Financial Statements
INDEPENDENT AUDITORS’ REPORT
To the Shareholder and Management of
Banco Nacional de Desenvolvimento Econômico e Social - BNDES
1. We have audited the accompanying individual (Bank) and consolidated balance sheets of Banco Nacional de
Desenvolvimento Econômico e Social (BNDES) and subsidiaries (the “Bank”, the Entity”) as of December 31, 2008
and the related individual statements of income, changes in shareholders’ equity, cash flows and value added for
the six-month period and year then ended, and the related consolidated statements of income, cash flows and
value added for the six-month period and year then ended, all expressed in Brazilian reais and prepared under the
responsibility of the Bank’s management. Our responsibility is to express an opinion on these financial statements.
The financial statements of affiliates in which the subsidiary BNDES Participações S.A. (BNDESPAR) has investments
of R$4,474,381 thousand as of December 31, 2008, representing 1.61% of total consolidated assets and 17.71%
of shareholders’ equity and in which net loss determined under the equity method amounts to R$388,435
thousand and R$247,598 thousand, respectively, for the year and six-month period ended December 31, 2008,
were audited by other independent auditors, whose opinion thereon was unqualified. Our opinion, insofar as it
relates to these investments and the related equity in affiliates, is based on the reports of the other auditors.
2. Our audits were conducted in accordance with auditing standards in Brazil and comprised: (a) planning of the
work, taking into consideration the significance of the balances, volume of transactions, and the accounting and
internal control systems of the Bank and its subsidiaries, (b) checking, on a test basis, the evidence and records that
support the amounts and accounting information disclosed, and (c) evaluating the significant accounting practices
and estimates adopted by Management, as well as the presentation of the financial statements taken as a whole.
3. In our opinion, based on our audits and the reports of other auditors, the financial statements referred to in
paragraph 1 present fairly, in all material respects, the individual and consolidated financial positions of Banco
Nacional de Desenvolvimento Econômico e Social (BNDES) and subsidiaries as of December 31, 2008, the results
of their operations, the changes in shareholders’ equity (Bank), their cash flows, the wealth generated and
distributed among the elements that contributed to its generation for the year and six-month period then ended,
in conformity with Brazilian accounting practices.
4. We had previously audited the financial statements of Banco Nacional de Desenvolvimento Econômico e Social –
BNDES and subsidiaries, for the year ended December 31, 2007, comprising the balance sheet, the statements of
income, changes in shareholders’ equity, changes in financial position, and supplemental information comprising
the statements of cash flows and value added, on which we issued a qualified opinion dated January 30, 2008,
given that an affiliate – BNDES Participações S.A. (BNDESPAR) – in which as of December 31, 2007 the Bank had
an investment determined under the equity method was not audited by us nor by other independent auditors.
Subsequently, however, an unqualified opinion on said financial statements was issued by other independent
auditors’ report. As mentioned in Note 2, changes in Brazilian accounting practices have been introduced
effective January 1, 2008. The financial statements for the year ended December 31, 2007, presented with the
2008 financial statements, have been prepared in accordance with Brazilian accounting practices in effect until
December 31, 2007 and, as permitted by Technical Pronouncement CPC 13, First-Time Adoption of Law 11638/07
and Provisional Act 449/08, are not being restated with adjustments for purposes of comparability between years.
5. The accompanying financial statements have been translated into English for the convenience of readers
outside Brazil.
Rio de Janeiro, January 28, 2009
DELOITTE TOUCHE TOHMATSUMarcelo Cavalcanti Almeida
Auditores IndependentesEngagement Partner
CRC 2SP 011.609/O-8 “F” RJCRC 1RJ 036.206/O-5
In Thousands of Brazilian Reais – R$
Table 1 – BNDES and Subsidiaries: Balance Sheets as of December 31
BNDES
2008
Note
Current assets
Cash
Interbank investments
Foreign exchange portfolio
Resale agreements
Interbank deposits
Securities
Banco do Brasil investment funds
Government securities
Shares and warrants
Trading debentures
Debentures
Allowance for losses – Debentures
Foreign fixed-income securities
Investment fund shares
Derivatives
Interbank onlendings
2008
5
39,734,479
3,929
347
2,920
5.1
903,000
5.2
2007
61,206,697
3,637
6,908,965
48,764,079
6,311
347
347
2,920
347
-
903,000
-
6,003,045
-
6,003,045
-
6
3,788,730
7,126,206
6,402,563
8,334,359
6.4
1,277,766
5,042,101
2,829,198
5,840,182
2,124,690
977,041
2,125,260
977,602
-
-
680
3,900
-
862,515
-
862,515
7
94,299
48,991
122,787
56,172
7.2.4
(463)
(10,318)
(3,433)
(15,767)
-
159,874
-
159,874
6.5
-
-
1,035,633
403,879
25
292,438
46,002
292,438
46,002
8
19,587,669
19,602,534
30,266,967
25,966,748
19,918,092
19,957,055
30,668,885
26,540,213
19,495,588
16,943,470
30,246,381
23,526,628
8
Loans
Unrestricted funds
Funds – PIS-Pasep
Funds – Merchant Marine Fund
Allowance for losses
Other receivables
Credit sale of securities
Allowance for losses – Credit sale of securities
Receivables
Allowance for losses – Receivables
Tax credits
Recoverable taxes
Other
2007
45,721,966
2,344
6,908,965
Interbank onlendings
Unrestricted funds
Funds – PIS-Pasep
Allowance for losses
Provision for rebates on special agricultural programs
Loans
Consolidated
422,504
3,013,585
422,504
3,013,585
(330,423)
(354,409)
(401,918)
(418,687)
-
(112)
-
(154,778)
13,836,735
11,099,823
15,539,143
12,312,302
14,102,859
11,423,284
15,837,897
12,660,351
11,912,269
9,139,990
13,647,307
10,377,057
1,780,027
2,082,052
1,780,027
2,082,052
410,563
201,242
410,563
201,242
(266,124)
(323,461)
(298,754)
(348,049)
1,424,189
1,882,912
1,912,088
2,125,284
9
15,754
18,925
254,749
77,043
9
(137)
(92)
(4,079)
(3,644)
9
110,034
116,941
115,490
515,146
9
(746)
(529)
(4,812)
(124,762)
20.2
132,113
155,025
379,475
305,858
20.1
46,673
47,406
266,554
315,877
11
1,120,498
1,545,236
904,711
1,039,766
BNDES 2008 / ANNUAL REPORT
04
In Thousands of Brazilian Reais – R$
Continuation
Table 1 – BNDES and Subsidiaries: Balance Sheets as of December 31
BNDES
Note
Other assets
Non-current assets
Long-term assets
Securities
6
Available-for-sale debentures
Debentures
Allowance for losses – Debentures
Government securities
Derivatives
Interbank onlendings
Property and equipment in use
Deferred charges
Total assets
BNDES 2008 / ANNUAL REPORT
05
2007
173,334
226,370,492
208,758,350
11,549,367
18,728
158,933,624
141,203,317
3,115,334
173,334
216,087,752
190,684,415
16,494,317
18,728
153,887,979
134,814,367
5,419,225
490,372
-
490,372
-
2,869,420
7,610,423
5,338,485
7.2.4
(6,491)
(8,795)
(142,226)
(174,530)
8,475,089
74,177
8,475,089
74,738
25
60,659
180,532
60,659
180,532
8
104,299,046
73,221,030
69,128,317
54,534,705
106,058,457
74,544,841
71,044,660
55,999,727
83,186,270
60,036,722
48,172,473
41,491,608
22,872,187
14,508,119
22,872,187
14,508,119
(1,759,411)
(1,323,811)
(1,916,343)
(1,465,022)
90,783,367
63,371,559
101,054,963
71,713,263
92,529,414
65,218,276
102,997,887
73,729,139
84,234,716
54,748,999
94,703,189
63,259,862
4,387,394
8,124,772
4,387,394
8,124,772
3,907,304
2,344,505
3,907,304
2,344,505
(1,746,047)
(1,846,717)
(1,942,924)
(2,015,876)
Other receivables
Investments in subsidiaries and affiliates
Other equity interests
Other investments
2008
2,529,738
8
Permanent assets Investments
2007
7
Loans
Unrestricted funds
Funds – PIS-Pasep
Funds – Merchant Marine Fund
Allowance for losses
Tax credits
Credit sale of securities
Allowance for losses – Credit sale of securities
Receivables
Allowance for losses – Receivables
Receivables – National Treasury
Tax incentives
2008
7.1
Interbank onlendings
Unrestricted funds
Funds – PIS-Pasep
Allowance for losses
Loans
Consolidated
2,126,570
1,495,394
4,006,818
3,147,174
20.2
538,364
378,018
906,194
729,698
9
4,985
20,001
1,073,109
1,260,399
9
(44)
(98)
(33,151)
(36,929)
9
995,786
1,000,673
1,011,120
1,013,138
9
(6,752)
(4,528)
(18,180)
(8,417)
28.1
452,441
-
768,976
-
141,790
101,328
298,750
189,285
12
17,501,315
17,639,334
25,292,510
18,982,639
12.1
17,373,979
17,511,530
7,637,318
7,284,944
84,003
84,471
17,611,859
11,639,336
12.6
43,333
43,333
43,333
58,359
96,674
14,153
272,092,458
83,189
7,784
198,668,103
96,674
14,153
277,294,449
83,189
7,784
202,652,058
In Thousands of Brazilian Reais – R$
Continuation
Table 1 – BNDES and Subsidiaries: Balance Sheets as of December 31
BNDES
Note
Current liabilities
Deposits
Interbank deposits
Special deposits – FAT
Restricted deposits
Other
14
16.2
Funding operations
Repurchase agreements
15
Interbranch accounts
Third-party funds in transit
Debentures
Borrowings and onlendings
Domestic borrowings
Foreign borrowings
Bonds
Domestic onlendings
National Treasury
Subsidiaries
Merchant Marine Fund
Other
Foreign onlendings – Multilateral institutions
18
17
17.1
17.1
17.1
17.1
17.1
Other payables
Financial and developments funds
PIS-Pasep
Other
Taxes on income
Other taxes
Linked to foreign exchange transactions
Dividends and interest on capital payable
Provision for civil and labor contingencies
Accounts payable – FAPES
Linked to the National Treasury
Provision for planned retirement program
Deferred taxes
Actuarial liabilities – FAMS
Derivatives
Other
13
20
21
26.2
28.2
27
20.2
26.3
25
Hybrid debt/equity instruments
National Treasury
19
Subordinated debt
FAT – Constitutional
Other subordinated debts
Non-current liabilities
16.1
Consolidated
2008
2007
2008
2007
22,230,358
3,375,935
2,455,884
319,196
388,635
212,220
8,446,983
8,446,983
5
5
108,291
3,302,287
359,779
36,733
36,733
1,978,486
1,281,692
231,242
450,793
14,759
927,289
4,395,743
1,979,095
1,474,313
504,782
386,115
69,074
1,319,462
5,178
15,923
6,943
50,190
30,876
11,630
292,776
228,481
87,368
87,368
2,513,746
2,513,746
2,513,746
224,595,479
12,857,888
794,114
282,344
511,100
670
4
4
3,948,184
1,800,056
1,800,056
1,580,673
150,345
479,513
237,227
713,588
567,455
5,849,849
1,728,869
1,393,653
335,216
711,580
60,023
1,737,019
7,493
14,018
1,155,265
99,538
11,640
3,880
320,524
80,585
80,585
2,185,152
2,185,152
2,185,152
160,886,865
22,869,490
3,375,935
2,455,884
319,196
388,635
212,220
8,446,983
8,446,983
5
5
276,379
3,140,899
359,779
36,733
36,733
1,817,098
1,351,546
450,793
14,759
927,289
5,028,175
1,979,103
1,474,313
504,790
464,149
129,946
36,271
1,319,462
10,195
21,284
391,876
66,540
30,876
16,509
292,776
269,188
87,368
87,368
2,513,746
2,513,746
2,513,746
229,158,338
13,144,073
794,114
282,344
511,100
670
4
4
3,530,040
1,800,056
1,800,056
1,162,529
211,714
237,227
713,588
567,455
6,554,178
1,728,877
1,393,653
335,224
1,220,414
142,391
17,450
1,737,019
12,078
18,754
1,155,265
142,875
16,011
3,880
359,164
80,585
80,585
2,185,152
2,185,152
2,185,152
164,584,635
BNDES 2008 / ANNUAL REPORT
06
In Thousands of Brazilian Reais – R$
Continuation
Table 1 – BNDES and Subsidiaries: Balance Sheets as of December 31
BNDES
Note
Long-term liabilities
Deposits
Interbank deposits
Special deposits – FAT
Debentures
Borrowings and onlendings
Domestic borrowings
Foreign borrowings
Bonds
Domestic onlendings
National Treasury
Subsidiaries
Merchant Marine Fund
Other
Foreign onlendings – Multilateral institutions
14
16.2
18
17
17.1
17.1
17.1
17.1
Other payables
Financial and developments funds
PIS-Pasep
Accounts payable – FAPES
Provision for civil and labor contingencies
Actuarial liabilities – FAMS
Provision for planned retirement program
Deferred taxes
13
26.2
21
26.3
27
20.2
Hybrid debt/equity instruments
National Treasury
19
Subordinated debt
FAT – Constitutional
Other subordinated debts
Debt eligible for capitalization
Shareholders' equity
22
Capital
Capital reserve
Revaluation reserve
Profit reserve
Legal reserve
Tax incentive reserve
Future Capital Increase reserve
Operating margin reserve
Fair value adjustments
Own assets
Assets of affiliates and subsidiaries
Retained earnings
Total liabilities and shareholders’ equity
The accompanying notes are an integral part of these financial statements.
BNDES 2008 / ANNUAL REPORT
16.1
07
Consolidated
2008
2007
2008
2007
224,595,479
27,783,772
2,850,000
24,933,772
6,895,067
64,835,781
5,713,392
3,539,700
3,539,700
42,600,123
31,528,980
2,696,403
4,300,004
4,074,736
12,982,566
30,342,921
28,045,762
28,045,762
879,422
800,344
425,268
56,660
135,465
5,936,566
5,936,566
88,801,372
88,801,372
76,324,657
12,476,715
25,266,621
13,879,407
106,631
4,910,845
1,182,918
58,678
748,307
2,920,942
161,647
156,963
4,684
6,208,091
272,092,458
160,886,865
25,817,269
25,817,269
24,093,895
935,490
935,490
14,377,523
4,185,665
3,085,410
2,675,891
4,430,557
8,780,882
27,737,820
26,513,438
26,513,438
581,420
202,325
356,075
84,562
5,580,677
5,580,677
77,657,204
77,657,204
65,346,148
12,311,056
24,923,350
13,879,407
106,631
281,105
917,266
917,266
9,738,941
198,668,103
229,158,338
27,783,772
2,850,000
24,933,772
9,029,416
66,441,636
5,713,392
3,539,700
3,539,700
44,205,978
35,831,238
4,300,004
4,074,736
12,982,566
31,165,576
28,045,762
28,045,762
1,026,268
1,289,163
578,640
82,224
143,519
5,936,566
5,936,566
88,801,372
88,801,372
76,330,800
12,470,572
25,266,621
13,879,407
106,631
4,910,845
1,182,918
58,678
748,307
2,920,942
161,647
156,963
4,684
6,208,091
277,294,449
164,584,635
25,817,269
25,817,269
2,025,935
24,846,296
935,490
935,490
15,129,924
8,023,476
2,675,891
4,430,557
8,780,882
28,657,254
26,513,439
26,513,439
728,026
800,285
492,227
115,124
8,153
5,580,677
5,580,677
77,657,204
77,657,204
65,362,465
12,294,739
24,923,350
13,879,407
106,631
281,105
917,266
917,266
9,738,941
202,652,058
In Thousands of Brazilian Reais – R$
Table 2 – BNDES and Subsidiaries: Statement of Income
BNDES
Income from financial
Intermediation
Loans and interbank
onlendings
Local currency
Foreign currency
Income from securities
Income from transactions linked
to the National Treasury
Man agement fee on funds
and programs
Expenses on financial
Intermediation
Fun ding operations –
financing and onlendings
Local currency
Foreign currency
Gains (losses) on derivatives
Expenses on transactions linked
to the National Treasury
Allowance for loan losses
Gains on foreign exchange
portfolio
24
Gross profit from financial
Intermediation
Other operating income
(expenses)
Equ ity in subsidiaries and
affiliates
Net monetary adjustment of
assets and liabilities – Selic
Premium amortization
Allowance for losses
on investments
Income from dividends
Income from interest on capital
Gain on sale of variable
income securities
Oth er income from interest
ownerships
Rev ersal of provision for civil
and labor contingencies
2008
2nd Half
of 2008
Note
12
Consolidated
2007
20,593,057
24,652,265
2nd Half
of 2008
7,759,846
2008
2007
23,511,417
28,577,862
9,956,013
5,977,003
10,990,263
8,741,342
6,517,682
12,496,298
10,442,636
13,040,893
11,171,205
(3,045,496)
15,416,966
13,219,529
(3,073,311)
1,249,613
1,830,104
1,322,677
1,241,887
2,183,389
1,824,086
105,068
192,014
142,174
114,539
210,104
163,453
220,480
468,679
599,149
220,343
468,542
599,149
(17,926,615)
(19,877,091)
(2,629,364)
(21,668,933)
(24,266,169)
(3,791,360)
(4,868,105)
(9,067,667)
(7,647,272)
(6,393,648)
(11,666,215)
(9,231,243)
(14,015,326)
(11,949,421)
3,864,794
(16,340,162)
(13,928,357)
3,858,537
1,038,106
940,731
246,124
1,038,106
940,731
246,124
(20,262)
(72,302)
(7,265)
(20,262)
(72,302)
(7,265)
(78,381)
256,275
954,616
29,680
444,681
1,382,848
17,353
15,293
(40,361)
17,353
15,293
(40,361)
2,666,442
4,775,174
5,130,482
1,842,484
4,311,693
6,164,653
(1,074,739)
1,238,900
3,341,669
(219,290)
3,024,273
3,882,005
271,828
3,622,865
4,121,578
69,465
5,815
1,101,861
(587,804)
(537,178)
124,813
(643,878)
(734,270)
(18,203)
-
-
-
-
-
(107,320)
(468)
(468)
-
(714,378)
(677,694)
(7,921)
249
433
46,004
499,261
887,925
527,310
-
-
-
782,236
1,170,228
860,773
-
-
506,276
578,164
4,613,946
3,729,779
-
-
-
23,986
23,986
210
11,228
(603,176)
28,901
202,954
(495,254)
(130,055)
BNDES 2008 / ANNUAL REPORT
08
Continuation
In Thousands of Brazilian Reais – R$
Table 2 – BNDES and Subsidiaries: Statement of Income
BNDES
2nd Half
of 2008
Note
Tax expenses
Personnel expenses
Administrative expenses
Other operating income
Other operating expenses
Income before profit sharing
Employee profit sharing
Net income
Earnings per share
09
2nd Half
of 2008
2008
2007
(162,094)
(267,578)
(247,711)
(258,088)
(455,564)
(494,624)
(197,208)
(430,882)
(391,005)
(340,695)
(723,761)
(573,174)
(83,845)
(136,462)
(124,693)
(126,160)
(205,964)
(161,957)
134,427
141,219
36,737
226,007
233,054
41,079
(549,873)
(759,231)
(518,164)
(618,174)
(885,753)
1,591,703
6,014,074
8,472,151
1,623,194
7,335,966
10,046,658
20
(168,968)
(507,096)
(777,616)
(198,663)
(1,543,616)
(1,725,976)
20
(104,827)
(258,741)
(285,293)
(114,428)
(635,849)
(639,556)
20
(102,492)
97,713
(60,707)
(73,647)
210,489
(297,961)
1,215,416
5,345,950
7,348,535
1,236,456
5,366,990
7,383,165
(32,910)
(32,910)
(34,770)
(53,950)
(53,950)
(69,400)
1,182,506
0,000188
5,313,040
0,000847
7,313,765
0,001166
1,182,506
-
5,313,040
-
7,313,765
-
The accompanying notes are an integral part of these financial statements.
BNDES 2008 / ANNUAL REPORT
2007
(461,052)
Income before taxes
on income
Income tax
Social contribution tax
Def erred taxes –
Net of realization
2008
Consolidated
Table 3 – BNDES and Subsidiaries: Statement of Changes in Shareholders’
Capital Reserves
Tax Incentive Reserve
Capital
Revaluation Reserve
for Investees’ Assets
Balances as of January 1, 2008
Supplementary dividends – 2006
Supplementary dividends – 2007
Revaluation reserve
Reversal of revaluation reserve (note 2)
Fair value adjustments
Net income
Allocation of income (note 22)
Legal reserve
Tax incentive reserve (note 2)
Interest on capital
Future capital increase reserve (note 22)
Operating margin reserve (note 22)
13,879,407
106,631
281,105
-
-
-
-
-
-
-
-
(281,105)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balances as of December 31, 2008
Changes in year
13,879,407
-
106,631
-
(281,105)
Balances as of July 1, 2008
Supplementary dividends – 2006
Supplementary dividends – 2007
Valuation adjustments to equity
Net income
Allocation of income (note 22)
Legal reserve
Tax incentive reserve (note 2)
Interest on capital
Future capital increase reserve (note 22)
Operating margin reserve (note 22)
13,879,407
106,631
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balances as of December 31, 2008
Changes in period
13,879,407
-
106,631
-
-
The accompanying notes are an integral part of these financial statements.
BNDES 2008 / ANNUAL REPORT
10
In Thousands of Brazilian Reais – R$
Equity for the Six-Month Period Ended December 31, 2008
Profit Reserve
Legal
Reserve
Tax Incentive
Reserve
Fair Value Adjustments
Future Capital
Operating
Increase Reserve Margin Reserve
Affiliates’ and
Subsidiaries’ Assets Retained Earnings
Own Assets
Total
917,266
-
-
-
-
-
9,738,941
24,923,350
-
-
-
-
-
-
(2,465,278)
(2,465,278)
-
-
-
-
-
-
(1,065,571)
(1,065,571)
-
-
-
-
-
-
-
(281,105)
-
-
-
-
156,963
4,684
-
161,647
-
-
-
-
-
-
5,313,040
5,313,040
265,652
-
-
-
-
-
(265,652)
-
-
58,678
-
-
-
-
(58,678)
-
-
-
-
-
-
-
(1,319,462)
(1,319,462)
-
-
748,307
-
-
-
(748,307)
-
-
-
-
2,920,942
-
-
(2,920,942)
-
1,182,918
265,652
58,678
58,678
748,307
748,307
2,920,942
2,920,942
156,963
156,963
4,684
4,684
6,208,091
(3,530,850)
25,266,621
343,271
917,266
-
-
-
-
584
13,869,475
28,773,363
-
-
-
-
-
-
(2,465,278)
(2,465,278)
-
-
-
-
-
-
(1,065,571)
(1,065,571)
-
-
-
-
156,963
4,100
-
161,063
-
-
-
-
-
-
1,182,506
1,182,506
265,652
-
-
-
-
-
(265,652)
-
-
58,678
-
-
-
-
(58,678)
-
-
-
-
-
-
-
(1,319,462)
(1,319,462)
-
-
748,307
-
-
-
(748,307)
-
-
-
-
2,920,942
-
-
(2,920,942)
-
1,182,918
265,652
58,678
58,678
748,307
748,307
2,920,942
2,920,942
156,963
156,963
4,684
4,100
6,208,091
(7,661,384)
25,266,621
(3,506,742)
BNDES 2008 / ANNUAL REPORT
11
In Thousands of Brazilian Reais – R$
Table 3 – BNDES and Subsidiaries:
Statement of Changes in Shareholders’ Equity for Period Ended December 31, 2007
Capital Reserves
Tax
Incentive Reserve
Capital
Profit
Reserve
Revaluation
Reserve for
Investees’
Assets
Legal Reserve
Retained
Earnings
Total
Balances as of January 1, 2007
Tax incentive reserve
Revaluation reserve
Recognition
Realization
Reversal
Net income
Allocation of income (note 22):
Legal reserve
Interest on capital
Dividends
13,879,407
60,726
84,761
551,578
4,515,458
19,091,930
-
45,905
-
-
-
45,905
-
-
212,527
-
-
212,527
-
-
(12,425)
-
12,425
-
-
-
(3,758)
-
-
(3,758)
-
-
-
-
7,313,765
7,313,765
-
-
-
365,688
(365,688)
-
-
-
-
-
(1,212,000)
(1,212,000)
-
-
-
-
(525,019)
(525,019)
Balances as of December 31, 2007
Changes in year
13,879,407
-
106,631
45,905
281,105
196,344
917,266
365,688
9,738,941
5,223,483
24,923,350
5,831,420
The accompanying notes are an integral part of these financial statements.
