ACC: Advance on Foreign Exchange Contract. One of the instruments for pre-shipment export financing.
ACE: Advance of Export Contract. Post-shipment export financing.
ALC: The Agribusiness Letter of Credit is ruled by Law # 11076, from December 12, 2004, and is a negotiable nominal security, representing a commitment to pay cash. The issuance of this letter of credit is exclusive for public and private financial institutions and is tied to credit rights from business with farmers, or their cooperatives, and third parties, including loans and financings related to the production, trading, processing and industrialization of agro and cattle raising products and inputs or machinery utilized in the agribusiness.
AML: Anti Money Laundering.
Arbitration Chamber: Chamber composed by specialized arbitrators with the support of BM&FBOVESPA for resolution of corporate and capital markets disputes between companies, its controlling shareholders, its management and its investors.
Arbitration Clause: Means the arbitration clause by means of which the Company, its shareholders, Senior managers and fiscal council members and BM&FBOVESPA undertake to solve trough an arbitration conducted by the Market Arbitration Chamber, all and any disputes or controversies that may arise among them relating to, or arising from, specially, the application, validity, effectiveness, construction, violation or effects of violations of the provisions of the Brazilian Corporate Law, bylaws of the Company, rules published by the Brazilian National Monetary Council (CMN), the Central Bank of Brazil and the Brazilian Securities Commission (CVM), as well as other rules applicable to the Brazilian securities markets, in addition to those provided in the Corporate Governance Level 2 Listing Regulation, Arbitration Regulation, Sanctions regulation and the Corporate Governance Level 2 Listing Agreement.
BACEN or Central Bank: The Brazilian Central Bank.
Basel Agreement: An accord developed during a 1975 meeting in Basel, Switzerland, of central bankers of the industrialized nations setting forth guidelines for the supervision of banks. The agreement was reached by the Committee on Banking Regulations and Supervisory Practices, meeting under the auspices of The Bank for International Settlements. The rules were published by the Committee on Banking Regulations and Supervisory Practices in 1988 aiming at improving the world financial system soundness. Included are guidelines for minimum capital requirements. The Basel Accord was introduced in Brazil through Resolution # 2099 from the National Monetary Authority in 1994, establishing the minimum capital adjusted to risk at the 11% for Brazilian financial institutions, towards 9% of the original Basel Accord. This agreement is constantly revised to adapt its guidelines to the changes in the world risk scene. Therefore, in January 2001, the Committee on Banking Regulations and Supervisory Practices published a new version of the Accord named Basel II. This version was adapted to Brazil through the Monetary Authority Resolution # 3490, from August 2007, which in added to Resolution # 2099, and related amendments, rule the implementation of the Basel II Accord to the Brazilian market.
Basel Index: As per Resolution of the Brazilian National Monetary Authority # 2099, from August 17, 1994, it was established that financial institutions in Brazil have the obligation of maintain an adjusted equity compatible to its assets risk structure in accordance to the Basel Accord. With the objective to promote the stability and solidity of the national financial system, the minimum Basel index required for Banks operating in Brazil is 11%, while the minimum established in the Basel Accord is 9%.
BI&P (Banco Indusval & Partners): Commercial name for Banco Indusval S.A. since March 22, 2011.
BIS: Bank for International Settlements Committee on Banking Supervision.
BM&FBOVESPA: Stock, Mercantile and Futures Exchange. BM&FBOVESPA was formed in 2008 by the combination of the business of São Paulo Stock Exchange and The Mercantile and Futures Exchange. It is the most important Brazilian capital market intermediary and the only stock, mercantile and futures exchange operating in Brazil.
BNDES (Banco Nacional de Desenvolvimento Econômico e Social): Brazilian social and economic development bank responsible for implementing the federal long term development policies, including corporate financing.
BR GAAP: Accounting practices adopted in Brazil, or Brazilian GAAP or Brazilian Corporation Law.
CAGR: Compound Annual Growth Rate.
CDA/WA: Agribusiness Deposit Certificate and Agribusiness Warrant. These securities are together, both issued by the depositary at the request of the depositor, and may be traded or transferred together or separetely, by endorsement. The CDA is a negotiable security representing a commitment of delivery of agricultural products, their derivatives and by-products with economic value, which are already deposited. The WA is a negotiable security representing a commitment of cash payment that grants the right of pledge on the related CDA, as well as on the product described in. These securities were established by Law # 11076, from December 30, 2004.
CDB (Banking Certificate of Deposit): Fixed income time deposit negotiable instrument issued by commercial, development, investment of multiple banks.
CDC: Consumer Credit for the financing the acquisition of goods.
