0.000000
0.000002
--
Class of share
Total
Total number of shares (units)
Number of shares (units)
0
Shares %
0.000000
OTHER
0
Pedro Voigt Trejes
057.698.199-01
0.000000
1
0.000002
--
Class of share
Number of shares (units)
Shares %
-Total
0
0.000000
I
Total
79,449,656
100.000000
0
0.000000
79,449,656
100.000000
Page 265 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Breakdown of shares (units)
Nationality-State
Number of common shares (units)
Common shares %
CONTROLLING
SHAREHOLDER / INVESTOR
Dabliuve Administradora Ltda
Cladis Voigt Trejes Administradora Ltda
08.703.890/0001-00
79,302,024
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares
(units)
CPF/CNPJ of shareholder
80.957.400/0001-29
32.899893
Class of share
Number of shares (units)
Total
0
Miriam Voigt Schwartz Administradora Ltda
08.649.305/0001-30
79,302,024
Class of share
Total
Part of the shareholders’ agreement
Total shares %
Breakdown of capital
No
Yes
04/01/2011
0
0.000000
79,302,024
No
Yes
04/01/2011
0
0.000000
79,302,024
32.899893
0
0.000000
0
0.000000
32.899893
Shares %
0.000000
32.899893
Number of shares (units)
0
Shares %
0.000000
OTHER
0
0.000000
I
Total
241 .040.370
Valsi Voigt Administradora Ltda
08.655.197/0001-09
100.000000
79,302,024
32.899893
Class of share
Number of shares (units)
0
0.000000
241 ,040,370
No
Yes
04/01/2011
0
0.000000
79,302,024
100.000000
32.899893
Shares %
--
Total
0
0.000000
Page 266 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Dabliuve Administradora Ltda
Werner Ricardo Voigt
009.954.369-91
Brazilian-SC
3,134,298
Class of share
Total
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
80.957.400/0001-29
Breakdown of capital
3,134,298
1.300321
1.300321
Number of shares (units)
0
No
Yes
0
0.000000
Shares %
0.000000
Page 267 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Decio da Silva Administradora Ltda.
Joana Zimmermann da Silva
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
08.649.347/0001-71
Breakdown of capital
058.297.959-57
26,100,338
50.000000
---
Class of share
Total
-Number of shares (units)
0
No
Yes
0
0.000000
26,100,338
50.000000
0
0.000000
0
0.000000
Shares %
0.000000
OTHER
0
0.000000
I
Total
52,200,676
Zaira Zimmermann da Silva
100.000000
046.818.429-58
26,100.338
Class of share
50.000000
Number of shares (units)
0
0.000000
No
Yes
0
0.000000
52,200,676
100.000000
26,100.338
50.000000
Shares %
--
Total
0
0.000000
Page 268 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Breakdown of shares (units)
Number of common shares (units)
CONTROLLING SHAREHOLDER / INVESTOR
Eggon João da Silva Administradora Ltda.
Decio da Silva Administradora Ltda.
Nationality-State
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Common shares %
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
CPF/CNPJ of shareholder
80.957.384/0001-74
No
Yes
11/16/2010
0
0.000000
52,813,901
19.999999
No
Yes
0
0.000000
10
0.000005
No
Yes
11/16/2010
0
0.000000
52,813,901
No
Yes
11/16/2010
0
0.000000
52,813,901
08.649.347/0001-71
52,813,901
19.999999
Class of share
Total
Eggon João da Silva
009.955.179-91
Number of shares (units)
0
Shares %
0.000000
Brazilian-SC
10
0.000005
--
Class of share
Total
Katia da Silva Bartsch Administradora Ltda.
Number of shares (units)
0
Shares %
0.000000
08.710.197/0001-64
52,813,901
19.999999
---
Class of share
Total
Márcia da Silva Petry Administradora Ltda
08.647.713/0001-53
52,813,901
-Number of shares (units)
0
Class of share
Total
Shares %
0.000000
-Number of shares (units)
0
19.999999
-
19.999999
---
Total shares %
Breakdown of capital
19.999999
Shares %
0.000000
Page 269 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Eggon João da Silva Administradora Ltda.
OTHER
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units) Total shares %
CPF/CNPJ of shareholder
80.957.384/0001-74
Solange da Silva Janssen Administradora Ltda.
08.680.12010001-99
52,813,901
Class of share
19.999999
Number of shares (units)
Total
0
Tânia Marisa da Silva Administradora Ltda
Yes
11/16/2010
0
0.000000
52,813,901
No
Yes
11/16/2010
0
0.000000
52,813,901
19.999999
Shares %
0.000000
08.649.342/0001-49
52,813,901
No
Breakdown of capital
19.999999
Class of share
Number of shares (units)
Shares %
Total
0
0.000000
19.999999
I
Total
264,069,515
100.000000
0
0.000000
264,069,515
100.000000
Page 270 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER / INVESTOR
G Werninghaus Admininstradora Ltda
Diether Werninghaus Administradora Ltda.
08.680.015/0001-50
58,380,742
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
CPF/CNPJ of shareholder
80.952.849/0001-02
No
Yes
01/15/2007
0
0.000000
58,380,742
No
Yes
01/15/2007
0
0.000000
58,380,742
No
Yes
01/15/2007
0
0.000000
58,380,742
24.731536
Brazilian-SC
No
Yes
1.073856
0
0.000000
2,534,918
1.073856
24.731536
Class of share
Number of shares (units)
Total
0
Eduardo & Luisa Werninghaus Administradora Ltda
08.680.096/0001-98
58,380,742
Class of share
Total
Heidi Behnke Administradora Ltda
2,534,918
Class of share
Total
24.731536
Number of shares (units)
0
Number of shares (units)
0
24.731536
Shares %
0.000000
08.601.978/0001-10
58,380,742
Class of share
Total
Lilian Werninghaus
435.912.999-87
24.731536
Shares %
0.000000
24.731536
Number of shares (units)
0
Total shares %
Breakdown of capital
Shares %
0.000000
Shares %
0.000000
Page 271 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
G Werninghaus Admininstradora Ltda
Martin Werninghaus Administradora Ltda
08.605.191/0001-27
58,380,742
Class of share
Total
24.731536
Number of shares (units)
0
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
80.952.849/0001-02
Breakdown of capital
No
Yes
01/15/2007
0
0.000000
58,380,742
24.731536
0
0.000000
0
0.000000
Shares %
0.000000
OTHER
0
0.000000
I
Total
236,057,886
100.000000
0
0.000000
236,057,886
100.000000
Page 272 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Katia da Silva Bartsch Administradora Ltda.
Bruna da Silva Bartsch
Part of the shareholders’ agreement
Controlling Shareholder Last amendment
Number of preferred shares (units)
Preferred shares %
004.860.769-03
26,100,338
50.000000
---
Class of share
Total
-Number of shares (units)
0
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
08.710.197/0001-64
Breakdown of capital
No
Yes
0
0.000000
26,100,338
50.000000
0
0.000000
0
0.000000
No
Yes
0
0.000000
26,100,338
50.000000
0
0.000000
52,200,676
100.000000
Shares %
0.000000
OTHER
0
Ricardo Bartsch Filho
0.000000
004.860.759-23
26,100,338
Class of share
50.000000
Number of shares (units)
Shares %
--
Total
0
0.000000
Total
52,200,676
100.000000
~
Page 273 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER / INVESTOR
Marcia da Silva Petry Administradora
Ana Flávia da Silva Petry
063.432.379-25
17,400,226
Last amendment
Number of preferred shares (units) Preferred shares %
Total number of shares (units)
CPF/CNPJ of shareholder
08.647.713/0001-53
Total shares %
Breakdown of capital
17,400,226
33.333333
17,400,226
33.333334
33.333333
Class of share
Total
Helena Marina da Silva Petry
063.432.389-05
17.400.226
Number of shares (units)
0
17,400,226
Number of shares (units)
0
-Number of shares (units)
0
Yes
0
0.000000
No
Yes
0
0.000000
No
Yes
0
0.000000
17,400,226
33.333333
0
0.000000
0
0.000000
Shares %
0.000000
33.333333
---
No
Shares %
0.000000
33.333334
Class of share
Total
Marcia da Silva Petry
508.022.759-15
Class of share
Total
Part of the shareholders’ agreement Controlling Shareholder
Shares %
0.000000
OTHER
0
0.000000
I
Total
52,200,678
100.000000
0
0.000000
52,200,678
100.000000
Page 274 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Miriam Voigt Schwartz Administradora Ltda
Eduardo Voigt Schwartz
010.528.409-22
39.724.828
Class of share
Total
Mariana Voigt Schwartz
009.273.789-73
39,724,828
Class of share
Total
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
08.649.305/0001-30
Breakdown of capital
39.724.828
50.000000
50.000000
Number of shares (units)
0
No
0
0.000000
No
No
0
0.000000
39,724,828
50.000000
0
0.000000
0
0.000000
,
Shares %
0.000000
50.000000
Number of shares (units)
0
No
Shares %
0.000000
OTHER
0
0.000000
,
I
Total
79,449,656
100.000000
0
0.000000
79,449,656
100.000000
Page 275 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Breakdown of shares (units)
Nationality-State
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Solange da Silva Janssen Administradora Ltda.
