Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A (Amendment no. 2)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the Fiscal Year Ended September 27, 2009
Commission file number 1-15983
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the Fiscal Year Ended September 27, 2009
Commission file number 1-15983
——————————
ARVINMERITOR, INC.
(Exact name of registrant as specified in its charter)
(Exact name of registrant as specified in its charter)
Indiana | 38-3354643 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
2135 West Maple Road | ||
Troy, Michigan | 48084-7186 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area
code: (248) 435-1000
SECURITIES REGISTERED PURSUANT TO SECTION
12(b) OF THE ACT:
Title of each class | Name of each exchange on which registered | |
Common Stock, $1 Par Value (including the | New York Stock Exchange | |
associated Preferred Share Purchase Rights) |
SECURITIES REGISTERED PURSUANT TO SECTION
12(g) OF THE ACT: None
Indicate by check mark whether the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.
Yes [ X ] No [ ]
Indicate by check mark if the registrant is
not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.
Yes [ ] No [ X ]
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405
of Registration S-T during the preceding twelve months (or for such shorter
period that the registrant was required to submit and post such
files).
Yes [ ] No [ ]
Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [ X ]
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer or a
smaller reporting company. See definitions of “large accelerated filer”,
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one)
Large accelerated filer | o | Accelerated filer | x | ||
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | o |
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [ X ]
The aggregate market value of the registrant’s
voting and non-voting common equity held by non-affiliates of the registrant on
April 1, 2010 (the last business day of the most recently completed second
fiscal quarter) was approximately $1,278,566,692.
94,072,706 shares of the
registrant’s Common Stock, par value $1 per share, were outstanding on April 4,
2010.
DOCUMENTS INCORPORATED BY
REFERENCE
Certain information contained in the Proxy
Statement for the Annual Meeting of Shareowners of the registrant held on
January 28, 2010 is incorporated by reference into Part III of the Annual Report
on Form 10-K for the fiscal year ended September 27, 2009.
EXPLANATORY NOTE -
AMENDMENT
ArvinMeritor, Inc. (the “company” or
“ArvinMeritor) is filing this Form 10-K/A to include in its Annual Report on
Form 10-K for the fiscal year ended September 27, 2009 (the “Annual Report”),
pursuant to Rule 3-09 of Regulation S-X under the Securities Exchange Act of
1934, financial statements and related notes of Master Sistemas Automotivos
Ltda. (“MSA”) and Suspensys Sistemas Automotivos Ltda. (“SSA”), unconsolidated
joint ventures in which the company owns an interest. ArvinMeritor owns a 49%
interest in MSA (directly) and a 50% interest in SSA (through both direct and
indirect interests).
Rule 3-09 of Regulation S-X provides that if a
50% or less owned person accounted for by the equity method meets the first or
third condition of the significant subsidiary tests set forth in Rule 1-02(w),
substituting 20% for 10%, separate financial statements for such 50% or less
owned person shall be filed.
MSA met such test for ArvinMeritor’s 2008
fiscal year and the company has included in this Form 10-K/A the required
audited financial statements for the fiscal year ended December 31, 2008
(“2008”). MSA did not meet the significance test for ArvinMeritor’s 2009 and
2007 fiscal years. Consequently, ArvinMeritor is only required to file unaudited
financial statements for 2009 and 2007 fiscal years. However, since MSA’s
audited financial statements for the fiscal year ended December 31, 2007
(“2007”) were filed with the Securities and Exchange Commission (“SEC”) in a
prior year filing, the audited financial statements for fiscal year 2007 have
been included in this Form 10-K/A for comparative purposes. ArvinMeritor has
also included in this Form 10-K/A MSA’s unaudited financial statements for
fiscal year ended December 31, 2009 (“2009”).
SSA met the significant subsidiary test for
ArvinMeritor’s 2008 fiscal year and the company has included in this Form 10-K/A
the required audited financial statements for the year ended December 31, 2008.
SSA did not meet the significance test for ArvinMeritor’s 2009 and 2007 fiscal
years. Consequently, ArvinMeritor is only required to file unaudited financial
statements for 2009 and 2007 fiscal years. However, since SSA’s audited
financial statements for the fiscal year ended December 31, 2007 (“2007”) were
filed with the SEC in a prior year filing, audited financial statements for
fiscal year 2007 have been included in this Form 10-K/A for comparative
purposes. ArvinMeritor has also included in this Form 10-K/A, SSA’s unaudited
financial statements for fiscal year ended December 31, 2009.
The financial statements of MSA and SSA are
prepared in accordance with accounting principles generally accepted in Brazil,
a basis of accounting other than U.S. GAAP. Since SSA met a 30% significance
test set forth in Rule 3-09 for 2008 (i.e. in one of the years for which
financial statements are presented), a quantitative reconciliation of key items
presented under accounting principles generally accepted in Brazil with those of
U.S. GAAP is required for all years for which financial statements of SSA are
presented. Such reconciliations are included for SSA for 2009, 2008 and 2007.
Since MSA met the significance test for 2008 at the 20% level and not the 30%
level, only a narrative description of differences between these two bases of
accounting is required for 2008 for MSA, which is included in MSA’s financial
statements.
Item 15 is the only portion of the Annual
Report being supplemented or amended by this Form 10-K/A. Additionally, in
connection with the filing of this Form 10-K/A and pursuant to SEC rules,
ArvinMeritor is including currently dated certifications. This Form 10-K/A does
not otherwise update any exhibits as originally filed and does not otherwise
reflect events occurring after the original filing date of the Annual Report.
Accordingly, this Form 10-K/A should be read in conjunction with ArvinMeritor’s
filings with the SEC subsequent to the filing of the Annual Report.
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(a) Financial Statements, Financial Statement Schedules and Exhibits.
(1) Financial Statements.
ArvinMeritor
The following financial statements and related
notes were filed as part of Amendment No. 1 to the Annual Report filed with the
SEC on November 20, 2009 (all financial statements listed below are those of the
company and its consolidated subsidiaries):
Consolidated
Statement of Operations, years ended September 30, 2009, 2008 and
2007.
Consolidated Balance
Sheet, September 30, 2009 and 2008.
Consolidated
Statement of Cash Flows, years ended September 30, 2009, 2008 and 2007.
Consolidated
Statement of Shareowners' Equity, years ended September 30, 2009, 2008 and
2007.
Notes to Consolidated
Financial Statements.
Report of Independent
Registered Public Accounting Firm.
Master Sistemas Automotivos
Ltda.
The following financial statements and related
notes of Master Sistemas Automotivos Ltda. are included in this Amendment No. 2
to Form 10-K/A pursuant to Rule 3-09 of Regulation S-X:
Balance Sheets,
December 31, 2009 and 2008
Statements of Income,
Changes in Shareholders’ Equity, and Cash Flows, years ended December 31, 2009,
2008 and 2007
Independent Auditors’
Report.
Suspensys Sistemas Automotivos
Ltda.
The following financial statements and related
notes of Suspensys Sistemas Automotivos Ltda. are included in this Amendment No.
2 to Form 10-K/A pursuant to Rule 3-09 of Regulation S-X:
Balance Sheets,
December 31, 2009 and 2008
Statements of Income,
Changes in Shareholders’ Equity, and Cash Flows, years ended December 31, 2009,
2008 and 2007
Independent Auditors’
Report.
Master Sistemas |
Automotivos Ltda. |
Financial Statements as of |
December 31, 2009 (Unaudited) and 2008 and For |
the Years Ended December 31, 2009 (Unaudited), |
2008 and 2007 and the Independent Auditors’ Report. |
Deloitte Touche Tohmatsu Auditores Independentes |
INDEPENDENT AUDITORS
REPORT
To the Board of
Directors of
Master Sistemas Automotivos Ltda. - Caxias do Sul – RS
Master Sistemas Automotivos Ltda. - Caxias do Sul – RS
We have audited the
accompanying balance sheet of Master Sistemas Automotivos Ltda. (the “Company”),
a company incorporated in Brazil, as of December 31, 2008 and the related
statements of income, changes in shareholders’ equity and cash flows for the
years ended December 31, 2008 and 2007 and the statement of value added for the
year ended December 31, 2008. These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our
audits in accordance with the auditing standards generally accepted in the
United States of America. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the
financial statements referred to above present fairly, in all material respects,
the financial position of the Company as of December 31, 2008 and 2007 and the
results of its operations for the years ended December 31, 2008 and 2007 in
conformity with accounting practices adopted in Brazil.
As mentioned in Note
3.10 to the financial statements, changes in Brazilian accounting practices have
been introduced effective January 1, 2008. The statements of income, changes in
shareholders’ equity and cash flows for the year ended December 31, 2007 have
been prepared in conformity with Brazilian accounting practices in effect until
December 31, 2007 and as permitted by Technical Pronouncement 13 – First-time
Adoption of Law 11638/07 and Provisional Act 448/09, are not being restated.
Consequently, the statements of income, changes in shareholders’ equity and cash
flows for the year ended December 31, 2008 may not be comparable with the
statements of income, changes in shareholders’ equity and cash flows for the
year ended December 31, 2007.
May 11,
2010
/s/ DELOITTE TOUCHE TOHMATSU AUDITORES
INDEPENDENTES
DELOITTE TOUCHE TOHMATSU AUDITORES INDEPENDENTES
Porto Alegre, Brazil
DELOITTE TOUCHE TOHMATSU AUDITORES INDEPENDENTES
Porto Alegre, Brazil
MASTER SISTEMAS AUTOMOTIVOS
LTDA.
BALANCE SHEETS AS OF DECEMBER
31, 2009
(UNAUDITED) AND 2008 (In thousands of Brazilian reais - R$) |
Note | |||||||
ASSETS | 2009 | 2008 | |||||
Unaudited | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | 4 | 58,080 | 12,986 | ||||
Short-term investments | 5 | - | 32,222 | ||||
Trade accounts receivable | 6 | 30,820 | 34,362 | ||||
Recoverable taxes | 7 | 3,254 | 5,759 | ||||
Inventories | 8 | 24,130 | 29,715 | ||||
Dividends and interest on capital receivable | 15 | 2,219 | 11,789 | ||||
Prepaid expenses | 153 | 268 | |||||
Deferred income and social contribution taxes | 20 | 1,074 | 2,357 | ||||
Other receivables | 559 | 1,365 | |||||
Total current assets | 120,289 | 130,823 | |||||
NONCURRENT ASSETS | |||||||
Long-term assets: | |||||||
Due from related parties | 15 | 354 | 597 | ||||
Recoverable taxes | 7 | 3,056 | 4,324 | ||||
Escrow deposits | 198 | 198 | |||||
Total long-term assets | 3,608 | 5,119 | |||||
Investments: | |||||||
Investment in nonconsolidated subsidiary | 9 | 87,246 | 75,468 | ||||
Other investments | 25 | 25 | |||||
Total investments | 87,271 | 75,493 | |||||
Property, plant and equipment, net | 10 | 65,559 | 64,513 | ||||
Intangible assets, net | 11 | 344 | 471 | ||||
Deferred charges, net | 12 | 933 | 1,264 | ||||
Total noncurrent assets | 157,715 | 146,860 | |||||
TOTAL ASSETS | 278,004 | 277,683 | |||||
The accompanying notes are an integral part of these financial statements |
MASTER SISTEMAS AUTOMOTIVOS
LTDA.