In Thousands of Brazilian Reais – R$
Table 4 – BNDES and Subsidiaries: Statements of Cash Flows
BNDES
Consolidated
2008
2nd Half
of 2008
2007
2nd Half
of 2008
2008
2007
Cash flows from operating activities
Net income
Items not requiring cash outlay
Rec ognition (reversal) of allowance
for losses
Rec ognition (reversal) of provision
for labor and civil contingencies
Rec ognition (reversal) of allowance
for losses on investments
Equity in subsidiaries and affiliates
Depreciation and amortization
Premium amortization
Realization (recognition) of tax credits, net
Changes in assets and liabilities
1,182,506
5,313,040
7,313,767
1,182,506
5,313,040
7,313,765
(94,689)
(3,359,452)
(5,029,107)
495,148
531,303
(1,922,541)
78,381
(256,275)
(954,616)
(29,680)
(444,681)
(1,382,848)
(11,228)
603,176
(28,901)
(202,955)
495,253
130,055
468
468
-
714,378
677,694
7,921
(271,828)
(3,622,865)
(4,121,578)
(69,465)
(5,815)
(1,101,861)
7,026
13,757
15,281
9,223
19,341
18,911
-
-
-
-
-
107,320
102,492
(97,713)
60,707
73,647
(210,489)
297,961
(10,376,981)
(16,431,396)
(12,212,092)
(5,032,064)
(9,662,312)
(10,737,752)
BNDES 2008 / ANNUAL REPORT
12
Continuation
In Thousands of Brazilian Reais – R$
Table 4 – BNDES and Subsidiaries: Statements of Cash Flows
BNDES
2nd Half
of 2008
2008
Consolidated
2007
2nd Half
of 2008
2008
2007
(45,474,040) (60,937,418) (16,044,741) (38,148,333) (51,011,450) (15,667,644)
Increase in financing, net
Inc rease (decrease) in interbank
(6,876,291)
(6,908,618)
436
(6,876,291)
(6,908,618)
436
investments, net
817,966
(9,593,303) (12,753,887)
1,650,078
Increase (decrease) in other assets, net (6,290,567) (8,271,045)
Inc rease (decrease) in loans
28,985,984
42,241,211
367,526
30,258,074
43,351,421
(602,847)
and onlendings, net
8,446,983
8,446,983
8,446,983
8,446,983
Increase in repurchase commitments, net
7,003,358
7,003,358
7,137,345
7,279,860
1,484,395
Increase in debentures, net
3,827,592
1,994,133
2,646,721
3,743,461
1,933,379
2,397,830
Increase in other liabilities, net
Net cash provided by (used in)
operating Activities
Cash flows from investing activities
Inc rease (decrease) in permanent
assets, net
Div idends received from subsidiaries
and affiliates
Net cash provided by (used in)
financing activities
Cash flows from financing activities
Increase in subordinated debt
Dividends paid
Net cash provided by (used in)
financing activities
Decrease in cash
(9,289,164)
(14,477,808)
(9,927,432)
(3,354,410)
(3,817,969)
(5,346,528)
(2,518,025)
126,156
3,646,686
(4,708,555)
(7,283,828)
(2,155,115)
2,643,821
2,643,821
687,745
12,312
146,227
687,745
125,796
2,769,977
4,334,431
(4,696,243)
(7,137,601)
(1,467,370)
7,487,452
11,472,762
5,087,713
7,487,452
11,472,762
5,087,713
(3,530,850)
(3,530,850)
(1,503,681)
(3,530,850)
(3,530,850)
(1,503,681)
3,956,602
7,941,912
3,584,032
3,956,602
7,941,912
3,584,032
(5,206,766)
(3,765,919)
(2,008,969)
(4,094,051)
(3,013,658)
(3,229,866)
Represented by:
At beginning of six-month period/year
6,486,876
5,046,029
7,054,999
6,926,886
5,846,493
9,076,359
Cash + cash equivalents (1)
6,486,876
5,046,029
7,054,999
6,926,886
5,846,493
9,076,359
At end of six-month period/year
1,280,110
1,280,110
5,046,030
2,832,835
2,832,835
5,846,493
Cash + cash equivalents (1)
1,280,110
1,280,110
5,046,030
2,832,835
2,832,835
5,846,493
(5,206,766)
(3,765,919)
(2,008,969)
(4,094,051)
(3,013,658)
(3,229,866)
Decrease in cash
(1) Includes cash and Banco do Brasil investment fund shares.
The accompanying notes are an integral part of these financial statements.
BNDES 2008 / ANNUAL REPORT
13
In Thousands of Brazilian Reais – R$
Table 5 – BNDES and Subsdiaries: Statements of Value Added
BNDES
2nd Half of 2008
2008
2007
Revenues
20,061,299
24,512,581
9,441,918
Financial intermediation
Other operating revenues
Reversal (recognition) of allowance for losses
Nonoperating revenues
20,593,057
24,652,265
7,944,289
(453,634)
(397,134)
540,950
(78,381)
256,275
954,616
257
1,175
2,063
Expenses
18,298,526
21,286,885
4,373,944
Financial intermediation
Other operating expenses
Nonoperating expenses
17,848,234
20,133,366
3,643,610
447,501
1,133,312
423,296
2,791
20,207
307,038
Inputs purchased from third parties
73,710
117,023
100,771
Materials, energy and others
Outside services
Loss (recovery) of assets
12,463
19,884
21,471
61,247
97,139
79,300
Gross value added
Retentions
-
-
-
1,689,063
5,646
3,108,673
10,943
4,967,203
15,281
Depreciation, amortization and depletion
5,646
10,943
15,281
Net value added generated by the entity
Value added received in transfer
1,683,417
272,077
3,097,730
3,623,298
4,951,922
4,167,582
271,828
3,622,865
4,121,578
249
433
Equity in subsidiaries and affiliates
Dividends and interest on capital
Value added for distribution
Distribution of value added
Personnel and related charges
Employee profit sharing
Taxes payable
Rentals
Dividends and interest on capital
Retained earnings
1,955,494 100.0%
1,955,494 100.0%
46,004
6,721,028 100.0%
6,721,028 100.0%
9,119,504 100.0%
9,119,504 100.0%
207,869
10.6%
375,376
5.6%
336,373
3.7%
32,910
1.7%
32,910
0.5%
34,770
0.4%
529,987
27.1%
995,551
14.8%
1,430,047
15.7%
2,222
0.1%
4,151
0.1%
4,549
0.0%
1,319,462
67.5%
1,319,462
19.6%
1,737,019
19.0%
(136,956)
-7.0%
3,993,578
59.4%
5,576,746
61.2%
BNDES 2008 / ANNUAL REPORT
14
Continuation
In Thousands of Brazilian Reais – R$
Table 5 – BNDES and Subsdiaries: Statements of Value Added
Consolidated
2nd Half of 2008
2008
2007
Revenues
24,369,253
33,893,527
15,151,357
Financial intermediation
Other operating revenues
Reversal (recognition) of allowance for losses
Nonoperating revenues
23,511,416
28,577,860
9,997,651
688,185
4,730,091
3,768,765
29,680
444,681
1,382,848
139,972
140,895
2,093
Expenses
22,657,697
26,558,172
6,356,967
Financial intermediation
Other operating expenses
Nonoperating expenses
21,698,613
24,710,850
5,233,838
950,687
1,806,382
815,740
8,397
40,940
307,389
824,983
853,860
140,567
Inputs purchased from third parties
Materials, energy and others
Outside services
Loss (recovery) of assets
714,378
677,694
7,921
Gross value added
886,573
6,481,495
8,653,823
20,540
32,313
27,373
90,065
143,853
105,273
Retentions
9,278
17,961
18,910
Depreciation, amortization and depletion
9,278
17,961
18,910
Net value added generated by the entity
877,295
6,463,534
8,634,913
1,350,962
2,063,968
2,489,944
Equity in subsidiaries and affiliates
Dividends and interest on capital
69,465
5,815
1,101,861
1,281,497
2,058,153
Value added for distribution
2,228,257 100.0%
8,527,502 100.0%
11,124,857 100.0%
Distribution of value added
2,228,257 100.0%
8,527,502 100.0%
11,124,857 100.0%
Value added received in transfer
Personnel and related charges
Employee profit sharing
Taxes payable
Rentals
Dividends and interest on capital
Retained earnings
287,070
12.9%
630,690
7.4%
491,597
4.4%
53,950
2.4%
53,950
0.6%
69,400
0.6%
701,089
31.5%
2,523,018
29.6%
3,244,377
29.2%
3,642
0.2%
6,804
0.1%
5,718
0.1%
1,319,462
59.2%
1,319,462
15.5%
1,737,019
15.6%
(136,956)
-6.1%
3,993,578
46.8%
5,576,746
50.1%
The accompanying notes are an integral part of these financial statements.
BNDES 2008 / ANNUAL REPORT
15
1,388,083
BANCO NACIONAL
DE DESENVOLVIMENTO ECONÔMICO
E SOCIAL – BNDES AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
1. OPERATIONS
1.1. History
Banco Nacional de Desenvolvimento Econômico e Social (“BNDES” or the “Bank”) was established on June 20,
1952, under Law 1628, as a government agency. Subsequently, according to Law 5662 and Decree 68786,
both of June 21, 1971, BNDES was converted into a state-owned company under private law, subject to general
budget and accounting rules and specific regulations established by the National Monetary Council (CMN).
1.2. Purposes and Activities
The BNDES Group is the Federal Government’s main instrument to grant long-term loans, focused on incentives
to domestic private enterprise.
BNDES structure is designed to promote national development and job creation by prioritizing:
Infrastructure investments;
Investments in basic inputs to revive industrial growth;
• Exports;
• Local technology;
• Support to small and medium businesses;
• Continental integration within South America.
•
•
In addition to operating as a development bank, BNDES has an important role in formulating national
development policies and pinpointing solutions for structural issues of the Brazilian economy.
BNDES 2008 / ANNUAL REPORT
16
BNDES also operates through its wholly-owned subsidiaries BNDES Participações S.A. (BNDESPAR), which invests
in local companies by subscribing shares and convertible debentures, and Agência Especial de Financiamento
Industrial (FINAME), which supports the expansion and modernization of Brazilian industry by financing the
purchase of machinery and equipment and the export of capital goods and services.
2. BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS
The individual and consolidated financial statements have been prepared in accordance with Brazilian Corporate
Law and Central Bank of Brazil’s standards, and are presented in the format required by the Standard Chart of
Accounts for National Financial Institutions (Cosif).
On December 28, 2007, Law 11638/07 was enacted, altering, revoking and adding new provisions to the
Brazilian Corporate Law (Law 6404, of December 15, 1976), especially with respect to chapter XV, Fiscal Year
and Financial Statements.
Although the Central Bank of Brazil (Bacen) has not yet issued standards on changes required by said Law, until
standards are fully introduced in Cosif, Management decided to adopt for the first time the provisions of Law
11638/07 and Provisional Act 449/08, with a transition date of January 1, 2008, based on Paragraph 1 of
article 186 of Law 6404/76 and, subsidiarily, the standards set forth by the Brazilian Securities and Exchange
Commission (CVM), not conflicting with Bacen regulations. The changes introduced by this Law that affected
the Entity’s financial statements as of December 31, 2008 are as follows:
eplacement of the statement of changes in financial position by the statement of cash flows –
R
CVM Resolution 547/2008;
• Inclusion of the statement of value added – CVM Resolution 557/2008;
• Changes in parameters for accounting for affiliates under the equity method – Law 11638/2007
and Executive Act 449/08;
• Recording of investment grants (tax incentives) in income, in the amount of R$58,678 thousand –
CVM Resolution 555/2008;
• Elimination of revaluation reserve – Law 11638/2007;
• Related parties – note 23 – CVM Resolution 560/2008.
•
BNDES 2008 / ANNUAL REPORT
17
Adjustments required by Law 11638/2007:
To allow comparability of income and shareholders’ equity with amounts that might have been obtained if the
Company had not been required to adopt the provisions of Law 11638/07 and Provisional Act 449/08, the Entity
estimated the impact thereof on income and shareholders’ equity as of December 31, 2008 as shown below:
In Thousands of Brazilian Reais – R$
BNDES
Shareholders’
Equity
Income
Reported amounts
Adjustments required by Law 11638/07:
Reversal of the revaluation reserve recognized in 2008
Tax incentives recorded in the year
Equity in subsidiaries – BNDESPAR and FINAME
Equity in affiliates valued at cost, not recorded in 2008
Amo rtization of premium on investments valued at cost,
not recorded in 2008
Div idends from affiliates formerly valued under the equity
method, recorded in income for 2008
Int erest on capital from affiliates formerly valued under
the equity method, recorded in income for 2008
Amounts that would have been reported if these
adjustments had not been made
Consolidated
5,313,040
25,266,620
Shareholders’
Equity
Income
5,313,040
25,266,620
-
281,105
-
281,105
(58,678)
-
(58,678)
-
24,764
24,764
-
-
-
-
331,179
331,179
-
-
(105,291)
(105,291)
-
-
(180,758)
(180,758)
-
-
(20,366)
(20,366)
5,279,126
25,572,489
5,279,126
25,572,489
3. CONSOLIDATION CRITERIA
The consolidated financial statements include BNDES and its wholly-owned subsidiaries FINAME and BNDESPAR.
The consolidation of the balance sheet and statement of income corresponds to the sum of assets, liabilities,
revenues and expenses, according to their nature, with the following eliminations:
(i)Intercompany investments, reserves and retained earnings;
(ii)Balances of transactions between BNDES and its subsidiaries and other intercompany receivables
and/or payables;
(iii)Intercompany balances and unrealized profit;
(iv)Taxes on unrealized profit and stated as deferred taxes in the consolidated balance sheet.
BNDES 2008 / ANNUAL REPORT
18
4. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
4.1. Results of Operations
Operations with fixed rates are stated at redemption value, and income and expenses for future periods are
recorded as a reduction of related assets and liabilities and recognized in income as incurred. Operations with
floating rates or indexed to foreign currencies are adjusted through the balance sheet date.
Other income and expenses are recognized on the accrual basis, observing the daily pro rata basis for those of
a financial nature.
The 17% appreciation of the Brazilian currency in relation to the US dollar in 2007 impacted significantly the
statement of income – for example, income from loans is negative (loss) and expenses on loans and financing
denominated in foreign currencies, in particular the US dollar, are positive (gain).
4.2. Interbank Investments
Stated at cost plus income earned through the balance sheet dates, less valuation allowance, when applicable.
4.3. Securities and Derivatives
According to Central Bank of Brazil Circular 3068/01, of November 8, 2001, securities in the portfolio are classified
into one of the following three categories, according to Management’s intention, as follows:
a) Trading securities;
b) Available-for-sale securities;
c) Held-to-maturity securities.
Trading securities and available-for-sale securities are stated at fair value on the balance sheet date and held-tomaturity securities are stated at cost plus income earned through the balance sheet date.
BNDES 2008 / ANNUAL REPORT
19
Adjustments to fair value of trading securities are recorded against the related income or expense account in the
statement of income for the period.
Adjustments to fair value of securities classified as available-for-sale are recorded in a separate caption in shareholders’
equity, net of taxes, and are transferred to the statement of income upon realization through the definitive sale
of the respective securities.
In conformity with article 9, paragraph 4, of Law 9491/97, holders of shares that are linked to the National
Privatization Fund must record such shares in their books, under the same criterion, until the privatization
process is completed. Before transferring such shares to that portfolio, they were recorded at the lowest of
their acquisition cost or market value, pursuant to article 183 of Law 6404/76.
Derivatives consisting of swap and futures market transactions are recorded under the following criteria:
- Swap transactions – the differential receivable or payable is accounted for in assets or liabilities, respectively,
and allocated to income or expense on a pro rata basis through the balance sheet date;
- Futures market transactions – notional amounts are recorded in memorandum accounts and amounts receivable
and/or payable relating to daily adjustments are recorded in balance sheet accounts against statement of income
accounts. These transactions are settled on a daily basis.
The Central Bank of Brazil set forth, through Circular 3082/2002, criteria for measuring and classifying derivatives.
At the balance sheet date, derivatives are stated at fair value, and the appreciation or depreciation of non-hedge
derivatives or non-market risk hedge derivatives is included in income or expense accounts in the statement of income.
4.4. Loans, Interbank Onlendings, Debentures, Credit Sales of Securities, Receivables, and Allowance
for Loan Losses
Loans, interbank onlendings, debentures, credit sales of securities and receivables are classified according to the
Management’s risk assessment, taking into consideration the economic situation, past experience and specific
risks related to the operation, debtors and guarantors, according to the parameters established by Central Bank
of Brazil Resolution 2682/99, which requires a periodic analysis of the portfolio and its classification in nine levels,
in which AA is minimum risk and H is maximum risk.
Income from transactions (loans and interbank onlendings) past due for more than 60 days, regardless of their
risk level, is only recorded as income when actually received. Transactions classified as level H, if past-due,
remain in this classification for six months, after which they are written off against the recorded allowance and
controlled, for at least five years, in memorandum accounts, with no record in the balance sheet.
BNDES 2008 / ANNUAL REPORT
20
Renegotiated operations remain at least at the same risk level in which they were classified. Renegotiated loans that
had already been written off against the allowance and that were recorded in memorandum accounts are classified
as level H, and possible gains resulting from the renegotiation are only recognized in income when realized.
The allowance for loan losses, considered sufficient by Management, complies with the criteria established by the
Central Bank of Brazil through Resolution 2682.
4.5. Investments
Investments in affiliates, considered as those entities over which the Company has significant influence, under
Provisional Act 449/08, are valued under the equity method. Other investments are stated at cost and, when
applicable, adjusted to their likely realizable value.
The declared dividends and interest on capital for investments accounted for under the equity method are
recorded as a reduction of the related equity interests. Dividends and interest on capital measured at acquisition
cost are recorded directly in the statement of income.
The premium determined on the acquisition of investments, whose economic basis is not identified, is fully
amortized. The premium calculated based on estimated future results is amortized over the period and to the
extent of the projections that determined it, limited to ten years.
The discount resulting from the acquisition of investments, whose economic basis is not identified (for other
economic reasons) will be written off upon the sale of the investments.
4.6. Property and Equipment
Stated at acquisition cost, less accumulated depreciation calculated under the straight-line method based
on the estimated useful lives of the assets.
4.7. Deferred Charges
Stated at acquisition or formation cost, less accumulated amortization calculated under the straight-line method.
4.8. Monetary Adjustment of Receivables and Payables
Receivables and payables legally or contractually subject to exchange variation or indices are adjusted through the balance
sheet dates. Corresponding register of these adjustments are recorded in the statement of income for the period.
BNDES 2008 / ANNUAL REPORT
21
4.9. Recognition of Actuarial Assets and Liabilities
a) Pension plan
Actuarial assets, determined by outside actuaries, are not recognized as assets of the sponsor because it is not
possible to offset such amounts against future contributions, as set forth by the pension fund regulations.
The portion of actuarial gains and losses to be recognized as an increase or decrease in future liabilities, to be
determined by outside actuaries, will correspond to the excess of the higher value between 10% of the fair value
of the plan’s assets or 10% of actuarial liabilities discounted to present value. This portion is recognized over the
average future period of service of the active participants of the plan. The effect of deferring actuarial gains and
losses is recognized through the annual expense on the pension plan, determined by the outside actuary.
Expenses on sponsor’s contributions to the pension plan are recognized in the statement of income on an accrual basis.
b) Health care plan
Actuarial liabilities, determined by the outside actuaries, are recognized by the sponsor as an increase in existing
provision, with a corresponding entry to the statement of income.
Expenses on sponsor’s contributions to the post-employment health care plan are charged to income on the
accrual basis.
4.10. Income and Social Contribution Taxes
The provision for income tax is recorded based on book income, adjusted for additions and deductions set forth
by tax legislation at the rate of 15%, plus a 10% surtax on taxable income exceeding R$120 thousand for the
six-month period (R$240 thousand for the year). Social contribution tax for BNDES and FINAME was recognized
at a rate of 9% through April and at a 15% rate beginning May 2008 (Law 11727/08); and 9% for BNDESPAR.
Deferred income and social contribution taxes on temporary additions are recorded under the caption “Tax credits”.
BNDES 2008 / ANNUAL REPORT
22
4.11. Accounting Estimates
The preparation of financial statements in conformity with Brazilian accounting practices and regulations of
the Central Bank of Brazil and the Brazilian Securities and Exchange Commission requires Management to use
judgement in determining and recording accounting estimates. Assets and liabilities subject to these estimates
and assumptions include the allowance for loan losses, provision for contingencies, accrued taxes, and realization
of tax credits. Actual results could differ from these estimates.
5. INTERBANK INVESTMENTS
5.1. Investments in Resale Commitments
BNDES conducted short-term investments in resale commitments (own portfolio) backed as of December 31,
2008 by Treasury Bills – LFT, with a balance of R$903,000 thousand.
5.2. Investments in Interbank Deposits
Interbank deposit is a financial instrument or security that allows exchange of reserves among financial institutions.
Issuance and assignment thereof is exclusively registered and book-entry. No certificate is issued. Registration and
settlement should be mandatorily performed through the Clearinghouse for the Custody and Financial Settlement
of Securities (CETIP), authorized by the Central Bank.
In December 2008, BNDES started to conduct this short-term transaction and, as of December 31, 2008, it had
interbank deposits in the amount of R$6,003,045 thousand,with Banco do Brasil as the counterparty, at a rate of
13.64% per year, with maturity scheduled for January 2, 2009, registered with Cetip.
BNDES 2008 / ANNUAL REPORT
23
6. SECURITIES
6.1. By Nature and Issuer
In Thousands of Brazilian Reais – R$
As of December 31
BNDES
2008
Own portfolio
Trading securities:
Public sector:
Treasury Bills – LFT
National Treasury Notes – NTN-B
Other
Private sector:
Banco do Brasil’s exclusive investment fund shares
Debentures
Consolidated
2007
2008
2007
5,706,553
9,946,034
13,404,041
14,033,141
1,188,419
-
1,188,419
-
76,124
956,860
76,124
956,860
-
6,273
-
6,273
1,277,766
5,042,101
2,829,198
5,840,182
-
862,515
-
862,515
2,542,309
6,867,749
4,093,741
7,665,830
Available-for-sale securities:
Public sector:
Treasury Bills – LTN (see note 17.1-c)
National Treasury Notes – NTN-F (see note 17.1-c)
Private sector:
Debentures
Mutual fund shares and interests
Shares, stock certificates and subscription warrants
397
-
397
-
49,438
-
49,438
-
490,372
-
490,372
-
-
-
1,035,633
403,879
-
-
680
3,900
540,207
-
1,576,520
407,779
1,686,791
1,038,170
1,916,030
1,038,170
-
-
570
1,122
937,246
1,880,241
5,817,180
4,356,487
-
159,874
-
159,874
(4,033)
(17,259)
(142,049)
(188,443)
Held-to-maturity securities:
Public sector:
Debentures
Other
Private sector:
Debentures
Foreign fixed-income securities
Allowance for losses – Debentures – Private sector
Allowance for losses – Debentures – Public sector
Total allowance for losses – Debentures
Linked to repurchase commitments
Available-for-sale securities (Public sector):
National Treasury Notes – Series F – NTN-F (see note 17.1-c)
Treasury Bills – LTN (see note 17.1-c)
(2,921)
(1,854)
(3,610)
(1,854)
(6,954)
(19,113)
(145,659)
(190,297)
2,617,083
9,201,929
3,059,172
-
7,588,121
9,201,929
5,365,356
-
7,615,859
-
7,615,859
-
561,857
-
561,857
-
BNDES 2008 / ANNUAL REPORT
24
In Thousands of Brazilian Reais – R$
Continuation
As of December 31
BNDES
2008
Consolidated
2007
2008
2007
Held-to-maturity securities (Public sector):
National Treasury Notes – Series B – NTN-B
Derivatives (note 25)
Linked to guarantees – Public sector
Treasury Bills – Series A
Total
1,024,213
-
1,024,213
-
353,097
226,534
353,097
226,534
83,472
88,085
83,472
88,085
15,338,097
10,241,540
22,896,880
13,753,584
3,788,730
7,126,206
6,402,563
8,334,359
Current
Non-current
11,549,367
3,115,334
16,494,317
5,419,225
Total
15,338,097
10,241,540
22,896,880
13,753,584
Summary by issuer (net of allowance):
Public sector
Private sector
12,283,649
2,087,534
12,512,769
2,088,656
3,054,448
8,154,006
10,384,111
11,664,928
Total
15,338,097
10,241,540
22,896,880
13,753,584
In September 2008, BNDES received public sector securities, as described in Note 17.1c, that were classified under
the “trading” category, as set forth in the Central Bank of Brazil´s (Bacen) Circular 3.068/2001. This classification
was based on the expectation that these assets would be sold in the short run, which, under such Bacen´s Circular,
is defined as an active and frequent trading transaction. Given the significant changes in market conditions since
then, BNDES changed its monetization strategy for such assets. In this regard, the likelihood of trading such
securities was significantly changed. Currently, sales are expected to be made between the current date and some
time in 2013, which would make the classification originally assumed inadequate. To conform the classification
of securities to the purposes they are currently intended to, in preparing the financial statements as of December
31, 2008, these securities were reclassified to the “available-for-sale” category. The adjustment to fair value made
at the reclassification date, in the period from September to December 2008, remained recorded in income for
the year, as set forth in Bacen’s Instruction 3068/2001. After the reclassification date, that is, December 31, 2008,
it was recorded in a specific shareholders’ equity account. This classification was adopted also for the second
fundraising transaction by the National Treasury, in October 2008, also in the form of securities.
Considering the unfavorable market conditions and the difficulty in selling debentures, even when the market
was more favorable, in preparing the financial statements as of December 31, 2008, debentures originally
classified as “trading” (Note 7.1) were reclassified to “available-for-sale”, under Bacen´s Circular 3068/2001,
and, after such reclassification, were recorded in a specific shareholders’ equity account.
BNDES 2008 / ANNUAL REPORT
25
6.2. Fair Value of Held-to-Maturity Securities
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Cost
Consolidated
Cost
Market
Market
Own portfolio
Held-to-maturity securities:
Public sector:
Debentures
Other
Private sector:
Debentures
Allowance for losses – Debentures
Linked to repurchase commitments:
1,686,791
1,686,791
1,686,791
1,686,791
1,916,030
570
1,916,600
1,916,030
570
1,916,600
937,246
(6,954)
1,024,213
937,246
(6,954)
1,067,559
5,817,180
(145,659)
1,024,213
5,817,180
(145,659)
1,067,559
1,024,213
3,641,296
1,067,559
3,684,642
1,024,213
8,612,334
1,067,559
8,655,680
Held-to-maturity securities:
Public sector:
National Treasury Notes – Series B – NTN-B
Total
Held-to-maturity debentures represent a type of financial support. They are issued by companies having BNDES as
the sole buyer and, thus, are not sold to the public and do not have a secondary market. For this reason, their fair
value is equal to adjusted cost.
The fair value of National Treasury notes was calculated based on the prices disclosed by Bloomberg Financial Services.