OTHER
0
Paula da Silva Janssen
Part of the shareholders’
agreement
Controlling Shareholder
Last amendment
Number of preferred shares
(units)
Preferred shares %
Total number of shares
(units)
CPF/CNPJ of shareholder Breakdown of capital
08.680.120/0001-99
0.000000
065.548.759-05
26,100,338
Class of share
Total shares %
50.000000
Number of shares (units)
0
0.000000
0
0.000000
No
Yes
0
0.000000
26,100,338
50.000000
No
Yes
0
0.000000
26,100,338
50.000000
0
0.000000
52,200,676
100.000000
Shares %
--
Total
Renata da Silva Janssen Decker
0
0.000000
035.997.069-99
26,100,338
50.000000
Class of share
Number of shares (units)
Shares %
Total
0
0.000000
Total
52,200,676
100.000000
Page 276 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Tania Marisa da Silva Administradora Ltda.
Alberto da Silva Geffert
034.304.249-50
Brazilian-SC
17,400,226
33.333334
17,400,226
Class of share
Total
Julia da Silva Geffert de Oliveira
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units) Total shares %
No
Yes
0
0.000000
Brazilian-SC
No
Yes
33.333333
0
0.000000
--Class of share
Total
Henrique da Silva Geffert
051.130.719-51
Part of the shareholders’ agreement
-Number of shares (units)
0
Number of shares (units)
0
CPF/CNPJ of shareholder
08.649.342/0001-49
Breakdown of capital
17,400,226
33.333334
17,400,226
33.333333
Shares %
0.000000
Shares %
0.000000
037.581.239-33
Brazilian-SC
No
Yes
17,400,226
33.333333
0
0.000000
17,400,226
33.333333
0
0.000000
0
0.000000
Class of share
Total
Number of shares (units)
0
Shares %
0.000000
OTHER
0
0.000000
I
Total
52,200,678
100.000000
0
0.000000
52,200,678
100.000000
Page 277 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Breakdown of shares (units)
Number of common shares (units)
CONTROLLING SHAREHOLDER /
INVESTOR
Valsi Voigt Administradora Ltda.
Dora Voigt de Assis
062.427.629-51
39,724,828
Nationality-State
Common shares %
Class of share
Total
Livia Voigt
062.427.659-77
Class of share
Total
-Number of shares (units)
0
No
No
0
0.000000
Last amendment
Total number of shares (units) Total shares %
CPF/CNPJ of shareholder
08.655.197/0001-09
Breakdown of capital
39,724,828
50.000000
-
---
Shares %
0.000000
50.000000
Number of shares (units)
0
Controlling Shareholder
Number of preferred shares (units) Preferred shares %
50.000000
---
39,724,828
Part of the shareholders’
agreement
No
No
0
0.000000
39,724,828
50.000000
Shares %
0.000000
OTHER
0
0.000000
0
0.000000
0
0.000000
79,449,656
100.000000
0
0.000000
79,449,656
100.000000
Total
Page 278 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Cladis Voigt Trejes Administradora Ltda.
Cladis Voigt Trejes
514.081.639-34
Brazilian-SC
79.449.654
Class of share
Total
Felipe Voigt Trejes
057.698.049-80
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
08.703.890/0001-00
Breakdown of capital
79.449.654
99.999998
1
0.000001
99.999998
Number of shares (units)
0
0.000001
--
Class of share
Total
Yes
0
0.000000
No
Yes
0
0.000000
Shares %
0.000000
Brazilian-SC
1
No
Number of shares (units)
0
-
--
Shares %
0.000000
OTHER
0
Pedro Voigt Trejes
057.698.199-01
1
Class of share
0.000000
0
0.000000
Brazilian-SC
No
Yes
0.000001
0
0
Number of shares (units)
0
0.000000
0.000000
1
0.000001
0.000000
79,449,656
100.000000
Shares %
--
Total
,
Total
0
79,449,656
0.000000
100.000000
Page 279 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Decio da Silva Administradora Ltda.
Joana Zimmermann da Silva
Part of the shareholders’ agreement
Controlling Shareholder Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
08.649.347/0001-71
Breakdown of capital
058.297.959-57
Brazilian-SC
No
Yes
26,100,338
50.000000
0
0.000000
26,100,338
50.000000
0.000000
0
0.000000
0
0.000000
100.000000
0
0.000000
52,200,676
100.000000
046.818.429-58
Brazilian-SC
No
Yes
26,100,338
50.000000
0
0.000000
26,100,338
50.000000
Class of share
Total
Number of shares (units)
0
Shares %
0.000000
OTHER
0
,
Total
52,200,676
Zaira Zimmermann da Silva
Class of share
Number of shares (units)
Shares %
--
Total
0
0.000000
Page 280 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Diether Werninghaus Administradora Ltda
Anne Marie Werninghaus
050.451.569-18
Brazilian-SC
58,458,160
Class of share
Total
Diether Werninghaus
310.427.409-68
1
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
08.680.015/0001-50
Breakdown of capital
58,458,160
99.999999
1
0.000001
99.999999
Number of shares (units)
0
Brazilian-SC
0.000001
Number of shares (units)
0
Yes
0
0.000000
No
Yes
0
0.000000
Shares %
0.000000
-Class of share
Total
No
-
---
Shares %
0.000000
OTHER
0
0.000000
0
0.000000
0
0.000000
58,458,161
100.000000
0
0.000000
58,458,161
100.000000
Total
Page 281 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Eduardo & Luisa Werninghaus Administradora Ltda
Eduardo Werninghaus
007.667.789-32
Brazilian-SC
29,229,081
Class of share
Total
Luisa Werninghaus
007.667.599-89
29,229,081
Class of share
Total
Part of the shareholders’ agreement
Controlling Shareholder Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
08.680.096/0001-98
Breakdown of capital
29,229,081
50.000000
No
Yes
0
0.000000
Brazilian-SC
No
Yes
50.000000
0
0.000000
29,229,081
50.000000
50.000000
Number of shares (units)
0
Number of shares (units)
0
Shares %
0.000000
Shares %
0.000000
OTHER
0
0.000000
0
0.000000
0
0.000000
58,458,162
100.000000
0
0.000000
58,458,162
100.000000
,
Total
Page 282 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Heidi Behnke Administradora Ltda
Daniel Ricardo Behnke
Part of the shareholders’ agreement
Controlling Shareholder Last amendment
Number of preferred shares (units)
Preferred shares %
051.107.199-00
Brazilian-SC
No
Yes
29,229,081
50.000000
0
0.000000
Class of share
Total
Davi Ricardo Behnke
Number of shares (units)
0
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
08.601.978/0001-10
Breakdown of capital
29,229,081
50.000000
Shares %
0.000000
041.310.259-90
Brazilian-SC
No
Yes
29,229,081
50.000000
0
0.000000
29,229,081
50.000000
Class of share
Total
Number of shares (units)
0
Shares %
0.000000
OTHER
0
0.000000
0
0.000000
0
0.000000
58,458,162
100.000000
0
0.000000
58,458,162
100.000000
Total
Page 283 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Katia da Silva Bartsch Administradora Ltda.