BALANCE SHEETS AS OF DECEMBER
31, 2009
(UNAUDITED) AND 2008 (In thousands of Brazilian reais - R$) |
Note | |||||||
LIABILITIES AND SHAREHOLDERS` EQUITY | 2009 | 2008 | |||||
Unaudited | |||||||
CURRENT LIABILITIES | |||||||
Trade accounts payable | 8,780 | 7,240 | |||||
Loans and financing | 13 | 10,793 | 28,803 | ||||
Payable derivative transactions | 18 | - | 4,385 | ||||
Taxes payable | 2,152 | 1,554 | |||||
Salaries payable | 874 | 452 | |||||
Accrued vacation and related charges | 2,513 | 2,214 | |||||
Dividends and interest on capital payable | 15 | 4,930 | 14,316 | ||||
Employee and management profit sharing | 2,781 | 2,253 | |||||
Payables to related parties | 15 | - | 1,334 | ||||
Other payables | 1,037 | 880 | |||||
Total current liabilities | 33,860 | 63,431 | |||||
NONCURRENT LIABILITIES | |||||||
Long-term liabilities: | |||||||
Loans and financing | 13 | 51,308 | 29,387 | ||||
Payables to parent company | 15 | - | 864 | ||||
Payables to related parties | 15 | 1,043 | 2,845 | ||||
Taxes payable | 2,301 | 1,370 | |||||
Deferred taxes | 20 | 314 | - | ||||
Other payables | 391 | 865 | |||||
Total noncurrent liabilities | 55,357 | 35,331 | |||||
SHAREHOLDERS` EQUITY | |||||||
Capital | 19 | 105,000 | 105,000 | ||||
Income reserve | 83,787 | 73,921 | |||||
Total shareholders` equity | 188,787 | 178,921 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS` EQUITY | 278,004 | 277,683 | |||||
The accompanying notes are an integral part of these financial statements |
MASTER SISTEMAS AUTOMOTIVOS
LTDA.
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2009 (UNAUDITED), 2008 AND 2007 (In thousands of Brazilian reais - R$) |
Note | |||||||||||
2009 | 2008 | 2007 | |||||||||
GROSS SALES | Unaudited | ||||||||||
Products and goods in the domestic market | 331,064 | 423,452 | 328,521 | ||||||||
Products and goods in the foreign market | 19,879 | 49,510 | 44,071 | ||||||||
Service Revenue | 2,509 | 2,767 | 2,888 | ||||||||
353,452 | 475,729 | 375,480 | |||||||||
DEDUCTIONS | |||||||||||
Taxes on sales | (80,026 | ) | (101,520 | ) | (77,408 | ) | |||||
Sales return | (873 | ) | (487 | ) | (464 | ) | |||||
NET SALES | 272,553 | 373,722 | 297,608 | ||||||||
COST OF PRODUCTS AND GOODS SOLD AND SERVICES | (224,289 | ) | (312,617 | ) | (238,554 | ) | |||||
GROSS PROFIT | 48,264 | 61,105 | 59,054 | ||||||||
OPERATING INCOME (EXPENSES) | |||||||||||
Selling expenses | (9,206 | ) | (11,779 | ) | (10,590 | ) | |||||
General and administrative expenses | (7,246 | ) | (8,179 | ) | (8,686 | ) | |||||
Management compensation | (431 | ) | (370 | ) | (326 | ) | |||||
Equity in nonconsolidated subsidiary | 9 | 27,827 | 36,517 | 28,928 | |||||||
Other operating expense, net | (4,256 | ) | (2,757 | ) | (4,505 | ) | |||||
6,688 | 13,432 | 4,821 | |||||||||
INCOME FROM OPERATIONS BEFORE FINANCIAL | 54,952 | 74,537 | 63,875 | ||||||||
INCOME (EXPENSES) | |||||||||||
FINANCIAL INCOME | |||||||||||
Financial income | 21 | 15,575 | 21,668 | 11,070 | |||||||
Financial expenses | 21 | (9,508 | ) | (25,615 | ) | (9,764 | ) | ||||
6,067 | (3,947 | ) | 1,306 | ||||||||
INCOME FROM OPERATIONS | 61,019 | 70,590 | 65,181 | ||||||||
INCOME BEFORE INCOME TAX AND SOCIAL | 61,019 | 70,590 | 65,181 | ||||||||
CONTRIBUTION | |||||||||||
INCOME TAX AND SOCIAL CONTRIBUTION | |||||||||||
Current | 20 | (6,291 | ) | (10,031 | ) | (10,233 | ) | ||||
Deferred | 20 | (1,596 | ) | 2,003 | 354 | ||||||
NET INCOME | 53,132 | 62,562 | 55,302 | ||||||||
The accompanying notes are an integral part of these financial statements |
MASTER SISTEMAS AUTOMOTIVOS
LTDA.
STATEMENTS OF CHANGES IN
SHAREHOLDERS` EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2009 (UNAUDITED), 2008 AND 2007 (In thousands of Brazilian reais - R$) |
Income | Retained | |||||||||||
Capital | Reserve | Earnings | Total | |||||||||
BALANCES ON DECEMBER 31, 2006 | 27,996 | 4,017 | 87,409 | 119,422 | ||||||||
Net income | - | - | 55,302 | 55,302 | ||||||||
Interest on capital | - | - | (8,024 | ) | (8,024 | ) | ||||||
Capital payment | 4,104 | (4,017 | ) | (86 | ) | 1 | ||||||
Dividend payment | - | - | (14,396 | ) | (14,396 | ) | ||||||
BALANCES ON DECEMBER 31, 2007 | 32,100 | - | 120,205 | 152,305 | ||||||||
Impact of adopting law no 11.638/07 | - | - | (130 | ) | (130 | ) | ||||||
and provisional act no. 449/08 | ||||||||||||
Capital Payment | 72,900 | (72,900 | ) | - | ||||||||
Complement of dividends from 2007 | - | - | (20,176 | ) | (20,176 | ) | ||||||
Net income | - | - | 62,562 | 62,562 | ||||||||
Interest on capital | - | - | (8,829 | ) | (8,829 | ) | ||||||
Dividend payment | - | - | (6,811 | ) | (6,811 | ) | ||||||
Income reserve | - | 73,921 | (73,921 | ) | - | |||||||
BALANCES ON DECEMBER 31, 2008 | 105,000 | 73,921 | - | 178,921 | ||||||||
Net income | - | - | 53,132 | 53,132 | ||||||||
Interest on capital | - | - | (10,358 | ) | (10,358 | ) | ||||||
Dividend payment | - | (21,108 | ) | (11,800 | ) | (32,908 | ) | |||||
Income reserve | - | 30,974 | (30,974 | ) | - | |||||||
BALANCES ON DECEMBER 31, 2009 (Unaudited) | 105,000 | 83,787 | - | 188,787 | ||||||||
The accompanying notes are an integral part of these financial statements |
MASTER SISTEMAS AUTOMOTIVOS
LTDA.
STATEMENTS OF CASH
FLOW
FOR THE YEARS ENDED DECEMBER 31, 2009 (UNAUDITED), 2008 AND 2007 (In thousands of Brazilian reais - R$) |
2009 | 2008 | 2007 | |||||||
CASH FLOW FROM OPERATING ACTIVITIES | |||||||||
Net income | 53,132 | 62,562 | 55,303 | ||||||
Adjustments to reconcile net income to net cash provided by | |||||||||
operating activities: | |||||||||
Depreciation and amortization | 6,260 | 10,916 | 7,763 | ||||||
Provisions | - | 1,586 | - | ||||||
Deferred income tax and social contribution | 1,596 | (2,003 | ) | (354 | ) | ||||
Loss on sale of property and equipment | 4 | 37 | 127 | ||||||
Exchange variation, interest on loans and financing and derivatives | (4,896 | ) | 12,516 | 3,948 | |||||
Equity in nonconsolidated subsidiary | (27,827 | ) | (36,517 | ) | (28,928 | ) | |||
Variations in assets and liabilities | |||||||||
(Increase) decrease in trade accounts receivable | 3,542 | (2,306 | ) | 6,937 | |||||
(Increase) decrease in inventories | 5,585 | (4,933 | ) | (9,981 | ) | ||||
(Increase) decrease in other receivables | 6,909 | 1,255 | (9,538 | ) | |||||
Increase (decrease) in trade accounts payables | 1,540 | (2,277 | ) | 1,903 | |||||
Increase in other payables | 178 | 3,730 | 4,724 | ||||||
Investment in short-term investments | - | (32,222 | ) | - | |||||
Redemption of short-term investments | 32,222 | - | - | ||||||
Dividends and interest on capital received | 24,930 | 14,557 | 20,879 | ||||||
Interest on loans and financing paid | (3,776 | ) | (4,397 | ) | (2,999 | ) | |||
Net cash provided by operating activities | 99,399 | 22,504 | 49,784 | ||||||
CASH FLOW FROM INVESTING ACTIVITIES | |||||||||
Acquisition of property, plant, equipment | (6,852 | ) | (18,523 | ) | (11,546 | ) | |||
Additions to intangible assets | - | - | (94 | ) | |||||
Net cash provided (used) in investing activities | (6,852 | ) | (18,523 | ) | (11,640 | ) | |||
CASH FLOW FROM FINANCING ACTIVITIES | |||||||||
Dividends and interest on capital paid | (51,099 | ) | (28,200 | ) | (22,420 | ) | |||
Payments to related parties | (864 | ) | (564 | ) | - | ||||
Proceeds from loans and financing | 37,379 | 41,133 | 49,941 | ||||||
Loans and financing paid | (32,870 | ) | (43,948 | ) | (32,419 | ) | |||
Net cash used for financing activities | (47,454 | ) | (31,579 | ) | (4,898 | ) | |||
NET INCREASE (DECREASE) IN BALANCE OF CASH | |||||||||
AND CASH EQUIVALENTS | 45,093 | (27,598 | ) | 33,246 | |||||
At beginning of year | 12,986 | 40,584 | 7,338 | ||||||
At end of year | 58,079 | 12,986 | 40,584 | ||||||
45,093 | (27,598 | ) | 33,246 | ||||||
The accompanying notes are an integral part of these financial statements |
MASTER SISTEMAS AUTOMOTIVOS
LTDA.
STATEMENTS OF ADDED
VALUE
FOR THE YEAR ENDED DECEMBER 31, 2009 (UNAUDITED) AND 2008 (In thousands of Brazilian reais - R$) |
2009 | 2008 | |||
SALES | (Unaudited) | |||
Sale of goods, products and services | 352,578 | 475,242 | ||
Other incomes | 31 | 653 | ||
352,609 | 475,895 | |||
MATERIAL PURCHASED FROM THIRD PARTIES (includes taxes - ICMS, IPI, PIS and COFINS) | ||||
Cost of products and goods sold and services | 231,112 | 328,418 | ||
Material, power, outsourced services and others | 30,028 | 41,488 | ||
261,140 | 369,906 | |||
GROSS ADDED VALUE | 91,469 | 105,989 | ||
DEPRECIATION AND AMORTIZATION | 6,260 | 10,916 | ||
NET ADDED VALUE PRODUCED BY THE COMPANY | 85,209 | 95,073 | ||
TRANSFERRED ADDED VALUE | ||||
Equity in subsidiary | 27,827 | 36,517 | ||
Rents and royalties | 110 | 103 | ||
Financial incomes | 15,575 | 21,668 | ||
43,512 | 58,288 | |||
TOTAL ADDED VALUE TO BE DISTRIBUTED | 128,721 | 153,361 | ||
ADDED VALUE DISTRIBUTED | 128,721 | 153,361 | ||
Personnel: | ||||
Direct remuneration | 21,300 | 23,762 | ||
Benefits | 3,574 | 4,064 | ||
FGTS (Employees' Severance Guarantee Fund) | 2,077 | 2,182 | ||
Management fees and profit sharing | 834 | 750 | ||
Employee profit sharing | 3,434 | 2,720 | ||
Pension plan | 187 | 183 | ||
Taxes and contributions: | ||||
Federal | 21,621 | 20,423 | ||
State | 11,554 | 9,653 | ||
Municipal | 16 | 11 | ||
Remuneration from third parties capital: | ||||
Interest on financial expenses | 9,508 | 25,615 | ||
Rents | 1,484 | 1,436 | ||
Remuneration on capital: | ||||
Interest on capital | 10,358 | 8,829 | ||
Dividends | 11,800 | 6,811 | ||
Retained earnings | 30,974 | 46,922 | ||
The accompanying notes are an integral part of these financial statements |
MASTER SISTEMAS AUTOMOTIVOS
LTDA.