6.3. Maturity
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Without
Maturity
Up to 3
Months
3 to 12
Months
1 to 3
Years
3 to 5
Years
5 to 15
Years
Over
15 Years
Total
Own portfolio
Trading securities:
Public sector:
Treasury Bills (LFT)
National Treasury Notes (NTN-B)
Private sector:
Ban co do Brasil’s exclusive
investment fund shares
-
1,188,419
76,124
-
-
-
-
-
1,188,419
76,124
1,277,766
-
-
-
-
-
-
1,277,766
1,277,766
1,264,543
-
-
-
-
-
2,542,309
BNDES 2008 / ANNUAL REPORT
26
In Thousands of Brazilian Reais – R$
Continuation
As of December 31, 2008
BNDES
Without
Maturity
Up to 3
Months
3 to 12
Months
1 to 3
Years
3 to 5
Years
5 to 15
Years
Over
15 Years
Total
Available-for-sale securities:
Public sector:
National Treasury Bills (LTN)
National Treasury Notes (NTN-F)
Private sector:
Debentures
-
2,540
397
-
46,898
-
-
-
397
49,438
-
2,540
397
314,010
360,908
152,825
152,825
23,537
23,537
-
490,372
540,207
-
-
-
-
64,001
1,622,790
-
1,686,791
12,699
12,699
-
81,600
81,600
86,602
86,602
259,277
323,278
497,068
2,119,858
-
937,246
2,624,037
-
415,585
-
1,911,154
-
5,289,120
-
7,615,859
-
-
-
561,857
-
-
-
561,857
-
10,354
415,372
598,487
-
-
-
1,024,213
-
425,939
289,657
415,372
2,781
3,071,498
60,659
-
5,289,120
-
-
9,201,929
353,097
1,290,465
3,975
1,986,654
11,924
512,074
31,799
3,611,466
31,799
507,902
3,975
7,436,490
83,472
- 15,345,051
Held-to-maturity securities:
Public sector:
Debentures
Private sector:
Debentures
Linked to repurchase
commitments
Available-for-sale securities:
Public sector:
National Treasury Notes –
Series F (NTN-F)
National Treasury Bills (LTN)
Held-to-maturity securities:
Public sector:
Nat ional Treasury Notes –
Series B (NTN-B)
Derivatives (Note 25)
Linked to guarantees
Public sector:
Treasury Bills (LFT) – Series A
Allowance for losses –
Debentures – Private sector
Allowance for losses –
Debentures – Public sector
Total
BNDES 2008 / ANNUAL REPORT
(4,033)
(2,921)
15,338,097
27
In Thousands of Brazilian Reais – R$
As of December 31, 2007
BNDES
Without
Maturity
Up to 3
Months
3 to 12
Months
1 to 3
Years
3 to 5
Years
5 to 15
Years
Over
15 Years
Total
Own portfolio
Trading securities:
Public sector:
National Treasury Bills (NTN-B)
Other
Private sector:
Banco do Brasil’s exclusive
inv estment fund share
Trading debentures
-
956,860
-
-
-
-
-
956,860
6,273
-
-
-
-
-
-
6,273
5,042,101
-
-
-
-
-
-
5,042,101
862,515
-
-
-
-
-
-
862,515
5,910,889
956,860
-
-
-
-
-
6,867,749
-
-
-
-
65,400
972,770
-
1,038,170
1,634
-
47,357
404,961
135,153
1,291,136
-
1,880,241
-
-
159,874
-
-
-
-
159,874
1,634
-
207,231
404,961
200,553
2,263,906
-
3,078,285
-
-
46,002
180,532
-
-
-
226,534
-
88,085
Held-to-maturity securities:
Public sector:
Debentures
Private sector:
Debentures
Foreign fixed-income securities
Derivatives (note 25)
Linked to guarantees
Public sector:
Treasury Bills (LFT) – Series A
Allowance for losses –
Debentures – Private sector
Allowance for losses –
Debentures – Public sector
Total
-
3,477
10,431
27,816
27,816
18,545
5,912,523
960,337
263,664
613,309
228,369
2,282,451
- 10,260,653
(17,259)
(1,854)
10,241,540
BNDES 2008 / ANNUAL REPORT
28
In Thousands of Brazilian Reais – R$
As of December 31, 2008
Consolidated
Without
Maturity
Up to 3
Months
3 to 12
Months
1 to 3
Years
3 to 5
Years
5 to 15
Years
Over
15 Years
Total
Own portfolio
Trading securities:
Public sector:
Treasury Bills (LFT)
National Treasury Notes (NTN-B)
Private sector:
Ban co do Brasil’s exclusive
investment fund shares
-
1,188,419
-
-
-
-
-
1,188,419
-
76,124
-
-
-
-
-
76,124
2,829,198
-
-
-
-
-
-
2,829,198
2,829,198
1,264,543
-
-
-
-
-
4,093,741
-
-
397
-
-
-
-
397
-
2,540
-
46,898
-
-
-
49,438
-
-
-
314,010
152,825
23,537
-
490,372
680
-
-
-
-
-
-
680
1,035,633
-
-
-
-
-
-
1,035,633
1,036,313
2,540
397
360,908
152,825
23,537
-
1,576,520
-
-
-
-
201,809
1,714,221
-
1,916,030
-
570
-
-
-
-
-
570
Available-for-sale securities:
Public sector:
National Treasury Bills (LTN)
National Treasury Notes (NTN-F)
Private sector:
Debentures
Sha res of publicly-traded
companies
Mut ual investment funds
and interests
Held-to-maturity securities:
Public sector:
Debentures
Other
Private sector:
Debentures
12,699
22,734
87,355
469,030
1,796,773
2,714,942
713,647
5,817,180
12,699
23,304
87,355
469,030
1,998,582
4,429,163
713,647
7,733,780
-
415,585
-
1,911,154
-
5,289,120
-
7,615,859
-
-
-
561,857
-
-
-
561,857
-
10,354
415,372
598,487
-
-
-
1,024,213
-
425,939
415,372
3,071,498
-
5,289,120
-
9,201,929
Linked to repurchase
commitments
Available-for-sale securities:
Public sector:
Nat ional Treasury Notes –
Series F (NTN-F)
National Treasury Bills (LTN)
Held-to-maturity securities:
Public sector:
Nat ional Treasury Notes –
Series B (NTN-B)
BNDES 2008 / ANNUAL REPORT
29
In Thousands of Brazilian Reais – R$
Continuation
As of December 31, 2008
Consolidated
Without
Maturity
Derivatives (note 25)
Up to 3
Months
3 to 12
Months
1 to 3
Years
3 to 5
Years
5 to 15
Years
Over
15 Years
Total
-
289,657
2,781
60,659
-
-
-
353,097
-
3,975
11,924
31,799
31,799
3,975
-
83,472
3,878,210
2,009,958
517,829
3,993,894
2,183,206
9,745,795
Linked to guarantees:
Public sector:
Treasury Bills (LFT) – Series A
713,647 23,042,539
Allowance for losses –
Debentures – Private sector
Allowance for losses –
Debentures – Public sector
(142,049)
(3,610)
Total
22,896,880
In Thousands of Brazilian Reais – R$
As of December 31, 2007
Consolidated
Without
Maturity
Up to 3
Months
3 to 12
Months
1 to 3
Years
3 to 5
Years
5 to 15
Years
Over
15 Years
Total
Own portfolio
Trading securities:
Public sector:
National Treasury Notes (NTN-B)
Other
Private sector:
Ban co do Brasil’s exclusive
investment fund shares
Trading debentures
Mut ual investment funds
and interests
-
956,860
-
-
-
-
-
956,860
6,273
-
-
-
-
-
-
6,273
5,840,182
-
-
-
-
-
-
5,840,182
862,515
-
-
-
-
-
-
862,515
403,879
-
-
-
-
-
-
403,879
7,112,849
956,860
-
-
-
-
-
8,069,709
Available-for-sale securities:
Private sector:
Subscription warrants
3,900
-
-
-
-
-
-
3,900
3,900
-
-
-
-
-
-
3,900
BNDES 2008 / ANNUAL REPORT
30
In Thousands of Brazilian Reais – R$
Continuation
As of December 31, 2007
Consolidated
Without
Maturity
Up to 3
Months
3 to 12
Months
1 to 3
Years
3 to 5
Years
5 to 15
Years
Over
15 Years
Total
Held-to-maturity securities:
Public sector:
Debentures
Other
Private sector:
Debentures
Foreign fixed-income securities
Derivatives (note 25)
-
-
-
-
65,400
972,770
-
1,038,170
-
561
-
561
-
-
-
1,122
1,634
216
54,322
769,951
368,857
2,495,622
665,885
4,356,487
-
-
159,874
-
-
-
-
159,874
1,634
777
214,196
770,512
434,257
3,468,392
665,885
5,555,653
-
-
46,002
180,532
-
-
-
226,534
-
88,085
Linked to guarantees:
Public sector:
Treasury Bills (LFT) – Series A
-
3,477
10,431
27,816
27,816
18,545
7,118,383
961,114
270,629
978,860
462,073
3,486,937
Allowance for losses –
Debentures – Private sector
Allowance for losses –
Debentures – Public sector
Total
665,885 13,943,881
(188,443)
(1,854)
13,753,584
6.4. Banco do Brasil Exclusive Investment Funds
Banco do Brasil Funds are classified as trading securities according to the Central Bank of Brazil’s Circular 3068,
of November 8, 2001.
The Funds’ portfolio consists basically of government securities issued by the National Treasury and under the
custody of the Special Settlement and Custody System (Selic).
BNDES 2008 / ANNUAL REPORT
31
The breakdown of the Funds’ portfolio is as follows:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
As of December 31, 2007
Consolidated
BNDES
Consolidated
BB Extramercado Fund*
Assets
Cash and cash equivalents
Repurchase commitments
Treasury Bills (LFT)
National Treasury Bills (LTN)
Securities
Treasury Bills (LFT)
National Treasury Notes (NTN-F)
National Treasury Bills (LTN)
Fixed-income fund shares
Other
10,022
30,039
1
7
1,240,379
2,187,555
2,286,615
2,286,615
-
-
693,350
754,038
28,095
612,433
467,222
1,204,695
-
-
17,783
17,783
-
-
381,149
381,149
102,754
-
-
102,754
2
4
2
5
1,278,498
2,830,031
3,948,876
4,747,046
(732)
(833)
(626)
(715)
(732)
1,277,766
(833)
2,829,198
(626)
3,948,250
(715)
4,746,331
Cash and cash equivalents
National Treasury Notes (NTN-B)
Treasury Bills (LFT)
-
-
13
13
-
-
77,137
77,137
-
-
809,819
809,819
National Treasury Bills (LTN)
-
-
195,993
195,993
Currency swap
Futures market
Other
-
-
1,294
1,294
-
-
9,610
9,610
-
-
2
2
-
-
1,093,868
1,093,868
-
-
(17)
(17)
1,277,766
2,829,198
(17)
1,093,851
5,042,101
(17)
1,093,851
5,840,182
Liabilities
Accounts payable
Subtotal
Fundo BB Polo XXVI Multimercado**
Assets
Liabilities
Accounts payable
Subtotal
Total
* Includes funds such as BB Urano 2 (FINAME), BB Extramercado Exclusivo 23 FI RF (BNDESPAR) and BB Milênio 28 FI Renda Fixa (BNDES),
whose investment policies are similar.
** Fund intended to hedge against foreign exchange rate fluctuation exposure.
BNDES 2008 / ANNUAL REPORT
32
BREAKDOWN OF THE SECURITIES INCLUDED IN THE FUNDS’ ASSETS BY MATURITY
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Number
Without
Maturity
Up to 3
Months
3 to 12
Months
1 to 3
Years
3 to 5
Years
5 to 15
Years
Over
15 Years
Total
BBExtramercado
Fund
Treasury Bills (LFT)
341,110
Total
-
1,240,379
1,789
-
26,306
-
-
1,268,474
-
1,240,379
1,789
-
26,306
-
-
1,268,474
In Thousands of Brazilian Reais – R$
As of December 31, 2007
BNDES
Number
Without
Maturity
Up to 3
Months
3 to 12
Months
1 to 3
Years
3 to 5
Years
5 to 15
Years
Over
15 Years
Total
BBExtramercado
Fund
831,764
Treasury Bills (LFT)
Nat ional Treasury
20,000
Notes (NTN-F)
Nat ional Treasury
1,224,347
Bills (LTN)
Fix ed-income fund
71,829,880
shares
-
2,296,863
-
179,626
157,981
119,367
-
2,753,837
-
-
-
-
-
17,783
-
17,783
-
702,570
4,379
367,550
-
-
-
1,074,499
102,754
-
-
-
-
-
-
102,754
102,754
2,999,433
4,379
547,176
157,981
137,150
244,285
-
80
-
-
-
809,739
-
809,819
50,000
-
-
-
-
-
-
77,137
77,137
220,000
-
-
-
195,993
-
-
-
195,993
102,754
80
2,999,513
4,379
195,993
743,169
157,981
809,739
946,889
77,137
77,137
1,082,949
5,031,822
3,948,873
BB Polo XXVI Fund
Treasury Bills (LFT)
Nat ional Treasury
Notes (NTN-B)
Nat ional Treasury
Bills (LTN)
Total
BNDES 2008 / ANNUAL REPORT
33
In Thousands of Brazilian Reais – R$
As of December 31, 2008
Consolidated
Number
Without
Maturity
Up to 3
Months
3 to 12
Months
1 to 3
Years
3 to 5
Years
5 to 15
Years
Over
15 Years
Total
BBExtramercado
Fund
Treasury Bills (LFT)
752,694
Total
-
2,187,555
44,521
-
91,227
476,685
-
2,799,988
-
2,187,555
44,521
-
91,227
476,685
-
2,799,988
In Thousands of Brazilian Reais – R$
As of December 31, 2007
Consolidated
Number
Without
Maturity
Up to 3
Months
3 to 12
Months
1 to 3
Years
3 to 5
Years
5 to 15
Years
Over
15 Years
Total
BBExtramercado
Fund
Treasury Bills (LFT) 1,054,251
Nat ional Treasury
20,000
Notes (NTN-F)
Nat ional Treasury
1,288,815
Bills (LTN)
Fix ed-income fund
71,829,880
shares
-
2,314,618
38,232
462,155
552,887
123,418
-
3,491,310
-
-
-
-
-
17,783
-
17,783
-
763,258
4,379
367,550
-
-
-
1,135,187
102,754
-
-
-
-
-
-
102,754
102,754
3,077,876
42,611
829,705
552,887
141,201
-
4,747,034
244,285
-
80
-
-
-
809,739
-
809,819
50,000
-
-
-
-
-
-
77,137
77,137
220,000
-
-
-
195,993
-
-
-
195,993
102,754
80
3,077,956
42,611
195,993
1,025,698
552,887
809,739
950,940
77,137
77,137
1,082,949
5,829,983
BB Polo XXVI Fund
Treasury Bills (LFT)
Nat ional Treasury
Notes (NTN-B)
Nat ional Treasury
Bills (LTN)
Total
BNDES 2008 / ANNUAL REPORT
34
6.5. Mutual Investment Funds and Interests
These investments are managed by private financial institutions. Shares of these funds are valued based on the
share value disclosed by the fund manager on the balance sheet date.
In Thousands of Brazilian Reais – R$
As of December 31
Fund
Manager
Bra sil 21 – Fundo Mútuo de Investimento
em Empresas Emergentes
PRO T – Fundo de Investimento em
Participações
Log ística Brasil – Fundo de Investimento
em Participações
Fire – Fundo Mútuo de Investimento
em Empresas Emergentes
Fun do de Invest. em Partic. Governança
e Gestão – FIPGG
Opportunity Equity Partners – FIA
Bra sil Energia – Fundo de Investimentos
em Participações
Inf raBrasil – Fundo de Investimentos
em Participações
RB Cinema I – Fundo Financiamento Ind.
Cinematográfica Nacional
Fun do Brascan de Petróleo e Gás
AG Angra Infra-Estrutura –
Fundo de Investimento em Participações
Fun do de Investimentos Cia. Paulista
Trens Metropolitanos
Other
Total
Dynamo Administradora de Recursos Ltda.
2008
2007
4,645
6,061
462,808
-
Banco Bradesco S.A.
13,564
-
Bra silPrivate Consultoria e Participações Ltda.
26,908
25,032
Gov ernança & Gestão Investimentos
28,974
31,187
Mellon Serviços Financeiros Distribuidora
de Títulos Mobiliários S.A.
104,698
57,891
Banco Bradesco S.A.
118,485
65,514
Banco ABN Amro Real S.A.
67,756
25,144
Rio Bravo Investimentos S.A.
11,677
11,087
Banco Brascan S.A.
13,642
11,388
Banco Bradesco S.A.
38,011
30,189
Banco Bradesco S.A.
79,164
83,175
Mellon Serviços Financeiros Distribuidora
de Títulos Mobiliários S.A.
65,301
57,211
1,035,633
403,879
Mutual investment funds in emerging companies Fire – Fundo Mútuo de Investimento em Empresas Emergentes
– and Brasil 21 – Fundo Mútuo de Investimento em Empresas Emergentes – were recognized as closed-end funds
financed solely by BNDESPAR, with an eight-year duration. These funds’ activities are expected to end by January,
2009 and January, 2010, respectively.
BNDES 2008 / ANNUAL REPORT
35
7. DEBENTURES
7.1. Available-For-Sale Debentures
Typically, BNDES fosters, through its subsidiary BNDESPAR, the development of the stock market. BNDES lacked
an action aimed at supporting the development of the Brazilian corporate debt market. Accordingly, in August
2006, the Bank established rules applicable to the subscription of simple debentures through public offering, and
the trading of these securities in the secondary market to support both new issues and the rollover of the assets
purchased to increase local market liquidity.
The subscription of publicly offered debentures is limited to low-risk transactions, with the following features:
Subscription limited to 15% of the offering;
• Industries supported by BNDES;
• Funds raised in order to finance:
- fixed investments;
- working capital;
- expenses on R&D or other intangible assets;
- mergers and acquisitions (where scale economies are material to drive expansion of the company’s activities);
- financial restructuring, if considered a necessary step to permit subsequent investments or partnerships.
• Adoption of distribution and trading procedures that favor securities widespread in the market, liquidity,
also with the participation of market makers, standardized clauses and corporate governance best practices.
•
Trading in the secondary market must follow the competition and pricing transparency principles, preferably
with transactions conducted through electronic platforms, or otherwise supported by quotations provided
by electronic platforms.
As of December 31, 2008, the trading securities balance was R$490,372 thousand (R$862,515 thousand as of
December 31, 2007).
BNDES 2008 / ANNUAL REPORT
36
7.2. Held-To-Maturity Securities
These debentures represent a type of financial support, rather than a financial investment, contracted directly
with the issuers and realized upon maturity or converted/transformed into equity interest according to contractual
clauses. Due to the characteristics of these securities, they are valued according to the standards defined by
Central Bank of Brazil Resolution 2682, as shown in Note 7.2.4.
7.2.1. Breakdown of Held-to-Maturity Debentures
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Consolidated
As of December 31, 2007
BNDES
Consolidated
Gross amount
Allowance for losses
2,624,037
7,733,210
2,918,411
(6,954)
(145,659)
(19,113)
(190,297)
Net amount
2,617,083
7,587,551
2,899,298
5,204,360
Current
Non-Current
93,836
119,354
38,673
40,405
2,523,247
7,468,197
2,860,625
5,163,955
Total
2,617,083
7,587,551
2,899,298
5,204,360
5,394,657
7.2.2. Gross Portfolio by Sector
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Public sector
Private sector
Manufacturing
Other services
Total
BNDES 2008 / ANNUAL REPORT
37
Consolidated
As of December 31, 2007
BNDES
Consolidated
1,686,791
1,916,030
1,038,170
1,038,170
273,778
2,821,147
1,250,840
2,684,424
663,468
2,996,033
629,401
1,672,063
937,246
2,624,037
5,817,180
7,733,210
1,880,241
2,918,411
4,356,487
5,394,657
7.2.3. Gross Portfolio by Maturity
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Consolidated
Current:
2009
2010
2011
2012
2013
After 2013
Total
2,624,037
7,733,210
94,299
122,787
86,602
469,031
-
-
172,431
401,629
-
1,446,106
2,270,705
5,293,657
In Thousands of Brazilian Reais – R$
As of December 31, 2007
BNDES
Current:
2008
2009
2010
2011
2012
After 2012
Total
Consolidated
48,991
56,172
232,897
268,813
172,064
501,137
-
2,581
200,552
431,676
2,263,907
4,134,278
2,918,411
5,394,657
BNDES 2008 / ANNUAL REPORT
38
7.2.4. Gross Portfolio and Allowance for Losses by Risk Level
In Thousands of Brazilian Reais – R$
As of December 31, 2008
Debentures
Risk level
AA
A
B
C
H
Status
Performing
Performing
Performing
Performing
Performing
Nonperforming
BNDES
Allowance
Consolidated
% Allowance
1,698,489
4,041,632
0,00
BNDES
-
Consolidated
-
802,207
2,224,908
0,50
4,011
11,125
37,872
1,261,849
1,00
379
12,618
85,469
85,469
3,00
2,564
2,564
-
119,067
100,00
-
119,067
-
285
100,00
-
285
119,352
7,733,210
6,954
119,352
145,659
Total
2,624,037
Current
Non-Current
94,299
122,787
463
3,433
2,529,738
7,610,423
6,491
142,226
Total
2,624,037
7,733,210
6,954
145,659
In Thousands of Brazilian Reais – R$
As of December 31, 2007
Debentures
Risk level
AA
A
B
C
D
E
F
G
H
Status
Performing
Performing
Performing
Performing
Performing
Performing
Performing
Performing
Performing
Nonperforming
Total
BNDES
Allowance
Consolidated
% Allowance
BNDES
Consolidated
1,706,094
2,444,159
0,00
-
-
1,053,137
1,969,655
0,50
5,266
9,849
40,168
40,168
1,00
402
402
104,272
428,860
3,00
3,128
12,866
-
367,944
10,00
-
36,795
-
10,187
30,00
-
3,056
-
3,862
50,00
-
1,930
14,740
14,740
70,00
10,317
10,317
-
106,150
100,00
-
106,150
-
8,932
100,00
-
8,932
-
115,082
-
115,082
2,918,411
190,297
5,394,657
19,113
Current
Non-Current
48,991
56,172
10,318
15,767
2,869,420
5,338,485
8,795
174,530
Total
2,918,411
5,394,657
19,113
190,297
BNDES 2008 / ANNUAL REPORT
39
7.2.5. Changes in the Allowance for Losses on Debentures
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Balance at beginning of year
Reversal, net
Write-offs against the allowance
Balance at end of year
As of December 31, 2007
Consolidated
BNDES
Consolidated
19,113
190,297
43,199
595,376
(12,159)
(35,617)
(24,086)
(405,076)
-
(9,021)
-
(3)
6,954
145,659
19,113
190,297
The effect on the statement of income is shown in note 24.
8. LOANS AND INTERBANK ONLENDINGS
8.1. Breakdown
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Loans
Allowance for losses
Interbank onlendings
Allowance for losses
Provision for rebates on special agricultural programs*
As of December 31, 2007
Consolidated
BNDES
Consolidated
106,632,273
118,835,784
76,641,560
(2,012,171)
(2,241,678)
(2,170,178)
86,389,490
(2,363,925)
104,620,102
116,594,106
74,471,382
84,025,565
125,976,549
101,713,545
94,501,896
82,539,940
(2,089,834)
(2,318,261)
(1,678,220)
(1,883,709)
-
-
(112)
(154,778)
99,395,284
215,989,390
92,823,564
167,294,946
80,501,453
164,527,018
Total
123,886,715
228,506,817
Current
Non-Current
33,424,404
45,806,110
30,702,357
38,279,051
195,082,413
170,183,280
136,592,589
126,247,967
Total
228,506,817
215,989,390
167,294,946
164,527,018
* See note 8.9
BNDES 2008 / ANNUAL REPORT
40
8.2. Gross Portfolio by Currency
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Local
Currency
Foreign
Currency
Consolidated
Total
Local
Currency
Foreign
Currency
Total
Subsidiaries
Other
66,503,840
12,670,377
79,174,217
-
-
-
121,854,736
31,579,869
153,434,605
176,285,693
44,263,636
220,549,329
Total
188,358,576
44,250,246
232,608,822
176,285,693
44,263,636
220,549,329
In Thousands of Brazilian Reais – R$
As of December 31, 2007
BNDES
Local
Currency
Subsidiaries
Other
Total
Foreign
Currency
Consolidated
Total
Local
Currency
Foreign
Currency
Total
45,961,008
9,816,779
55,777,787
-
-
-
95,864,687
19,500,982
115,365,669
139,269,150
29,660,280
168,929,430
141,825,695
29,317,761
171,143,456
139,269,150
29,660,280
168,929,430
8.3. Gross Portfolio by Sector
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Public sector
Private sector
Rural
Manufacturing
Commerce
Financial intermediation
Other services
Total
BNDES 2008 / ANNUAL REPORT
41
Consolidated
As of December 31, 2007
BNDES
Consolidated
107,632,036
36,683,353
77,914,054
28,385,922
2,403,477
49,952,340
27,876,531
972,962
43,771,476
124,976,786
232,608,822
2,403,477
49,952,340
74,562,212
972,962
55,974,985
183,865,976
220,549,329
1,763,708
36,198,919
710,010
23,573,095
30,983,670
93,229,402
171,143,456
1,763,708
36,198,920
710,010
61,138,944
40,731,926
140,543,508
168,929,430
8.4. Gross Portfolio by Maturity
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Past-due
Current:
2009
2010
2011
2012
2013
After 2013
Total
Consolidated
328,324
328,324
33,692,627
28,446,216
23,089,066
18,739,056
15,767,722
112,545,811
232,608,822
46,178,458
40,732,294
30,489,809
23,175,764
16,179,921
63,464,759
220,549,329
In Thousands of Brazilian Reais – R$
As of December 31, 2007
BNDES
Past-due
Current:
2008
2009
2010
2011
2012
After 2012
Total
Consolidated
180,777
181,274
30,900,291
27,713,796
23,965,556
20,525,244
9,800,559
58,057,233
171,143,456
38,282,233
29,333,845
23,677,641
15,675,504
4,701,090
57,077,843
168,929,430
8.5. Loans and Interbank Onlendings Portfolio Concentration
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
10 largest customers
50 next largest customers
100 next largest customers
Other
Total
122,266,840
55,696,804
29,970,715
24,674,463
232,608,822
Consolidated
76,249,414
74,543,198
39,973,371
30,783,346
220,549,329
As of December 31, 2007
BNDES
89,459,540
41,563,189
20,479,922
19,640,805
171,143,456
Consolidated
60,987,879
56,469,584
29,411,708
22,060,259
168,929,430
BNDES 2008 / ANNUAL REPORT
42
8.6. Breakdown of Portfolio and Allowance for Losses by Risk Level
The National Monetary Council established, through Resolution 2682 of December 21, 1999, published by the
Central Bank of Brazil, a system for recognizing the allowance for loan losses. The rule, which defines the risk
ratings for performing and nonperforming loans and the related percentages, became effective in March 2000.