Bruna da Silva Bartsch
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
08.710.197/0001-64
Breakdown of capital
004.860.769-03
Brazilian-SC
No
Yes
26,100,338
50.000000
0
0.000000
26,100,338
50.000000
0.000000
0
0.000000
0
0.000000
004.860.759-23
Brazilian-SC
No
Yes
26,100,338
50.000000
0
0.000000
26,100,338
50.000000
0
0.000000
52,200,676
100.000000
Class of share
Total
Number of shares (units)
0
Shares %
0.000000
OTHER
0
Ricardo Bartsch Filho
Class of share
Number of shares (units)
Shares %
--
Total
,
Total
0
52,200,676
0.000000
100.000000
,
Page 284 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Márcia da Silva Petry Administradora Ltda
Ana Flávia da Silva Petry
063.432.379-25
Brazilian-SC
17,400,226
Controlling Shareholder Last amendment
Number of preferred shares (units)
Preferred shares %
33.333333
Class of share
Total
Helena Marina da Silva Petry
063.432.389-05
17,400,226
Number of shares (units)
0
33.333334
Class of share
Total
Márcia da Silva Petry
508.022.759-15
17,400,226
-Number of shares (units)
0
0
0.000000
No
Yes
0
0.000000
CPF/CNPJ of shareholder
08.647.713/0001-53
Breakdown of capital
17,400,226
33.333333
17,400,226
33.333334
---
Shares %
0.000000
33.333333
-Number of shares (units)
0
Yes
Total shares %
-
Brazilian-SC
---
No
Total number of shares (units)
Shares %
0.000000
Brazilian-SC
---
Class of share
Total
Part of the shareholders’ agreement
No
Yes
0
0.000000
17,400,226
33.333333
-
---
Shares %
0.000000
OTHER
0
0.000000
0
0.000000
0
0.000000
52,200,678
100.000000
0
0.000000
52,200,678
100.000000
,
Total
Page 285 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Martin Werninghaus Administradora Ltda
Mariana Werninghaus
060.449.029-19
Brazilian-SC
29,229,081
Class of share
Total
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
08.605.191/0001-27
Breakdown of capital
No
Yes
0
0.000000
29,229,081
50.000000
0.000000
0
0.000000
0
0.000000
Brazilian-SC
No
Yes
50.000000
0
0.000000
29,229,081
50.000000
0
0.000000
58,458,162
100.000000
50.000000
Number of shares (units)
0
Shares %
0.000000
OTHER
0
Ricardo Werninghaus
043.365.399-01
29,229,081
Class of share
Number of shares (units)
Shares %
Total
0
0.000000
Total
58,458,162
100.000000
Page 286 of 347
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15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Miriam Voigt Schwartz Administradora Ltda
Eduardo Voigt Schwartz
010.528.409-22
Brazilian-SC
39,724,828
Class of share
Total
Mariana Voigt Schwartz
009.273.789-73
39,724,828
Class of share
Total
Part of the shareholders’ agreement
Controlling Shareholder Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
08.649.305/0001-30
Breakdown of capital
39,724,828
50.000000
No
Yes
0
0.000000
Brazilian-SC
No
Yes
50.000000
0
0.000000
39,724,828
50.000000
50.000000
Number of shares (units)
0
Number of shares (units)
0
Shares %
0.000000
Shares %
0.000000
OTHER
0
0.000000
0
0.000000
0
0.000000
79,449,656
100.000000
0
0.000000
79,449,656
100.000000
Total
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15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER / INVESTOR
Solange da Silva Janssen Administradora Ltda
OTHER
0
Paula da Silva Janssen
Part of the shareholders’ agreement
Controlling Shareholder Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
CPF/CNPJ of shareholder
08.680.120/0001-99
Total shares %
Breakdown of capital
0
0.000000
26,100,338
50.000000
0.000000
0
0.000000
065.548.759-05
Brazilian-SC
No
Yes
26,100,338
50.000000
0
0.000000
Class of share
Number of shares (units)
Shares %
--
Total
Renata da Silva Janssen Decker
0
0.000000
035.997.069-99
Brazilian-SC
No
Yes
26,100,338
50.000000
0
0.000000
26,100,338
50.000000
0
0.000000
52,200,676
100.000000
Class of share
Number of shares (units)
Shares %
--
Total
0
0.000000
Total
52,200,676
100.000000
Page 288 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Tânia Marisa da Silva Administradora Ltda
Alberto da Silva Geffert
Part of the shareholders’ agreement
Controlling Shareholder
Last amendment
Number of preferred shares (units)
Preferred shares %
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
08.649.342/0001-49
Breakdown of capital
17,400,226
33.333333
17,400,226
33.333333
034.304.249-50
Brazilian-SC
No
Yes
17,400,226
33,333333
0
0,000000
Brazilian-SC
No
Yes
33.333333
0
0.000000
Class of share
Total
Henrique da Silva Geffert
051.130.719-51
17,400,226
Class of share
Total
Julia da Silva Geffert de Oliveira
Number of shares (units)
0
Number of shares (units)
0
Shares %
0.000000
Shares %
0.000000
037.581.239-33
Brazilian-SC
No
Yes
17,400,226
33.333334
0
0.000000
17,400,226
33.333334
Class of share
Total
Number of shares (units)
0
Shares %
0.000000
OTHER
0
0.000000
0
0.000000
0
0.000000
52,200,678
100.000000
0
0.000000
52,200,678
100.000000
Total
Page 289 of 347
Reference Form - 2012 - WEG SA
Version: 1
15.2 – Shareholding position
CONTROLLING SHAREHOLDER / INVESTOR
SHAREHOLDER
CPF/CNPJ of shareholder
Nationality-State
Breakdown of shares (units)
Number of common shares (units)
Common shares %
CONTROLLING SHAREHOLDER /
INVESTOR
Valsi Voigt Administradora Ltda
Dora Voigt de Assis
062.427.629-51
Brazilian-SC
39,724,828
Controlling Shareholder Last amendment
Number of preferred shares (units)
Preferred shares %
50.000000
Class of share
Total
Livia Voigt
062.427.659-77
39,724,828
Number of shares (units)
0
50.000000
-Number of shares (units)
0
No
Yes
0
0.000000
No
Yes
0
0.000000
Total number of shares (units)
Total shares %
CPF/CNPJ of shareholder
08.655.197/0001-09
Breakdown of capital
39,724,828
50.000000
39,724,828
50.000000
Shares %
0.000000
Brazilian-SC
--Class of share
Total
Part of the shareholders’ agreement
-
--
Shares %
0.000000
OTHER
0
0.000000
0
0.000000
0
0.000000
79,449,656
100.000000
0
0.000000
79,449,656
100.000000
,
Total
Page 290 of 347
Reference Form - 2012 - WEG SA
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15.3 – Capital distribution
Date of last meeting / Date of last
amendment
Number of individual shareholders (units)
Number of legal entity shareholders
(units)
Number of institutional investor (units)
04/24/2012
7,701
650
499
Outstanding shares
Outstanding shares corresponding to all the issuer’s shares except for those held by
the controlling interest holder, individuals related to it, the directors and officers of the
issuer and treasury shares
Number of common shares (units)
Number of preferred shares (units)
Total
208,815,386
0
208,815,386
33.630809%
0.000000%
33.630809%
Page 291 of 347
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15.4 – Shareholders’ structure
Page 292 of 347
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15.5 – Shareholders’ agreement filed at the issuer’s head office or of which the
controlling shareholder is part
There are no shareholders’ agreements files at the Company’s head office.
Page 293 of 347
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Version: 1
15.6 – Significant changes to interests held by the members of the group of
controlling shareholders and by the issuer’s directors and officers
There was no significant changes in equity interest held by the Company’s controlling
group members over the past fiscal year, since the 2011 Reference Form was
originally presented in May 2011. Changes in interests held by the managing officers
for the period, which were not material considering Company's overall shareholding
structure, mainly result from acquisition of "invested shares” regarding the Stock Option
Plan, in accordance with items 13.4 to 13.9 and 13.16.
Page 294 of 347
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15.7 - Other relevant information
There is no other significant information on the Company’s shareholding structure in
addition to that provided in chapter 15.
Page 295 of 347
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16.1 – Description of the issuer’s rules, policies and practices regarding
transactions with related parties
Business transactions involving the purchase and sale of products, raw materials and
services, as well as financial transactions involving loans, funding among the Group
companies and management compensation were carried out as described in item 16.2.
In Board of Directors' Meeting held on June 21, 2011, approval of Policy of
Transactions with Related Parties of WEG S.A was deliberated, as follows:
POLICY OF TRANSACTIONS WITH RELATED PARTIES OF WEG S.A.