NOTES TO THE FINANCIAL
STATEMENTS
AS OF DECEMBER 31, 2009 (UNAUDITED) AND 2008 AND FOR THE YEARS ENDED DECEMBER 31, 2009 (UNAUDITED), 2008 AND 2007 (Amounts in Brazilian thousand reais – R$, except when stated otherwise) |
1. OPERATIONS
Master Sistemas Automotivos Ltda. (“Company”) was established on April
24, 1986 and began operations in April, 1987. The company is engaged in the
development, manufacturing, sale, assembly, distribution, importation and
exportation of motion control systems for buses, trailers, trucks, and their
related parts and components.
2. FINANCIAL STATEMENTS PRESENTATION
The financial
statements have been prepared in conformity with the accounting practices
adopted in Brazil, which comprise the Brazilian Corporate Law, the
pronouncements, guidelines and interpretations issued by the Accounting
Pronouncements Committee (CPC) and standards issued by Brazilian Securities and
Exchange Commission (CVM).
In preparing the
financial statements for 2008, the Company adopted for the first time the new
accounting practices introduced by Law 11638/07, approved on December 28, 2007,
as amended by Provisional Act 449 of December 3, 2008.
Law 11638/07 and the
Provisional Act 449/08 altered Law 6404/76 in aspects related to the preparation
and disclosure of financial statements.
Adjustments related
to the first-time adoption of Law 11638/07 and Provisional Act 449/08 are set
forth in note 3.10.
3. SIGNIFICANT ACCOUNTING PRACTICES
3.1 Income
recognition
Income and expenses
are recognized on the accrual basis.
Revenue from the sale
of products is recognized in the statement of income when all risks and benefits
inherent in the product are transferred to the buyer. Revenue from services
provided is recognized in the statement of income when services are
rendered.
3.2. Use of estimates
The preparation of
financial statements in conformity with the Accounting practices adopted in
Brazil requires Management to use its judgment in determining and recording
accounting estimates. Significant assets and liabilities subject to these
estimates and assumptions include the net book value of property, plant and
equipment, allowance for doubtful accounts, inventories and deferred tax assets,
reserve for contingencies, and assets and liabilities related to employees’
benefits. The settlement of transactions involving these estimates may result in
values different from those we estimated due to lack of precision inherent to
the process of their determination.
3.3 Foreign currency
Monetary assets and liabilities denominated in foreign currencies were
translated into Brazilian reais at the exchange rate in effect on the balance
sheet date, and currency translation differences were recognized in the
statement of income.
3.4 Current and noncurrent
assets
- Cash and cash equivalents
These include cash balances, bank deposits and temporary cash investments
redeemable within 90 days from the investment date. Temporary cash investments
are readily convertible into a known amount of cash and are subject to a very
low risk of change in their market value.
- Trade accounts receivable
Trade accounts receivable are stated at the billed amount plus related
taxes and are recorded at present value on the balance sheet date.
- Inventories
Stated at average acquisition or production cost, which does not exceed
market value.
- Other current and noncurrent assets
Stated at their net realizable value.
- Property, plant and equipment and intangible assets
Stated at acquisition or construction cost. Depreciation and amortization
are calculated using the straight-line method at rates stated in Notes 10 and
11, based on the estimated useful life of assets.
- Deferred charges
Recorded at incurred cost up to December 31, 2007, and amortized using
the straight-line method at a rate of 20% per year, from completion date of
respective projects.
3.5 Loans and financing
Loans are initially recognized at fair value at the time the resources
are received, net of transaction costs, and are subsequently measured at
amortized cost, that is, including charges, interest and monetary and exchange
variations, as provided for in the contract, incurred up to the balance sheet
date, as shown in Note 13.
3.6 Current and noncurrent
liabilities
Stated at known or estimated amounts, plus, if applicable, related
charges and monetary and/or exchange variations through to the balance sheet
date. The trade accounts payable balances are recorded at their present value on
the balance sheet date.
3.7 Financial instruments
(a) Classification and
measurement
Financial assets and liabilities kept by the Company are classified under
the following categories: (1) financial assets measured at fair value through
profit and loss; and (2) financial assets and liabilities held to maturity. The
classification depends on the purpose for which the financial assets and
liabilities were acquired or contracted. The management of the Company
classifies its financial assets and liabilities at the moment they are
contracted.
Financial assets and liabilities held to
maturity
Financial assets and liabilities held to maturity are mainly comprised of
the short-term investments and loans and financing. They are measured at the
acquisition cost plus income earned according to the contracted terms and
conditions, in the case of short-term investments, and at the amortized cost
using the effective interest rate method, in the case of loans and financing,
recorded to statement of income on the accrual basis.
(b) Derivatives
Initially, they are measured at the acquisition costs on the date they
are contracted and then remeasured at the fair value, with variations recorded
through profit and loss.
Evaluation of derivate financial instruments at the fair value is usually
made by the Company’s treasury department based on information on each
contracted operation and respective market data on each balance sheet date. The
fair values of derivative financial instruments are shown in Note
18.
3.8 Contingencies
A provision is recognized in the balance sheet when the Company has a
legal or constructive obligation as a result of a past event and it is probable
that an outflow of resources will be required to settle the obligation.
Provisions are recorded based on the best estimates of the involved
risk.
3.9 Income and social contribution
taxes
The income tax and social contribution, current and deferred, are
calculated at the rate of 15% plus a 10% surtax on monthly taxable income in
excess of R$ 20 for income tax, and 9% on monthly taxable income for social
contribution. This calculation takes into consideration the offsetting of tax
loss carryforwards, limited to 30% of the taxable income.
3.10 First-time
adoption of Law 11638/07 and Law 11941/09
The Company’s management opted to prepare its opening balance sheet with
the transition date of January 1,
2008, which is the starting point for accounting in conformity with amendments
introduced by Law 11638/07 and Law 11941/09. The changes introduced by said
legislation are qualified as a change in accounting policy, however, as
permitted by Technical Pronouncement CPC 13 – First-time Adoption of Law
11638/07 and Provisional Act 449/08 (converted in Law 11941/09), approved by CVM
Resolution 565 of December 17, 2008, all of the adjustments resulting from the
first-time adoption of Law 11638/07 and Law 11941/09 were made directly in
retained earnings on the transition date, in conformity with the provisions of
Article 186 of Law 6404/76, without retrospective effects on the financial
statements. Below are the equity adjustments arising from the first-time
adoption of Law 11638/07 and Law 11941/09, a summary of the accounting practices
amended by said legislation, effects thereof in the balance sheet on the date of
transition.
a) Adjustments arising from
the first-time adoption of Law 11638/07 and Law 11941/09 to the balance sheet as
of the transition date – January 1, 2008:
Date of transition - 01/01/2008 | ||||||||||
December 31, | ||||||||||
2007 | ||||||||||
Balances | Adjustments | Balances | ||||||||
Capital | 32,100 | - | 32,100 | |||||||
Retained earnings | 120,205 | (130 | ) | {a} | 120,075 | |||||
Shareholders’ equity | 152,305 | (130 | ) | 152,175 | ||||||
Summary of adjustments | ||||
{a} Adjustments against retained earnings | ||||
{a1} Adjustment for the present value of trade accounts receivables | (142 | ) | ||
{a2} Adjustment for the present value of trade accounts payable | 12 | |||
Total | (130 | ) | ||
b) Summary of changes in
accounting practices for the first-time adoption of Law 11638/07 and Provisional
Act 449/08:
Deferred charges
Deferred charges as of December 31, 2007 will be maintained up to its
full realization through amortization or write-off against the net income for
the year. Deferred charges were recorded for their recoverable
value.
Adjustments to present
value
Trade accounts receivable and trade accounts payable were adjusted to
present value based on interest rates reflecting the nature of receivables and
payables in terms of maturity and payment conditions on the dates of the related
transactions.
The effects of adjustments to present value from the first-time adoption
of Law 11638/07 and Provisional Act 449/08 were recorded in retained
earnings.
Statements of cash flows and value
added
Replacement of the statement of changes in financial position by the
statement of cash flows and inclusion of the statement of value
added.
3.11 Changes in
Brazilian accounting practices effective from January 1, 2010
With the advent of Law no. 11638/07, which amended the Brazilian
corporate law to enable the convergence of accounting practices adopted in
Brazil with those contained in International Financial Reporting Standards
(IFRS), new standards and technical accounting pronouncements have been issued
in line with international standards by Brazilian Accounting Pronouncements
Committee (CPC).
As of the date of preparation of these financial statements, 40 new
technical accounting pronouncements, guidelines and interpretations had been
issued by the CPC and approved by the CVM Deliberations and resolutions of the
Federal Accounting Council - CFC, with mandatory implementation in 2010.
Pronouncements, guidelines and interpretations of the CPC that are applicable to
the Company, given its current operations, are:
Standard | Description | |||
CPC 16 | Inventories | |||
CPC 18 | Investments in associates | |||
CPC 20 | Borrowing costs | |||
CPC 23 | Accounting policies, change in accounting estimates and errors | |||
CPC 24 | Events after the reporting period | |||
CPC 25 | Provisions, contingent liabilities and contingent assets | |||
CPC 26 | Presentation of financial statements | |||
CPC 27 | Property, plant and equipment | |||
CPC 30 | Revenue | |||
CPC 32 | Income taxes | |||
CPC 33 | Employee benefits | |||
CPC 38 | Financial instruments: Recognition and measurement | |||
CPC 39 | Financial instruments: Presentation | |||
CPC 40 | Financial instruments: Disclosures | |||
CPC 43 | First-time adoption of Technical Pronouncements CPC 15 to 40 | |||
OCPC 03 | Financial instruments: Recognition, measurement and presentation | |||
ICPC 09 | Individual financial statements, Separate financial statements, Consolidated | |||
financial statements and application of equity method. | ||||
ICPC 10 | Interpretation on the first-time adoption to Property, Plant and Equipment | |||
and Investment Property of Technical Pronouncements CPC 27, 28, 37 and 43 |
Company’s Management is analyzing the impacts of changes introduced by
these new pronouncements. In the case of adjustments arising from adoption of
new practices from January 1, 2010, the Company will assess the need to
remeasure the effects that would be produced in its financial statements for
2009, for comparison, as if these new procedures had been in place since the
beginning of the year ended December 31, 2009.
4. CASH AND CASH EQUIVALENTS
Temporary cash investments refer to Bank Deposits Certificates (CDB) and
are linked to rate variations of interbank deposit certificate – CDI. Temporary
cash investments are remunerated as shown below:
2009 | 2008 | ||||
Unaudited | |||||
Cash and bank deposits | 467 | 191 | |||
Temporary cash investments: | |||||
CDB - 97.50% to 99.99% CDI | 33 | 19 | |||
CDB – 100.00% to 100.99% CDI | 10,079 | 3,612 | |||
CDB – 101.00% to 101.99% CDI | 1,547 | 2,034 | |||
CDB – 102.00% to 102.99% CDI | 521 | 4,515 | |||
CDB – 103.00% to 103.99% CDI | 9,475 | 2,615 | |||
CDB – 104.00% to 104.99% CDI | 30,540 | - | |||
CDB – 105.00% to 105.99% CDI | 5,418 | - | |||
57,613 | 12,795 | ||||
Total | 58,080 | 12,986 | |||
5. SHORT-TERM INVESTMENTS
On December 31, 2008, in addition to temporary cash investments linked to
CDI, the Company had financial investments in the value of R$ 32,222 at
pre-fixed rates, with restrictions to early redemption and remunerated at rates
between 14.38% and 15.23% a year.