Therefore, the allowances for losses on performing and nonperforming loans and interbank onlendings were as follows:
a) Loans
In Thousands of Brazilian Reais – R$
As of December 31, 2008
Loans
Risk Level
AA
A
B
C
D
E
F
G
H
Status
Performing
Performing
Performing
Performing
Nonperforming
Performing
Nonperforming
Performing
Nonperforming
Performing
Nonperforming
Performing
Nonperforming
Performing
Nonperforming
Total
Current
Non-Current
Total
BNDES 2008 / ANNUAL REPORT
43
BNDES
Allowance
Consolidated
% Allowance
44,302,869
46,334,150
0,00
-
-
43,185,871
43,341,617
0,50
215,929
216,708
12,985,501
16,619,790
1,00
129,855
166,198
4,004,177
10,385,424
3,00
120,126
311,563
150,981
150,981
4,529
4,529
4,155,158
10,536,405
124,655
316,092
159,292
159,292
15,929
15,929
10,00
BNDES
Consolidated
42,299
42,299
4,230
4,230
201,591
201,591
20,159
20,159
167,521
167,521
50,256
50,256
354
354
106
106
167,875
167,875
50,362
50,362
88,676
88,676
44,338
44,338
193
193
97
97
88,869
88,869
44,435
44,435
354,595
354,595
248,217
248,217
37,950
37,950
26,565
26,565
392,545
392,545
274,782
274,782
1,062,481
1,063,429
1,062,481
1,063,429
89,513
89,513
89,513
89,513
1,151,994
106,632,273
1,152,942
118,835,784
1,151,994
2,012,171
1,152,942
2,241,678
30,00
50,00
70,00
100,00
14,102,859
15,837,897
266,124
298,754
92,529,414
102,997,887
1,746,047
1,942,924
106,632,273
118,835,784
2,012,171
2,241,678
In Thousands of Brazilian Reais – R$
As of December 31, 2007
Loans
Risk Level
AA
A
B
C
D
E
F
G
Status
Performing
Performing
Performing
Performing
Nonperforming
Performing
Performing
Performing
Nonperforming
Performing
Nonperforming
BNDES
Allowance
Consolidated
% Allowance
29,820,944
31,567,755
0,00
BNDES
-
Consolidated
-
34,015,132
34,153,855
0,50
170,077
170,770
6,971,586
9,496,226
1,00
69,717
94,962
1,587,956
6,896,628
3,00
47,639
206,900
1,763
1,763
3,00
1,589,719
6,898,391
53
53
47,692
206,953
712,670
735,345
10,00
71,267
73,535
2,174,665
2,174,851
30,00
652,400
652,457
82,704
82,704
50,00
41,352
41,352
50,00
41,805
41,805
83,609
83,609
166,313
166,313
382,019
382,019
70,00
70,00
83,157
83,157
267,415
267,415
196
196
382,215
382,215
730,960
737,183
77,356
77,356
808,316
76,641,560
814,539
86,389,490
Current
Non-Current
11,423,284
12,660,351
323,461
348,049
65,218,276
73,729,139
1,846,717
2,015,876
Total
76,641,560
86,389,490
2,170,178
2,363,925
H
Performing
Nonperforming
Total
137
137
267,552
267,552
100,00
730,960
737,183
100,00
77,356
77,356
808,316
2,170,178
814,539
2,363,925
b) Interbank Onlendings
In Thousands of Brazilian Reais – R$
As of December 31, 2008
Interbank Onlendings
Risk Level
AA
A
B
C
D
E
H
Status
Performing
Performing
Performing
Performing
Performing
Performing
Performing*
Nonperforming
BNDES
Allowance
Consolidated
% Allowance
BNDES
Consolidated
99,310,948
36,826,912
0,00
-
-
23,174,735
59,302,777
0,50
115,874
296,514
1,472,221
3,243,963
1,00
14,722
32,440
59,070
354,679
3,00
1,772
10,640
138
288
10,00
14
29
2,835
8,982
30,00
850
2,694
1,949,568
1,968,910
100,00
1,949,568
1,968,910
7,034
7,034
7,034
7,034
1,975,944
101,713,545
1,956,602
2,089,834
1,975,944
2,318,261
Total
1,956,602
125,976,549
Current
Non-Current
19,918,092
30,668,885
330,423
401,918
106,058,457
71,044,660
1,759,411
1,916,343
Total
125,976,549
101,713,545
2,089,834
2,318,261
* See note 8.8
BNDES 2008 / ANNUAL REPORT
44
In Thousands of Brazilian Reais – R$
As of December 31, 2007
Interbank Onlendings
Risk Level
AA
A
B
C
D
E
H
Status
Performing
Performing
Performing
Performing
Performing
Performing
Performing*
Nonperforming
BNDES
Allowance
Consolidated
% Allowance
74,575,876
33,088,061
0,00
BNDES
-
Consolidated
-
16,371,865
41,572,221
0,50
81,859
207,861
1,924,038
6,192,422
1,00
19,240
61,923
32,284
45,780
3,00
970
1,374
24,054
32,080
10,00
2,405
3,208
47
47
30,00
14
14
1,555,879
1,590,979
100,00
1,555,879
1,590,979
100,00
17,853
18,350
1,573,732
94,501,896
1,609,329
82,539,940
Current
Non-Current
19,957,055
26,540,213
354,409
418,687
74,544,841
55,999,727
1,323,811
1,465,022
Total
94,501,896
82,539,940
1,678,220
1,883,709
Total
17,853
18,350
1,573,732
1,678,220
1,609,329
1,883,709
* See note 8.8
8.7. Changes in Allowance for Losses on Loans and Interbank Onlendings
a) Loans
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
As of December 31, 2007
Consolidated
BNDES
Consolidated
Balance at beginning of year
Reversal, net
Write-offs against the allowance
2,170,173
2,363,919
3,393,405
3,655,083
(88,470)
(52,199)
(1,125,738)
(1,193,630)
(69,532)
(70,042)
(97,494)
(97,528)
Balance at end of year
2,012,171
2,241,678
2,170,173
2,363,925
b) Interbank Onlendings
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
As of December 31, 2007
Consolidated
BNDES
Consolidated
Balance at beginning of year
Recognition, net
Write-offs against the allowance
1,678,220
1,883,710
463,104
685,408
411,613
434,551
1,215,116
1,198,301
1
-
-
-
Balance at end of year
2,089,834
2,318,261
1,678,220
1,883,709
The effect on the statement of income is shown in note 24.
BNDES 2008 / ANNUAL REPORT
45
8.8. Provision for Onlendings Under the Pronaf Program
As of December 31, 2007, onlending operations carried out under the National Program for the Strengthening
of Family Agriculture (Pronaf), totaling R$1,808,803 thousand as of December 31, 2008 (R$1,488,205 thousand
as of December 31, 2007), have been classified at risk level H of CMN Resolution 2682/99. This reclassification
is in accordance with article 2 of said Resolution because these operations are constantly renegotiated, as required
by the Federal Government, with extension of maturities, waiver of fines and late-payment charges, reduction
of interest rates, granting of discounts, and return of paid installments.
8.9. Provision for Rebates on Special Agricultural Programs
Through Decree 6201, of August 28, 2007, regulated by Central Bank of Brazil Resolution 3496, of August 30,
2007, the Federal Government authorized the granting of rebates on rural investment financing installments
falling due in 2007, including operations carried out under the FINAME Special Agricultural Program, whose cost
will be assumed by FINAME.
Consequently, the Bank accrued R$169,204 thousand and R$120 thousand, as of December 31, 2008, as costs
resulting from the granting of rebates on operations carried out under the FINAME Special Agricultural Program,
which will be assumed by FINAME and BNDES credit facilities, respectively, pursuant to article 5 of Decree
6201/07. As of December 31, 2008, onlendings are presented net of the effects of such costs.
9. OTHER RECEIVABLES – TERM SALES OF SECURITIES AND RECEIVABLES
9.1. Breakdown
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Term sales of securities
Allowance for losses
Receivables
Allowance for losses
Total
Current
Non-Current
Total
Consolidated
As of December 31, 2007
BNDES
Consolidated
20,739
1,327,858
38,926
(181)
(37,230)
(190)
1,337,442
(40,573)
20,558
1,290,628
38,736
1,296,869
1,105,820
1,126,610
1,117,614
1,528,284
(7,498)
(22,992)
(5,057)
(133,179)
1,098,322
1,118,880
1,103,618
2,394,246
1,112,557
1,151,293
1,395,105
2,691,974
124,905
361,348
135,245
463,783
993,975
2,032,898
1,016,048
2,228,191
1,118,880
2,394,246
1,151,293
2,691,974
BNDES 2008 / ANNUAL REPORT
46
9.2. Gross Portfolio by Sector
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Public sector
Private sector
Manufacturing
Financial intermediation
Other services
Total
Consolidated
As of December 31, 2007
BNDES
Consolidated
894,292
894,291
879,102
1,254,586
15,512
1,289,777
25,792
1,317,340
5,226
13,779
10,422
28,336
211,529
256,621
241,224
265,464
232,267
1,126,559
1,560,177
2,454,468
277,438
1,156,540
1,611,140
2,865,726
9.3. Gross Portfolio by Maturity
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Past-due
Current:
2008
2009
2010
2011
2012
2013
After 2012
After 2013
Total
BNDES 2008 / ANNUAL REPORT
47
Consolidated
As of December 31, 2007
BNDES
Consolidated
7,728
7,815
128,138
584,374
137,319
370,239
215,665
413,537
124,013
319,912
145,934
334,500
132,572
328,583
182,643
371,293
75,660
266,096
83,030
268,104
66,416
256,370
393,402
886,103
1,156,540
2,865,726
590,579
913,268
1,126,559
2,454,468
9.4. Breakdown of Gross Portfolio by Risk Level and Allowance for Losses
In Thousands of Brazilian Reais – R$
As of December 31, 2008
Credit Sale of Securities
Risk Level
Status
Consolidated
% Allowance
-
9,371
0,00
-
-
5,226
5,226
0,50
26
26
15,513
1,288,947
1,00
155
12,890
-
24,314
100,00
-
24,314
Total
20,739
1,327,858
181
37,230
Current
Non-Current
15,754
254,749
137
4,079
4,985
1,073,109
44
33,151
Total
20,739
1,327,858
181
37,230
AA
A
B
H
Performing
Performing
Performing
Performing
BNDES
Allowance
BNDES
Consolidated
In Thousands of Brazilian Reais – R$
As of December 31, 2007
Credit Sale of Securities
Risk Level
Status
Consolidated
% Allowance
-
17,865
0,00
-
-
38,926
47,817
0,50
190
235
-
1,269,507
3,00
-
38,085
-
2,253
100,00
-
2,253
Total
38,926
1,337,442
190
40,573
Current
Non-Current
18,925
77,043
92
3,644
20,001
1,260,399
98
36,929
Total
38,926
1,337,442
190
40,573
AA
A
C
H
Performing
Performing
Performing
Performing
BNDES
Allowance
BNDES
Consolidated
In Thousands of Brazilian Reais – R$
As of December 31, 2008
Receivables
Risk Level
AA
G
H
Total
Current
Non-Current
Total
Status
Performing
Performing
Performing
BNDES
Allowance
Consolidated
% Allowance
1,098,322
1,098,322
0,00
BNDES
Consolidated
-
-
-
17,652
70,00
-
12,356
7,498
10,636
100,00
7,498
10,636
1,105,820
1,126,610
7,498
22,992
110,034
115,490
746
4,812
995,786
1,011,120
6,752
18,180
1,105,820
1,126,610
7,498
22,992
BNDES 2008 / ANNUAL REPORT
48
In Thousands of Brazilian Reais – R$
As of December 31, 2007
Receivables
Risk Level
AA
A
E
F
G
H
Status
Performing
Performing
Performing
Nonperforming
Performing
Nonperforming
BNDES
Allowance
Consolidated
% Allowance
871,373
884,485
0,00
BNDES
-
Consolidated
-
238,513
238,513
0,50
1,193
1,193
112,645
-
375,485
30,00
-
7,728
7,728
50,00
3,864
3,864
-
21,986
70,00
-
15,390
100,00
-
87
Total
1,117,614
1,528,284
-
87
5,057
133,179
Current
Non-Current
116,941
1,000,673
515,146
529
124,762
1,013,138
4,528
Total
1,117,614
1,528,284
8,417
5,057
133,179
9.5. Changes in Allowance for Losses on Credit Sales of Securities
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Consolidated
As of December 31, 2007
BNDES
Consolidated
Balance at beginning of year
Reversal, net
Write-offs against the allowance
190
40,578
1,308
101,070
(9)
(3,277)
(1,118)
(60,481)
-
(71)
-
(11)
Balance at end of year
181
37,230
190
40,578
The effect on the statement of income is shown in note 24.
9.6. Changes In Allowance For Losses on Receivables
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Consolidated
As of December 31, 2007
BNDES
Consolidated
Balance at beginning of year
Recognition (reversal), net
5,057
133,179
1,311
2,441
(110,187)
3,746
92,775
Balance at end of year
7,498
22,992
5,057
133,179
The effect on the statement of income is shown in note 24.
BNDES 2008 / ANNUAL REPORT
49
40,404
10. RECEIVABLES WRITTEN OFF AS LOSSES AND RENEGOTIATED
In Thousands of Brazilian Reais – R$
2nd Half of 2008
BNDES
Receivables written off as losses
Recovered receivables*
Renegotiated receivables
As of December 31, 2008
Consolidated
BNDES
As of December 31, 2007
Consolidated
BNDES
Consolidated
8,683
9,145
69,531
79,063
97,494
97,542
454,747
554,010
569,686
677,952
1,022,541
1,014,743
2,252,650
2,252,650
2,428,661
2,428,661
668,046
668,046
* The effect on the statement of income is shown in note 24.
11. OTHER RECEIVABLES – OTHER
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Receivables – National Treasury
Dividends and interest on capital
Refundable payments
Escrow deposits
Other
As of December 31, 2007
Consolidated
BNDES
Consolidated
-
-
183,369
212,236
840,176
652,134
965,646
450,190
71,313
16,596
64,618
15,274
154,870
172,985
141,266
158,683
54,139
62,996
190,337
203,383
Total
1,120,498
904,711
1,545,236
1,039,766
Current
Non-Current
1,120,498
904,711
1,545,236
1,039,766
-
-
-
-
Total
1,120,498
904,711
1,545,236
1,039,766
12. INVESTMENTS
In 2008 Brazilian Corporate Law (Law 6404/76) was altered by Law 11638, of December 28, 2007 and Provisional
Act 449, of December 3, 2008. With respect to accounting for investments in affiliates, the new Law altered the
scope of application of the equity method, eliminated the concept of materiality, and established the concept
of “significant influence”, which should be considered to exist when a holding company has at least 20% of its
investee’s voting capital.
BNDES 2008 / ANNUAL REPORT
50
To conform to these new criteria, in 2008 the Company was required to revalue investments in affiliates.
This led to the reclassification, in 2008, of 39 investments from equity method to cost method, since there was
no significant influence applied to these companies. Pursuant to CVM Resolution 565, of December 17, 2008,
which approved Technical Pronouncement CPC 13 – First-time Adoption of Law 11638/07, the carrying amount
of investments in affiliates as of December 31, 2007, including unamortized premium or discount, was considered
to be the new cost value for purposes of future measurement and determination of their recoverable value
(“impairment”), whereas valuation under the equity method was no longer applicable. Dividends and interest
on capital received for income that had already been recognized under the equity method are being accounted
for as a reduction of these investments.
Additionally, the amounts of the investments and shareholders’ equity were decreased by R$281,105 thousand,
because of BNDESPAR’s decision to reverse the balance of the Revaluation Reserve, consisting fully of affiliates’
revaluations, as determined by article 6 of Law 11638/07. BNDES adjusted the financial statements of the affiliates
that opted to maintain the balances of the revaluation reserve, to ensure that procedures are applied consistently.
12.1. Breakdown
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
In subsidiaries
Accounted for under the equity method
In affiliates
Accounted for under the equity method
Other equity interests
Other investments
Total
As of December 31, 2007
Consolidated
BNDES
Consolidated
17,373,979
-
17,511,530
-
-
7,637,318
-
7,284,944
17,373,979
7,637,318
17,511,530
7,284,944
84,003
17,611,859
84,471*
11,639,336
43,333
43,333
43,333
58,359
17,501,315
25,292,510
17,639,334
18,982,639
* As of December 31, 2007, R$8,010 thousand (BNDES) and R$3,721,368 thousand (Consolidated) were classified as “investments in affiliates at cost”.
BNDES 2008 / ANNUAL REPORT
51
12.2. BNDES’ Subsidiaries
Subsidiaries
Shareholders’
Equity
Base Date
Agê ncia Especial de Financiamento Industrial (FINAME)
BNDES Participações S.A. (BNDESPAR)
Net Incorme
for the Year
12.31.2008
3,834,579
262,637
12.31.2008
13,539,400
3,360,228
Total
(a) Valuation adjustments to shareholders’ equity.
The percentage of equity interest held in subsidiaries is 100%.
12.3. Affiliates Under the Equity Method - Consolidated
Investees
Base Date
Capital
Bertin (1)
Brasiliana (1)
Copel (1)
10.31.2008
3,349,360
10.31.2008
2,960,708
10.31.2008
4,460,000
Rio Polímeros (1)
10.31.2008
1,469,806
Telemar Part, (1) (2)
10.31.2008
2,043,690
Number of Shares
Held (in Thousands)
Base Net
Income for
Equity in
Affiliates
Shareholders’
Equity
(476,189)
Common
Preferred
3,423,079
7,709
-
(34,980)
3,161,719
300,000
50,000
1,146,796
8,008,485
38,299
27,282
(99,197)
1,406,491
317,974
-
52,812
2,488,300
858,225
1,000
Subtotal
Other companies
Total
(1) Financial statements audited by other independent auditors for the base date of the equity in affiliates.
(2) Includes redeemable preferred shares, in the amount of R$1,239,616 thousand. These shares have priority in the distribution of fixed, accumulated dividends
equivalent to 5% per year on the issue price adjusted based on the IPCA (extended consumer price index) variation. Payment thereof may be made upon delivery
of class-A preferred shares issued by Telemar Norte Leste S.A.
BNDES 2008 / ANNUAL REPORT
52
In Thousands of Brazilian Reais – R$
Equity in Subsidiaries
As of December 31
2008
2nd Half
of 2008
Net Book Value of Investment
As of December 31
2007
Dividends
Adjustments
to Subsidiaries’
Shareholders’ Equity
(a)
As of December 31 As of December 31
2008
2007
65,193
262,638
363,092
(59,777)
-
3,834,579
3,631,718
206,636
3,360,228
3,758,486
(780,399)
4,684
13,539,400
13,879,812
271,829
3,622,866
4,121,578
(840,176)
4,684
17,373,979
17,511,530
In Thousands of Brazilian Reais – R$
Equity in Subsidiaries
Equity
Interest
(%)
26,92
Net Book Value
As of December 31 As of December 31
2008
2007
Equity
Value of
Investment
Premium
Discount
All for Losses
a
b
c
As of December 31 As of December 31
2008
2007
(132,809)
-
921,558
1,450,247
a
2,371,805
-
53,85
(14,115)
149,770
1,702,464
(231,948)
b
1,470,516
1,816,633
23,96
279,356
267,433
1,919,212
(313,525)
b
1,605,687
1,395,494
(30,019)
(53,650)
b
c
267,954
197,298
1,603,721
598,733
25,00
(26,348)
20,541
351,623
31,38
(215,167)
61,789
1,631,175
(109,083)
499,533
6,526,032
114,898
546,629
325,135
5,815
1,046,162
(27,454)
b
1,450,247
a
(602,946)
b
(53,650)
c
a
b
7,319,683
4,008,158
317,635
3,276,786
7,637,318
7,284,944
(7,500)
c
1,450,247
a
(602,946)
b
(61,150)
c
6,851,167
• The base date indicates the investee’s shareholders’ equity date used in the last calculation of equity in affiliates. The effects of significant events subsequent
to the base date were recognized.
• In addition to the base Net Equity, equity in affiliates considers the effects of changes in affiliates’ net equity from prior year base date to the current year
base date, including effects of prior year adjustments, capital reserves, repurchase of shares, change in capital and in interest ownership percentage.
• The amounts related to discount on investment subscription are not amortized due to the lack of economic fundamentals.
• 2007 consolidated equity in affiliates, in the amount of R$1,101,861 thousand, as shown in the Statement of Income, includes the effect of changes in
capital reserves on subsidiaries BNDESPAR and FINAME, in the amount of R$55,700 thousand.
BNDES 2008 / ANNUAL REPORT
53
12.4. Other Equity Interests
In Thousands of Brazilian Reais – R$
Net Book Value
Number of Shares
Held (in Thousands)
Investees
Amé rica Latina Logística
(ALL) (2)
Aracruz Celulose S.A.
Banco do Brasil S.A.
Bom Gosto (2)
Brasil Telecom Part. S.A.
Braskem
Brenco
GEG (2)
Cad am – Caulim
da Amazônia S.A. (1)
Cesp
Coteminas
CPFL Energia S.A.
Cia. Siderúrgica Nacional (CSN)
Cia. Vale do Rio Doce (Vale)
Eletrobrás (1)
Emp resa Brasileira de
Aeronáutica S.A. (Embraer)
Gerdau S.A.
Independência
Ind ústrias Verolme
Ishibrás S.A. (1)
JBS (1)
Klabin (2)
Light (2)
Marfrig Frigoríficos
MPX – Mineração
Ouro Fino (1)
Paranapanema
Petrobras
Rede Energia (2)
Red e Ferroviária Federal S.A.
(RFFSA)
Tele Norte Leste
Participações S.A.
Valepar S.A. (3)
Common
Equity
Interest
(%)
Preferred
BNDES
Consolidated
As of Dec 31 As of Dec 31 As of Dec 31 As of Dec 31
2008
2008
2007
2007
130,448
175,614
10.61
-
-
638,696
-
56,881
-
5.51
-
-
129,280
129,280
64,006
-
2.52
-
-
1,085,480
1,275,237
-
2,424
34.59
-
-
245,845
-
1,271
9,660
3.00
-
-
166,663
195,899
-
26,496
5.22
-
-
227,545
243,207
134,835
-
20.92
-
-
140,000
-
17,944,799
-
34.56
-
-
140,600
-
-
3,712
16.87
8,008
8,008
8,008
8,008
-
18,697
5.71
-
-
234,736
139,789
-
12,070
10.35
-
-
115,005
134,005
29,822
-
6.21
-
-
608,161
550,600
28,887
-
3.64
-
-
151,379
268,615
218,836
326
4.08
-
-
1,508,260
709,886
133,758
-
11.81
-
-
2,240,013
2,240,013
37,413
-
5.05
-
-
109,699
109,699
35,917
14,162
3.50
-
-
153,352
49,096
-
10,840
13.89
-
-
250,000
-
1,224,784
1,224,784
12.98
2
2
2
2
186,892
-
13.00
-
-
1,472,274
1,137,006
-
185,860
20.25
-
-
562,144
-
68,556
-
33.62
-
-
822,511
-
39,286
-
14.66
-
-
817,655
102,000
178
-
2.61
-
-
179,180
179,180
84,000
-
11,250
20.00
-
-
105,727
54,986
-
17.52
-
-
125,261
805
94,492
574,047
7.62
-
-
1,022,684
1,022,685
-
64,236
25.30
-
-
263,332
-
-
3,956,987
1.55
73,579
73,579
73,579
73,579
775
5,627
1.63
-
-
164,599
164,599
149,787
18,394
9.79
-
-
2,625,429
1,558,569
BNDES 2008 / ANNUAL REPORT
54
In Thousands of Brazilian Reais – R$
Continuation
Number of Shares
Held (in Thousands)
Investees
Common
Preferred
Subtotal
Other interests
Total (4)
Net Book Value
Equity
Interest
(%)
BNDES
Consolidated
As of Dec 31 As of Dec 31 As of Dec 31 As of Dec 31
2008
2008
2007
2007
81,589
81,589
16,387,099
2,414
2,882
1,224,760
10,375,759
1,263,577
84,003
84,471
17,611,859
11,639,336
(1) Classified as “Investments in affiliates at cost” in 2007.
(2) Classified as “Investments in affiliates under the equity method” in 2007.
(3) In this quarter, the Company invested R$1,066,860 thousand relating to 18,394,143 redeemable preferred shares in Valepar. These shares will be
redeemable on a semiannual basis, in May and November, of each year, from 2011 to 2015. Dividends from these shares are fixed and cumulative
based on a fixed rate of 16% per year.
(4) Book value net of allowance in the amount of R$316,835 thousand in 2008 and R$315,453 thousand in 2007 – BNDES and R$1,194,458 thousand
in 2008 and R$791,553 thousand in 2007 – Consolidated.
12.5. Quality of Stock Portfolio – Consolidated
The amount of equity interests recorded is R$25,249,177 thousand, of which R$7,637,318 thousand in affiliates
(subject and not subject to equity in affiliates) and R$17,611,859 thousand in other companies. Of that total,
approximately 62%, R$15,624,615 thousand is invested in shares traded on stock exchanges and R$9,624,562
thousand in unlisted companies.