1. Subject to the rules set forth in this Policy, WEG S.A. may engage services from
parties related to the controlling shareholders ("related parties"), as defined by
applicable legislation and regulations.
2. The same standards, policies and internal procedures in engaging suppliers and
vendors are applicable and shall be strictly adopted upon engaging related parties.
Such procedures are to be formally documented.
3. All decisions regarding engaging a related party will be taken solely by the Executive
Board and approved by the Board of Directors through Independent Board’s special
majority vote.
4. Under no circumstances may a related party be the only provider of a service.
5. On no hypotheses may conditions set forth in related-party agreements, including,
but not limited to, those on prices, terms and penalties, be more favorable to the
related party that those adopted for any other supplier or vendor.
6. Agreements with related parties will be subject to analysis by the Audit Department
and the Independent Auditor of WEG, who will examine whether standards set forth in
this Policy have been met. Reports issued will be submitted to the Board of Directors.
7. All agreements with related parties, including amounts and conditions, are
periodically reported, in accordance with the regulation in force issued by Brazilian
Securities and Exchange Commission (CVM).
Page 296 of 347
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16.2 – Information on transactions with related parties
Related party
WEG Equipamentos Elétricos S.A.
Relation with issuer
Subject of the contract
Transaction
date
Amount involved
(reais)
Existing balance
Amount (reais)
Duration
12/31/2009
Subsidiary
1,746,000.00
1,746,000.00
Not applicable
Not applicable
22,970,000.00
Not applicable
Not applicable
No
0.000000
4,644,000.00
Not applicable
Not applicable
No
0.000000
139,000.00
Not applicable
Not applicable
No
0.000000
Loan or other
type of debt
No
Interest rate
charged
0.000000
Management of Financial Resources
Guarantee and insurance
Not applicable
Termination or extinguishment
Not applicable
Nature and reason for the transaction
RF Reflorestadora S.A.
Relation with issuer
Subject of the contract
12/31/2009
Subsidiary
22,970,000.00
Management of Financial Resources
Guarantee and insurance
Not applicable
Termination or extinguishment
Not applicable
Nature and reason for the transaction
WEG Equipamentos Elétricos S.A.
Relation with issuer
Subject of the contract
12/31/2010
Subsidiary
4,644,000.00
Management of Financial Resources
Guarantee and insurance
Not applicable
Termination or extinguishment
Not applicable
Nature and reason for the transaction
RF Reflorestadora S.A.
Relation with issuer
Subject of the contract
12/31/2010
Subsidiary
139,000.00
Management of Financial Resources
Page 297 of 347
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16.2 – Information on transactions with related parties
Related party
Guarantee and insurance
Termination or extinguishment
Transaction date
Amount involved
(reais)
Existing balance
Amount (reais)
Duration
Loan or other
type of debt
Interest rate
charged
Not applicable
Nature and reason for the transaction
WEG Tintas Ltda
Relation with issuer
Subject of the contract
12/31/2011
Subsidiary
79,00.,00
79,000.00
Not applicable
Not applicable
No
0.000000
1,699,000.00
Not applicable
Not applicable
No
0.000000
138,000.00
Not applicable
Not applicable
No
0.000000
Management of Financial Resources
Guarantee and insurance
Not applicable
Termination or extinguishment
Not applicable
Nature and reason for the transaction
WEG Equipamentos Elétricos S.A.
Relation with issuer
Subject of the contract
12/31/2011
Subsidiary
1,699,000.00
Management of Financial Resources
Guarantee and insurance
Not applicable
Termination or extinguishment
Not applicable
Nature and reason for the transaction
RF Reflorestadora Ltda
Relation with issuer
Subject of the contract
12/31/2011
Subsidiary
138,000.00
Management of Financial Resources
Guarantee and insurance
Not applicable
Termination or extinguishment
Not applicable
Nature and reason for the transaction
Page 298 of 347
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16.3 – Identification of the measures adopted to address conflicts of interest and
evidence that the transaction was carried out at arm’s length or was adequately
compensated
Description of each transaction of group of transactions mentioned in item 16.2 carried
out over the past fiscal year: (a) identification of the measures adopted to address
conflicts of interest; and (b) evidence that the transaction was carried out at arm’s
length or was adequately compensated.
The transactions carried out among WEG Group companies do not entail potential
conflicts of interest, considering their common control. The transactions involving
members of management follow the principles of impersonality and impartiality.
Information on related-party balances and transactions reported on the financial
statements as of December 31, 2011 is as follows:
CONTROLLING
SHAREHOLDER
12/31/11
12/31/10
BALANCE SHEET
Non-current assets
Management of financial resources
WEG Tintas Ltda
Current liabilities
Agreements with Directors/Officers
Non-current liabilities
Management of financial resources
WEG Equipamentos Elétricos
S.A.
RF Reflorestadora Ltda
INCOME STATEMENT
Management compensation:
a) Fixed (fees)
Board of Directors
Executive Board
b) Variable (profit sharing)
Board of Directors
Executive Board
CONSOLIDATED
12/31/11
12/31/10
79
-
-
-
79
1,837
4,783
1,566
1,566
-
1.570
1,570
-
-
-
1,699
138
4,644
139
-
-
CONTROLLING
SHAREHOLDER
12/31/11
12/31/10
CONSOLIDATED
12/31/11
12/31/10
1,701
1,124
577
1,580
1,052
528
16,988
1,588
15,400
17,336
1,596
15,740
979
647
332
727
484
243
6,129
906
5,223
4,213
706
3,507
Page 299 of 347
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16.3 – Identification of the measures adopted to address conflicts of interest and
evidence that the transaction was carried out at arm’s length or was adequately
compensated
a) Business transactions
Purchase and sale transactions of inputs and products are carried out under the same
conditions as those transactions conducted with unrelated parties. Most sales are cash
sales.
b) Management of Financial Resources
Financial and business transactions carried out among Group companies are
accounted for pursuant to the Group’s requirements and bear no interest.
Lending/loan agreements entered into with Managing Officers are accounted for and
bear interest ranging from 95% to 100% of Interbank Deposit Certificate (CDI) index
variation.
In Special and General Meeting of WEG S.A. held on April 24, 2012, changes to main
section of article 33 of the Company’s Bylaws were approved, so as not to allow
lending to managing officers.
c) Service Provision and Other Covenants
WEG Equipamentos Elétricos S.A. has entered into a “Guarantees and Other
Covenants” agreement with Hidráulica Industrial S.A Ind. e Com - HISA, whereby WEG
will provide guarantee or collateral in loan operations and in the issuance of guarantees
to clients (performance bonds, surety bonds etc.).
d) Sureties and Guarantees
WEG S.A. provided its foreign subsidiaries with sureties and guarantees amounting to
US$ 207.5 million (US$ 142.0 million as of December 31, 2010).
e) Management compensation
For services provided, members of the Board of Directors received compensation
amounting to R$ 1,588 and members of the Executive Board received compensation
amounting to R$ 15,400, totaling R$ 16,988.
Provided that the net results are at least 10% of net equity, profit sharing payable to
management will range from 0% to 2.5% of net income. A provision amounting to R$
6,129 is recorded in P&L for the period under Other Operating Expenses. The Board of
Directors receive additional corporate benefits, such as: medical and dental assistance,
life insurance, supplementary pension benefits, among others.
Page 300 of 347
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17.1 – Information on capital stock
Date of authorization or
Value of capital
approval
(reais)
Type of capital
Issued capital
04/24/2012
2718,440,437.00
Type of capital
Subscribed capital
04/24/2012
2,718,440,437.00
Type of capital
Paid up capital
04/24/2012
2,718,440,437.00
Type of capital
Authorized capital
02/22/2011
0.00
Payment deadline
Number of common
shares (units)
Number of preferred
shares (units)
Total number of shares
(units)
Paid up capital
620,905,029
0
620,905,029
620,905,029
0
620,905,029
620,905,029
0
620,905,029
633,323,029
0
633,323,029
Page 301 of 347
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17.2 – Capital stock increase
Date of
resolution
04/06/2009
Body which
Date of
deliberated the
issuance
increase
General/Special
meeting
04/06/2009
Total value of
issuance
439,500,000.00
Type of
increase
Without
issuance
of shares
Common (units)
0
Total shares
(units)
Preferred (units)
0
Subscription/
previous capital
Issuance price Quotation factor
0
0.00000000
0.00
R$ per unit
3.75
R$ per unit
0.00000000
0.00
R$ per unit
0.00000000
0.00
R$ per unit
Criteria to determine issuance
price
Form of payment
12/28/2009
Special meeting
Criteria to determine issuance
price
Form of payment
04/26/2011
General/Special
meeting
12/28/2009
Public
3,278,300
0
3,278,300
12,294,000.00
subscription
0.68000000
Appraisal report prepared by third parties, in the scope of merger of subsidiary TRAFO Equipamentos Elétricos
S.A.