6. TRADE ACCOUNTS RECEIVABLE
The balance of trade accounts receivable on December 31 are presented as
follows:
2009 | 2008 | ||||
Unaudited | |||||
Trade accounts receivable from third parties – domestic market | 19,437 | 15,776 | |||
Trade accounts receivable from third parties – foreign market | 748 | 2,648 | |||
Trade accounts receivable from related parties – domestic market | 3,994 | 3,718 | |||
Trade accounts receivable from related parties – foreign market | 6,641 | 12,220 | |||
Total | 30,820 | 34,362 | |||
7. RECOVERABLE TAXES
The balances of recoverable taxes as of December 31 are presented as
follows:
2009 | 2008 | ||||
Unaudited | |||||
IPI (federal VAT) | 66 | 49 | |||
ICMS (state VAT) | 1,442 | 2,356 | |||
ICMS on fixed asset acquisitions | 2,747 | 3,597 | |||
PIS | 21 | 70 | |||
PIS on fixed asset acquisitions | 343 | 426 | |||
COFINS | 112 | 351 | |||
COFINS on fixed assets acquisitions | 1,579 | 1,964 | |||
CS (Social contribution) | - | 1,182 | |||
Others | - | 88 | |||
Total | 6,310 | 10,083 | |||
Current | 3,254 | 5,759 | |||
Noncurrent | 3,056 | 4,324 |
The balance of recoverable taxes recorded in noncurrent assets comprises
ICMS, PIS and COFINS on acquisitions on fixed assets, which are recoverable in
48 months, according to current legislation. Of the ICMS recoverable balance, R$
699 (Unaudited) (R$ 1,211 on December 31, 2008) refer to the purchase of
Randon’s credits and will be offset according to schedule prepared by
Secretaria da Fazenda do Estado do Rio Grande
do Sul.
8. INVENTORIES
Inventories as of December 31 are presented as follows:
2009 | 2008 | |||||
Unaudited | ||||||
Finished products | 1,413 | 1,827 | ||||
Work in process | 6,372 | 9,363 | ||||
Raw materials and others | 13,677 | 18,033 | ||||
Stock in transit | 1,176 | 490 | ||||
Advances to suppliers | 245 | 392 | ||||
Imports in transit | 1,247 | 1,999 | ||||
Provision for inventory losses | - | (2,389 | ) | |||
Total | 24,130 | 29,715 | ||||
9. INVESTMENTS IN NONCONSOLIDATED SUBSIDIARY
The following summarizes financial information pertaining to the
company’s unconsolidated subsidiary, Suspensys Sistemas Automotivos Ltda. as of
December 31:
2009 | 2008 | ||||||
Unaudited | |||||||
Capital | 71,291 | 71,291 | |||||
Shareholders’ equity | 170,928 | 145,607 | |||||
Tax incentives reserve – Fundopem (*) | (24,591 | ) | (11,578 | ) | |||
Non-proportional allocated dividends | 17,730 | 7,893 | |||||
Shareholders’ equity – adjusted | 164,067 | 141,922 | |||||
Interest on capital payable | (8,635 | ) | (6,183 | ) | |||
Dividends paid | (2,289 | ) | (4,319 | ) | |||
Dividends payable | (75,046 | ) | (16,914 | ) | |||
Net income | 65,343 | 80,940 | |||||
Ownership interest (%) | 53.18 | % | 53.18 | % | |||
Number of shares | 53,177 | 53,177 | |||||
Opening balance | 75,468 | 53,530 | |||||
Interest on capital receivable | (4,592 | ) | (3,288 | ) | |||
Reversal of dividends | 1,217 | - | |||||
Dividends receivable | - | (8,994 | ) | ||||
Dividends received | (12,674 | ) | (2,297 | ) | |||
Equity in subsidiary earnings | 27,827 | 36,517 | |||||
Ending balance | 87,246 | 75,468 | |||||
(*) As established in the “joint venture” agreement and ratified by the
shareholders in the meeting minutes for approval of profit allocation, Randon
S.A. - Implementos e Participações, a shareholder of Suspensys, is entitled to
receiving non-proportional dividends.
10. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31 are presented as follows:
Annual | 2009 | 2008 | |||||||||
depreciation | Accumulated | ||||||||||
rate (%) | Cost | depreciation | Net | Net | |||||||
Unaudited | Unaudited | Unaudited | Unaudited | ||||||||
Land | - | 2,745 | - | 2,745 | 2,745 | ||||||
Buildings | 1.69 | 19,502 | (3,371 | ) | 16,131 | 8,356 | |||||
Machinery and equipment | 10.47 | 82,577 | (45,871 | ) | 36,706 | 35,664 | |||||
Molds and dies | 13.16 | 16,680 | (11,920 | ) | 4,760 | 5,495 | |||||
Installations | 0.79 | 2,353 | (1,007 | ) | 1,346 | 1,336 | |||||
Furniture and fixtures | 9.53 | 3,374 | (1,818 | ) | 1,556 | 1,540 | |||||
Vehicles | 16.23 | 2,234 | (1,297 | ) | 937 | 1,033 | |||||
Computer equipment | 19.75 | 1,198 | (925 | ) | 273 | 268 | |||||
Advances to suppliers | 137 | - | 137 | 614 | |||||||
Work in progress | 968 | - | 968 | 5,277 | |||||||
Property, plant and equipment in progress | - | - | - | 2,185 | |||||||
Total | 131,768 | (66,209 | ) | 65,559 | 64,513 | ||||||
Machinery and equipment with a residual value of R$ 628 (Unaudited) and
R$ 784 (Unaudited) were provided as collateral in loans from BNDES – (National Bank for Economic and Social
Development), by the
company and its subsidiary Suspensys Sistemas Automotivos Ltda.,
respectively.
The Company revised the useful life of its fixed assets, which have
depreciated by new rates, as shown in the table above. The effects of this
change were recognized prospectively as of January 1, 2009. This change in the
useful lives reduced depreciation expense by R$ 1,250 (Unaudited).
11. INTANGIBLE ASSETS
Intangible assets as of December 31 are presented as
follows:
Annual | 2009 | 2008 | |||||||||
amortization | Accrued | ||||||||||
rate (%) | Cost | amortization | Net | Net | |||||||
Unaudited | Unaudited | Unaudited | Unaudited | ||||||||
Software | 20 | 1,293 | (949 | ) | 344 | 471 |
12. DEFERRED CHARGES
Deferred charges as of December 31 are presented as follows:
Annual | 2009 | 2008 | |||||||||
amortization | Accrued | ||||||||||
rate (%) | Cost | amortization | Net | Net | |||||||
Unaudited | Unaudited | Unaudited | Unaudited | ||||||||
Costs studies and projects | 20 | 1,619 | (686 | ) | 933 | 1,264 |
13. LOANS AND FINANCING
Loans and financing were
obtained to finance the modernization of the industrial facilities, development of quality processes, finance exports and machinery imports. The loans and
financing were obtained from several
financial institutions through funds obtained by such
institutions from the BNDES (Brazilian National Bank for Social
and Economic Development).
The balance of loans and financing on December 31 is
presented as follows:
2009 | 2008 | ||||||||
Type: | Annual Financial Charges | Unaudited | |||||||
Working capital / exports | |||||||||
Bank credit - Exin | U.S. Dollar exchange variation + interest of 4.50% | 32,595 | - | ||||||
Bank credit - Exin | TJLP (long-term interest rate) + interest of 2.70% | - | 12,543 | ||||||
ACC – Advance on Foreign Exchange Contracts | U.S. Dollar exchange variation + int. 5.25% to 5.80% | - | 5,018 | ||||||
Financing | |||||||||
Financing with BNDES | TJLP + interest of 2.5% to 5% | 18,377 | 24,717 | ||||||
FINEP – Financiamento de estudos e projetos | Interest of 4% + 6% in excess of TJLP | 4,413 | 6,899 | ||||||
FINAME – Financiamento de máquinas e equipamentos | UMBNDES (foreign currencies) plus interest of 4% | 144 | 427 | ||||||
FINAME – Financiamento de máquinas e equipamentos | Interest of 4% to 5.5% + the excess of 6% of TJLP | 495 | 1,374 | ||||||
FININP – Financiamento de maquinas e equipamentos | U.S. Dollar exchange variation + LIBOR + 1% to 4.4% | 2,881 | 4,583 | ||||||
Financing with BNDES | U.S. Dollar exchange variation + interest of 2.5% | 1,508 | 2,629 | ||||||
FUNDOPEM – ICMS | IPCA + 3% | 1,688 | - | ||||||
Total | 62,101 | 58,190 | |||||||
Current | 10,793 | 28,803 | |||||||
Noncurrent | 51,308 | 29,387 |
Maturities of noncurrent portions of loans and
financing are presented as follows:
Maturity | 2009 | 2008 | |||
Unaudited | |||||
2010 | - | 11,110 | |||
2011 | 8,479 | 8,913 | |||
2012 | 38,910 | 6,910 | |||
2013 | 2,400 | 1,958 | |||
2014 | 225 | 73 | |||
2015 and following | 1,294 | 423 | |||
Total | 51,308 | 29,387 | |||
The loans and financing from
BNDES and FINAME are collateralized by machinery and equipment of the Company and its shareholders.
14. INTEREST ON CAPITAL PAYABLE
On December 31, 2009, the Company recorded interest on capital payable in
the amount of R$ 10,358 (Unaudited) (R$ 8,829 in 2008), by applying the TJLP
(Long-term interest rate) for the period January and December, 2009 on
shareholders’ equity balances of December 31, 2008, observing the greater limit
of 50% of the pre-tax income or 50% of the retained earnings.
In accordance with tax legislation, the amount recorded as interest on
capital was entirely deducted when calculating income tax and social
contribution, resulting in a tax benefit of R$ 3,522 (Unaudited) (R$ 3,002 in
2008). For the purpose of these financial statements, such interest on capital
was considered as dividends and was recorded as a reduction of retained earnings
in shareholders’ equity.
Additionally, the Company recorded financial income regarding interest on
capital receivable from the subsidiary Suspensys Sistemas Automotivos Ltda., in
the total amount of R$ 4,592 (Unaudited), (R$ 3,288 in 2008), which for purposes
of disclosure and adjustment to accounting practices, the aforementioned amount
was reversed in the statement of income and credited in investments in
subsidiary balance.