As of December 31, 2008, the estimated market value of equity interests is R$52,824,196 thousand. Equity interest
in shares traded on stock exchanges, calculated using the average quotation by share in the last trading session
on the São Paulo Stock Exchange (Bovespa) was R$38,458,496 thousand.
In Thousands of Brazilian Reais – R$
As of December 31, 2008
Net Book Value
Equity interest in Eletrobrás
Equity interest in Petrobras
Other equity interests traded on stock exchanges
Interest in unlisted companies*
Total
Market
Value
Unrecorded
Gain (Loss)
2.240.013
3.477.707
1.237.694
1.022.684
15.645.974
14.623.290
12.361.918
19.334.815
6.972.897
9.624.562
14.365.700
4.741.138
25.249.177
52.824.196
27.575.019
* As the estimated value is based on economic value projections, the market value of such equity interests has not been audited by independent auditors.
BNDES 2008 / ANNUAL REPORT
55
12.6. Other Investments
In Thousands of Brazilian Reais – R$
Net Book Value
BNDES
As of Dec 31
2008
Consolidated
As of Dec 31
2007
As of Dec 31
2008
As of Dec 31
2007
Tax incentive investments
Stock exchange memberships
Works of art
Investment in projects – Vale: Project 118
296
296
296
296
41,606
41,606
41,606
41,606
Total
43,333
43,333
43,333
58,359
1,131
1,131
1,131
16,157
300
300
300
300
13. PIS/PASEP FUND
Since 1974, part of the revenue from PIS and Pasep (taxes on revenue), which formed the PIS/Pasep Fund, began
to be transferred to BNDES. Under applicable legislation, the funds would be used in economic development
programs, including capital markets. On average, in the period from 1974 to 1988, 38% of this tax revenue,
equivalent to approximately R$700,000 thousand per year, was transferred.
The PIS/Pasep Fund bears the risk of transactions conducted through December 31, 1982. BNDES receives an
annual management fee of 0.5% per year on 1.63% of the total portfolio as of December 31, 2008, paid by
the Fund. The Bank bears the risks of transactions conducted after that date (98.37% of the portfolio), and is
authorized to charge from borrowers a management fee of up to 0.5% per year, embedded in the interest rate,
and a risk fee of up to 1.5% per year.
As of December 31, the Bank manages the following amounts of the PIS/Pasep Fund:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
PIS/Pasep
FPS
29,510,021
As of December 31, 2007
27,840,246
10,054
66,845
29,520,075
27,907,091
Current
Non-Current
1,474,313
1,393,653
28,045,762
26,513,438
Total
29,520,075
27,907,091
BNDES 2008 / ANNUAL REPORT
56
The balances of the PIS/Pasep Fund loans entered into through December 31, 1982, which are a Fund’s risk,
were reclassified at the end of the first half of 2002 as BNDES liabilities, rectifying the amount of the related
liability to the Fund, as instructed by the Central Bank of Brazil.
In Thousands of Brazilian Reais – R$
As of December 31, 2008
Changes in PIS-PASEP
BNDES Risk
PIS/Pasep Risk
Total
Balance at beginning of year/period
Income (expenses)
Transfers from FPS
Returns
27,840,246
606,296
28,446,542
2,030,426
23,207
2,053,633
1,049,329
-
1,049,329
(1,409,980)
-
(1,409,980)
Balance at end of year/period
29,510,021
629,503
30,139,524
14. INTERBANK DEPOSITS
Deposit funds from other financial institutions. Since November 2008, BNDES has raised funds through interbank
deposits, under the following conditions:
In Thousands of Brazilian Reais – R$
As of December 31
Counterpart
Maturity
Caixa Econômica Federal
Index
Rate
2008
2007
5. 21.2009
101.50 DI
Selic
1,200,000
5. 25.2009
101.50 DI
Selic
1,200,000
-
Banco do Brasil
5. 5.2010
99.70 DI
Selic
1,400,000
-
6. 4.2010
100.00 DI
Selic
50,000
-
HSBC
Banco Real
Accrued interest
5. 27.2010
98.50 DI
Selic
1,000,000
-
4. 12.2010
100.00 DI
Selic
400,000
-
55,884
-
Total
5,305,884
-
Current
2,455,884
-
Non-Current
2,850,000
-
Total
5,305,884
-
BNDES 2008 / ANNUAL REPORT
57
-
15. MONEY MARKET FUNDING
Operations conducted in the Brazilian financial system’s over-the-counter market in which the seller assumes the
commitment of repurchasing at a preset date and subject to interest securities he himself sold.
In 2008, BNDES raised funds using National Treasury securities (note 17.1c), therefore, its own portfolio, involving
National Treasury Notes – series F – NTN-F, National Treasury Bills – LTN, and National Treasury Notes – series B –
NTN-B. Such transactions are short term and conditions are as follows:
In Thousands of Brazilian Reais – R$
As of December 31
Securities
National
National
National
National
National
Treasury
Treasury
Treasury
Treasury
Treasury
Rates*
Notes
Notes
Notes
Notes
Notes
F
F
F
F
F
(NTN-F)
(NTN-F)
(NTN-F)
(NTN-F)
(NTN-F)
Maturity
2008
2007
100.1% of ASR
1.6.2009
288,006
-
100.2% of ASR
1.6.2009
518,255
-
100.2% of ASR
1.12.2009
396,945
-
100.2% of ASR
1.27.2009
2,840,719
-
100.2% of ASR
2.16.2009
2,758,456
-
6,802,381
National Treasury Bills (LTN)
100.2% of ASR
1.6.2009
National Treasury Notes B (NTN-B)
100.2% of ASR
1.22.2009
National Treasury Notes B (NTN-B)
100.2% of ASR
2.16.2009
516,740
-
516,740
590,085
-
430,571
-
1,020,656
Financial charges
Total
107,206
-
8,446,983
-
* ASR – Average Selic Rate
16. FAT – SUBORDINATED DEBT AND SPECIAL DEPOSITS
The Fund for Workers’ Assistance (FAT), consisting basically of revenue from PIS and Pasep (taxes on revenue)
and income from its investments, is used to fund the unemployment insurance and the salary bonuses, as well
as economic development programs through BNDES, by at least 40% of that tax revenue.
BNDES 2008 / ANNUAL REPORT
58
Thus, FAT succeeded the PIS/Pasep Fund and significantly changed the purpose of the referred taxes. While the
PIS/Pasep Fund was created to be part of the individual endowment of workers who held fund shares, FAT is used
as a tool against unemployment on two fronts. The first, of an emergency nature, supports the unemployed by
granting a temporary compensation, and a training and outplacement program. The second front is preventive,
fostering job creation through economic development projects.
FAT funds transferred to BNDES are classified into two categories:
16.1. Constitutional FAT
Constitutional FAT comprises transfers of funds up to the limit of 40% of the PIS and Pasep revenue. In this
category, balances are subject to TJLP (long-term interest rate) or indexed to the US dollar (FAT Exchange) and
bear interest based on LIBOR. BNDES pays to FAT (Federal Government) semiannual interest corresponding to
the TJLP, limited to 6% per year. The difference between the TJLP and the interest paid is included within the
debit balance of non-current liabilities.
Constitutional FAT funds are amortized only when there are insufficient funds to pay unemployment insurance
and salary bonuses, in the amounts and circumstances set forth by law.
The debit balance of Constitutional FAT is recorded under the caption “Subordinated debt” and consists of:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
FAT – Constitutional
FAT – TJLP – Principal
FAT – Foreign exchange – US$*
Accrued interest
Total
As of December 31, 2007
83,321,872
63,186,272
5,479,500
14,470,932
88,801,372
77,657,204
2,513,746
2,185,152
91,315,118
79,842,356
Current
Non-Current
2,513,746
2,185,152
88,801,372
77,657,204
Total
91,315,118
79,842,356
*Up to 50% of total regular transfers; used to finance production/sale of products with acknowledged international demand.
BNDES 2008 / ANNUAL REPORT
59
Central Bank of Brazil Resolution 344, of February 28, 2007, which revoked Central Bank of Brazil Resolution
2837, of May 30, 2001, maintained the classification of funds transferred by the Fund for Workers’ Assistance
(FAT) as Subordinated Debt. This classification is possible since BNDES debt related to these funds is not subject to
contractually defined repayment terms, as they must only be required when the Ministry of Labor lacks sufficient
funds to pay unemployment insurance. In this case, about 20% of the debit balance would be repaid in the first
two years, 10% in the following three years, and 5% from the sixth year, when required, to cover unemployment
insurance expenses.
In addition, pursuant to item III, article 14 of Central Bank of Brazil Resolution 3444, Subordinated Debt – Eligible
for Capitalization is limited to 50% of the Tier I Capital, equivalent to R$12,476,715 thousand and R$12,470,572
thousand as of December 31, 2008 (R$12,311,056 thousand and R$12,294,739 thousand as of December 31,
2007) Bank and Consolidated, respectively.
16.2. FAT – Special Deposits
FAT – Special Deposits represent additional transfers to Constitutional FAT. Special Deposits are used in specific
programs and under special conditions, subject to different rules of interest rate, repayment and interest
payments to FAT.
The debit balance of FAT – Special Deposits is recorded under the caption “FAT – Special deposits” and consists
of the following:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
FAT – Special deposits
“Pró-emprego” (government employment incentive program)
Export/Development FAT
Pronaf (rural development program)
Infrastructure
Giro Rural (rural financing)
Accrued interest
As of December 31, 2007
314,459
377,241
6,793,636
6,392,011
954,225
965,609
16,387,148
17,402,287
484,304
680,121
24,933,772
25,817,269
319,196
282,344
Total
25,252,968
26,099,613
Current
Non-Current
319,196
282,344
24,933,772
25,817,269
Total
25,252,968
26,099,613
BNDES 2008 / ANNUAL REPORT
60
Changes in the Constitutional FAT and FAT – Special deposits for the period ended December 31, 2008 were as follows:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
Constitutional
Foreign
Exchange
TJLP
Special
Deposits
Total
Balance at beginning of six-month period
Inflow of funds
Monetary adjustment
Foreign exchange variation
Accrued interest
Interest on special deposits
Amortization of special deposits
Interest paid
Transfer to FAT foreign exchange
Return on FAT foreign exchange
65,023,277
14,819,079
26,099,613
105,941,969
10,138,203
-
1,700,000
11,838,203
179,120
-
-
179,120
-
826,845
-
826,845
4,496,570
298,426
36,853
4,831,849
-
-
1,525,804
1,525,804
-
-
(2,492,576)
(2,492,576)
(3,928,256)
(538,146)
(1,616,726)
(6,083,128)
(3,422,481)
3,422,481
-
-
13,240,758
(13,240,758)
-
-
Balance at end of six-month period
85,727,191
5,587,927
25,252,968
116,568,086
17. BORROWINGS AND ONLENDINGS
17.1. Breakdown
a) Domestic Borrowings
To pay dividends and interest on capital for 2007, BNDES acquired federal government securities from FGTS
(Severance Pay Fund), by entering into a financing agreement in the amount of R$6,073,171 thousand, as of
December 31, 2008, under the following conditions: Inflation adjustment based on TR (managed prime rate)
plus interest of 4.8628% per year, to be amortized in 18 years, from January 1, 2009 to December 1, 2026.
BNDES 2008 / ANNUAL REPORT
61
b) Foreign Borrowings – Bonds
In Thousands of Brazilian Reais – R$
BNDES and Consolidated
Amount of issue
Maturity
US$1 billion
ITL 300 billion
US$300 million
Accrued interest
6.16.2018* JPMorgan Chase
Institution
4.28.2010 Citibank
12.12.2011 JPMorgan Chase
As of December 31,
2008
As of December 31,
2007
2,337,000
1,771,300
501,600
404,100
701,100
531,390
36,733
28,756
Total
3,576,433
2,735,546
Current
Non-Current
36,733
1,800,056
3,539,700
935,490
Total
3,576,433
2,735,546
*The repricing process of foreign securities issued in 1998 and maturing in June 2008 was concluded in June 2008. The repricing was made at the
original issue amount (US$1 billion), at face value, with interest rate of 6.369% per year and a new maturity for June 16, 2018.
Foreign loan agreements are subject to annual interest rates varying from 5.86% to 5.83% per year as of
December 31, 2008. Concentration by funding rate range is as follows:
In Thousands of Brazilian Reais – R$
BNDES and Consolidated
As of December 31,
2008
Funding rates:
From 5.1 to 7%
From 7.1 to 9%
From 9.1 to 11%
Accrued interest
Total
As of December 31,
2007
2,337,000
1,771,300
501,600
404,100
701,100
531,390
3,539,700
2,706,790
36,733
28,756
3,576,433
2,735,546
BNDES 2008 / ANNUAL REPORT
62
c) Domestic Onlendings – National Treasury
In Thousands of Brazilian Reais – R$
BNDES
Currency
As of December 31,
2008
Average Maturity
As of December 31,
2007
TR + 6% per year
Selic
IPCA + 6% per year
IGP-DI
18.26 years
1,559,519
1,536,747
-
-
137,123
9.05 years
1,635,723
1,451,018
7.02 years
1,323,420
1,190,121
US$ + 6% per year
20.98 years
17,953,332
7,364
Reais + 12%*
11.10 years
10,254,497
-
Reais
-
1,642
1,642
82,539
11,995
32,810,672
4,336,010
1,281,692
150,345
Non-Current
31,528,980
4,185,665
Total
32,810,672
4,336,010
Accrued interest
Total
Current
* Provisional Act 439/2008 authorized granting financing to BNDES in the amount of up to R$15 billion. In September and October 2008. the first two
financing agreements were entered into, in the amount of R$5.000.000 thousand each, through direct placement by the Federal Government of
government securities benefiting BNDES. National Treasury Bills and National Treasury Notes – Series F were issued.
In Thousands of Brazilian Reais – R$
Consolidated
Currency
As of December 31,
2008
Average Maturity
TR + 6% per year
Selic
IPCA + 6% per year
IGP-M + 10% per year
US$ + 6% per year
IGP-DI
Reais + 12%
Reais
Accrued interest
As of December 31,
2007
18.26 years
1,559,519
1,536,747
9.05 years
2,141,457
2,041,123
9.05 years
1,635,723
1,451,018
2.19 years
2,160,800
1,933,811
20.98 years
17,953,332
7,364
7.02 years
1,323,420
1,190,121
11.10 years
10,254,497
-
-
1,642
1,642
152,394
73,364
37,182,784
8,235,190
1,351,546
211,714
Non-Current
35,831,238
8,023,476
Total
37,182,784
8,235,190
Total
Current
BNDES 2008 / ANNUAL REPORT
63
d) Foreign Onlendings – Multilateral Institutions
In Thousands of Brazilian Reais – R$
BNDES and Consolidated
Institution
Currency
JBIC
IDB
NIB
KfW
YEN/US$
CDB
US$
Accrued interest
Total
Current
Average Maturity
As of December 31,
2008
As of December 31,
2007
7.61 years
2,731,683
2,064,901
Various
14.98 years
8,593,885
6,622,144
US$
10.12 years
350,550
283,408
1.30 year
355,881
271,217
14.17 years
1,752,750
-
125,106
106,667
13,909,855
9,348,337
927,289
567,455
Various
Non-Current
12,982,566
8,780,882
Total
13,909,855
9,348,337
Foreign onlending agreements are subject to annual interest rates varying from 1.63% to 10.35% per year as of
December 31, 2008. Concentration by funding rate range is as follows:
In Thousands of Brazilian Reais – R$
BNDES and Consolidated
As of December 31,
2008
Funding rates:
Up to 3%
3.1 to 5%
5.1 to 7%
7.1 to 9%
9.1 to 11%
Accrued interest
Total
As of December 31,
2007
2,830,556
729,613
6,786,081
112,617
3,817,562
6,798,457
-
1,335,288
350,550
265,695
13,784,749
9,241,670
125,106
106,667
13,909,855
9,348,337
BNDES 2008 / ANNUAL REPORT
64
BNDES’ foreign sources of funds are comprised of both fundraising through traditional financial instruments
– syndicated loans and issuance of Eurobonds – as well as fundraising from multilateral credit institutions
and governmental agencies. While market instruments are not guaranteed by the Federal Government,
the loans obtained from multilateral institutions – World Bank, Inter-American Development Bank (IDB),
Nordic Investment Bank (NIB) and their co-financiers – require under their Articles of Organization that such
loans be formally guaranteed by the Federal Government. Independent loans, which are not co-financed
with multilateral institutions yet raised with governmental entities, such as the Japan Bank for International
Cooperation (JBIC), Kreditanstelt für Wiederaufban (KfW) and China Development Bank (CDB), may or may
not be formally guaranteed by the Federal Government.
e) Merchant Marine Fund (FMM)
Since January 1984, BNDES is the financial agent of the Merchant Marine Fund (FMM), the purpose of which
is to provide financial support to National Merchant Marine fleet renewal, expansion, and overhauling activities.
As of December 31, 2008, FMM investments reached R$5,402,864 thousand, of which R$4,750,797 thousand
(R$450,793 thousand in current and R$4,300,004 thousand in long-term) involve BNDES risk (R$2,913,118
thousand as of December 31, 2007). Since June 2002, under guidance of the Central Bank of Brazil, transactions
involving BNDES risk, which rectified the related sources of funds, have been reclassified to the Bank’s assets.
f) National Development Fund (FND)
On October 3, 1988, with the enactment of Decree 96905, BNDES assumed the responsibilities of the National
Development Fund (FND) Executive Department, providing technical, administrative and personnel support.
FND’s assets totaled R$7,726,722 thousand as of December 31, 2008; its net equity amounted to R$1,934,189
thousand, divided into 2,363 million shares, with a par value of R$0.8289.
The funds raised from FND amounted to R$4,049,038 thousand (R$761,002 thousand in current and R$3,288,036
thousand in long-term) and R$5,107,088 thousand in 2007.
BNDES 2008 / ANNUAL REPORT
65
17.2. Borrowings and Onlendings, by Year of Maturity, are as Follows:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Domestic
Current:
2009
2010
2011
2012
2013
After 2013
Total
Foreign
Consolidated
Total
Domestic
Foreign
Total
2,338,265
964,022
3,302,287
2,176,877
964,022
3,140,899
7,376,871
1,805,612
9,182,483
5,262,498
1,805,612
7,068,110
3,865,644
2,203,071
6,068,715
3,356,508
2,203,071
5,559,579
4,230,636
1,208,441
5,439,077
4,228,740
1,208,441
5,437,181
4,265,113
1,153,748
5,418,861
4,622,405
1,153,748
5,776,153
28,575,251
10,151,394
38,726,645
32,449,219
10,151,394
42,600,613
50,651,780
17,486,288
68,138,068
52,096,247
17,486,288
69,582,535
In Thousands of Brazilian Reais – R$
As of December 31, 2007
BNDES
Domestic
Current:
2008
2009
2010
2011
2012
After 2012
Total
Foreign
Consolidated
Total
Domestic
Foreign
Total
1,580,673
2,367,511
3,948,184
1,162,529
2,367,511
3,530,040
1,236,812
597,042
1,833,854
1,105,710
597,042
1,702,752
4,890,240
1,381,497
6,271,737
3,011,163
1,381,497
4,392,660
2,003,893
1,210,613
3,214,506
996,476
1,210,613
2,207,089
662,362
778,245
1,440,607
660,471
778,245
1,438,716
5,584,216
5,748,975
11,333,191
9,356,104
5,748,975
15,105,079
15,958,196
12,083,883
28,042,079
16,292,453
12,083,883
28,376,336
18. ISSUE OF DEBENTURES
BNDES System issued private debentures through BNDES and public debentures through BNDESPAR:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
As of December 31, 2007
Debentures issued
BNDES
Private issue (BNDES)
Public issue (BNDESPAR)
7,003,358
7,003,358
-
-
2,302,437
-
-
Total
7,003,358
9,305,795
-
2,025,935
Consolidated
BNDES
Consolidated
2,025,935
BNDES 2008 / ANNUAL REPORT
66
18.1. PRIVATE ISSUE – BNDES
BNDES issued 700,000 thousand simple, registered debentures, nonconvertible into shares, in five series, with
no secured or floating guarantee, no preemptive rights, however, with collateral.
The unit par value of debentures is R$10 thousand as of the issuance date, December 23, 2008. The placement
was private, through exclusive subscription by FGTS Investment Fund, represented by its manager, Caixa Econômica
Federal (CEF).
Debentures will be adjusted on a monthly basis every 15th of each month based on TR and yield 6% p.a. on
a monthly basis. Maturity is scheduled for October 15, 2029 and the liability will be amortized monthly from
January 15, 2009 through October 15, 2029.
The adjusted amount of liabilities for debentures issued is as follows:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
1st series
Adjusted principal (TR)
Accrued interest (6% p.a.)
2nd series
Adjusted principal (TR)
Accrued interest (6% p.a.)
3rd series
Adjusted principal (TR)
Accrued interest (6% p.a.)
4th series
Adjusted principal (TR)
Accrued interest (6% p.a.)
5th series
Adjusted principal (TR)
Accrued interest (6% p.a.)
Total
Current
Non-Current
Total
BNDES 2008 / ANNUAL REPORT
67
As of December 31, 2007
1,500,234
-
486
-
1,500,234
-
486
-
1,500,234
-
486
-
1,500,234
-
486
-
1,000,156
-
322
-
7,003,358
-
108,291
-
6,895,067
-
7,003,358
-
18.2. Public Issue – BNDESPAR
BNDESPAR issued 600,000 simple, registered, book-entry, nonconvertible debentures of a single series, without guarantee
or preference (non-privileged), with a unit par value of R$1,000 on the issue date, totaling R$600,000 thousand.
This public distribution was held as part of the Issuer’s First Public Debenture Distribution Program approved at
the Meeting of Executive Board of BNDES, the issuer’s single shareholder, held on September 2, 2006, pursuant
to Executive Board’s Decision 836/2006 – BNDES and filed with the Brazilian Securities and Exchange Commission
on December 19, 2006, under No. CVM/SRE/PRO/2006/0011.
Debentures were subscribed and paid up at the price of R$898.33 each, corresponding to a unit par value of
R$1,000 (one thousand reais), adjusted for a discount of 10.167%, determined in a book-building procedure.
Debentures’ unit par value should be adjusted from the subscription and payment date based on the extended
consumer price index (IPCA), as determined and disclosed by the Brazilian Institute of Geography and Statistics
(IBGE), and the adjustment amount should be added automatically, according to the formulas defined in the
debenture indenture.
Debentures will pay interest of 6% p.a. calculated on the debenture’s updated unit par value and paid at the
end of each capitalization period, that is, January 15, 2009, January 15, 2010, January 15, 2011 and January 15,
2012, as detailed in the debenture indenture. Debentures will be repaid in a single installment, on the maturity
date, January 15, 2012.
In the second distribution, which occurred on July 1, 2007, BNDESPAR issued 1,350 thousand simple, registered,
book-entry debentures, in two series, out of which 550 thousand debentures of the First Series and 800 thousand
debentures of the Second Series, without guarantee and preemptive rights (non-privileged), at a unit par value of
R$1,000, in the second issue, totaling R$1,350,000 thousand. These debentures were subscribed and paid up at
their unit par value.
The unit par value of the First Series debentures will not be adjusted, bearing only fixed interest of 11.20% per
year. Interest and principal will be fully paid on the maturity date, January 1, 2011.
The unit par value of the First Series debentures will be adjusted based on the IPCA (extended consumer price
index), calculated and released by the IBGE. The result of the adjustment is automatically added to the par value,
under the formulas set forth in the Indenture Final Amendment.
BNDES 2008 / ANNUAL REPORT
68
On the second-series debentures’ unit par value, adjusted for inflation, fixed interest of 6.80% per year will be
calculated, since the subscription and payment date or from the date of prior payment of second-series interest,
as the case may be, through the actual payment date. Second-series interest will be paid on August 15, 2009,
August 15, 2010, August 15, 2011, August 15, 2012, and on the maturity date, August 15, 2013, when it will
be repaid in a single installment. Second Series interest will be calculated according to the formula set forth in the
Indenture Final Amendment.
The adjusted amount of liabilities for debentures issued is as follows:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
1st distribution
Adjusted principal (IPCA)
Accrued interest (6% p.a.)
Discount
Accumulated amortization of discount*
2nd distribution
1st series
Principal
Accrued interest (11.2% p.a.)
2nd series
Adjusted principal (IPCA)
Accrued interest (6.8% p.a.)
665,811
As of December 31, 2007
625,776
83,333
38,160
(61,002)
(61,002)
24,598
12,791
712,739
615,725
550,000
550,000
89,799
24,874
865,143
812,961
84,756
22,375
Total
1,589,698
2,302,437
1,410,210
2,025,935
Current
Non-Current
168,088
-
2,134,349
2,025,935
Total
2,302,437
2,025,935
* Discount will be amortized on a straight-line basis from December 2007 to January 2012.
BNDES 2008 / ANNUAL REPORT
69
19. PRIVATIZATION OF COMPANHIA VALE DO RIO DOCE
Pursuant to Law 9491/97, regulated by Decree 2201/97 and the Share Transfer and Debt Assumption Agreement
and Other Covenants, shares of Companhia Vale do Rio Doce (CVRD) owned by the Federal Government
(94,953,982 registered common shares and 4,372,154 registered preferred shares) were transferred to BNDES.
A portion of these shares was sold during CVRD’s privatization at auctions held in May 1997, and the proceeds
were transferred to BNDES.
In exchange for the funds received, BNDES agreed to, alternatively or jointly, at the Ministry of Finance’s discretion:
a) Assume both acknowledged and novated debts of the Federal Government involving the Salary Variation
Compensation Fund (FCVS);
b) Transfer to the Federal Government its own BNDESPAR debentures with the same profile (dates of payment
and financial conditions) as those of the debts of the Federal Government to the FCVS.