Substitution of shares issued by TRAFO merged by WEG S.A.
453,073 ,406.00
Without
issuance
of shares
453,073, 406.00
Without
issuance
of shares
04/26/2011
0
0
0
Criteria to determine issuance
price
Form of payment
General/Special
04/24/2012
meeting
Criteria to determine issuance
price
Form of payment
04/24/2012
0
0
0
Page 302 of 347
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17.3 – Information on share splits, reverse splits and bonuses
Justification for noncompletion of the table-format information:
The Company carried out no splits, reverse splits or provided bonus over the past three
fiscal years.
Page 303 of 347
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17.4 – Information on capital stock decrease
Justification for noncompletion of the table-format information:
The Company carried out no capital reduction over the past three fiscal years.
Page 304 of 347
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Version: 1
17.5 - Other relevant information
There is no other information on capital stock in addition to that already provided in
Chapter 17.
Page 305 of 347
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Version: 1
18.1 – Stock rights
Type of Shares or Class of Share Common
Tag along
100.000000
Entitled do Dividends
Minimum 25% (twenty-five percent) of net income
adjusted pursuant to article 202 of the Corporation Law will be distributed as dividends
and/or interest on equity, in the form of Law No. 9249/95, allocated to dividends.
Right to vote
Convertible
Entitled to capital reimbursement
Restricted circulation
Conditions to alter the rights which were protected by said
securities
Other relevant characteristics
Full
No
No
No
Not applicable
Not applicable
Page 306 of 347
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Version: 1
18.2 – Description of rules, if any, included in the issuer’s bylaws that limit the
voting rights of significant shareholders or that require them to make a public
tender offer
There are no rules included in the issuer’s bylaws that limit the voting rights of
significant shareholders or that require a public tender offer.
Page 307 of 347
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18.3 – Description of exceptions and suspension clauses relating to equity or
political rights included in the bylaws
There are no exceptions and suspension clauses relating to equity or political rights
included in the bylaws.
Page 308 of 347
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18.4 – Volume of trading operations and highest and lowest quoted price of securities traded
Fiscal year
12/31/2011
Quarter
Marketable
security
Type
Class
03/31/2011
Shares
Common
Market
Stock
exchange
06/30/2011
Shares
Common
Stock
exchange
09/30/2011
Shares
Common
Stock
exchange
12/31/2011
Shares
Common
Stock
exchange
Fiscal year
12/31/2010
Quarter
Marketable
security
Type
03/31/2010
Shares
Common
Market
Stock
exchange
06/30/2010
Shares
Common
Stock
exchange
09/30/2010
Shares
Common
Stock
exchange
12/31/2010
Shares
Common
Stock
exchange
Fiscal year
12/31/2009
Quarter
Marketable
security
Type
03/31/2009
Shares
Common
Market
Stock
exchange
06/30/2009
Shares
Common
Stock
exchange
09/30/2009
Shares
Common
Stock
exchange
12/31/2009
Shares
Common
Stock
exchange
Class
Class
Managing entity
Negotiated financial
volume (reais)
Value of highest quote
(reais)
Value of lowest quote
Quotation
factor
BM&FBOVESPA S.A. - Bolsa de Valores,
Mercadorias e Futuros
534,939,337
22.47
18.18
R$ per unit
BM&FBOVESPA S.A. - Bolsa de Valores,
Mercadorias e Futuros
515,306,182
22.22
16.77
R$ per unit
BM&FBOVESPA S.A. - Bolsa de Valores,
Mercadorias e Futuros
465,599,001
19.47
14.51
R$ per unit
BM&FBOVESPA S.A. - Bolsa de Valores,
Mercadorias e Futuros
328,178,447
19.89
16.96
R$ per unit
Negotiated financial
volume (reais)
Value of highest
quote (reais)
Value of lowest quote
Quotation
factor
BM&FBOVESPA S.A. - Bolsa de Valores,
Mercadorias e Futuros
357,865,580
19.75
16.51
R$ per unit
BM&FBOVESPA S.A. - Bolsa de Valores,
Mercadorias e Futuros
266,412,364
19.48
15.00
R$ per unit
BM&FBOVESPA S.A. - Bolsa de Valores,
Mercadorias e Futuros
380,689,143
18.79
16.33
R$ per unit
BM&FBOVESPA S.A. - Bolsa de Valores,
Mercadorias e Futuros
660,994,368
24.16
18.40
R$ per unit
Negotiated financial
volume (reais)
Value of highest
quote (reais)
Value of lowest quote
Quotation
factor
BM&FBOVESPA S.A. - Bolsa de Valores,
Mercadorias e Futuros
213,070,336
12.77
9.91
R$ per unit
BM&FBOVESPA S.A. - Bolsa de Valores,
Mercadorias e Futuros
462,612,618
15.75
10.59
R$ per unit
BM&FBOVESPA S.A. - Bolsa de Valores,
Mercadorias e Futuros
417,145,979
16.73
12.03
R$ per unit
BM&FBOVESPA S.A. - Bolsa de Valores,
Mercadorias e Futuros
430,584,657
19.38
15.24
R$ per unit
Managing entity
Managing entity
Page 309 of 347
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18.5 – Description of other securities issued
Justification for noncompletion of the table-format information:
The Company issued no securities other than shares.
Page 310 of 347
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Version: 1
18.6 – Brazilian markets where the securities are admitted to trading
The Company trades its shares (WEGE3) on the Stock, Futures and Commodities
Exchange "BM&FBovespa."
Page 311 of 347
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Version: 1
18.7 – Information on each class and type of securities admitted to trading on
external markets
On September 27, 2010, we announced the negotiation of American Depository
Receipts (ADR), level 1, in the scope of the program that sponsors depository receipts
of Company shares (“Program”).
The Program did not represent a capital increase or issuance of new shares. With this
program, WEG seeks to offer more access options to investors, including those
domiciled abroad, broadening the liquidity of shares.
Each ADR represents 1 Company-issued common share, under the terms of the
depository contract between the Company and JP Morgan Chase Bank, N.A., being
traded in the over-the-counter market, under code “WEGZY.”
We present below the following information regarding our ADR program.
Country:
Market
United States of America
Over the Counter or OTC
Date of admission for negotiation
Negotiation segment:
Percentage of negotiation volume abroad
in comparison with total volume of
negotiation of each class and type in the
past year:
Symbol:
CUSIP:
Local ISIN:
Proportion of depository certificates abroad
in comparison with each class and type of
shares
Depository Bank:
Custodian Bank:
September 27, 2010
ADR level 1
Less than 1%
WEGZY
94858P 209
BRWEGEACNORO
Maximum of 50,000,000 ADRs / shares,
which represent less than 1 % of total
shares issued by the Company
JP Morgan Chase Bank, N.A.
Banco Bradesco S.A.
Page 312 of 347
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18.8 – Public offerings made by the issuer or third parties, including controlling
shareholders and affiliates and subsidiaries, involving the issuer’s securities
No public offerings have been made, either by the Company or by third parties,
including controlling shareholders, affiliate companies and subsidiaries, involving
securities issued by the Company.
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18.9 – Description of the public tender offerings made by the issuer referring to
third party shares
There was no tender offerings made by the Company referring to third-party shares.
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18.10 - Other relevant information
There is no other information on Securities in addition to that already provided in
Chapter 18.
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19.1 – Information on repurchase plans for the issuer’s shares
Decision date
Repurchase
period
Available reserves
and profit (reais)
Type
0.00
Common
Class
Amount
foreseen (units)
% relation to
outstanding
shares
Approved acquired
quantity (unit)
PMP
Quotation factor
% acquired
500,000
0.239426
500,000
20.11
R$ per unit
100,000000
Other characteristics
04/26/2011
04/26/2011 to
04/26/2012
The objective of the Repurchase Plan is to support the Company’s Stock Option Plan.