15. RELATED-PARTY TRANSACTIONS
Transactions and balances with related parties as of December 31 are
presented as follows:
Randon Companies (*) | ArvinMeritor Companies (**) | Total | ||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |||||||||||||
Unaudited | Unaudited | Unaudited | ||||||||||||||||
Balance sheet | ||||||||||||||||||
Trade accounts receivable - net | 2,080 | 1,583 | 8,555 | 14,355 | 10,635 | 15,938 | ||||||||||||
Interest on capital receivable | 2,219 | 2,795 | - | - | 2,219 | 2,795 | ||||||||||||
Dividends receivable | - | 8,994 | - | - | - | 8,994 | ||||||||||||
Receivables from parent company | 354 | 597 | - | - | 354 | 597 | ||||||||||||
Other accounts receivable | 243 | 243 | - | - | 243 | 243 | ||||||||||||
Trade accounts payable | 550 | 1,199 | 211 | 1,558 | 761 | 2,757 | ||||||||||||
Interest on capital payable | 2,515 | 3,827 | 2,415 | 3,677 | 4,930 | 7,504 | ||||||||||||
Dividends payable | - | 3,475 | - | 3,337 | - | 6,812 | ||||||||||||
Payables with related companies – current | - | - | - | 1,334 | - | 1,334 | ||||||||||||
Payables to parent company | - | 864 | - | - | - | 864 | ||||||||||||
Payables with related company – noncurrent | 1,043 | - | - | 2,845 | 1,043 | 2,845 | ||||||||||||
2009 | 2008 | 2007 | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | ||||||||||
Unaudited | Unaudited | Unaudited | ||||||||||||||||
Statement of income | ||||||||||||||||||
Sale of products and goods | 55,613 | 74,537 | 56,960 | 38,865 | 71,512 | 57,994 | 94,478 | 146,049 | 114,954 | |||||||||
Purchase of products and services | 18,541 | 24,524 | 16,077 | 3,889 | 5,761 | 4,514 | 22,430 | 30,285 | 20,591 | |||||||||
Financial income | 1 | 213 | 166 | - | 724 | 1,401 | 1 | 937 | 1,567 | |||||||||
Financial expenses | 55 | 12 | 94 | - | 2,182 | 354 | 55 | 2,194 | 448 | |||||||||
Commissions expenses | 262 | 328 | 739 | - | - | 51 | 262 | 328 | 790 | |||||||||
Administrative expenses | 2,599 | 3,801 | 2,958 | - | - | - | 2,599 | 3,801 | 2,958 |
(*) Includes: |
Randon S.A.
Implementos e Participações (Controladora), Fras-Le S.A., Fras-Le
Argentina S.A., Fras-Le Andina Comercio y Representacion Ltda., Jost
Brasil Sistemas Automotivos Ltda., Randon Implementos, Randon Argentina, e
Suspensys Sistemas Automotivos Ltda., Castertech Fundição e Tecnologia
Ltda.
|
|
(**) Includes: |
ArvinMeritor do Brasil Sistemas
Automotivos Ltda., Meritor Automotive Inc., Meritor Heavy Vehicle Systems
LLC., Meritor HVS Ltd, ArvinMeritor Qri,, Arvin Meritor Inc. ArvinMeritor
CVS, ArvinMeritor Frankfurt, and Sisamex Sistemas
Automotrices.
|
Loan balances with officers and managers are recorded in the group of
other accounts payable, in the amount of R$ 362 (current - Unaudited) R$ 390
(noncurrent - Unaudited) in 2009, and R$ 501 (current) and R$ 313 (noncurrent)
in 2008. The balances are adjusted at the rates used by the financial market
(DI-extra, issued by Ambima).
The remuneration and profit sharing of management was R$ 834 (Unaudited)
in 2009 (R$ 750 in 2008 and 715 in 2007).
Debits and credits with the parent company Randon S.A. Implementos e
Participações are subject to financial market rates (DI-extra, issued by
Ambima).
The payables to related companies refer to accounts payable to
ArvinMeritor Inc., resulting for the import of machinery by the
Company.
Commercial Transactions
The commercial transactions with related parties follow the prices and
terms established by the agreement signed between the parties. The agreement
takes into account the term, volume and specifications of the products purchased
by the related parties, which are not comparable to sales to unrelated
parties.
16. PENSION PLAN
The Company co-sponsors RANDONPREV, a defined contribution pension plan
under a capitalization regime whose main objective is to provide benefits that
supplement those provided by the Government plans. The expenses included in the
statement of income for the years ended December 31, 2009, 2008 and 2007 totaled
R$ 187 (Unaudited), R$ 183 and R$ 176 respectively.
17. CONTINGENT LIABILITIES
There are
contingencies of a general nature with respect to taxes, since it is not
possible to secure definite and final approval of income tax returns, and tax
laws in general are indefinite and dependent upon administrative
interpretations, which are subject to changes.
The contingent
liabilities as of December 31, 2009 are as follows:
Contingency | Likelihood of losses | |||||
Probable | Possible | |||||
Unaudited | Unaudited | |||||
Social security | - | 516 | ||||
Labor | - | 236 | ||||
Tax | - | 1,399 | ||||
Total | - | 2,151 | ||||
The Company has
administrative proceedings in progress for which, based on the opinion of its
attorneys and in accordance with Brazilian accounting practices, no reserves for
contingencies have been recorded since the proceedings have been assessed as
possible or remote likelihood of loss. The main proceedings with a possible
likelihood of loss are presented as follows:
Tax
a) IPI Tax Rebate – The
company was assessed by the Revenue Service in the total amount of R$ 1,399
(Unaudited). Fiscal authorities have turned down the application filed by the
Company for loss reimbursement of tax rebate and have demanded the payment of
the corresponding tax. The amount includes the principal amount, penalties and
interest.
Social Security
a) Refers to INSS (social
security contribution) tax assessment in the total amount of R$ 516 (Unaudited),
resulting from the non-collection of payroll charges on employee profit
sharing.
18. FINANCIAL INSTRUMENTS
The estimated fair
value of financial instruments has been determined using available market
information and appropriate valuation methodologies. However, considerable
judgment was required in the interpretation of market data to develop the most
appropriate fair value estimates. Consequently, the estimates presented herein
are not necessarily indicative of the amounts the Company could realize in a
current exchange market. The use of different market valuation methodologies may
have a material effect on the fair value estimates.
The management of
these instruments is done through operating strategies, aimed at liquidity,
profitability and security. The Company’s financial instruments management
policy consists of ongoing monitoring of contracted rates compared to market
rates. The Company does not have transactions involving derivative financial
instruments or any other risk assets for speculative purposes.
Balances breakdown
In compliance with Brazilian Securities and Exchange Commission (CVM)
Instruction 235/95, the carrying amounts and fair value of the financial
instruments included in the balance sheets are as follows:
2009 | 2008 | |||||||||
Description | Carrying amount | Fair value | Carrying amount | Fair value | ||||||
Unaudited | Unaudited | |||||||||
Temporary cash investments | 57,613 | 57,613 | 12,795 | 12.795 | ||||||
Short-term investments | - | - | 32,222 | 32,222 | ||||||
Trade accounts receivable | 30,820 | 30,820 | 34,362 | 34,362 | ||||||
Receivables from parent company | 354 | 354 | 597 | 597 | ||||||
Other accounts receivable | 559 | 559 | 1,365 | 1,365 | ||||||
Trade accounts payable | 8,780 | 8,780 | 7,240 | 7,240 | ||||||
Loans and financing: | ||||||||||
In national currency | 57,568 | 57,568 | 45,533 | 45,533 | ||||||
In foreign currency | 4,533 | 4,533 | 12,657 | 12,657 | ||||||
Payables to related companies | 1,043 | 1,043 | 5,043 | 5,043 | ||||||
Other accounts payable | 1,134 | 1,134 | 1,138 | 1,138 | ||||||
Derivative transactions ( non-deliverable forward ) | - | - | 4,385 | 4,385 |
Criteria, assumptions
and limitations used in the calculation of the market value
- Temporary cash investments
The balances of
temporary cash investments have their market values close to book
balances.
- Short-term investments
The balances of
short-term investments have their market values close to their book
balances.
- Trade accounts receivable
The balances of
accounts receivable have their market values close to their book
balances.
- Receivables from parent company and other receivables
The balance of
accounts receivables from parent company and other accounts receivable have
their market values close to their book values.
- Trade accounts payable
The balances of trade
accounts payable have their market values close to their book
values.
- Payables to related companies and other accounts payable
The balances of
accounts payable to related companies and other accounts payable have their
market values close to their book values.
- Loans and financing
Loans and financing
are recorded at the contractual interest of each transaction, as shown in Note
no. 13.
- Derivatives
The Company’s policy is to eliminate market risks by avoiding taking
positions exposed to fluctuations in market values and by operating only with
instruments allowing the control of such risks. Derivative contracts are made up
of non-deliverable forward (NDF) operations.
- Limitations
The market values were estimated at the balance sheet date, based on
relevant market information. The changes in the assumptions may significantly
affect the estimates presented.
- Management of financial risks
The Company is exposed to the following risks associated with its
operating activities and financing, including the utilization of its financial
instruments:
i. Credit risk
ii. Market risk
ii. Market risk
The Company, through its Parent Company, has Hedge Transaction Policy
prepared by the Planning and Finance Committee and endorsed by the Executive
Board. The objective of such policy is to standardize the procedures of the
Company while defining responsibilities and limitations involving hedge
operations. These procedures are aimed to reduce the effects of fluctuation if
exchange rates of foreign currency amounts estimated in the cash flow with no
speculative purposes.
The monthly-estimated cash flow in foreign currency is taken as a basis
for the twelve following months, either based on the Strategic Plan projections
or on the updated expectations of each company. The instruments used are
conservative and are previously approved by the same committee. For the
transactions contracted, instruments used are Non deliverable forwards (NDF).
a. Credit risk
The sales policies of the Company are governed by credit policies
determined by its management and are intended to minimize customer default
risks. This objective is achieved by management through a careful selection of
the customer portfolio, which considers the customers ability to pay (credit
analysis).
b. Market risk
Represented by the risk that changes in the market, such as changes in
the exchange rates, interest rates and in prices will affect the income of the
Company or the value of its financial instruments. The objective in managing
market risks is to control the exposure to market risks within acceptable
parameters, optimizing their return.
Foreign exchange rate risk
The results of the Company are susceptible to significant variations due
to the effects of the volatility of the foreign exchange rates on assets and
liabilities indexed to foreign currencies, mainly the U.S. dollar, which closed
2009 with a negative variation of 25.49% (positive variation of 32% in 2008).
The Company is exposed to currency risk (exchange rate risk) on sales,
purchases and loans denominated in a currency different from that usually used
by the Company.
The Company contracts derivative transactions to hedge part of its
foreign exchange rate exposure, with maturities normally below one year from the
balance sheet date.
Non Deliverable
Forward – (NDF)
For these transactions, the Company has obligations based on a previously
contracted quotation at the time of their maturity. Changes in the market value
of these transactions are recorded in the statement of income for the period. On
December 31, 2009 (Unaudited), the company does not have any NDF operation.
The Company's net exposure to the risk of exchange rate on December 31 is
as below:
2009 | 2008 | |||||
Unaudited | ||||||
A. Financing | (4,533 | ) | (12,657 | ) | ||
B. Suppliers / Commissions | (1,148 | ) | (6,788 | ) | ||
C. Customers | 7,389 | 14,868 | ||||
D. Non Deliverable Forward | - | (4,385 | ) | |||
E. Net exposure (A+B+C+D) | 1,708 | (8,962 | ) | |||
Interest rate risk
The results of the Company are susceptible to significant variations
arising from loans and financing contracted at floating interest rates.
The Company does not have derivative financial instruments to protect
variations in interest rates.
In accordance with its financial policies, the Company has not conducted
operations involving financial instruments on a speculative basis.
Price risk
Price risk relates to the possibility of fluctuations in market prices of
the products sold or manufactured by the Company and other inputs used in the
manufacturing process. These price oscillations may cause substantial
alterations in the income and costs of the Company. To mitigate these risks, the
Company continuously monitors the local and international markets, seeking to
anticipate price movements.