On December 29, 2000, a debt assumption was formalized in the amount of R$2,593,470 thousand (originally
received, adjusted by TR variation, plus annual interest of 6.17% per year), corresponding to 1,608,084
CVSA970101 securities, payable under the following conditions:
Grace period for payment of interest
4 years and 1 month beginning on December 1, 2000, and first payment on January 1, 2005
Grace period for payment of principal 8 years and 1 month beginning on December 1, 2000, and first payment on January 1, 2009
Remaining term
27 years beginning on December 1, 2000 and last payment of principal and charges on January 1, 2027
Interest rate
TR (managed prime rate) + 6.17% per year
In March 2002, BNDES sold through a public offering on the domestic and foreign markets, 39,389,193 common
shares issued by Cia. Vale do Rio Doce (CVRD) for R$2,218,339 thousand, settled in April 2002. Such amount
was also the subject matter of an assumption of debt of the Federal Government regarding the Salary Variation
Compensation Fund (FCVS), monetarily adjusted by TR (managed prime rate) and interest of 6.17% per year.
In December 2005, the remaining shares transferred by the Federal Government were sold in an auction together
with minority interest, for R$1,516 thousand, and the settlement was concluded in January 2006.
BNDES 2008 / ANNUAL REPORT
70
In August 2006, BNDES and the Federal Government entered into a Debt Novation and Acknowledgment
Agreement in the amount of R$5,293,537 thousand, corresponding to the portion of the agreements above
intended to change BNDES debt profile and increase its Regulatory Capital, adjusting its terms and conditions to
those of a hybrid debt/equity instrument, pursuant to Resolution 2837, as established by the National Monetary
Council (CMN) on May 30, 2001, under the terms of Executive Act 315, of August 3, 2006.
As of December 31, 2008, the balances of these agreements were as follows:
Hybrid Debt/Equity Instrument: R$6,023,934 thousand (R$5,730,182 thousand as of December 31, 2007).
• Debt Assumption Agreement: R$1,568,958 thousand (R$1,547,056 thousand as of December 31, 2007),
recorded under Domestic Onlendings – National Treasury.
•
20. INCOME AND SOCIAL CONTRIBUTION TAXES
20.1. Current
BNDES calculates income and social contribution taxes based on annual taxable income and is subject to monthly
payments on an estimated basis, whenever the tax suspension/reduction is not applicable, as provided for in articles
27 to 35 of Law 8981/95 and other applicable legislation.
As of December 31, 2008 and 2007, the Bank recorded provisions for social contribution tax (at the rate of 9%
until April 2008 and 15% beginning May 2008 pursuant to article 17 of Law 11727/2008) and income tax
(at a 15% rate, plus a 10% surtax).
In the consolidated statement, only BNDESPAR recorded the provision for social contribution tax at the rate of 9%.
BNDES 2008 / ANNUAL REPORT
71
Income and social contribution taxes were calculated as follows:
In Thousands of Brazilian Reais – R$
BNDES
2nd Half of 2008
Income
Tax
Income before taxes
Employee profit sharing
Tax basis
Tot al income tax and social contribution
charges (credit) at rates of 25% and
9% respectively
Eff ects of additions (deductions)
on tax calculation:
• C redits written off as loss
• A llowance for loan losses
(Central Bank of Brazil Resolution
2682/99)
• E quity in subsidiaries
• A llowance for investment valuation
• Provision for civil and labor contingencies
• Int erest on capital payable to the
Federal Government – Bank
• A ctuarial liabilities – FAMS
• Planned Employee Retirement Program
• A djustment of securities to fair value
• A djustment of swap to fair value
• FAPES – Technical Reserves
• G rants – Tax Incentives
• Dividends from investments stated at cost
• Increase in CSLL rate
• O ther additions (deductions), net
Income tax and social contribution
Reversal of IRPJ and CSLL in 2007
Income tax and social contribution
As of December 31, 2008
Social
Contribution
Income
Tax
As of December 31, 2007
Social
Contribution
Income
Tax
Social
Contribution
1,591,703
1,591,703
6,014,074
6,014,074
8,472,151
8,472,151
(32,910)
(32,910)
(32,910)
(32,910)
(34,770)
(34,770)
1,558,793
1,558,793
5,981,164
5,981,164
8,437,381
8,437,381
389,698
140,292
1,495,291
538,305
2,109,345
759,364
(48,401)
(17,425)
(55,819)
(20,095)
(140,523)
(50,588)
131,111
47,200
60,970
21,949
(7,394)
(2,662)
(67,957)
(24,465)
(905,716)
(326,058)
(1,030,394)
(370,942)
-
-
76,085
27,390
(3,054)
(1,100)
148,926
53,613
(7,225)
(2,601)
(329,866)
(118,752)
(329,866)
(118,752)
(303,000)
(109,080)
7,072
2,545
17,296
6,226
12,643
4,552
(9,662)
(3,478)
(19,312)
(6,952)
46,025
16,569
(19,459)
(7,005)
(19,459)
(7,005)
-
-
48,992
17,637
48,992
17,637
-
-
72,617
26,142
72,617
26,142
29,355
10,568
(14,669)
(5,281)
(14,669)
(5,281)
-
-
-
-
-
-
(3,248)
(1,169)
-
41,752
-
72,602
-
-
12,546
6,765
12,089
7,933
(4,053)
3,892
168,968
104,827
511,340
260,264
777,616
285,293
-
-
(4,244)
(1,523)
-
-
168,968
104,827
507,096
258,741
777,616
285,293
BNDES 2008 / ANNUAL REPORT
72
In Thousands of Brazilian Reais – R$
Consolidated
2nd Half of 2008
Income
Tax
Income before taxes
Employee profit sharing
Tax basis
Tot al income tax and social contribution
charges (credit) at the rates of 25%
and 9% respectively
Eff ects of additions (deductions)
on tax calculation:
• C redits written off as loss
• A llowance for loan losses
(Central Bank of Brazil Resolution
2682/99)
• E quity in subsidiaries
• Int erest on capital of subsidiaries
and affiliates
• B arter of securities
• Dividends from investments stated at cost
• Int erest on capital payable to the
Federal Government – Bank
• A llowance for investment valuation
• Provision for civil and labor contingencies
• A ctuarial liabilities – FAMS
• Premium amortization, net of realization
• A djustment of securities to fair value
• A djustment of swap to fair value
• FAPES – Technical Reserves
• Planned Employee Retirement Program
• G rants – Tax Incentives
• E ff ect of CSLL rate increase
(May to December)
• O ther additions (deductions), net
• Effect of tax loss carryforwards FINAME
Income tax and social contribution
Reversal of IRPJ and CSLL in 2007
Income tax and social contribution
BNDES 2008 / ANNUAL REPORT
73
As of December 31, 2008
Social
Contribution
Income
Tax
Social
Contribution
As of December 31, 2007
Income
Tax
Social
Contribution
1,623,194
1,623,194
7,335,966
7,335,966
10,046,658
10,046,658
(53,950)
(53,950)
(53,950)
(53,950)
(69,400)
(69,400)
1,569,244
1,569,244
7,282,016
7,282,016
9,977,258
9,977,258
392,311
141,232
1,820,504
655,381
2,494,315
897,953
(155,775)
(56,079)
(163,126)
(58,725)
(146,191)
(52,629)
128,778
46,360
38,534
13,872
(116,413)
(41,909)
(17,366)
(6,252)
(1,453)
(524)
(275,465)
(99,167)
16,564
5,963
16,564
5,963
16,239
5,846
1,116
402
(39,201)
(14,112)
36,526
13,149
(124,752)
(44,911)
(221,875)
(79,875)
(131,828)
(47,458)
(329,866)
(118,752)
(329,866)
(118,752)
(303,000)
(109,080)
173,355
62,408
163,893
59,002
40,090
14,432
(51,022)
(18,370)
121,749
43,829
32,320
11,635
9,074
3,266
21,728
7,822
17,650
6,354
(8,076)
319
(22,057)
(3,285)
(32,201)
(633)
(19,459)
(7,005)
(19,459)
(7,005)
-
-
48,992
17,637
48,992
17,637
-
-
72,617
26,142
72,617
26,142
29,355
10,568
(11,660)
(4,198)
(27,309)
(9,831)
64,499
23,220
(34,273)
(12,573)
(34,273)
(12,573)
-
-
-
15,334
-
50,807
-
-
17,946
9,020
11,739
7,114
80
7,275
90,159
54,485
90,159
54,485
-
-
198,663
114,428
1,547,860
637,372
1,725,976
639,556
-
-
(4,244)
(1,523)
-
-
198,663
114,428
1,543,616
635,849
1,725,976
639,556
Breakdown of taxes payable is as follows:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Taxes on income:
Provision:
Income tax
Social contribution tax
Prepayments:
Income tax
Social contribution tax
Taxes payable
As of December 31, 2007
Consolidated
BNDES
Consolidated
511,340
1,547,860
777,616
260,264
637,372
285,292
1,725,975
639,554
771,604
2,185,232
1,062,908
2,365,529
(249,427)
(1,228,617)
(255,866)
(834,215)
(136,062)
(492,466)
(95,462)
(310,900)
(385,489)
386,115
(1,721,083)
464,149
(351,328)
711,580
(1,145,115)
1,220,414
Recoverable and prepaid taxes are as follows:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
As of December 31, 2007
Consolidated
BNDES
Consolidated
Income tax overpaid in prior years
Withholding income tax on fixed income
Withholding income tax on variable income
Withholding income tax on interest on capital
Prepayments – Audiovisual
Prepayments of IRPJ and CSLL for offset
Other
-
622
-
2,287
41,303
178,686
39,182
104,497
5,370
9,570
4,130
7,600
-
30,199
-
-
-
1,657
4,094
3,202
Total
46,673
266,554
47,406
315,877
Current
Long-term
46,673
266,554
47,406
315,877
-
-
-
-
Total
46,673
266,554
47,406
315,877
-
-
-
182,317
-
45,820
-
15,974
BNDES 2008 / ANNUAL REPORT
74
20.2. Tax Credits
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Breakdown of deferred tax assets:
Credits written off as loss
Provision for civil and labor contingencies
Allowance for investment valuation
Adjustment of swap to fair value
Swa p transactions – Regulatory Instruction 334/03
of the Federal Revenue Service
Adjustment of securities to fair value
Employee profit sharing
Planned Employee Retirement Program
Unearned interest
Premium amortization, net of realization
Barter of securities
Allowance for losses on assets
Tax loss
Social contribution tax loss carryforwards
As of December 31, 2007
Consolidated
BNDES
Consolidated
262,771
314,346
303,230
351,457
311,330
477,490
59,984
263,178
29,455
190,254
26,417
130,642
4,304
4,304
4,173
4,173
-
-
38,536
38,536
-
-
5,823
5,823
13,427
20,904
11,822
23,596
42,740
57,693
62,594
87,719
-
-
19,961
19,961
-
69,366
-
109,968
-
218
-
-
152
152
503
503
-
90,159
-
-
-
54,485
-
-
664,179
1,279,371
533,043
1,035,556
5,642
5,642
-
-
656
656
-
-
Subtotal
Total
6,298
670,477
6,298
1,285,669
533,043
1,035,556
Current
Long-term
132,113
379,475
155,025
305,858
538,364
906,194
378,018
729,698
Total
670,477
1,285,669
533,043
1,035,556
Subtotal
Bre akdown of deferred tax on fair value adjustment
of available-for-sale securities:
IRPJ and CSLL
PIS and Cofins
Breakdown of deferred tax liabilities:
Amortization of discount
Adjustment of swap to fair value
Adjustment of securities to fair value
-
(8,054)
-
(8,153)
(2,548)
(2,548)
-
-
(30,876)
(30,876)
-
-
(33,424)
(41,478)
-
(8,153)
Taxes payable on available-for-sale securities:
IRPJ and CSLL
PIS and Cofins (taxes on revenues)
(119,074)
(119,074)
-
-
(13,843)
(13,843)
-
-
Subtotal
Total
(132,917)
(166,341)
(132,917)
(174,395)
-
(8,153)
Current
Long-term
(30,876)
(30,876)
-
-
(135,465)
(143,519)
-
(8,153)
Total
(166,341)
(174,395)
-
(8,153)
Subtotal
BNDES 2008 / ANNUAL REPORT
75
Pursuant to Central Bank of Brazil Resolution 3059/02 and prevailing tax rates mentioned in Note 20.1, the Bank
recognized deferred tax assets and liabilities on temporary additions and deductions that will be taxable and
deductible from income and social contribution tax bases in the future. As of December 31, 2008, the provisions
for deferred income and social contribution taxes were as follows:
In Thousands of Brazilian Reais – R$
2 Half of 2008
nd
BNDES
Income tax
Social contribution
Total
Consolidated
As of December 31, 2008
BNDES
Consolidated
As of December 31, 2007
BNDES
Consolidated
(64,057)
(52,500)
2,279
65,607
(44,637)
(38,435)
(21,147)
95,434
144,882
(16,070)
(237,941)
(60,020)
(102,492)
(73,647)
97,713
210,489
(60,707)
(297,961)
The effect of the increase in social contribution tax rate (from 9% to 15% beginning May 2008, for BNDES and
FINAME) amounted to R$94,067 thousand (R$107,940 thousand – Consolidated) and is included in the table
shown above.
Basically, deferred tax assets on temporary differences arise from:
a) Credits written off as loss: refer to losses on loans or interbank onlendings which are past due for more than
360 days or had their maturity accelerated due to noncompliance with contract clauses. Such receivables may
be under amicable collection by the receivables recovery department or, otherwise subject to court collection.
b) Provisions for civil and labor contingencies: refer to labor (note 21.a) and civil (21.b) contingencies.
c) Allowance for losses on investments: equity interests accounted at cost or under the equity method and other
investments.
d) Swap transactions: net gains or losses on swap transactions used to hedge payables.
e) Barter of securities: refers to the tax credit recorded to offset the effect of current income and social contribution
taxes paid on the difference between fair value and carrying amount arising from the securities barter transaction.
The realization of these credits is tied to the sale of the underlying securities.
f) Planned retirement employee program: estimated costs of the plan which provides incentives to employees who
qualify for retirement for length of service (note 27).
BNDES 2008 / ANNUAL REPORT
76
Tax credits and taxes payable on temporary additions and deductions are realized upon payment, utilization or
reversal of the related provisions. The amounts recognized and written off in the year are as follows:
In Thousands of Brazilian Reais – R$
BNDES
Increase in
CSLL Rate
12/31/2007
Tax credits:
Credits written off as loss
Provision for civil and labor contingencies
Allowance for investment valuation
Swa p transactions – Regulatory Instruction
334/03 of the Federal Revenue Service
Adjustment of swap to fair value
Adjustment of securities to fair value
Employee profit sharing
Planned Employee Retirement Program
Recognition
Realization
12/31/2008
303,230
53,511
52,541
(146,511)
262,771
59,984
10,585
252,150
(11,389)
311,330
26,417
4,662
187
(1,811)
29,455
38,536
6,801
-
(45,337)
-
4,173
736
82,738
(83,343)
4,304
5,823
1,028
183,079
(189,930)
-
11,822
2,086
13,427
(13,908)
13,427
62,594
11,046
-
(30,900)
42,740
19,961
3,523
-
(23,484)
-
503
89
-
(440)
152
533,043
94,067
584,122
(547,053)
664,179
IRPJ and CSLL
-
-
5,642
-
5,642
PIS and Cofins
-
-
656
-
656
Unearned interest
Allowance for losses on assets
Subtotal
Tax credits payable on available-for-sale securities:
Subtotal
-
-
6,298
-
6,298
533,043
94,067
590,420
(547,053)
670,477
Adjustment of swap to fair value
-
-
(2,548)
-
(2,548)
Adjustment of securities to fair value
-
-
(30,876)
-
(30,876)
-
-
(33,424)
-
(33,424)
IRPJ and CSLL
-
-
(119,074)
-
(119,074)
PIS and Cofins
-
-
(13,843)
-
(13,843)
Subtotal
-
-
(132,917)
-
(132,917)
Total
-
-
(166,341)
-
(166,341)
Total
Taxes payable liabilities:
Subtotal
Taxes payable on available-for-sale securities:
BNDES 2008 / ANNUAL REPORT
77
In Thousands of Brazilian Reais – R$
Consolidated
Increase in
CSLL Rate
12/31/2007
Tax credits:
Credits written off as loss
Provision for civil and labor contingencies
Allowance for investment valuation
Swa p transactions – Regulatory Instruction
334/03 of the Federal Revenue Service
Adjustment of swap to fair value
Adjustment of securities to fair value
Employee profit sharing
Planned Employee Retirement Program
Unearned interest
Amortization of premium
Barter of securities
Allowance for losses on assets
Tax loss
Social contribution tax loss carryforwards
Recognition
Realization
12/31/2008
351,457
57,610
55,811
(150,532)
314,346
263,178
18,815
302,024
(106,527)
477,490
130,641
4,662
242,917
(187,966)
190,254
38,536
6,801
-
(45,337)
4,304
4,173
736
82,738
(83,343)
5,823
1,028
183,079
(189,930)
-
23,597
2,561
20,904
(26,158)
20,904
87,719
12,115
457
(42,598)
57,693
19,961
3,523
-
(23,484)
-
109,968
-
11,834
(52,436)
69,366
-
-
218
-
218
503
89
-
(440)
152
-
-
90,159
-
90,159
-
-
54,485
-
54,485
1,035,556
107,940
1,044,626
(908,751)
1,279,371
IRPJ and CSLL
-
-
5,642
-
5,642
PIS and Cofins (taxes on revenues)
-
-
656
-
656
-
-
6,298
-
6,298
1,035,556
107,940
1,050,924
(908,751)
1,285,669
Subtotal
Taxes credits on available-for-sale securities:
Subtotal
Total
Taxes payable liabilities:
Amortization of discount
(8,153)
-
-
99
(8,054)
Adjustment of swap to fair value
-
-
(2,548)
-
(2,548)
Adjustment of securities to fair value
-
-
(30,876)
-
(30,876)
(8,153)
-
(33,424)
99
(41,478)
IRPJ and CSLL
-
-
(119,074)
-
(119,074)
PIS and Cofins
-
-
(13,843)
-
(13,843)
-
-
(132,917)
-
(132,917)
(8,153)
-
(166,341)
99
(174,395)
Subtotal
Taxes payable on available-for-sale securities:
Subtotal
Total
BNDES 2008 / ANNUAL REPORT
78
In Thousands of Brazilian Reais – R$
BNDES
12/31/2006
Tax credits:
Credits written off as loss
Provision for civil and labor contingencies
Allowance for investment valuation
Swa p transactions – Regulatory Instruction 334/03 of the
Federal Revenue Service
Adjustment of securities to fair value
Employee profit sharing
Planned Employee Retirement Program
Unearned interest
Allowance for losses on assets
Total
Recognition
Realization
12/31/2007
498,797
33,543
(229,110)
303,230
10,480
77,045
(27,541)
59,984
25,374
3,195
(2,152)
26,417
38,536
5,604
(1,431)
42,709
-
5,863
(40)
5,823
20,060
11,822
(20,060)
11,822
-
62,594
-
62,594
-
19,961
-
19,961
503
-
-
503
593,750
219,627
(280,334)
533,043
In Thousands of Brazilian Reais – R$
Consolidated
12/31/2006
Tax credits:
Credits written off as loss
Provision for civil and labor contingencies
Allowance for investment losses
Swa p transactions – Regulatory Instruction 334/03
of the Federal Revenue Service
Adjustment of securities to fair value
Employee profit sharing
Planned Employee Retirement Program
Unearned interest
Recognition
Realization
12/31/2007
555,865
33,553
(237,961)
351,457
158,195
136,279
(31,296)
263,178
181,523
21,439
(72,321)
130,641
38,536
5,604
(1,431)
42,709
-
5,863
(40)
5,823
25,330
19,857
(21,590)
23,597
-
87,719
-
87,719
-
19,961
-
19,961
Amortization of premium
133,927
27,811
(51,770)
109,968
Barter of securities
239,638
-
(239,638)
-
503
-
-
503
1,333,517
358,086
(656,047)
1,035,556
(8,153)
-
-
(8,153)
(8,153)
-
-
(8,153)
Allowance for losses on assets
Total
Taxes payable:
Amortization of discount
Total
BNDES 2008 / ANNUAL REPORT
79
Unrecorded tax credits as of December 31, 2008 totaled R$2,293,766 thousand (R$11,623,496 thousand as of
December 31, 2007), BNDES, and R$3,214,098 thousand (R$2,550,983 thousand as of December 31, 2007),
Consolidated. These amounts refer basically to the allowance for loan losses (Central Bank of Brazil Resolution
2682/99), part of the provisions for civil and labor contingencies, allowance for losses on investments arising
from tax incentives (Finor – Northeast Investment Fund) – only for CSLL – and others, and the provision for medical
expenses (FAMS). Pursuant to Central Bank of Brazil Resolution 3059/02, tax credits can only be recognized
on amounts that will be realized in up to 5 years, a period changed to 10 years under Central Bank of Brazil
Resolution 3355/06. However, the 5-year timeframe has been conservatively maintained for the realization
of tax credits, and these amounts will either be realized over a longer period or are not expected to be realized.
The expected realization of tax credits is as follows:
In Thousands of Brazilian Reais – R$
BNDES
2009
Credits written off as loss
Provision for civil and labor contingencies
Allowance for investment losses
Adjustment of swap to fair value
Employee profit sharing
Planned Employee Retirement Program
Allowance for losses on assets
Total
2010
2011
2012
2013
After 2013
Total
92,236
77,814
13,513
47,012
32,196
-
262,771
2,071
74,131
2,374
1,302
231,452
-
311,330
-
-
-
-
-
29,455
29,455
4,304
-
-
-
-
-
4,304
13,427
-
-
-
-
-
13,427
20,076
8,600
8,194
5,870
-
-
42,740
-
-
-
-
-
152
152
132,114
160,545
24,081
54,184
263,648
29,607
664,179
In Thousands of Brazilian Reais – R$
Consolidated
2009
2010
2011
2012
2013
After 2013
Total
Credits written off as loss
Provision for civil and labor contingencies
Allowance for investment losses
Adjustment of swap to fair value
Employee profit sharing
Unrealized gain on marketable securities
barter
Planned Employee Retirement Program
Amortization of premium
Allowance for losses on assets
Income tax loss carryforwards
Tax loss carryforwards
122,667
94,032
15,106
50,079
32,463
-
314,347
3,777
238,037
2,747
1,459
231,470
-
477,490
99,289
45,090
-
14,089
-
31,785
190,253
4,304
-
-
-
-
-
4,304
20,905
-
-
-
-
-
20,905
218
-
-
-
-
-
218
25,840
12,390
10,796
8,667
-
-
57,693
52,705
1,954
967
3,414
370
9,956
69,366
-
-
-
-
-
152
152
31,107
33,611
25,441
-
-
-
90,159
18,664
20,166
15,654
-
-
-
54,484
Total
379,476
445,280
70,711
77,708
264,303
41,893
1,279,371
BNDES 2008 / ANNUAL REPORT
80
The present value of recorded tax credits, calculated considering the average funding rate, is R$491,493 thousand
(R$1,004,886 thousand - Consolidated).
Under article 5 of Resolution 3059/02, the assets corresponding to the portion of tax credits must be written
off whenever the amounts effectively realized in two consecutive periods are less than 50% of the amounts
estimated for the same period in a technical study prepared by the Bank. The provisions of this article are not
applicable to tax credits recognized before the date on which such Resolution took effect. As of December 31,
2008, no write-offs of such nature have been made. The tax credits recognized after this Resolution took effect
total R$570,375 thousand (R$1,088,679 thousand - Consolidated).
21. PROVISIONS FOR CIVIL AND LABOR CONTINGENCIES
BNDES is a party to various labor and civil lawsuits arising from the normal course of its business.
The lawsuits were classified into three risk of loss categories: probable, possible, and remote, based on the
likelihood of loss according to opinion of the internal and external legal counsel that analyze the nature of the
lawsuits, similarity with previous cases, complexity, previous court decisions, and the status of the lawsuits.
The use of this classification criterion complies with CVM Resolution 489, of October 3, 2005, concerning
contingencies, which recommends recognizing a provision in the total amount of contingencies classified
as probable and the disclosure of contingencies classified as possible.
The provisions recognized were considered by Management to be sufficient to cover any losses.
The provisions recognized by nature are as follows:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Consolidated
As of December 31, 2007
BNDES
Consolidated
Labor lawsuits
Civil lawsuits
44,425
57,284
69,617
81,051
761,097
1,242,074
140,201
731,312
Total
805,522
812,363
1,299,358
209,818
Current
Non-Current
5,178
10,195
7,493
12,078
800,344
1,289,163
202,325
800,285
Total
805,522
1,299,358
209,818
812,363
BNDES 2008 / ANNUAL REPORT
81
a) Labor Lawsuits
The provision for labor contingencies reflects the risk of probable loss on 115 ongoing lawsuits that refer basically
to job reinstatement of dismissed employees (136 lawsuits - Consolidated.)
Changes in the provisions for labor contingencies in the period are as follows:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Balance at beginning of year
Recognition (reversal), net
Payments
Balance at end of year
Consolidated
As of December 31, 2007
BNDES
Consolidated
69,617
81,051
79,690
96,018
(17,720)
(15,509)
(10,073)
(14,191)
(7,472)
(8,258)
-
(776)
44,425
57,284
69,617
81,051
As of December 31, 2008, there are 87 ongoing lawsuits (105 - Consolidated) classified as possible loss, in the
estimated amount of R$26,382 thousand (R$30,499 thousand - Consolidated).
b) Civil Lawsuits
The provision for civil contingencies reflects the risk classification as probable loss on 38 (42 - Consolidated)
lawsuits, the main of which refer to a claim for compensation for property damages and pain and suffering, for
which the judgement of the appeals filed is pending, and privatizations made by the Federal Government and
implemented by BNDES as the manager of the National Privatization Program (PND), besides contractual issues.
At the consolidated level, lawsuits are similar, with the main one being a lawsuit filed in 1995, relating to
a privatization auction held in 1989 for which the lower court decision, favorable to BNDESPAR, was revised
and still awaiting judgement.