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19.2 – Changes in the treasury securities values
Fiscal year (12/31/2011)
Shares
Type of share
Common
Changes
Opening balance
Acquisition
Disposal
Cancellation
Ending balance
Preferred share class
Number (units)
0
500,000
0
0
500,000
Description of securities
Total value (reais)
0.00
10,055,000.00
0.00
0.00
10,055,000.00
Weighted average price
(reais)
0.00
20.11
0.00
0.00
20.11
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19.3 – Information on treasury securities on the closing date of the latest year
Security
Shares
Relation to
outstanding
shares
Type of share
Common
Class of share
Description of
securities
Number (units)
500,000
Weighted average
acquisition price
20.11
Quotation
factor
R$ per unit
Acquisition date
04/27/2011
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(%)
0.239540
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19.4 - Other relevant information
There is no other information on Repurchase Plans in addition to that already provided
in Chapter 19.
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20.1 – Information on the securities trading policy
Date of approval July 23, 2008
Position and/or function
For this POLICY, related persons are those who, due to their function or position in the Company, have
continuous, frequent and repetitive access to Privileged Information. Therefore, Related Persons, among
others, are:
1. Direct or indirect controlling shareholders,
2 Member of the Board of Directors,
3 Members of the Supervisory Board,
4 Members of the Executive Board,
5 Members of any bodies with technical or consulting positions set forth in the Company’s Bylaws,
6 Other persons, according to the decision of the Investor Relations Board.
In specific cases, the following can be compared to Related Persons:
1. Any legal entity in which a Related Person may influence security-related negotiation decisions.
2. Any person who has access to Privileged Information through the Related Person and has signed a
specific Confidentiality Agreement.
3. For spouses, companions, and any dependents, including those in the person’s income tax return, and
companies which are directly or indirectly controlled thereby.
Main characteristics
Purposes of the POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS AND ON SECURITIES
TRADING ("POLICY")
1. The POLICY establishes the guidelines and procedures that govern WEG S.A. and the other WEG
Group companies (“WEG” or “the Company”), as well as its related persons, covering:
1.1. The handling of material acts or facts, both for secrecy and adequate disclosure purposes; 1.2. The
trading of securities issued by WEG or benchmarked thereto,
2. The POLICY was established pursuant to the terms of CVM Ruling No. 358, of January 3, 2002, and of
the São Paulo Exchange (“BOVESPA”) “Novo Mercado” (New Market) Regulations.
3. The POLICY shall not be amended pending any undisclosed Material Acts or Facts.
Blackout period and description of inspection procedures
CONCERNED PERSONS may not trade Securities Issued by WEG from the date formally communicated
by Investor Relations Board to the date the Material Act or Fact Notice is published, or until new formal
communication releasing trading is disclosed. Related Persons are required to maintain confidentiality of
the fact that they are in the blackout period. Management members separated from the Company prior to
public disclosure of material acts or facts started during their offices are also required to abide by a sixmonth blackout period as from termination date.
Blackout period:
th
1. Between the 15 (fifteenth) day prior to and the day (inclusive) (i) quarterly information is disclosed
(Quarterly Information - ITR) and; (ii) annual P&L is disclosed (Standard Financial Statements - DFP).
2. Whilst acquisition or disposal of shares issued by WEG is in place by are WEG itself, its subsidiaries,
affiliates and jointly-controlled entity, or if an option or term of office for said purpose has been issued.
The blackout period will be set based on the likelihood of a specific act or fact taking place and being
understood as material, considering judgment of when such act or fact turned from mere expectation to
solid possibility, even if this cannot be ensured.
1. Even if not in compliance with the criteria of significance and materiality defined above, the Investor
Relations Board may determine trading impediments to preserve proper functioning of Securities Issued by
WEG or to preserve legitimate interests of WEG or its shareholders.
2. Partial negotiation impediments applicable only to the Related Persons and third parties aware of the
non-disclosed act or fact may be established.
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20.2 - Other relevant information
See "POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS AND ON
SECURITIES TRADING OF WEG S.A." in item 21.1
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21.1 – Description of internal rules, regulations or procedures on disclosure of
information
POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS AND ON SECURITIES
TRADING OF WEG S.A.
Purpose of this POLICY
l.
This POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS AND ON
SECURITIES TRADING (“POLICY”) establishes the guidelines and procedures
that govern WEG S.A. and the other WEG Group companies (“WEG” or “the
Company”), as well as its related persons, covering:
1.1. The handling of material acts or facts, both for secrecy and adequate disclosure
purposes;
1.2. The trading of securities issued by WEG or benchmarked thereto,
2. This POLICY was established pursuant to the terms of CVM Ruling No. 358, of
January 3, 2002, and of the São Paulo Exchange (“BOVESPA”) “Novo Mercado”
(New Market) Regulations.
3. This POLICY shall not be amended pending any undisclosed Material Acts or
Facts.
Definitions
Securities Issued by WEG
4. Securities Issued by WEG shall be construed as the shares, negotiable rights,
subscription receipts and debentures issued and publicly offered by WEG or by
public companies controlled by WEG, as well as the securities issued by third
parties, the price of which is benchmarked to or derives from securities issued by
WEG.
Material Act of Fact
5. A Material Act or Fact shall be construed as any decision, act or fact that may
considerably impact the price of securities issued by WEG or the investors’
decision to buy, sell, hold or exercise any rights underlying their capacity as owners
of these securities, in accordance with applicable legislation.
6. As an objective criterion, though not compulsorily required, guiding the
considerable impacts of the Material Act or Fact defined above, the concept of
materiality of such an event will be used in the context of WEG’s activities, with a
material act or fact being considered as that which, on an individual or aggregated
basis, may cause changes in:
6.1. Annual Gross Revenue by 5% or more
6.2. Annual EBITDA by 5% or more
6.3. Net Income for the Year by 5% or more
6.4. Net Equity by 5% or more.
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21.1 – Description of internal rules, regulations or procedures on disclosure of
information
Privileged Information
7. Privileged Information shall be construed as the knowledge of a Material Act or
Fact before it is disclosed to the regulatory agencies, such as CVM, the São Paulo
Stock Exchange BOVESPA and the shareholders and other parties in the capital
markets in general, as defined in this POLICY.
Unfair Practice
8. Unfair Practice shall be construed as the use of Privileged Information to obtain,
for oneself or third parties, benefits of any kind as a result of trading in the
securities issued by the Company or benchmarked thereto.
Related Persons
9. Related Persons to this POLICY shall be construed as any persons that, by virtue
of their rank or role in the Company, have continuous, frequent and repeated
access to Privileged Information. Therefore, Related Persons, among others, are:
9.1. Direct or indirect controlling shareholders,
9.2 Members of the Board of Directors,
9.3 Members of the Supervisory Board,
9.4 Members of the Executive Board,
9.5 Members of any bodies with technical or advising functions, creased by the Bylaws,
9.6 Other persons, as defined by the Investor Relations Officer.
10. The following shall be considered like Related Persons, in specific cases:
10.1. Any legal entity in which a Related Person may have an influence on decisions
regarding securities trading.
10.2. Any person that may have had access to Privileged Information by means of a
Related Person and that may have executed a specific confidentiality agreement.
10.3. For natural persons to a spouse, common-law partner, any dependent included in
their annual income tax return and any companies directly or indirectly controlled by
them.
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21.1 – Description of internal rules, regulations or procedures on disclosure of
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Responsibilities of the Related Persons
Duty to Adhere to the POLICY
11. The Related Persons must formally adhere to the POLICY by executing the related
term of agreement (attachments I, II or III) upon hire, election, promotion or
transfer, or upon knowledge of the material act or fact, stating that they are aware
of the terms of this POLICY and agree to comply therewith.
11.1. The Disclosure Committee shall define, together with each of the Company’s
Executive Boards, the ranks, employees and third parties that must adhere to the
POLICY.
Duty of Confidentiality
12. The Related Persons must not use Privileged Information to obtain, for oneself or
third parties, benefits of any kind as a result of trading in the Securities Issued by
WEG using Unfair Practices.
13. Related Persons must act in a diligent manner with a view to keeping confidentiality
of the Privileged Information to which they have access, pursuant to legislation and
applicable rules.
14. Related Persons must only disclose Privileged Information to third parties not
related to this POLICY only if such information is absolutely necessary for the
performance of specific professional duties in the Company’s normal course of
business.