Estimated fair values
Fair values were estimated at the balance sheet date, based on "relevant
market information". Changes in assumptions and in financial market transactions
may significantly affect those estimates. Methods and assumptions adopted by the
Company to estimate the disclosure of its derivatives’ fair values at the
balance sheet date are described below:
Fair value is typically based on market price quotations for assets or
liabilities with similar characteristics. If these market prices are not
available, fair values are based on market operator quotations, pricing models,
discounted cash flows or similar techniques, for which the determination of fair
value may require significant judgment or estimates by management. Market price
quotations are used to determine the fair value of these derivative
instruments.
The table below shows the carrying amounts and the estimated fair values
of the Company’s derivatives on December 31. The nominal outstanding values,
exposed to U.S. dollar variation, as well as their respective fair values, are
as follows:
2008 - R$ | ||||||||||||||||
Notional | Carrying | Fair value - | (credit) /debit | |||||||||||||
amount – | Notional | amount - | R$ - (credit) | Amount | Amount | |||||||||||
Description | US$ | amount –R$ | R$ | / debit | received | paid | ||||||||||
NDF | 8,400 | 14,455 | (4,385 | ) | (4,385 | ) | 109 | (1,084 | ) | |||||||
2009 - R$ | |||||||||||||
Notional | Carrying | Fair value - | (credit) / debit | ||||||||||
amount – | Notional | amount - | R$ - (credit) | Amount | Amount | ||||||||
Description | US$ | amount –R$ | R$ | / debit | received | paid | |||||||
Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | ||||||||
NDF | - | - | - | - | 1,446 | 579 |
The maturities of these operations are summarized below, with reference
notional values in thousands of dollars:
2008 – thousand of U.S. dollar | |||||||||
From 31 to | From 181 to | ||||||||
Description | Up to 30 days | 180 days | 365 days | Total | |||||
NDF | 700 | 3,500 | 4,200 | 8,400 |
19. CAPITAL
Subscribed capital is represented by 105,000 shares (Unaudited) in the
nominal value of R$ 1.00 each, and their composition, per shareholder,
is:
Shareholder | R$ | % | |||
Unaudited | Unaudited | ||||
Randon S.A. Implementos e Participações | 53,550 | 51 | |||
Arvinmeritor do Brasil Sistemas Automotivos Ltda. | 51,450 | 49 | |||
Total | 105,000 | 100 | |||
20. INCOME TAX AND SOCIAL CONTRIBUTION
Reconciliation of income tax and social contribution - Charges for income
tax and social contribution for the years ended December 31 are reconciled to
the statutory rates as follows:
2009 | 2008 | 2007 | |||||||||||||||
IRPJ | CSLL | IRPJ | CSLL | IRPJ | CSLL | ||||||||||||
Unaudited | |||||||||||||||||
Income before income and social contribution taxes | 61,019 | 61,019 | 70,590 | 70,590 | 65,182 | 65,182 | |||||||||||
Statutory rate | 25% | 9% | 25% | 9% | 25% | 9% | |||||||||||
Income tax and social contribution and social | |||||||||||||||||
contribution at statutory rates | 15,255 | 5,492 | 17,648 | 6,353 | 16,296 | 5,866 | |||||||||||
Effect of taxes on: | |||||||||||||||||
Interest on capital expense | (2,589 | ) | ( 932 | ) | (2,207 | ) | (795 | ) | (2,005 | ) | (722 | ) | |||||
Interest on capital income | 1,148 | 413 | 822 | 296 | 633 | 228 | |||||||||||
Equity in subsidiary | (6,957 | ) | (2,504 | ) | (9,129 | ) | (3,287 | ) | (7,232 | ) | (2,603 | ) | |||||
Others | (812 | ) | (320 | ) | (781 | ) | (303 | ) | (288 | ) | (173 | ) | |||||
(9,210 | ) | (3,343 | ) | (11,295 | ) | (4,089 | ) | (8,892 | ) | (3,270 | ) | ||||||
Income tax and social contribution before | |||||||||||||||||
deductions | 6,045 | 2,149 | 6,353 | 2,264 | 7,404 | 2,596 | |||||||||||
Income tax deductions and other adjustments | (248 | ) | (59 | ) | (467 | ) | (122 | ) | (121 | ) | - | ||||||
Income tax and social contribution | 5,797 | 2,090 | 5,886 | 2,142 | 7,283 | 2,596 | |||||||||||
Current income tax and social contribution | 4,540 | 1,751 | 7,358 | 2,673 | 7,544 | 2,689 | |||||||||||
Deferred income tax and social contribution | 1,257 | 339 | (1,472 | ) | (531 | ) | (261 | ) | (93 | ) | |||||||
Deferred income tax
and social contribution:
2009 | 2008 | ||||||||
Temporary | Deferred | Temporary | Deferred | ||||||
differences | taxes | differences | taxes | ||||||
Unaudited | Unaudited | ||||||||
Temporary differences | |||||||||
Provision for loss in inventories | - | - | 2,389 | 812 | |||||
Provision for profit sharing | 2,781 | 946 | - | - | |||||
Derivatives transactions payable | - | - | 4,385 | 1,491 | |||||
Provision for warranties | 146 | 49 | 65 | 22 | |||||
Provision for collective labor agreement | 63 | 21 | 48 | 16 | |||||
Other temporary additions | 171 | 58 | 45 | 16 | |||||
Total Assets | 3,161 | 1,074 | 6,932 | 2,357 | |||||
Accelerated Depreciation - Law 11.774 | 1,256 | 314 | - | - | |||||
Total Liabilities | 1,256 | 314 | - | - | |||||
21. FINANCIAL INCOME (EXPENSES)
Net financial income (expenses) for the years ended December 31, is
presented as follows:
2009 | 2008 | 2007 | |||||||
Unaudited | |||||||||
Financial income | |||||||||
Income from temporary cash
investments
|
4,374 | 6,101 | 2,996 | ||||||
Interest received and discounts obtained | 168 | 101 | 1,113 | ||||||
Foreign exchange gains | 8,653 | 11,019 | 6,961 | ||||||
Adjustment to present value of trade accounts receivable | 2,380 | 4,447 | - | ||||||
15,575 | 21,668 | 11,070 | |||||||
Financial expenses | |||||||||
Interest on loans and financing | (3,688 | ) | (4,529 | ) | (3,975 | ) | |||
Banking expenses | (760 | ) | (909 | ) | (843 | ) | |||
Foreign exchange losses | (4,584 | ) | (19,108 | ) | (4,946 | ) | |||
Adjustment to present value of trade accounts payable | (476 | ) | (1,069 | ) | - | ||||
(9,508 | ) | (25,615 | ) | (9,764 | ) | ||||
Financial income (expenses), net | 6,067 | (3,947 | ) | 1,306 | |||||
22.
|
SUMMARY OF THE
SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING PRACTICES ADOPTED IN BRAZIL (BR
GAAP) AND ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF
AMERICA (U.S. GAAP)
|
The financial statements of the Company are prepared in accordance with
BR GAAP. Note 3 to the consolidated financial statements summarizes the
accounting policies adopted by the Company. BR GAAP differs from U.S. GAAP in
certain significant respects, which are summarized below:
(a) Deferred charges
BR GAAP allowed until December 31, 2007 the deferral of pre-operating
expenses and certain expenses related to research and development. Under BR
GAAP, these items are amortized over a period of five to ten years. Under U.S.
GAAP, these are recorded as expenses when incurred.
(b) VAT tax incentive - Fundopem
Under BR GAAP, prior to January 1, 2008, tax incentives related to
certain state taxes on revenues were recorded directly in shareholders’ equity.
Under U.S. GAAP, these tax incentives are recorded in the statement of income.
Beginning January 1, 2008, the tax incentive is recorded in the statement of
income under BR GAAP.
(c) Capitalization of interest in relation to construction in progress
Under accounting practices adopted in Brazil, prior to January 1, 1996
the Company was not required to capitalize the interest cost of borrowed funds
as part of the cost of the related asset. Under U.S. GAAP, capitalization of
borrowed funds during construction of major facilities is recognized as part of
the cost of the related assets.
Under Brazilian GAAP exchange losses on foreign currency denominated
assets and liabilities are capitalized. Under U.S. GAAP, capitalization of
exchange losses is not permitted.
(d) Pension Plan Surplus
Under Brazilian GAAP, the excess of the fair value of the pension plan
assets over the projected benefit obligation is not recognized as an asset on
the balance sheet. Under U.S. GAAP, the asset is recognized on the balance sheet
as prepaid pension cost.
(e) Dividends
Under BR GAAP,
proposed dividends are accounted for in the financial statements in anticipation
of their approval by the shareholders’ meeting. Distributions characterized as
interest on shareholders’ equity as well as minimum compulsory dividends are
accrued for under both BR GAAP and U.S. GAAP. Any excess of proposed dividends
over either the minimum compulsory dividend or distributions characterized as
interest on shareholders’ equity would not be accounted for under U.S. GAAP, if
such proposed dividends are subject to approval at the annual shareholders’
meeting.
(f) New Accounting Pronouncements
In June 2009, the
Financial Accounting Standards Board (FASB) issued Financial Accounting Standard
(FAS) No. 167, “Amendments to FASB Interpretation No. 46(R)” (FAS 167). FAS 167
is a revision to FASB Interpretation No. 46(R), “Consolidation of Variable
Interest Entities,” and amends the consolidation guidance for variable interest
entities. Additionally, FAS 167 will require additional disclosures about
involvement with variable interest entities and any significant changes in risk
exposure due to that involvement. FAS 167 is effective January 1, 2010 for
companies reporting on a calendar-year basis. We currently do not expect the
adoption of the revised standard to have an effect on our consolidated results
of operations and financial position, when adopted.
In June 2009, the
FASB issued FAS No. 166, “Accounting for Transfers of Financial Assets” (FAS
166). FAS 166 is a revision to FAS No. 140, “Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities,” and will
require more information about transfer of financial assets, including
securitization transactions, and enhanced disclosures when companies have
continuing exposure to the risks related to transferred financial assets.
Additionally, FAS 166 eliminates the concept of a qualifying special-purpose
entity. FAS 166 is effective January 1, 2010 for companies reporting on a
calendar-year basis. We currently do not expect the adoption of the revised
standard to have an effect on our consolidated results of operations and
financial position, when adopted.
(g) Other Comprehensive Income
Under U.S. GAAP,
guidance on the reporting of comprehensive income requires the disclosure of
comprehensive income. Comprehensive income is comprised of net income and “other
comprehensive income”, which include charges or credits directly to equity that
are not the result of transactions with shareholders. The Company has not
recorded other comprehensive income for all periods presented.
(h) Cash and Cash Equivalents
Under U.S. GAAP, cash
equivalents are defined as short-term, highly liquid investments, which are both
readily convertible to known amounts of cash and have original maturities of 90
days or less. The Company holds certain highly liquid, low risk financial
investments, comprised principally of high quality government debt, which are
classified as cash equivalents under BR GAAP. Under U.S. GAAP, since these
investments have original maturities of over 90 days, such investments do not
qualify as cash equivalents.
(i) Effects of U.S. GAAP adjustments on equity
investee
Suspensys Sistemas
Automotivos Ltda. (“Suspensys”) is accounted for using the equity method of
accounting under BR GAAP. The principal U.S. GAAP adjustments that affect the
Company’s accounting for the results of Suspensys are as
follows:
- Deferred charges
- Capitalization of interest
- Pension plan surplus
- Deferred income tax on the above adjustments
The effect of these adjustments is included as “U.S. GAAP adjustments on
equity in earnings of Suspensys”, a line item in the reconciliation of net
income (loss) and shareholders’ equity.