BNDES 2008 / ANNUAL REPORT
82
Changes in the provision for civil contingencies in the period are as follows:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Consolidated
As of December 31, 2007
BNDES
Consolidated
Balance at beginning of year
Recognition (reversal), net
140,201
731,312
159,029
587,066
620,896
510,762
(18,828)
144,246
Balance at end of year
761,097
1,242,074
140,201
731,312
As of December 31, 2008, there are 73 ongoing lawsuits (84 - Consolidated) classified as possible loss, in the
estimated amount of R$285,733 thousand (R$734,658 thousand - Consolidated).
22. SHAREHOLDERS’ EQUITY
BNDES’s subscribed capital is represented by 6,273,711,452 registered common shares, without par value, all held
by the Federal Government.
In September 2008, the Board of Directors of BNDES approved the additional payment of dividends for 2007
and 2006, respectively, in the amount of R$1,065,571 thousand and R$2,465,279 thousand, paid with federal
government securities (CVS) that month.
22.1. Profit Reserves
In 2008, the by-laws of BNDES includes the recognition of a profit reserve for future capital increase, a profit
reserve for operating margin and a tax incentive reserve.
The reserve for future capital increase is intended to assure that a shareholders’ equity compatible with the
expected increases in the Bank’s assets is formed, and is recorded at the rate of 15% of adjusted net income,
limited to 30% of capital. In 2008, the reserve for future capital increase was recorded in the amount of
R$748,307 thousand.
The reserve for operating margin is intended to guarantee operating margin compatible with the development of
the Bank’s transactions, and is recorded at the rate of 100% of the remaining balance of net income, limited to 50%
of the capital. In 2008, the reserve for operating margin was recorded in the amount of R$2,920,742 thousand.
BNDES 2008 / ANNUAL REPORT
83
Further, with the enactment of Law 11638/07, tax incentives are recorded in the 2008 net income, and are allocated
to profit reserves. In 2008, BNDES recorded a Tax incentive reserve in the amount of R$58,678 thousand which
was deducted from the calculation basis of mandatory dividends, pursuant to article 195-A of Law 6404/76.
22.2. Mandatory Minimum Dividend
The by-laws of BNDES provides for the payment of minimum dividends of 25% of adjusted net income, pursuant
to article 202 of the Brazilian Corporate Law.
Mandatory minimum dividends were calculated as follows:
Net income
Legal reserve
Tax incentive reserve
5,313,040
Adjusted net income
Mandatory minimum dividends – 25%
Proposed dividends subject to interest on capital
4,988,710
1,247,178
1,319,462
(265,652)
(58,678)
In 2007, BNDES allocated 5% of its net income of R$7,313,765 thousand for the recognition of the legal reserve,
in the amount of R$365,688 thousand. Twenty-five percent (25%) of net income was allocated as mandatory
minimum compensation to the shareholder, after the recognition of the legal reserve, of which R$1,212,000
thousand as interest on capital and R$525,019 thousand as dividends.
22.3. Retained Earnings
The balance of retained earnings, in the amount of R$6,208,091 thousand, refers to prior years’ earnings, which
under Bacen Resolution 3605, of August 29, 2008, shall be allocated until December 31, 2010.
BNDES 2008 / ANNUAL REPORT
84
23. TRANSACTIONS WITH SUBSIDIARIES
23.1. Transactions with Subsidiaries
Transactions between companies included in consolidation have been eliminated from the consolidated
financial statements and were as follows:
In Thousands of Brazilian Reais – R$
2 Half of 2008
As of December 31, 2008
nd
FINAME
BNDESPAR
Total
Assets:
Onlendings
Local currency
Foreign currency
FINAME
BNDESPAR
Total
As of December 31, 2007
FINAME
49,627,262 16,876,578 66,503,840 38,579,777
12,575,447
94,931 12,670,378
9,737,582
62,202,709 16,971,509 79,174,218 48,317,359
Liabilities:
Onlendings
Local currency
Income:
Onlendings
Local currency
Foreign currency
BNDESPAR
Total
7,381,231 45,961,008
79,197
9,816,779
7,460,428 55,777,787
(686,993) (2,240,652) (2,927,645) (1,222,934) (2,341,989) (3,564,923)
885,504
625,481
1,510,985
1,672,673
982,458
4,184,336
38,563
4,222,899
3,427,930
33,057
5,069,840
664,044
5,733,884
5,100,603
(1,413)
(113,737)
(115,150)
(311,614)
Expenses:
Onlendings
Local currency
BNDES 2008 / ANNUAL REPORT
85
2,655,131
1,461,971
356,215
1,818,186
3,460,987 (1,537,743)
(11,103) (1,548,846)
1,015,515
6,116,118
(75,772)
345,112
269,340
(203,995)
(515,609)
(354,819)
(202,107)
(556,926)
23.2. Transactions with the National Treasury – BNDES’ Single Shareholder
Transaction conditions are described in Note 17 and are summarized as follows:
In Thousands of Brazilian Reais – R$
BNDES
2nd Half
of 2008
Liabilities:
Onlendings
Expenses:
Onlendings
Consolidated
As of
December 31,
2008
As of
December 31,
2007
(32,810,672)
(4,336,010)
6,757,308
449,135
6,308,173
2nd Half
of 2008
As of
December 31,
2008
As of
December 31,
2007
(37,182,784)
(8,173,821)
5,936,554
164,143
5,811,994
23.3. Transactions with Welfare and Pension Plan Foundation of BNDES – FAPES
Transactions with FAPES and Health Care and Welfare Fund (FAMS), administered by FAPES, summarized below,
are detailed in Note 26:
In Thousands of Brazilian Reais – R$
BNDES
Liabilities:
Payables – FAPES – Private pension plan
Actuarial liabilities – FAMS – Health care plan
Consolidated
As of
December 31,
2007
As of
December 31,
2008
As of
December 31,
2007
As of
December 31,
2008
(895,345)
(595,438)
(1,047,553)
(746,780)
(436,898)
(367,715)
(595,149)
(508,238)
In Thousands of Brazilian Reais – R$
BNDES
2nd Half
of 2008
Expenses:
Private pension plan
Health care plan
As of
December 31,
2008
Consolidated
As of
December 31,
2007
As of
December 31,
2008
2nd Half
of 2008
As of
December 31,
2007
(59,208)
(60,595)
(45,558)
(76,148)
(82,810)
(63,309)
(25,105)
(28,285)
(22,706)
(29,933)
(42,833)
(41,235)
BNDES 2008 / ANNUAL REPORT
86
24. INCOME FROM (EXPENSES ON) ALLOWANCE FOR LOSSES
Breakdown of income from allowance for losses:
In Thousands of Brazilian Reais – R$
2nd Half of 2008
BNDES
Reversal (recognition), net, of:
Loans
Interbank onlendings
Debentures
Installment sales of securities
Receivables
Rec overy of receivables written
off from assets
Recorded income (expense), net
As of December 31, 2008
Consolidated
BNDES
Consolidated
As of December 31, 2007
BNDES
Consolidated
(332,905)
(393,818)
88,470
52,199
1,125,738
1,193,630
(202,288)
(230,984)
(411,613)
(434,551)
(1,215,116)
(1,198,301)
1,755
(2,358)
12,159
35,617
24,086
405,076
(37)
(21,592)
9
3,277
1,118
60,481
342
124,422
(2,441)
110,187
(3,746)
(92,775)
454,752
1,423,112
569,691
1,547,054
1,022,536
1,014,737
(78,381)
898,782
256,275
1,313,783
954,616
1,382,848
25. DERIVATIVES
Foreign exchange and interest rate derivatives are used to adjust the composition and volatility of the exchange
and interest rate positions of foreign financial liabilities of BNDES so that its “currency basket” credit product,
which represents the composition of the Bank’s foreign currency exposure, is more attractive to borrowers.
Concurrently, these derivatives facilitate management of assets and liabilities denominated in hard currencies
to reduce any mismatching among these currencies.
Pursuant to its financial policy, BNDES tries to transfer to borrowers exchange and interest rate risks, including
those arising from derivative transactions, and ultimately assumes any credit risk derived from the effect of
exchange or interest rate volatility on its customers.
Exchange and interest rate derivatives transactions are intended to increase the dollar weight in the “currency
basket” and minimize any adverse impact that the volatility of other hard currencies may cause on borrowers of
funds denominated in the currency unit linked to the “currency basket” of BNDES, and reduce the risk associated
to a possible currency mismatch in the BNDES balance sheet.
BNDES 2008 / ANNUAL REPORT
87
As regards the effectiveness analysis of exchange and interest rate over-the-counter transactions, BNDES receives
the full amount payable on the underlying hedged asset. Thus, the hedging level is usually close to 100%.
Until the end of 2004, all BNDES transactions were carried out in the foreign over-the-counter market because of
its higher liquidity offered. However, with the tax treatment changes introduced by Laws 11033 of December 21,
2004 and 11196 of November 21, 2005, BNDES decided to carry out new hedging transactions in the local market,
registered with the Clearinghouse for the Custody and Financial Settlement of Securities (Cetip). Additionally,
current transactions conducted in the foreign market were migrated to the local market. The option for carrying out
transactions in the local market after 2005 required the preparation and negotiation of contractual instruments that
regulate the local market hedging transactions with several institutions (Global Derivative Contract and Attachment),
as well as the adaptation to the criteria for acceptance of local counterparties.
In view of the liability transactions’ profile of BNDES, hedging transactions have been traded in the over-thecounter market and registered with Cetip. In order to mitigate the credit risk involved in such transactions,
acceptance of the counterparties is determined based on the credit rating made by BNDES, with possible
requirement of formal guarantees.
The tables below describe the asset transactions involving currency hedges as of December 31, 2008. All transactions
below were recorded according to Central Bank of Brazil Circular 3082, of January 30, 2002, and were traded in
the local market and registered with Cetip.
25.1. Summary of Current Currency Swap Transactions
Notional
Value
Benchmark Currencies Maturity
ITL 300 billion
Euro – US$
US$482 million
US$ – R$
US$793 million
April 2010
bet ween January 2009
and June 2010
bet ween March 2015
US$ (fixed – floating interest rate)
and May 2021
Counterparts
Ita ú BBA and Banco Merrill
Lynch de Investimentos
Cit ibank, Santander, Unibanco
and Itaú BBA
Cit ibank, Merrill Lynch de
Investimentos and HSBC
BNDES 2008 / ANNUAL REPORT
88
25.2. Managed Portfolio
Additionally, in order to manage short-term currency mismatches, BNDES performs, through the Managed Portfolio,
operations involving foreign exchange derivatives on the BMF (Commodities & Futures Exchange). The investments
and redemptions are determined by BNDES and performed by BB DTVM, and the proceeds from redemptions of
securities are deposited into a BNDES account maintained with Banco do Brasil and can be reinvested.
Breakdown of derivatives (BNDES and Consolidated)
In Thousands of Brazilian Reais – R$
As of December 31, 2008
Memorandum Account Balance Sheet Account
Maturity
Asset position:
Swap contracts:
Foreign currency:
US$ x R$
US$ x R$
US$ x EUR
Futures contracts (long position)
R$
US$
Liability position:
Swap contracts:
Foreign currency:
US$ x R$
US$ x R$
US$ x EUR
Futures contracts (short position)
US$
Total
BNDES 2008 / ANNUAL REPORT
89
Custodian
Nominal Value
Amount Receivable
(Payable)
Fair Value
Note 25.1
Cetip
400,096
40,985
40,985
jan/2009 and jan/2010
BMF
1,197,778
197,956
197,956
Note 25.1
Cetip
1,261,550
63,441
63,441
2,859,424
302,382
302,382
28,171
jan/2012
BMF
3,881,176
28,171
jan/2009
BMF
971,024
22,544
22,544
4,852,200
50,715
353,097
50,715
353,097
Note 25.1
Cetip
460,238
233,090
233,090
jan/2009 and jan/2010
BMF
1,014,255
14,434
14,434
Note 25.1
Cetip
467,135
-
-
1,941,629
247,523
247,523
701,100
45,253
45,253
292,776
60,321
292,776
60,321
jan/2009
BMF
In Thousands of Brazilian Reais – R$
As of December 31, 2007
Memorandum Account
Shareholders’ Equity
Nominal Value
Amount Receivable
(Payable)
Swap contracts:
Asset position:
Foreign currency:
US$ x R$
US$ x EUR
Liability position:
Foreign currency:
US$ x R$
US$ x EUR
Total
Fair Value
692,787
159,078
707,092
67,456
159,078
67,456
1,399,879
226,534
226,534
(354,059)
(3,880)
(3,880)
(810,893)
-
-
(1,164,952)
234,927
(3,880)
222,654
(3,880)
222,654
In Thousands of Brazilian Reais – R$
Amounts Receivable (Payable)
Summary of derivatives
As of December 31, 2008
Short position
Long position
As of December 31, 2007
353,097
Total
226,534
(292,776)
(3,880)
60,321
222,654
In Thousands of Brazilian Reais – R$
2nd Half of 2008
Income (expense) on swaps contracts
Income (expense) on futures contracts
Total
As of December 31,
2008
As of December 31,
2007
(59,450)
(51,248)
1,097,556
991,979
246,124
-
1,038,106
940,731
246,124
BNDES 2008 / ANNUAL REPORT
90
The income (expenses) on derivative transactions are fully transferred to borrowers of funds pegged to
a “currency basket”.
The fair value of each swap transaction is defined as the difference between the estimated present values of their
long and short positions. Position estimate is based on the calculation of their respective future cash flows – based
on the rate at which the transaction was contracted, for fixed rate positions, or on projections from market curves,
for floating rate positions – measured at present value based on the market curves applicable to each transaction.
Swap transactions contracted by BNDES are intended to: (i) manage its exposure to market risks arising from
fluctuations in foreign exchange and interest rates and/or (ii) manage the composition of the currency basket
product, which is passed on to customers. Therefore, potential losses on these instruments arising from changes
in the abovementioned factors are likely to be offset against gains on assets or reductions in liabilities associated
with each transaction.
26. PENSION PLAN
26.1. Pension Plan
Welfare and Pension Plan Foundation of BNDES (FAPES) is a private pension plan entity. Its main purpose is to
provide benefits that supplement the social security benefits granted by the National Institute of Social Security
(INSS) to the employees of its sponsors: BNDES, FINAME, BNDESPAR and FAPES itself.
FAPES has a defined benefit plan and uses the capitalization financial system to measure its reserves.
Sponsors must provide to FAPES, when required, funds for covering any technical deficits identified by an actuarial
valuation, as established by the Foundation’s bylaws, pursuant to the legislation in force.
Based on FAPES’ balance sheet of as of December 31, 2008, there is a surplus, before receivables from the
sponsors, between the guarantee assets and the actuarial obligation, in the amount of R$277,866 thousand
for BNDES - Bank (R$175,387 thousand as of December 31, 2007) and R$366,979 thousand - Consolidated
(R$227,415 thousand as of December 31, 2007), equivalent to 8.7% (4.5% as of December 31, 2007) and
8.8% (17.0% as of December 31, 2007) of FAPES’ total guarantee assets, respectively, for BNDES – Bank
and Consolidated. The actuarial liability is covered by Accounts payable – FAPES (Note 26.2) recorded in
BNDES Group companies, in accordance with accounting recognition rules set forth by Accounting Procedure
and Standard (NPC) 26 issued by the Brazilian Institute of Independent Auditors (Ibracon). Considering the
sponsors’ receivables, the pension and retirement plan has a surplus of R$1,173,211 thousand for BNDES
BNDES 2008 / ANNUAL REPORT
91
(R$670,381 thousand as of December 31, 2007) and R$1,414,532 thousand for Consolidated (R$873,751
thousand as of December 31, 2007), equivalent to 36.7% (17.1% as of December 31, 2007) and 34.0%
(17.0% as of December 31, 2007) of total guarantee assets, respectively, for BNDES and Consolidated.
The actuarial liability was measured by an independent actuary under the Projected Unit Credit (PUC) method,
based on analyses carried out in September 2006. The amounts were adjusted through December 31, 2008
based on actuarial interest of 6% per year and monetary adjustment based on the INPC (National Consumer Price
Index) variation.
The table below shows the contributions made by BNDES to fund the benefit plan, in accordance with the limits
established by legislation in force:
In Thousands of Brazilian Reais – R$
2nd Half of 2008
BNDES
Payroll
Participants’ contribution
Sponsors’ contribution
As of December 31, 2008
Consolidated
BNDES
Consolidated
As of December 31, 2007
BNDES
Consolidated
195,275
230,890
333,109
398,450
248,261
313,694
14,825
17,967
25,425
30,763
28,778
36,333
21,319
25,922
37,364
45,463
28,778
36,333
26.2.Accounts Payable – FAPES
Accounts payable – FAPES refers to debt acknowledgement contracts entered into with the sponsors, with
fixed amortization term and monthly payments, with a total of thirteen installments each year, calculated
by the Price System and subject to an actuarial interest rate of 6% per year, plus an administrative costing
rate and monetary adjustment, which occurs at the same time and ratio as the salary adjustment or general
changes of the sponsors’ employees.
BNDES 2008 / ANNUAL REPORT
92
The debt balance is as follows:
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Consolidated
As of December 31, 2007
BNDES
Consolidated
2002 contracts (a)
2004 contracts (b)
Provision for change in career and salaries plan – PECS (c)
385,002
492,038
357,999
457,528
119,433
164,605
136,995
188,808
390,910
390,910
100,444
100,444
Total
895,345
1,047,553
595,438
746,780
Current
Non-Current
15,923
21,284
14,018
18,754
879,422
1,026,269
581,420
728,026
Total
895,345
1,047,553
595,438
746,780
(a) Refers to the agreement between the BNDES group entities and their employees regarding the recognition of changes in working hours, pursuant
to Law 10556, of November 13, 2002, which resulted in a 16.67% increase in the participants’ contribution salary, directly impacting the benefit
plan’s mathematical reserves. For partial coverage of the increase in such reserves in 2002, contracts establishing the debt repayment in 390
installments were entered into. The payments began in January 2003.
(b) Refers to conversion of the mathematical reserves to be recognized (in compliance with Central Bank of Brazil’s recommendation), which were being
amortized on a monthly basis since November 1998 through extraordinary contributions, into debt acknowledged by the sponsors, falling due in
November 2018. The first installment was paid in December 2004.
(c) PECS (Strategic Career and Salaries Plan):
BNDES Executive Board approved the amendment to the NEA (Salary Evolution and Access Standard) that substitutes the originally established seven fiveyear periods for thirty one-year periods. As a result, STEA – Serviços Técnicos de Estatística e Atuaria Ltda, a company that provides the actuarial valuation
and calculation services to FAPES, concluded that the changes made would increase mathematical reserves for unvested benefits of active participants by
R$390,910 thousand as of July 2007, in view of the entry of new participants, the aging of the group of beneficiaries, and the increase in participants’
contribution salary. Therefore, BNDES Executive Board authorized the accrual of this amount.
26.3.Other Employee Benefits
a) Health Care Plan
BNDES and its subsidiaries sponsor the Health Care and Welfare Fund (FAMS), created primarily to provide the
plan’s participants and dependents with benefits that supplement or are similar to those granted by the INSS.
These benefits, which include healthcare, hospital and dental care services under free- or directed-choice systems,
are provided to the employees since 1976, under BNDES Executive Board Resolution 933/98, also applicable to
BNDES subsidiaries.
FAMS beneficiaries are active and retired employees of BNDES and its subsidiaries and their dependents;
in the event of death of the principal beneficiary, the dependent is assured of his/her right to the benefits
over a maximum of 24 months.
FAMS receives funds donated by BNDES and its subsidiaries to attain its goals. These funds are managed by
FAPES, which is also responsible for annual budgeting and detailing of operating costs required by FAMS.
BNDES 2008 / ANNUAL REPORT
93
FAMS is not covered by guarantee assets. Benefits are prepaid by BNDES based on budgets prepared by FAPES,
which files with BNDES a monthly Accountability Schedule prepared by FAPES to support the expenses incurred.
As of December 31, 2008, the amount of the actuarial obligation to covered participants and active participants
for the average future length of service was recorded based on the update of the actuarial valuation made by an
independent actuary on September 30, 2008.
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
As of December 31, 2007
Consolidated
BNDES
Consolidated
Active participants
Covered participants
268,984
345,099
249,469
332,623
302,021
392,411
328,687
410,987
Value of actuarial obligation
571,005
737,510
578,156
743,610
Unrecognized actuarial losses
(134,107)
(142,361)
(210,441)
(235,372)
436,898
595,149
367,715
508,238
Current
Non-Current
11,630
16,509
11,640
16,011
425,268
578,640
356,075
492,227
Total
436,898
595,149
367,715
508,238
Net actuarial liability
In Thousands of Brazilian Reais – R$
2 Half of 2008
As of December 31, 2008
nd
Net expenses in the period
BNDES
Consolidated
BNDES
Consolidated
Cost of current service
Cost of interest
Unrecognized actuarial losses, net
4,664
7,017
11,015
13,368
22,678
40,305
61,519
79,147
(1,397)
-
10,902
12,299
Total
25,945
47,322
83,436
104,814
In Thousands of Brazilian Reais – R$
2 Half of 2007
As of December 31, 2007
nd
Net expenses in the period
BNDES
Consolidated
BNDES
Consolidated
Cost of current service
Cost of interest
Unrecognized actuarial losses, net
5,309
6,758
10,113
12,874
23,777
32,000
46,682
62,792
-
767
5,581
9,414
Total
29,086
39,525
62,376
85,080
BNDES 2008 / ANNUAL REPORT
94
b) Other Benefits
In addition to FAMS, BNDES and its subsidiaries grant the following benefits to their active employees:
In Thousands of Brazilian Reais – R$
2nd Half of 2008
BNDES
As of December 31, 2008
Consolidated
BNDES
Consolidated
As of December 31, 2007
BNDES
Consolidated
Transportation ticket
Meal voucher
Daycare
137
208
249
321
250
347
6,260
7,790
12,581
14,439
10,700
13,478
1,103
1,162
2,018
2,100
1,581
1,703
Total
7,500
9,160
14,848
16,860
12,531
15,528
26.4.Results of Actuarial Valuation of the Pension Plan
In Thousands of Brazilian Reais – R$
As of December 31, 2008
BNDES
Change in fair value of plan assets:
Fair value of plan assets at beginning of year
Expected return on plan assets
Contributions received by the fund*
Benefits paid
Actuarial gain (loss) on plan assets at beginning of year**
Fair value of plan assets at end of year (1)
Change in actuarial obligation:
Present value of actuarial obligation at beginning of year
Cost of interest
Cost of current service
Benefits paid
Actuarial loss on actuarial obligation at beginning of year
Present value of actuarial obligation at end of year (2)
(3) P resent value of obligations in excess of present value
of assets (1-2)
(4) Unrecognized actuarial losses
(5) Net actuarial assets (obligations) before receivables
from sponsor (3+4)
(6) Receivables from sponsor
Net actuarial assets (liabilities) (5+6)
Consolidated
As of December 31, 2007
BNDES
Consolidated
3,922,537
414,453
101,088
(197,127)
(1,046,697)
3,194,254
5,142,609
545,559
127,703
(246,712)
(1,414,386)
4,154,773
3,092,471
328,917
93,106
(172,054)
580,096
3,922,536
4,038,455
430,176
120,130
(210,950)
764,798
5,142,609
3,299,595
345,022
71,991
(197,127)
317,767
3,837,248
4,325,904
452,954
88,458
(246,712)
370,513
4,991,117
3,052,813
178,082
60,646
(172,054)
180,108
3,299,595
3,986,664
232,964
76,665
(210,950)
240,562
4,325,905
(642,994)
(836,344)
622,941
816,704
920,860
1,203,323
(447,554)
(589,289)
277,866
366,979
175,387
227,415
895,345
1,173,211
1,047,553
1,414,532
494,994
670,381
646,336
873,751
* 2
008 - Includes R$38,299 thousand, in BNDES, and R$51,477 thousand, in Consolidated, from other participants’ contributions.
2007 - Includes R$35,550 thousand, in BNDES, and R$47,464 thousand, in Consolidated, from other participants’ contributions.
** The Brazilian, as well as the global, stock market has turned in a negative performance, which ultimately impacts FAPES’ results. Accordingly,
significant losses in the variable rate segment, which account for 26% of FAPES’ assets were recorded. BNDES and FAPES understand that this loss
is due to a market situation expected to be temporary.
BNDES 2008 / ANNUAL REPORT
95
In Thousands of Brazilian Reais – R$
2nd Half of 2008
Net expenses in the period
BNDES
Cost of current service
Cost of interest
Expected return on plan assets
Participants' contributions
Unrecognized actuarial gains, net
Total
As of December 31, 2008
Consolidated
BNDES
Consolidated
39,008
47,930
71,991
88,457
248,851
326,765
345,022
452,954
(209,791)
(277,103)
(414,452)
(545,559)
(12,190)
(14,604)
(24,476)
(29,936)
-
827
(3,950)
(7,713)
65,878
83,815
(25,865)
(41,797)
In Thousands of Brazilian Reais – R$
2nd Half of 2007
Net expenses in the period
BNDES
Cost of current service
Cost of interest
Expected return on plan assets
Participants' contributions
Consolidated
31,194
Total
As of December 31, 2007
BNDES
39,434
Consolidated
60,646
76,665
89,100
116,658
178,082
232,963
(167,681)
(219,453)
(328,917)
(430,176)
(10,032)
(12,800)
(19,905)
(25,470)
(57,419)
(76,161)
(110,094)
(146,018)
The main assumptions adopted in the actuarial valuation were:
Specification
Type
As of December 31, 2008
As of December 31, 2007
Benefits plan
Benefits considered
Actuarial valuation method
Defined benefit
All regulatory benefits
Defined benefit
All regulatory benefits
Projected unit credit method
Projected unit credit method
Mortality table
AT-2000
AT-2000
Disability
Ave rage turnover up to 47 years old for those
joining the plan after 12/31/1977
Ave rage turnover after 47 years old for those
joining the plan by 12/31/1977
Álvaro Vindas
Álvaro Vindas
0% per year
0% per year
0% per year
0% per year
Ind ex of actual salary increase expected for
active participants
2.4426% and 2.9546% per year, for 2.4426% and 2.9546% per year, for
assistants and technicians, respectively, assistants and technicians, respectively,
up to the expected retirement age
up to 51 years and nil after 51 years
Ind ex of actual increase expected for pension
0% per year
benefits granted:
Ind ex of actual increase expected for health care 3% (actual growth) and 2% due
to aging
benefits granted:
0% per year
5% per year
Rat e used to discount actuarial liabilities to
present value:
Interest of 6% per year plus 4.5%
adjustment
Interest of 6% per year plus 4.5%
adjustment
Expected rate of return on plan assets:
Interest of 6% per year plus 4.5%
adjustment
Interest of 6% per year plus 4.5%
adjustment
BNDES 2008 / ANNUAL REPORT
96
27. PLANNED EMPLOYEE RETIREMENT PROGRAM
After the decision of the Federal Supreme Court (STF) establishing that the voluntary retirement of employees
does not automatically terminate the employment contract, a large number of employees remained working at
the Bank while receiving the retirement benefit, which impaired the expected renewal of its personnel.