14.1. Such Privileged Information should be disclosed only to the extent necessary for
the required purposes, always preceded by an explanation about the secrecy of such
information and the extent of the duty of confidentiality.
14.2. If the Privileged Information is disclosed on a frequent and repeated basis, the
unrelated person must adhere to this POLICY, by executing the related term of
agreement.
14.3. Any Related Person leaving WEG, or ceasing to participate in the business or
project to which the Privileged Information refers, shall remain subject to the duty of
confidentiality until such information is publicly disclosed.
Duty to Observe Blackout Periods
15. The Related Persons must not trade in the Securities Issued by WEG from the date
of formal notification by the Investor Relations Officer to the date of public
disclosure of a Material Act or Fact, or of new formal notification permitting trading
operations. The Related Persons must maintain confidentiality about their own
temporary prohibition to trading. Any member of management leaving the Company
before the public disclosure of a material act or fact originating in his/her tenure
must also respect a lock-up period of six months from the date of termination.
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21.1 – Description of internal rules, regulations or procedures on disclosure of
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15.1. The Related Persons must respect the following automatic blackout periods:
15.1.1. Between the 15th (fifteenth) day prior to and the day of (i) the disclosure of
quarterly financial results (filing of the Quarterly Information Form - ITR with the CVM);
and (ii) the disclosure of annual financial results (filing of the Standard Financial
Statement Form - DFP with the CVM), with no formal notification from the Investor
Relations Officer being required. WEG shall disclose, at the beginning of each fiscal
year, and shall keep it updated throughout the period, a calendar of corporate events
including the estimated dates for disclosure of its quarterly and annual financial results,
as set out in attachment IV to this POLICY.
15.1.2. As long as the shares issued by WEG are being acquired or disposed of by
WEG itself, its subsidiaries, affiliates or other companies under common control, or if
an option or mandate for this purpose has been granted.
Duty to Inform of Trading of Material Ownership
16. The Related Persons must inform the Investor Relations Officer of the number,
characteristics, and form of acquisition of the securities issued by WEG, as well as
any changes in ownership, pursuant to the “Individual Trading Form”, as set out in
attachment VI to this POLICY.
16.1. Initial notification shall be made immediately after taking office.
16.2. Subsequent trading shall be notified immediately after it has taken place, and the
Related Persons must require the brokers used in the trading operation to provide this
information to the Investor Relations Officer.
17. The shareholders that elect members of the Board of Directors or the Supervisory
Board, as well as any natural or artificial person, or group of persons acting
together or representing the same interest, that have direct or indirect equity
interest equivalent to a minimum 5% (five percent) of shares comprising the capital
stock of WEG must provide the Investor Relations Officer with the information
required in the “Statement of Equity Ownership”, as set out in attachment V to this
POLICY, upon the occurrence of events defined by applicable legislation and/or
regulations.
Responsibilities of the Investor Relations Officer
Manage and Handle Violations
18. Manage the application of this POLICY and adopt the necessary measures for its
strict enforcement.
19. Handle POLICY violations, define penalties and inform them to the appropriate
level of authority for each case.
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21.1 – Description of internal rules, regulations or procedures on disclosure of
information
Control Adherence and Trading
20. Keep centralized and updated records of all Related Persons, being also
responsible for making these records available to the proper authorities upon
request.
21. Keep specific and individual control over all Related Persons, including the number,
characteristics and form of acquisition of the securities issued by WEG, as well as
any changes in these positions, regularly providing this information to CVM and
BOVESPA.
Define Blackout Periods
22. Define the initial period of temporary prohibition to trading in Securities Issued by
WEG by Related Persons based on the likely occurrence of specific acts or facts
that might be deemed material, considering judgment of when the likelihood of their
occurrence passed from mere expectation on to an actual possibility, although it
cannot be assured.
22.1. Even if the previously defined relevance and materiality criteria are not observed,
the Investor Relations Officer may determine a blackout period to preserve the proper
operation of the market for the Securities Issued by WEG or to safeguard the legitimate
interests of WEG or its shareholder.
22.2. Partial prohibition to trading may be imposed only on those Related Persons and
third parties who become knowledgeable of specific acts or facts not yet disclosed.
Define and Disclose Material Acts or Facts
23. Analyze and qualify an act or fact as a Material Fact and define the
appropriateness and/or need for disclosure. Provided that information
confidentiality is not impaired, the Investor Relations Officer may opt not to
immediate disclose a material act or fact if it considers this to be the Company’s
legitimate interest.
24. Prepare the Material Fact Release document, which must be clear, accurate and in
user-friendly language, including timely and comprehensive information required for
a perfect understanding.
24.1. WEG shall necessarily publish its documents in Portuguese, but English versions
thereof may be provided in due course for the convenience of interested readers only.
24.2. Only the Chief Executive Officer, the Investor Relations Officer or a person
expressly appointed by either of them are allowed to comment on, clarify or detail the
content of the material act or fact as disclosed.
Comments, clarifications or details about immaterial acts or facts that have already
been subject to extensive disclosure may be provided by other WEG personnel,
pursuant to applicable policies as the case may be.
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21.1 – Description of internal rules, regulations or procedures on disclosure of
information
24.3. Material acts or facts shall preferably be disclosed before or after the trading
hours on the São Paulo Stock Exchange (BOVESPA). If it is imperative that this
disclosure take place during the BOVESPA trading hours, the Investor Relations
Officer shall request BOVESPA to suspend trading of the securities issued by WEG for
as long as it is necessary to properly communicate relevant information.
25. Oversee the communication of Notices of Material Fact, in the following order of
priority:
25.1. To CVM, through the electronic media defined by this agency,
25.2. To BOVESPA and, as applicable, to other stock exchanges and entities operating
in organized over-the-counter markets;
25.3. Directly to the parties in the capital markets in general, through usual or
convenient media, including publications in newspapers determined at WEG’s General
Meeting, which may be in summary form with an indication of where the complete
information is available.
Assist Investors
26. Assist investors, market analysts and interested parties, directly or through an
expressly appointed representative. Other employees shall only communicate with
investment experts and other parties in the capital market as expressly authorized
and directed to do so by the Investor Relations Officer in the presence of the
appointed representative.
26.1. WEG’s representatives in assisting shareholders and investors must zero in on
widely disclosed public information and not discuss or transmit Privileged Information;
26.2. For the period of 15 days before publication of its financial results, on the dates
specified in the calendar of corporate events registered with the CVM and the
BOVESPA, pursuant to attachment IV, WEG shall not discuss, provide information or
estimate projections regarding these results. This prohibition does not include
discussing information that has been already publicly disclosed.
26.3. WEG shall not express an opinion on rumors, speculations, news or information
whose source is not clearly identified, unless, by decision of the Investor Relations
Officer, it is understood that a formal expression by WEG may help preserve an orderly
trading of the securities issued by WEG.
26.4. WEG will neither disclose projections of future results nor make comments,
express opinions or judgments about other projections of results prepared by third
parties.
26.5. WEG may, in a timely manner, disclose its expected operating performance for
the coming fiscal years. These expectations regarding future performance represent
mere estimates and are based on management’s expectations for the future, being
largely subject to market changes, to the overall economic performance of the country
and business sector, and to the international markets, being subject to changes.
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21.1 – Description of internal rules, regulations or procedures on disclosure of
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26.6. WEG may, through the usual means adopted in its investor relations activities,
use or disclose the projections of results prepared by third parties. This practice does
not imply any assessment, value judgments or validation of these expected results.
26.7. WEG shall not be liable for recommended investments, expected results, target
prices and other judgments and opinions of third parties about the securities issued by
WEG.
Responsibilities of the Disclosure and Trading Committee
27. The Disclosure and Trading Committee is hereby established as an advisory and
deliberative body composed of a maximum 5 (five) members, one of them
compulsorily being the Investor Relations Officer, who shall preside it, and the
others being selected by the Executive Board of WEG, which shall be assigned
with the following responsibilities:
27.1. Previously review the content of specific communications with the capital market
that may contain relevant information about WEG, ensuring that no information about
material acts or facts as yet undisclosed by the company is improperly disclosed;
27.2. Consider the need for defining temporary blackout periods for the persons related
to this POLICY;
27.3. Determine the necessary procedures for disclosure and communication of this
POLICY, also to WEG’s employees;
27.4. Rule on adherence by all persons required by law, as defined in this POLICY;
27.5. Propose the adoption of applicable disciplinary measures, as a result of
noncompliance with the rules established in this POLICY, without prejudice to the
applicable administrative, civil and criminal penalties.