CDCA: Agribusiness Credit Rights Certificate. Established by Law # 11076, from December 30, 2004, it is a negotiable nominal security representing a commitment to cash payment and is tied to credit rights from business with farmers, or their cooperatives, and third parties.
CETIP: Cetip S.A. is an organized assets and derivatives counter and operates as the main depositary for fixed income private and public securities.
CMN: Conselho Monetário Nacional or National Monetary Authority (NMA).
COPOM: Monetary Policy Committee.
CPC: Comitê de Pronunciamentos Contábeis or Accounting Pronouncement Committee, responsible for analyzing, adapting and issuing the rules for the convergence of BR GAAP to the international accounting Standards under IFRS.
CPR: Agribusiness Product Certificate. Established by Law # 8929, from August 22, 1994, it is a negotiable security representing an obligation for production or development financing, with a commitment of physical or financial delivery of rural products.
CVM: The Brazilian Securities Commission (Comissão de Valores Mobiliários).
DI or CDI Rate: Daily average interest rate of the interbank deposits, expressed in percentage per annum, calculated and published by CETIP.
DPGE: This type of Guaranteed Time Deposit, bearing a special guarantee from a credit guarantee fund - Fundo Garantidor de Crédito (FCG), was created by Resolution # 3692, from CMN in 2009. The guarantee covers time deposits for a minimum tenor of 1 year and maximum 5 years, up to R$ 20 million by depositor.
Efficiency Ratio: It is the proportion, expressed in percentage, between (i) the sum of Personnel, Tax, Other Administrative Expenses, Other Operating Expenses and Profit sharing and (ii) the sum of the Gross Financial Intermediation Result without the effects of Loan Loss Allowances, the Service and Banking Fees and Other Operating Income. This ratio is utilized for the analysis of operating performance of a financial institution and as it is a ratio between Expenses and Income, the lower is the percentage the better is the operating performance of a financial institution. It is important to note that this ratio is not regulated by the BR GAAP and is a performance managerial tool, thus, the calculation method may differ from an institution to another depending on the interpretation of each management.
FGC: The Fundo Garantidor de Crédito or Credit Guarantee Fund was established by the National Monetary Authority as an independent private entity with the savings, financial and financing institutions operating in Brazil compulsorily associated and contributing to capitalize an maintain this Fund with resources sufficient to guarantee the stability and solidity of the National Financial System. Credit Cooperatives do not take part in the fund thus not being covered by its guarantee. The objective of the fund is to guarantee the deposits made on the associated institutions up to R$ 60,000.00 by depositors.
FIDC: Credit Rights Investment Fund.
Free Cash: The adding of Cash Availabilities, Immediately Available Investments, Securities and Derivatives rights deducted the Repurchase Agreements (repos) and obligations on Derivative.
Free Float: Number or percentage of shares available for negotiation in the market defined by the total number of shares of the Paid-up capital deducted those shares belonging to the controlling shareholders and related persons, those held by the management of the company and in its treasury.
GFM: Gross Financial Margin is the proportion between the Gross Result of Financial Intermediation and the Average Remunerable Assets, expressed in percentage.
IADB (Inter-American Development Bank): IADB is an important multilateral agency for the financing of economic, social sustainable development of Latin America and Caribbean.
IBOV: Ticker for Bovespa Index, the most important average Brazilian market share performance indicator. It indicates the performance of the most traded shares in BM&FBOVESPA market and it maintains its historical series integrity as its methodology is unchanged since its inception in 1968.
IFC (International Finance Corporation): World Bank arm for private companies with the objective of promoting the sustainable development of productive enterprises and the capital markets in emerging markets aiming at economic development of the member countries.
IFC A/B Loan: Loan syndicated by IFC, which is also lender of the A tranche (A Loan). The B Loan is financed by a pool of international private Banks.
IFRS: International Financial Reporting Standards, international accounting standards aiming at allowing a better comparison of results and balance sheets of different companies in different countries.
IGC: Index composed by shares of companies traded in the BM&FBOVESPA market with a differentiated level of Corporate Governance.
Indusval & Partners Corretora de Valores: Indusval S.A. Corretora de Títulos e Valores Mobiliários, the brokerage house subsidiary to Banco Indusval S.A.
IOE:Interest on Equity. Shareholder remuneration based on the Long Term Interest Rate (TJLP) over the adjusted equity. The amount of interest paid can be considered in the calculation of minimum annual dividends as set forth in article 202 of Law # 6404, from 1976 (Brazilian Corporate Law).
IPCA: Inflation index published by the Brazilian Geography and Statistics Institute (IBGE) on Ample Consumer Prices.
ITAG: Index composed by shares of companies traded in the BOVESPA market that offer 100% tag along both to all its ordinary and preferred shares.