The Planned Retirement Program, which encourages employees who qualify for full or early retirement for length
of service to leave the Bank, was approved in the 2007 Collective Bargaining Agreement to ensure the renewal of
personnel and that the experience of the retirees is passed on to the new employees.
According to a FAPES estimate, in the next five years 713 employees will be eligible to the Program, which corresponds
to approximately 35% of the current personnel of BNDES Group.
As of December 31, 2008, the estimated disbursement resulting from the implementation of the program is
approximately R$148,764 thousand, as follows: R$106,850 thousand – BNDES, R$30,198 thousand – BNDESPAR
and R$11,716 thousand – FINAME. The disbursement for the next 12 months is estimated at R$66,540 thousand,
as follows: R$50,190 thousand – BNDES, R$12.928 thousand – BNDESPAR and R$3,422 thousand – FINAME.
28. ASSETS AND LIABILITIES WITH THE NATIONAL TREASURY
28.1. Assets
Refer to amounts receivable from the National Treasury to equalize interest from Federal Government’s incentive
programs (Pronaf, Revitaliza and Agrícolas) with a fixed rate below the long-term interest rate (TJLP) to TJLP plus 1%.
Balances as of December 31, 2008 were R$452,441 thousand – BNDES and R$768,976 thousand – Consolidated.
28.2. Liabilities
Refer to amounts payable to the National Treasury to equalize interest from Federal Government’s incentive
programs (Modermaq and Moderfrota) with fixed rate above TJLP, to TJLP. In other words, under programs
whose fixed rate is higher than TJLP, any excessive interest in relation to TJLP shall be returned to the National
Treasury. Receivables from the acquisition of shares in Banco do Brasil, in March 2007, from Export Guaranty Fund
(FGE), which were paid in installments to the National Treasury, settled in October 2008. As of December 31,
2008, balances were R$6,943 thousand and R$391,876 thousand, in BNDES and Consolidated, respectively
(R$1,155,265 thousand as of December 2007, in BNDES and Consolidated).
BNDES 2008 / ANNUAL REPORT
97
29. OPERATING LIMITS (BASEL ACCORD)
Pursuant to Central Bank of Brazil Resolution 2283 of June 5, 1996, the minimum capital ratios (Bank and
Consolidated) are calculated on risk-weighted assets. As of December 31, 2008, such ratio reached 19.14% for
BNDES (28.29% as of December 31, 2007) and 17.80% for Consolidated (26.73% as of December 31, 2007).
30. OTHER INFORMATION
30.1.Joint Liability of the Federal Government
In conformity with Opinion 1124/96 issued by the Ministry of Planning and Budget, BNDES, as a wholly-owned
company of the Federal Government, cannot file for bankruptcy and the Federal Government is jointly liable for
obligations assumed by BNDES.
30.2.Counter-Guarantees Provided
BNDES pledged to the National Treasury as counter-guarantees for guarantees and loans raised abroad, in the
amount of US$600 million, 7,744,038 registered preferred shares issued by Petróleo Brasileiro S.A. – Petrobras
(later split into 61,952,304 preferred shares) and 28,083,251,230 registered common shares issued by Centrais
Elétricas Brasileiras S.A. – Eletrobrás (later grouped into 56,166,502 common shares) held by its wholly-owned
subsidiary BNDES Participações S.A. – BNDESPAR. Out of these shares, 61,952,304 preferred shares issued by
Petrobras and 1,510,070 common shares in Eletrobrás remain blocked and under custody.
30.3.Management of Programs
Export Guaranty Fund – FGE
FGE, a accounting fund linked to the Ministry of Finance and managed by BNDES, was created by Law 9818/99
for the purpose of covering the guarantees pledged by the Federal Government on export insurance guarantee
transactions. As of December 31, 2008, total guarantees pledged amounted to R$5,656,916 thousand.
BNDES 2008 / ANNUAL REPORT
98
Guaranty Fund to Promote Competitiveness – FGPC
FGPC is an accounting fund linked to the Ministry of Development, Industry and Foreign Trade and managed by
BNDES, created by Law 9531/97 and regulated by Decree 3113/99. The purpose of this fund is to provide funds
to guarantee the risk of financing operations undertaken by BNDES and FINAME, directly or through onlending
institutions, to micro, small and midsized export companies or producers of inputs that are an integral part of
the production process, assembly or packaging of goods for export. As of December 31, 2008, total guarantees
pledged amounted to R$314,402 thousand.
Regional Development Fund using Privatization Resources – FRD
FRD, created on December 17, 1997 through BNDES Resolution 918, is an accounting fund engaged in providing
financial support to regional and social development projects in municipalities geographically located in areas
under the influence of Companhia Vale do Rio Doce (Vale). The seed capital of the fund was R$85,900 thousand,
provided from a donation made under National Privatization Board (CND) Resolution 02/97. In 2008, the fund
conducted transactions totaling R$8,368 thousand.
Land and Agrarian Reform Fund – Banco da Terra
Banco da Terra is an accounting fund created by Supplementary Law 93/98 and regulated by Decree 3475/2000,
to provide funds for rural settlement and land reform programs, and BNDES is the financial manager of the Fund.
30.4.Risk Management and Internal Controls
Proper risk management and an effective internal control system are crucial to allow BNDES to fulfill its mission
effectively, in accordance with internal and external regulations and with the goals established by Top Management.
These activities are extended and integrated into a specific unit called AGR (Risk Management Area).
BNDES 2008 / ANNUAL REPORT
99
AGR comprises the Internal Control, Credit Risk Management, Market Risk Management and Operational Risk
Management Departments. In general, it has the following functions:
efine and propose to the Board of Directors the general risk management and internal control guidelines for
D
BNDES and its subsidiaries;
• Monitor the risk exposure levels;
• Analyze and monitor the regulatory capital requirements;
• Analyze the evolution of the allowances for loan losses and their impacts on the results of BNDES and its subsidiaries;
• Evaluate the quality of existing internal controls in the BNDES System, assignment of responsibilities, segregation of
•
duties, involved risks, and compliance with internal and external regulations, proposing actions for their improvement;
• Disseminate an internal control and risk management culture in the BNDES System.
The Risk Management Committee (CGR) was also created and is composed of the Chairman, the Vice-Chairman
and Directors of BNDES who meet monthly to evaluate and express their opinions on risk management and
internal control issues.
Prudential Regulation
The year 2008 was marked by a reversal in the world economy evidencing the risk management issue, as well
as the importance of Financial Regulation for the health of economies.
In Brazil, the emphasis is on the change in the institutional structure of Financial Regulation, with the enforcement
of the Brazilian Central Bank regulations referring to the implementation of Basel II in Brazil and the preparation
of financial institutions for the change in accounting norms which will occur with the enforcement of international
accounting standards – International Financial Reportings Standards (IFRS).
For BNDES, in this year, the efforts were focused on adapting to new Brazilian Central Bank regulations,
improving internal controls, and disseminating a risk culture in the Institution. Among the new obligations as of
July 2008, there is the sending of information to the Regulatory Agency on market risk on a daily basis, and on
market, credit and operational risk, on a monthly basis.
BNDES 2008 / ANNUAL REPORT
100
Internal Controls
BNDES intends to promote the continuous improvement of internal controls for financial, operating and
managerial information systems. For this, it performs procedures with the objective of evaluating the risks
and internal controls on work processes, as well as compliance with internal and external regulations. Reports
containing evaluation conclusions are submitted to the Risk Management Committee and the Top Management.
In addition, actions for the dissemination of internal controls culture are developed to lead to high ethical and
conduct standards resulting in a structured process of communication based on transparency.
During 2008, the Executive Board and the Board of Directors approved the BNDES Corporate Policy of Internal
Controls which defined objectives, principles, guidelines and responsibilities required for the maintenance of
internal controls adequate to the institution.
Operational Risk
In 2008, the unit responsible for conducting activities related to operational risk, implemented a set of actions
aiming at compliance with the Brazilian Central Bank (Bacen) regulations.
A template of an operational risk event chart was developed, classifying loss events in three levels, considering
the eight categories provided for in Resolution 3380/06. This tool guides the capture, analysis, and monitoring
of possible loss events in BNDES, in addition to aggregating and organizing events possessing similar features,
contributing to build a database which will permit the use of an advanced methodology in the future to calculate
the operation risk portion for capital requirement calculation.
In compliance with Bacen Release 16913, BNDES selected the Basic Indicator Approach as the methodology for
calculating the Required Regulatory Capital (PRE) portion referring to the operational risk (POPR) addressed by
Circular 3383, of April 30, 2008. This portion has been periodically determined and informed to Bacen as an
integral part of the Statement of Operational Limits (DLO).
In order to disseminate the operational risk culture in the institution, a specific module on this theme was
included in the new employee training program which has been regularly ministered to new employees.
BNDES 2008 / ANNUAL REPORT
101
A review of the Operational Risk Corporate Policy was carried out and was subsequently approved by BNDES
Executive Board and Board of Directors, in compliance with the determination of the supervising entity, pursuant
to the terms of Bacen Resolution 3380/2008.
Within the scope of the Business Continuity Management (GCN) there was, under the coordination of AGR,
the participation of Business Units in CPD Contingency Tests to evaluate the BNDES capacity of carrying out key
business processes in an alternative environment, as a preliminary stage for the construction of an integrated
GCN system.
Credit Risk
The main objective of credit risk management is to evaluate the BNDES loan portfolio risk. One of its assignment
is to calculate Regulatory Capital, in order to guarantee compliance with current regulation. Currently, the
standardized methodology for the calculation of Regulatory Capital, issued by the regulatory agency, is used.
However, BNDES already carries out internally preliminary estimates for different risk components of its loan
portfolio, aiming at evaluating potential expected and unexpected financial losses.
During the first half of 2008, the Department organized itself to comply with the procedures established by Bacen
Circular 3360/2007, for the calculation of the Required Regulatory Capital (PRE) portion referring to exposures
weighted by a risk weight factor (PEPR). This activity involved other areas of the Bank and comprised a database
survey and organization, including information on several risk mitigators used by BNDES, and the exposures
related to credit commitments.
During the second half of 2008, the BNDES completed the database treatment required for the determination
of different credit risk components (Probability of Default, Loss Due to Default and Credit Risk Exposure).
After the database treatment, preliminary estimates for mentioned risk components have already been obtained.
Simultaneously, BNDES has structured itself to comply with Bacen Circular 3398/2008, and currently carries out
the monthly monitoring of credit risk exposure of the Public Sector, of different sectors of the economic activity,
and of the limits established in CMN Resolution 2844/2001.
The improvement of credit risk management techniques currently used by BNDES will not only permit compliance
with Basel II requirements but will also provide a deep knowledge of the Institution’s credit portfolio, generating
important bases for the improvement of its credit policy.
BNDES 2008 / ANNUAL REPORT
102
Market Risk
Activities carried out by market risk management involve measuring and managing risks arising from the volatility
of macroeconomic variables, such as interest rate, foreign exchange rate, and share price.
Accordingly, as of 07/01/2008, when Bacen Resolution 3490 and underlying Circulars 3361, 3362, 3363, 3364,
3365, 3366 and 3368 of 09/12/08 and 3389 of 06/25/2008, BNDES defined and improved data survey and
regulatory capital calculation mechanisms required to cover market risks existing in the Bank’s portfolio.
BNDES informs Bacen, on a regular basis, the Journal Statement of Capital Requirement Installments (DDR),
as well as monthly information on market risk for both trading and bank portfolios, through the Statement
of Limits and Minimum Standards (DLO). In addition to this information, marking to market of the whole Bank’s
portfolio is sent on a monthly basis (Statement of Market Risk - DRM).
As regards of market risk measurement of transactions contained in the bank portfolio, computed in Rban
(installment related to interest rate risk of the bank portfolio transactions), BNDES defined GAP as the standard
methodology to be used, and also created a routine for retrieving data related to all asset and liability transactions
of the bank portfolio.
During 2008, the following activities should be highlighted: studies for the implementation of a model for market
risk management of its own; contribution for the dissemination of a risk management culture in the institution;
monitoring of the capital structure of the companies of the BNDES system; and carrying out the bid notice public
inquiry to acquire market risk tool.
Centralization of market risk management process permitted a greater specialization of the work and the
implementation of new routines, important for the improvement of market risk management in the Institution.
BNDES 2008 / ANNUAL REPORT
103
BOARD OF DIRECTORS
Chairman
Miguel Jorge
Vice Chairman
Luciano Coutinho
MEMBERS OF THE BOARD
Alessandro Golombiewski Teixeira
Carlos Roberto Lupi
Eduardo Eugênio Gouvêa Vieira
João Antônio Felício
João Paulo dos Reis Velloso
Luiz Eduardo Melin de Carvalho e Silva
Paulo Antonio Skaf
Paulo Bernardo Silva
Cláudio Renato Guimarães da Silva
SUPERVISORY BOARD
Erenice Alves Guerra
Charles Carvalho Guedes
Reginaldo Braga Arcuri
Clayton Campanhola – Alternate member
Nina Maria Arcela – Alternate member
Maurício Teixeira da Costa – Alternate member
BNDES 2008 / ANNUAL REPORT
104
EXECUTIVE BOARD
CEO
Luciano Coutinho
Vice-President
Armando Mariante Carvalho Junior
OFFICERS
Eduardo Rath Fingerl
Elvio Lima Gaspar
João Carlos Ferraz
Luiz Fernando Linck Dorneles
Maurício Borges Lemos
Wagner Bittencourt de Oliveira
SUPERINTENDENT OF THE FINANCIAL AREA
Maria Isabel Rezende Aboim
HEAD OF THE ACCOUNTING DEPARTMENT
Vânia Maria da Costa Borgerth – CRC – RJ 064.817/4
BNDES 2008 / ANNUAL REPORT
105
In Thousands of Brazilian Reais – R$
Table 6 – BNDESPAR: Balance Sheets
As of December 31
2008
Current assets
Cash and cash equivalents
Securities
Shares of Banco do Brasil investment funds
Debentures
Allowance for losses – Debentures
Shares and warrants
Shares of investment funds
Government securities
Other receivables
Term sale of securities
Allowance for losses – Term sale of securities
Receivables
Allowance for losses – Receivables
Dividends and interest on capital receivable
Tax credits
Recoverable and prepaid taxes
Other
2007
3,052,918
317
1,645,429
2,640,088
83
1,179,516
583,708
769,444
28,488
7,181
(2,970)
(5,449)
-
3,900
1,035,633
403,879
570
561
1,407,172
1,460,489
377,460
320,187
(3,942)
(3,552)
5,456
398,205
(4,066)
(124,233)
652,134
450,190
172,598
133,531
189,682
267,841
17,850
18,320
33,644,460
8,479,286
4,944,950
24,805,007
5,950,172
2,303,892
Debentures
Allowance for losses – Debentures
Government securities
5,080,685
2,469,066
(135,735)
(165,735)
-
561
Other receivables
3,534,336
3,646,280
Term sale of securities
Allowance for losses – Term sale of securities
Receivables
Allowance for losses – Receivables
Tax credits
Tax incentives
3,170,312
3,320,318
(33,107)
(36,831)
15,334
12,464
Non-current assets
Long-term assets
Securities
(11,428)
(3,889)
267,324
290,365
125,901
63,853
Investments
25,165,174
18,854,835
Investments in affiliates
Other equity interests
Other investments
7,637,318
7,284,944
17,527,856
11,554,865
-
15,026
Total assets
36,697,378
27,445,095
BNDES 2008 / ANNUAL REPORT
106
In Thousands of Brazilian Reais – R$
Continuation
Table 6 – BNDESPAR: Balance Sheets
As of December 31
2008
2007
Current liabilities
Securities
Onlendings
4,075,740
168,088
2,899,149
2,922,463
1,445,475
BNDES
2,899,149
1,445,475
Other payables
1,008,503
1,476,988
780,399
881,274
78,033
400,762
58,747
78,247
5,017
4,585
Dividends and interest on capital payable
Taxes on income
Other taxes
Provision for civil and labor contingencies
Actuarial liabilities – FAMS
Linked to foreign exchange transactions
Accounts payable – FAPES
Provision for Planned Retirement Program
Others
3,653
3,379
12,116
10,337
3,943
3,483
12,928
35,358
53,667
59,563
Non-current liabilities
Long-term liabilities
Debentures
Onlendings
19,082,238
19,082,238
2,134,349
16,213,817
10,642,819
10,642,819
2,025,935
7,918,953
BNDES
National Treasury
14,072,360
6,014,953
2,141,457
1,904,000
Other payables
734,072
697,931
Accounts payable – FAPES
Actuarial liabilities – FAMS
Provision for Planned Retirement Program
Provision for civil and labor contingencies
Deferred taxes
108,302
108,086
117,047
105,100
17,270
20,720
483,399
455,872
8,054
8,153
Shareholders’ equity
13,539,400
13,879,813
Capital
Capital increase under approval
Capital reserve
Revaluation reserve
Valuation adjustments to equity – Affiliates’ assets
Profit reserve
Legal reserve
Tax incentive
Retained earnings
10,404,356
10,404,356
Total liabilities and shareholders’ equity
BNDES 2008 / ANNUAL REPORT
107
2,370,910
-
92,993
92,993
-
281,105
4,684
-
595,835
427,823
70,622
-
-
2,673,536
36,697,378
27,445,095
In Thousands of Brazilian Reais – R$
Table 7 – BNDESPAR: Statements of Income
As of December 31
2nd Half
of 2008
Operating income
Equity interest
Equity in affiliates
Gain on sale of variable-income securities
Interest on capital
Dividends
Commissions and fees
Financial transactions
Loans
Securities
Income from investment funds
Commissions and charges
Operating expenses
Equity interest
Equity in affiliates
Recognition of allowance for losses on investments
Expenses on equity in affiliates
Premium amortization
Financial transactions
Financial charges on payables:
Issue of debentures
BNDES
BNDES – PIS/Pasep funds
National Treasury Bills
Other payables
Reversal of the allowance for losses
General and administrative expenses
Tax expenses
Officers’ compensation
Personnel expenses
Recognition (reversal) of provision for civil and labor contingencies
Inflation adjustment of assets and liabilities, net – Selic
Administrative expenses
Others
Income before taxes on income
Income tax
Social contribution tax
Deferred taxes
Income before profit sharing
Employee Profit Sharing
Net income
Earnings per share
2008
2007
2,387,638
2,200,950
328,491
578,164
782,236
499,011
13,048
186,688
209,320
274,466
(301,567)
4,469
(1,735,664)
(973,109)
(259,026)
(713,910)
(173)
(762,555)
8,143,948
7,442,517
746,866
4,613,946
1,170,218
887,501
23,986
701,431
392,965
439,456
(143,307)
12,317
(2,759,656)
(1,418,450)
(741,051)
(677,226)
(173)
(1,341,206)
6,577,679
5,719,235
1,153,442
3,223,503
827,760
514,320
210
858,444
408,289
339,813
106,198
4,144
(793,912)
(222,522)
(107,281)
(7,921)
(107,320)
(571,390)
(134,283)
(664,044)
(24,993)
(134,164)
(4)
194,933
(252,140)
(82,316)
(170)
(123,217)
(14,011)
(56,074)
(30,405)
54,053
399,834
(102,438)
(40,167)
(34,948)
222,281
(15,645)
206,636
206,636
(277,012)
(1,015,515)
(54,984)
(237,458)
(4)
243,767
(610,915)
(154,104)
(370)
(215,692)
(28,585)
(193,777)
(49,670)
31,283
4,773,377
(1,036,520)
(377,109)
16,125
3,375,873
(15,645)
3,360,228
3,360,228
(138,240)
(345,111)
(266,167)
(180,838)
(4)
358,970
(646,276)
(211,664)
(305)
(203,887)
(27,912)
(140,998)
(30,247)
(31,263)
5,137,491
(811,689)
(304,994)
(283,471)
3,737,337
(26,710)
3,710,627
3,710,627
BNDES 2008 / ANNUAL REPORT
108
In Thousands of Brazilian Reais – R$
Table 8 – FINAME: Balance Sheets
As of December 31
Current assets
Cash
Securities
Banco do Brasil exclusive investment fund
Stocks
2008
2007
20,117,060
976
968,403
15,172,572
2,299
28,638
967,723
28,638
680
-
Interbank onlendings
17,330,205
13,869,316
Interbank onlendings
Allowance for losses
Provision for rebates on special agricultural programs
17,401,700
14,088,260
(71,495)
(64,278)
-
(154,666)
Loans
1,702,408
1,212,479
Loans
Allowance for losses
1,735,038
1,237,067
(32,630)
(24,588)
115,068
59,840
Other receivables
Prepaid taxes
Tax credits
Linked to the National Treasury
Other
30,199
630
74,764
17,302
-
28,867
10,105
13,041
Non-current assets
long-term assets
Interbank onlendings
48,759,270
48,759,270
38,039,574
39,236,417
39,236,417
30,809,293
Interbank onlendings
Allowance for losses
38,196,506
30,950,505
(156,932)
(141,212)
Loans
10,271,596
8,341,704
Loans
Allowance for losses
10,468,473
8,510,863
(196,877)
(169,159)
Other receivables
448,100
85,420
Tax credits
Linked to the National Treasury
Tax incentives
100,506
61,315
Total assets
BNDES 2008 / ANNUAL REPORT
109
316,535
-
31,059
24,105
68,876,330
54,408,989
In Thousands of Brazilian Reais – R$
Continuation
Table 8 – FINAME: Balance Sheets
As of December 31
2008
2007
Current liabilities
Onlendings
4,248,736
3,728,931
6,146,889
5,903,658
BNDES
National Treasury
3,659,077
5,842,289
Other payables
Actuarial liabilities – FAMS
Credits restricted to transaction settlement
Dividends and interest on capital payable
Taxes on income
Other taxes
Accounts payable – FAPES
Provision for Planned Retirement Program
Linked to the National Treasury
Other
69,854
61,369
519,805
243,231
1,226
992
24,155
7,113
59,777
84,372
-
108,071
2,125
4,121
1,418
1,253
3,422
7,979
384,933
-
42,749
29,330
Non-current liabilities
log-term liabilities
Onlendings
60,793,016
60,793,016
60,704,433
44,630,382
44,630,382
44,408,881
BNDES
National Treasury
58,543,632
42,475,070
2,160,801
1,933,811
Other payables
88,583
221,501
Accounts payable – FAPES
Provision for civil and labor contingencies
Actuarial liabilities – FAMS
Provision for planned program
38,544
38,520
5,420
142,087
36,325
31,051
8,294
9,843
Shareholders’ equity
3,834,578
3,631,718
Capital
Capital increase under approval
Capital reserve
Profit reserve
Legal reserve
Tax incentive reserve
Retained earnings
3,494,062
3,182,869
316,988
137,656
-
23,992
13,132
34,086
Total liabilities and shareholders’ equity
10,396
-
-
253,115
68,876,330
54,408,989
BNDES 2008 / ANNUAL REPORT
110
In Thousands of Brazilian Reais – R$
Table 9 – FINAME: Statements of Income
As of December 31
2nd Half
of 2008
Income from financial intermediation
Loans and interbank onlendings
Local currency
Foreign currency
Income from transactions linked to the National Treasury
Income from securities
2007
2008
6,274,945
7,584,914
1,826,345
1,960,848
3,984,318
3,330,472
4,278,627
3,537,531
(1,576,660)
21,278
9,471
18,090
25,999
44,975
51,255
(6,512,103)
(7,408,625)
(1,079,230)
(2,240,672)
(3,924,950)
(2,685,869)
(4,184,559)
(3,428,314)
1,537,377
(86,872)
(55,361)
69,262
(237,158)
140,642
176,289
(4,909)
747,115
(244,222)
Reversal (recognition) of provisions for civil and labor contingencies
Tax expenses
Inflation adjustment of dividends and interest on capital – Selic
Personnel expenses
Administrative expenses
Other operating expenses
Other operating income
205,737
136,507
(131,044)
(13,499)
(33,882)
(35,042)
-
(3,315)
(2,018)
(38,887)
(77,195)
(52,183)
(11,742)
(19,463)
(6,697)
(14,179)
(20,839)
(20,976)
13,212
13,278
3,738
Income before taxes
(96,516)
171,380
502,893
Income tax
Social contribution tax
Deferred taxes – Recognition
72,744
-
(136,670)
30,566
-
(49,270)
63,793
96,652
46,217
Income before profit sharing
70,587
268,032
363,170
Expenses on financial intermediation
Loans from BNDES and National Treasury
Local currency
Foreign currency
Allowance for loan losses
Gross profit from financial Intermediation
Other operating income (expenses)
Employee profit sharing
Net income
Earnings per share
BNDES 2008 / ANNUAL REPORT
111
(5,395)
(5,395)
(7,920)
65,192
0,000111
262,637
0,000445
355,250
0,000603