Penalties for POLICY Violations
28. Failure to comply with the rules established in this POLICY shall subject the violator
to disciplinary measures, pursuant to WEG’s internal rules of procedure and those
described in this item, without prejudice to the applicable administrative, civil and
criminal penalties.
29. Any related person that becomes aware of his/her violation must immediately report
it to the Investor Relations Officer. Failure to report violations of the POLICY is
considered misconduct.
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POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS AND ON SECURITIES
TRADING OF WEG S.A.
ATTACHMENT I
TERM OF ADHESION FOR CONTROLLING SHAREHOLDERS AND MANAGING
OFFICERS
[name, nationality, marital status, profession], holder of Identity Card No. [RG], enrolled
with the National Register of Individuals under No. [CPF], residing at [full address], the
undersigned, as the [position held] for [WEG S.A. or subsidiary], adheres to the
POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS AND ON SECURITIES
TRADING OF WEG S.A., hereby received as a copy; represents that is fully aware of
its terms, and agrees to fully comply therewith. The undersigned hereby states to be
aware that any penalties arising from violation of the aforementioned POLICY will be
deliberated by the Company’s Board of Directors.
Jaraguá do Sul, [Month] [day], 20[year]
[Full Name]
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POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS AND ON SECURITIES
TRADING OF WEG S.A.
ATTACHMENT II
TERM OF ADHESION FOR EMPLOYEES
[name, nationality, marital status, profession], holder of Identity Card No. [RG], enrolled
with the National Register of Individuals under No. [CPF], residing at [full address], the
undersigned, as the [position held] for [WEG S.A. or subsidiary], adheres to the
POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS AND ON SECURITIES
TRADING OF WEG S.A., hereby received as a copy; represents that is fully aware of
its terms, and agrees to fully comply therewith. The undersigned hereby states to be
aware that any violation of the aforementioned POLICY may be considered
misconduct.
Jaraguá do Sul, [Month] [day], 20[year]
[Full Name]
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21.1 – Description of internal rules, regulations or procedures on disclosure of
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POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS AND ON SECURITIES
TRADING OF WEG S.A.
ATTACHMENT III
ADHESION TERM FOR THIRD PARTIES
[name, nationality, marital status, profession], holder of Identity Card No. [RG], enrolled
with the National Register of Individuals under No. [CPF], residing at [full address], the
undersigned, as the [position held] for [company engaged by WEG] and [his/her] legal
agent, adheres to the POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS
AND ON SECURITIES TRADING OF WEG S.A., hereby received as a copy;
represents that is fully aware of its terms, and agrees to fully comply therewith.
Compliance with this POLICY is applicable to all employees and persons related to
[company engaged by WEG] involved in the rendering of services and/or products
subject matter of an agreement with WEG S.A. The undersigned also states to be
aware of the blackout period dates established in advance, and that any violation of the
referred to POLICY will be considered as breach of contract and, that accordingly, the
Company may terminate the contract which originated this adhesion, without any
encumbrances, and require payment of the fine set forth therein, without prejudice to
damage and loss.
Jaraguá do Sul, [Month] [day], 20[year]
[Full Name]
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21.1 – Description of internal rules, regulations or procedures on disclosure of
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POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS AND ON SECURITIES
TRADING OF WEG S.A.
ATTACHMENT IV
SCHEDULE FOR 20XX
INCLUDES BLACKOUT PERIODS FOR SECURITIES ISSUED BY WEG S.A., OR
BENCHMARKED THEREON, DUE TO PERIODIC EVENTS (DFP and ITR)
Periodic Events
Balance sheet/DFP 12.31.YYYY
ITR – 1Q/YY
IAN 20YY
ITR – 2Q/YY
ITR – 3Q/YY
Blackout Periods
MM.DD.20YY to MM.DD.20YY;
MM.DD.20YY to MM.DD.20YY;
MM.DD.20YY to MM.DD.20YY;
MM.DD.20YY to MM.DD.20YY;
MM.DD.20YY to MM.DD.20YY;
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POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS AND ON SECURITIES
TRADING OF WEG S.A.
ATTACHMENT V
INDIVIDUAL NEGOTIATION FORM
Trading – Managing Officers and Related Persons – article 11 – CVM Ruling No.
358/2002
In [Month/year]
( ) only the following operations with securities and derivatives were carried out, in
accordance with article 11 of CVM Ruling No. 358/2002.(1)
( ) no operations with securities and derivatives were carried out, in accordance with
article 11 of CVM Ruling No. 358/2002, considering that current position of my
securities and derivatives is as follows.
Name of Company:
Name:
WEGS.A.
CPF/CNPJ:
Qualification:
Opening balance
Characteristics of Bonds (2)
Number %interest
Same
Type/Class
Total
Security / Derivative
Transactions for the Month
Security /
Derivative
Characteristics
of Bonds (2)
Operation
Day
Number
Price
Interim
Volume
(R$) (3)
Purchase
Total Purchases
Sale
Total Sales
Ending
balance
Characteristics of Bonds (2)
Security / Derivative
Number %interest
Same
Type/Class
Total
(1) When filling out this form, exclude lines containing no information.
(2) Issue/series, convertible, simple, deadlines, sureties, types/class etc.
(3) Number multiplied by price.
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POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS AND ON SECURITIES
TRADING OF WEG S.A.
ATTACHMENT VI
REPRESENTATION OF SHAREHOLDING
I, [name and qualification], as [position held] for WEG S.A., REPRESENT, in
compliance with Brazilian Securities and Exchange Commission (CVM) Ruling No.
358/02, that I [acquired or disposed of] [shares / other marketable securities / rights on
shares / other marketable securities – specify type and class, as the case may be]
issued by WEG S.A., having [reached / increase / decrease / reduced] by [5 or more] %
interest held by me, [directly / indirectly], which accounts for [shares / other marketable
securities / rights on shares / other marketable securities] comprising WEG S.A.
capital, as follows:
I Purpose of my shareholding and envisioned quantity: ………………….
Il – Number of shares, subscription bonus, share subscription rights and stock options,
by type and class, already held, either directly or indirectly, by me or someone
connected to me: ……………………………..
III – Number of debentures convertible into shares already held, either directly or
indirectly, by me or someone connected to me (explain number of shares subject to
conversion, by type and class): ………………………..
IV – Indicate any agreement or contract governing the exercise of voting rights or the
purchase and sale of securities issued by the Company: ………………………..
I hereby agree to promptly communicate to the relevant body in charge of corporate
matters any changes in positions herein reported representing an increase or decrease
by 5% in interest held by me.
Jaraguá do Sul, [Month] [day], 20[year]
[Full Name]
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21.2 – Description of the policy on disclosure of material fact or event notice and
of procedures regarding maintenance of confidentiality of significant information
not disclosed
See "POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS AND ON
SECURITIES TRADING OF WEG S.A." in item 21.1
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Reference Form - 2012 - WEG S.A.
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21.3 – Managing officers responsible for implementation, maintenance,
assessment and overview of the information
See "POLICY ON DISCLOSURE OF MATERIAL ACTS OR FACTS AND ON
SECURITIES TRADING OF WEG S.A." in item 21.1
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Reference Form - 2012 - WEG S.A.
Version: 1
21.4 - Other relevant information
There is no other relevant information on Policy on Information Disclosure in addition to
that stated in Chapter 21.
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Reference Form - 2012 - WEG S.A.
Version: 1
22.1 – Acquisition or disposal of any significant asset that does not fall under the
issuer’s normal activities
There is no other relevant information on Policy on Information Disclosure in addition to
that stated in Chapter 21.
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Reference Form - 2012 - WEG S.A.
Version: 1
22.2 – Significant changes in the manner of conducting the issuer’s business
There were no significant changes in the manner of conducting the issuer’s business.
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Reference Form - 2012 - WEG S.A.
Version: 1
22.3 – Significant contracts entered into between the issuer and its subsidiaries
not directly related to operating activities
The Company and/or its subsidiaries entered into no significant agreements with third
parties not directly related to their operating activities.
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Reference Form - 2012 - WEG S.A.
Version: 1
22.4 - Other relevant information
The Company has no other relevant information in addition to that reported in prior
items of this Reference Form.
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