L/C: Letter of Credit issued by a financial institution to guarantee the payment by the importer of a foreign trade deal.
LD/FT: Money Laundering and Financing to Terrorism.
Level 1 of Corporate Governance: It is aspecial listing segment for the shares traded at BM&FBOVESPA for companies that voluntarily adhere to the Level 1 Listing regulation and commit to comply with requirements additional to those established in the Brazilian legislation. The most relevant of which are: (i) minimum 25% free float; (ii) share public offerings; (iii) availing more detailed quarterly information to the market; (iv) additional transparency requirements; (v) publishing of shareholder agreements and stock options programs; and, (vi) publishing of the annual programmed corporate events calendar.
Level 2 of Corporate Governance: It is a special listing segment for the shares traded at BM&FBOVESPA for companies that voluntarily adhere to the Level 2 listing regulation and commit to comply with additional requirements to those established in the Brazilian legislation and in the Level 1 listing regulation. The most relevant requirements are: (i) minimum of 5 members in the Board of Directors, in which at least 20% must be independent; (ii) the same person must not accumulate the positions of president of the Board of Directors and Chief Executive Officer or Chief Executive of the Company; (iii) 100% tag along for common and preferred shares; and (iv) voting rights restricted to the following matters: (a) transformation, merger or spin-off of the Company; (b) approval of contracts between the Company and directly or indirectly related parties, when they are resolved at the General Shareholders' Meetings; (c) valuation of assets for payment of a capital increase of the Company; (d) selection of specialized company for verification of the Economic Value of the Company, in case of deslisting of the Company; and (e) amendment or revocation of statutory provisions that alter or modify the requirements in minimum clauses ruled by the Level 2 regulation.
LLA or ALL: Loan Loss Allowances or Allowances for Loan Losses aims at reserving a portion of the obtained results from operations to protect the net worth of the financial institution to face possible future losses from credit operations. The constitution of Loan Loss Allowances is ruled by the Brazilian National Monetary Authority Resolution # 2682 that also sets the criteria for credit operations risk rating. The Central Bank supervises the financial institutions both on their methodology and capacity to properly evaluate the borrowers’ risks and the proper application of the rules set forth in resolution 2682.
LTIR or, in Portuguese, TJLP: It is the Long Term Interest Rate determined by the Brazilian National Monetary Authority, expressed in percentage per annum.
Middle Market Enterprises: As defined by BI&P, enterprises with annual sales, predominantly, in the range from R$ 40 million to R$ 400 million.
NIM: Net Interest Margin is the proportion between the Gross Result of Financial Intermediation, without the effects of Loan Loss Allowances, and the Average Remunerable Assets, expressed in percentage.
NPL (Non Performing Loans): Loans overdue more than 60 days.
Real, Reais or R$: refers to the Brazilian real, the official currency of Brazil.
Regulation S: Rule promulgated under the U.S. Securities Act of 1933, as amended, or the Securities Act, related to institutional and other investors outside the United States and Brazil that are not U.S. persons.
ROA: Return on Assets. Percentage of Net Profit over Total Assets.
ROAA: Return on Average Assets.
ROE: Return on Equity. Percentage of Net Profit over Equity.
ROAE Return on Average Equity.
Rule 144A: Rule promulgated under the U.S. Securities Act of 1933, as amended, or the Securities Act, related to qualified institutional buyers of the United States.
SEC: Securities and Exchange Commission. Institution that regulates and supervises the United Stated capital markets.
Securities Act: 1933 US Law that regulates their capital markets.
SELIC rate: It is a reference interest rate based on government securities in the Clearing and Depositary Special System (Sistema Especial de Liquidação e Custódia – SELIC) and reflects the Brazilian Financial System base rate.
Syndicated Loan: Loan granted with the sharing of funding and risks by a group of financial institutions.
Tag Along: This mechanism is set forth in article 254-A of the Brazilian Law # 6404 that insures that the direct or indirect sale of the controlling shareholdership of a company can only occur in case the acquirer makes a public offering for the remainder common shares paying at least 80% of the price paid by the controlling shares. The By-Laws of Banco Indusval guarantees 100% Tag Along both for common and preferred shares. That means to say that in case the controlling shareholdership of Banco Indusval is sold, all shareholders will have the right to sell their share under the same price conditions of the controlling shareholders.
U.S. dollar, U.S. dollars or US$: refers to U.S. dollars.
Upper Middle or Larger Enterprises: As defined by BI&P, enterprises with annual sales above R$ 400 million, predominantly.
VaR: Value at Risk.
Share Warrants: On November 8, 2011, BI&P issued in private placement 19,779 warrants for subscription of preferred shares. Each warrant gives the holder the right to subscribe 100 preferred shares within 5 years from issuance.