Suspensys Sistemas
Automotivos Ltda. Financial
Statements
As of December 31, 2009(unaudited) and 2008 and For The Years Ended December 31, 2009 (unaudited), 2008 and 2007 and the Independent Auditors` Report. |
Deloitte Touche
Tohmatsu Auditores
Independentes
|
INDEPENDENT AUDITORS
REPORT
To the Board of
Directors of
Suspensys Sistemas Automotivos Ltda. - Caxias do Sul – RS
Suspensys Sistemas Automotivos Ltda. - Caxias do Sul – RS
1. | We have audited the accompanying balance sheet of Suspensys Sistemas Automotivos Ltda. (the “Company”), a company incorporated in Brazil, as of December 31, 2008 and the related statements of income, changes in shareholders’ equity and cash flows for the years ended December 31, 2008 and 2007, and the statement of value added for the year ended December 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. | |
2. | We conducted our audits in accordance with the auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. | |
3. | In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2008, the results of its operations, changes in shareholders’ equity and cash flows for the years ended December 31, 2008 and 2007 in conformity with accounting practices adopted in Brazil. | |
4. | As mentioned in Note 3.10 to the financial statements, changes in Brazilian accounting practices have been introduced effective January 1, 2008. The statements of income, changes in shareholders’ equity and cash flows for the year ended December 31, 2007 have been prepared in conformity with Brazilian accounting practices in effect until December 31, 2007 and as permitted by Technical Pronouncement 13 – First-time Adoption of Law 11638/07 and Provisional Act 448/09, are not being restated. Consequently, the statements of income, changes in shareholders’ equity and cash flows for the year ended December 31, 2008 may not be comparable with the statements of income, changes in shareholders’ equity and cash flows for the year ended December 31, 2007. | |
5. | Accounting practices adopted in Brazil vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and effect of such differences is presented in Note 19 to the financial statements. |
May 11, 2010
/s/ DELOITTE TOUCHE TOHMATSU AUDITORES
INDEPENDENTES
DELOITTE TOUCHE TOHMATSU AUDITORES INDEPENDENTES
Porto Alegre, Brazil
DELOITTE TOUCHE TOHMATSU AUDITORES INDEPENDENTES
Porto Alegre, Brazil
SUSPENSYS SISTEMAS
AUTOMOTIVOS LTDA.
BALANCE SHEETS AS OF DECEMBER 31, 2009 (UNAUDITED) AND 2008 | ||||||
(In thousands of Brazilian reais - R$) | ||||||
Note | 2009 | 2008 | ||||
Unaudited | ||||||
ASSETS | ||||||
CURRENT ASSETS | ||||||
Cash and cash equivalents | 4 | 112,087 | 33,361 | |||
Trade accounts receivable | 5 | 71,776 | 66,973 | |||
Recoverable taxes | 6 | 11,252 | 12,820 | |||
Inventories | 7 | 53,217 | 52,241 | |||
Receivables from related parties | 11 | 368 | - | |||
Deferred income tax and social contribution | 17 | 2,534 | 2,804 | |||
Other receivables | 768 | 1,701 | ||||
Total current assets | 252,002 | 169,900 | ||||
NONCURRENT ASSETS | ||||||
Long-term assets: | ||||||
Receivables from related parties | 11 | 485 | 880 | |||
Recoverable taxes | 6 | 2,302 | 5,814 | |||
Other receivables | 58 | 185 | ||||
Total long-term assets | 2,845 | 6,879 | ||||
Property, plant and equipment, net | 8 | 91,906 | 85,894 | |||
Intangible assets | 8 | 769 | 1,000 | |||
Deferred charges | 9 | 2,201 | 3,294 | |||
Total noncurrent assets | 97,721 | 97,067 | ||||
TOTAL ASSETS | 349,723 | 266,967 | ||||
The accompanying notes are an integral part of these financial statements. |
SUSPENSYS SISTEMAS
AUTOMOTIVOS LTDA.
BALANCE SHEETS AS OF DECEMBER 31, 2009 (UNAUDITED) AND 2008 | ||||||
(In thousands of Brazilian reais - R$) | ||||||
Note | 2009 | 2008 | ||||
Unaudited | ||||||
LIABILITIES AND SHAREHOLDERS` EQUITY | ||||||
CURRENT LIABILITIES | ||||||
Trade accounts payable | 48,915 | 19,000 | ||||
Loans and financing | 9 | 11,138 | 22,555 | |||
Advances from customers | 361 | 338 | ||||
Taxes payable | 3,183 | 2,650 | ||||
Payroll and related taxes | 1,678 | 820 | ||||
Accrued vacation and related charges | 4,772 | 3,623 | ||||
Dividends and interest on capital payable | 11 | 4,174 | 22,170 | |||
Employee and management profit sharing | 4,939 | 6,503 | ||||
Deferred income tax and social contribution | 1,623 | - | ||||
Other payables | 3,423 | 5,287 | ||||
Total current liabilities | 84,206 | 82,946 | ||||
NONCURRENT LIABILITIES | ||||||
Long-term liabilities: | ||||||
Loans and financing | 10 | 89,360 | 34,846 | |||
Payables to related parties | 11 | - | 2,388 | |||
Reserve for contingencies | 13 | 141 | 136 | |||
Taxes payable | 1,999 | 1,045 | ||||
Other accounts payable | 3,089 | - | ||||
Total noncurrent liabilities | 94,589 | 38,415 | ||||
SHAREHOLDERS' EQUITY | ||||||
Capital | 15 | 71,291 | 71,291 | |||
Tax incentive reserve | 24,591 | 11,578 | ||||
Income reserves | 75,046 | 62,737 | ||||
Total shareholders' equity | 170,928 | 145,606 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 349,723 | 266,967 | ||||
The accompanying notes are an integral part of these financial statements |
SUSPENSYS SISTEMAS
AUTOMOTIVOS LTDA.
STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2009 (UNAUDITED), 2008 AND 2007 (In thousands of Brazilian reais - R$) |
||||||||||
Note | 2009 | 2008 | 2007 | |||||||
Unaudited | ||||||||||
GROSS SALES | ||||||||||
Products and goods - Domestic market | 844,421 | 1,063,659 | 801,677 | |||||||
Products and goods - Foreign market | 12,640 | 40,208 | 41,646 | |||||||
857,061 | 1,103,867 | 843,323 | ||||||||
DEDUCTIONS | ||||||||||
Taxes on sales | (199,963 | ) | (251,674 | ) | (189,394 | ) | ||||
Discounts and rebates | (13,263 | ) | (15,718 | ) | (7,738 | ) | ||||
NET SALES | 643,835 | 836,475 | 646,191 | |||||||
COST OF PRODUCTS AND GOODS | (536,780 | ) | (703,228 | ) | (522,819 | ) | ||||
GROSS PROFIT | 107,055 | 133,247 | 123,372 | |||||||
OPERATING INCOME (EXPENSES) | ||||||||||
Selling expenses | (20,944 | ) | (24,773 | ) | (20,215 | ) | ||||
General and administrative expenses | (13,241 | ) | (13,447 | ) | (14,760 | ) | ||||
Tax incentive - Fundopem | 16 | 13,013 | 11,578 | - | ||||||
Other operating income (expenses), net | (4,686 | ) | (8,258 | ) | (7,349 | ) | ||||
(25,858 | ) | (34,900 | ) | (42,324 | ) | |||||
INCOME FROM OPERATIONS BEFORE FINANCIAL INCOME | 81,197 | 98,347 | 81,048 | |||||||
(EXPENSES) | ||||||||||
FINANCIAL INCOME (EXPENSES) | ||||||||||
Financial income | 18 | 13,708 | 26,980 | 6,967 | ||||||
Financial expense | 18 | (11,456 | ) | (17,257 | ) | (9,345 | ) | |||
2,252 | 9,723 | (2,378 | ) | |||||||
INCOME FROM OPERATIONS | 83,449 | 108,070 | 78,670 | |||||||
NONOPERATING INCOME (EXPENSES), NET | - | - | (34 | ) | ||||||
INCOME BEFORE INCOME TAX AND SOCIAL CONTRIBUTION | 83,449 | 108,070 | 78,636 | |||||||
INCOME TAX AND SOCIAL CONTRIBUTION | ||||||||||
Current | 17 | (16,213 | ) | (27,892 | ) | (26,215 | ) | |||
Deferred | 17 | (1,893 | ) | 762 | 1,979 | |||||
NET INCOME | 65,343 | 80,940 | 54,400 | |||||||
The accompanying notes are an integral part of these financial statements. |
SUSPENSYS SISTEMAS
AUTOMOTIVOS LTDA.
STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY FOR THE YEARS ENDED DECEMBER 31, 2009 (UNAUDITED), 2008 AND 2007 (In thousands of Brazilian reais - R$) |
|||||||||||||||
Tax incentive | Income | Retained | |||||||||||||
Note | Capital | reserve | reserves | earnings | Total | ||||||||||
BALANCES AS OF DECEMBER 31, 2006 | 34,233 | 28,114 | - | 23,340 | 85,687 | ||||||||||
Dividends payable | - | - | - | (18,115 | ) | (18,115 | ) | ||||||||
Dividends paid - Randon | - | - | - | (4,886 | ) | (4,886 | ) | ||||||||
Dividends payable - Randon | - | - | - | (4,219 | ) | (4,219 | ) | ||||||||
Tax incentive - Fundopem | 16 | - | 8,944 | - | - | 8,944 | |||||||||
Net income | - | - | - | 54,400 | 54,400 | ||||||||||
Dividends paid | - | - | - | (16,382 | ) | (16,382 | ) | ||||||||
Interest on capital | 13 | - | - | (4,766 | ) | (4,766 | ) | ||||||||
BALANCES AS OF DECEMBER 31, 2007 | 34,233 | 37,058 | - | 29,372 | 100,663 | ||||||||||
Impact of adopting law 11638/07 | |||||||||||||||
and provisional act 449/08 | - | - | - | (690 | ) | (690 | ) | ||||||||
Dividends paid for 2007 | - | - | - | (4,319 | ) | (4,319 | ) | ||||||||
Capital increase | 37,058 | (37,058 | ) | - | - | - | |||||||||
Net income | - | - | - | 80,940 | 80,940 | ||||||||||
Tax incentive - Fundopem | - | 11,578 | - | (11,578 | ) | - | |||||||||
Income reserve | - | - | 62,737 | (62,737 | ) | - | |||||||||
Dividends Randon | - | - | - | (7,891 | ) | (7,891 | ) | ||||||||
Dividends paid | - | - | - | (16,914 | ) | (16,914 | ) | ||||||||
Interest on capital | 13 | - | - | - | (6,183 | ) | (6,183 | ) | |||||||
BALANCES AS OF DECEMBER 31, 2008 | 71,291 | 11,578 | 62,737 | - | 145,606 | ||||||||||
Tax incentive - Fundopem (Unaudited) | - | 13,013 | - | (13,013 | ) | - | |||||||||
Net income (Unaudited) | - | - | - | 65,343 | 65,343 | ||||||||||
Income reserve (Unaudited) | - | - | 22,503 | (22,503 | ) | - | |||||||||
Interest on capital (Unaudited) | 13 | - | - | - | (8,635 | ) | (8,635 | ) | |||||||
Reversal of proposed dividends in 2008 (Unaudited) | - | - | 2,289 | - | 2,289 | ||||||||||
Dividends distributed (Unaudited) | - | - | - | (13,535 | ) | (13,535 | ) | ||||||||
Dividends from revenue reserve (Unaudited) | - | - | (10,300 | ) | - | (10,300 | ) | ||||||||
Dividends Randon (Unaudited) | - | - | (2,183 | ) | (7,657 | ) | (9,840 | ) | |||||||
BALANCES AS OF DECEMBER 31, 2009 (UNAUDITED) | 71,291 | 24,591 | 75,046 | - | 170,928 | ||||||||||
The accompanying notes are an integral part of these financial statements. |
SUSPENSYS SISTEMAS
AUTOMOTIVOS LTDA.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2009 (UNAUDITED), 2008 AND 2007 (In thousands of Brazilian reais - R$) |
||||||||
2009 | 2008 | 2007 | ||||||
Unaudited | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income | 65,343 | 80,940 | 54,400 | |||||
Adjustments to reconcile net income to the net cash | ||||||||
provided by operating activities: | ||||||||
Depreciation and amortization | 11,324 | 14,899 | 12,892 | |||||
Loss on sale of property and equipment | 8 | 189 | 132 | |||||
Exchange rate variation and interests on loans and financing | 3,433 | 7,365 | 2,621 | |||||
Tax incentive - Fundopem | - | - | 8,944 | |||||
Deferred income tax and social contribution | 1,893 | (762 | ) | (1,979 | ) | |||
Changes in operating assets and liabilities: | ||||||||
(Increase) decrease in trade accounts receivable | (4,803 | ) | 15,424 | (38,055 | ) | |||
(Increase) inventories | (976 | ) | (6,293 | ) | (23,167 | ) | ||
Decrease (increase) in other receivables | 5,602 | (10,227 | ) | (3,629 | ) | |||
Increase (decrease) in trade accounts payable | 27,527 | (18,593 | ) | 11,494 | ||||
Increase in accounts payable and provisions | 7,029 | 2,874 | 6,106 | |||||
Interest on loans and financing paid | (5,287 | ) | (4,684 | ) | (3,081 | ) | ||
Income tax and social contribution paid | - | - | 1,965 | |||||
Net cash provided by operating activities | 111,093 | 81,132 | 28,643 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Acquisition of property, plant and equipment | (16,020 | ) | (51,170 | ) | (12,417 | ) | ||
Additions to deferred charges | - | - | (310 | ) | ||||
Net cash used in investing activities | (16,020 | ) | (51,170 | ) | (12,727 | ) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Dividends paid | (52,877 | ) | (34,543 | ) | (27,338 | ) | ||
Interest on capital paid | (8,421 | ) | (4,766 | ) | (5,501 | ) | ||
Proceeds from loans and financing | 69,000 | 27,795 | 30,680 | |||||
Loans from related parties | 394 | 871 | - | |||||
Loans and financing paid | (24,443 | ) | (26,031 | ) | (5,109 | ) | ||
Net cash used in financing activities | (16,347 | ) | (36,674 | ) | (7,268 | ) | ||
NET INCREASE (DECREASE) IN BALANCE OF CASH | ||||||||
AND CASH EQUIVALENTS | 78,726 | (6,712 | ) | 8,648 | ||||
At beginning of year | 33,361 | 40,073 | 31,425 | |||||
At end of year | 112,087 | 33,361 | 40,073 | |||||
78,726 | (6,712 | ) | 8,648 | |||||
The accompanying notes are an integral part of these financial statements. |
SUSPENSYS SISTEMAS
AUTOMOTIVOS LTDA.
STATEMENTS OF ADDED
VALUE FOR THE YEARS ENDED DECEMBER 31, 2009 (UNAUDITED) AND 2008 (In thousands of Brazilian reais - R$) |
|||
2009 | 2008 | ||
Unaudited | |||
SALES | |||
Sale of products and goods | 843,813 | 1,088,049 | |
MATERIAL PURCHASED FROM THIRD PARTIES (includes taxes - ICMS, | |||
IPI, PIS and COFINS) | |||
Cost of products and goods | 605,074 | 786,322 | |
Materials, power, outsourced services and others | 54,300 | 84,888 | |
659,374 | 871,210 | ||
GROSS ADDED VALUE | 184,439 | 216,839 | |
AMORTIZATION AND DEPRECIATION | 11,324 | 14,899 | |
NET ADDED VALUE PRODUCED BY THE COMPANY | 173,115 | 201,940 | |
TRANSFERRED ADDED VALUE | |||
Financial income | 13,708 | 26,980 | |
TOTAL ADDED VALUE TO BE DISTRIBUTED | 186,823 | 228,920 | |
ADDED VALUE DISTRIBUTED | 186,823 | 228,920 | |
Personnel: | |||
Direct remuneration | 46,086 | 48,309 | |
Benefits | 4,556 | 7,797 | |
FGTS (Employees' Severance Guarantee Fund) | 3,812 | 3,360 | |
Taxes and contributions: | |||
Federal | 37,822 | 49,719 | |
State | 14,174 | 16,961 | |
Municipal | 116 | 119 | |
Remuneration from third parties capital: | |||
Interest on financial expenses | 11,456 | 17,257 | |
Rents | 3,458 | 4,458 | |
Remuneration on capital: | |||
Interest on capital | 8,422 | 6,183 | |
Dividends | 48,299 | 24,805 | |
Retained earnings | 8,622 | 49,952 | |
The accompanying notes are an integral part of these financial statements. |
SUSPENSYS SISTEMAS AUTOMOTIVOS
LTDA.
NOTES TO THE
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2009 (UNAUDITED) AND 2008 AND FOR THE YEARS ENDED DECEMBER 31, 2009 (UNAUDITED), 2008 AND 2007 (Amounts in thousands of Brazilian reais – R$, except when stated otherwise) |
1. | OPERATIONS | |
Suspensys Sistemas Automotivos Ltda. (the “Company”) was established on October 1, 2002, and is engaged in the manufacturing and sale of air and mechanical suspensions for trucks, buses and trailers, trailer axles, third axles and hubs and drums for trucks, buses and trailers, in addition to providing technical assistance for its products. | ||
2. | FINANCIAL STATEMENTS PRESENTATION | |
The financial statements have been prepared in conformity with the accounting practices adopted in Brazil, which comprise the Brazilian Corporate Law, the pronouncements, guidelines and interpretations issued by the Accounting Pronouncements Committee (CPC) and standards issued by Brazilian Securities and Exchange Commission (CVM). | ||
In preparing the financial statements for 2008, the Company adopted for the first time the new accounting practices introduced by Law 11638/07, approved on December 28, 2007, as amended by Provisional Act 449 of December 3, 2008. | ||
Law 11638/07 and the Provisional Act 449/08 altered Law 6404/76 in aspects related to the preparation and disclosure of financial statements. | ||
Adjustments related to the first-time adoption of Law 11638/07 and Provisional Act 449/08 are set forth in note 3.10. | ||
The financial statements have been prepared in conformity with the accounting practices adopted in Brazil described in Note 3 and differ in certain respects from accounting principles generally accepted in the United States of America (“U.S.GAAP”). See note 19 for a discussion of these differences and a reconciliation of shareholders’ equity and net income presented under accounting practices adopted in Brazil to U.S. GAAP. | ||
3. | SIGNIFICANT ACCOUNTING PRACTICES | |
3.1 Income
recognition
|
||
Income and expenses are recognized on
the accrual basis.
|
||
Revenue from the sale of products is
recognized in the statement of income when all risks and benefits inherent
in the product are transferred to the buyer. Revenue from services
provided is recognized in the statement of income when services are
rendered.
|
3.2 Use of estimates | ||
The preparation of financial statements in conformity with the accounting practices adopted in Brazil requires management to use its judgment in determining and recording accounting estimates. Significant assets and liabilities subject to these estimates and assumptions include the net book value of property, plant and equipment, allowance for doubtful accounts, inventories and deferred tax assets, reserve for contingencies, and assets and liabilities related to employees’ benefits. The settlement of transactions involving these estimates may result in values different from those we estimated due to lack of precision inherent to the process of their determination. | ||
3.3 Foreign currency | ||
Monetary assets and liabilities denominated in foreign currencies were translated into Brazilian reais at the exchange rate in effect on the balance sheet date, respectively, and currency translation differences were recognized in the statement of income. | ||
3.4 Current and noncurrent assets | ||
These include cash balances, bank
deposits and temporary cash investments redeemable within 90 days from the
investment date. Temporary cash investments are readily convertible into a
known amount of cash and are subject to a very low risk of change in their
market value.
Trade accounts receivable are stated at
the billed amount plus related taxes and are recorded at present value on
the balance sheet date.
Stated at average acquisition or
production cost, which does not exceed market value.
Stated at their net realizable value.
Stated at acquisition or construction
cost. Depreciation and amortization are calculated using the straight-line
method at rates stated in Note 8, based on the estimated useful life of
assets.
Recorded at incurred cost up to December
31, 2007, and amortized using the straight-line method at a rate of 20%
per year, from completion date of respective projects.
|
||
3.5 Loans and financing
|
||
Loans are initially recognized at fair
value at the time the resources are received, net of transaction costs,
and are subsequently measured at amortized cost, that is, including
charges, interest and monetary and exchange variations, as provided for in
the contract, incurred up to the balance sheet date, as shown in Note 10.
|
||
3.6 Current and noncurrent
liabilities
|
||
Stated at the known or estimated
amounts, plus, if applicable, related charges and monetary and/or exchange
variations through to the balance sheet date. The trade accounts payable
balances are recorded at their present value on the balance sheet
date.
|
3.7 Financial instruments | ||
Classification and measurement | ||
Financial assets and liabilities kept by the Company are classified under the following categories: (1) financial assets measured at fair value through profit and loss; and (2) financial assets and liabilities held to maturity. The classification depends on the purpose for which the financial assets and liabilities were acquired or contracted. The management of the Company classifies its financial assets and liabilities at the moment they are contracted. | ||
Financial assets and liabilities held to maturity | ||
Financial assets held to maturity are mainly comprised of temporary cash investments and loans and financing. They are measured at the acquisition cost plus income earned according to the contracted terms and conditions, in the case of temporary cash investments, and at the amortized cost using the effective interest rate method, in the case of loans and financing, recorded to statement of income on the accrual basis. | ||
3.8. Reserve for contingencies | ||
A provision is recognized in the balance sheet when the Company has a legal or constructive obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation. Provisions are recorded based on the best estimates of the involved risk. | ||
3.9. Income Tax and Social Contribution | ||
The income tax and social contribution, current and deferred, are calculated at the rate of 15% plus a 10% surtax on monthly taxable income in excess of R$ 20 for income tax, and 9% on monthly taxable income for social contribution. This calculation takes into consideration the offsetting of tax loss carryforwards, limited to 30% of the taxable income. | ||
3.10. First-time adoption of Law11638/07 and Law 11941/09 | ||
The Company’s management opted to prepare its opening balance sheet with the transition date of January 1, 2008, which is the starting point for accounting in conformity with amendments introduced by Law 11638/07 and Law 11941/09. The changes introduced by said legislation are qualified as a change in accounting policy, however, as permitted by Technical Pronouncement CPC 13 – First-time Adoption of Law 11638/07 and Provisional Act 449/08 (converted in Law 11941/09), approved by CVM Resolution 565 of December 17, 2008, all of the adjustments resulting from the first-time adoption of Law 11638/07 and Law 11941/09 were made directly in retained earnings on the transition date, in conformity with the provisions of Article 186 of Law 6404/76, without retrospective effects on the financial statements. |
Below are the equity adjustments arising
from the first-time adoption of Law 11638/07 and Law 11941/09, a summary
of the accounting practices amended by said legislation, effects thereof
in the balance sheet on the date of transition.
|
||
a) |
Adjustments arising from the first-time
adoption of Law 11638/07 and Law 11941/09 to the balance sheet as of the
transition date – January 1,
2008:
|
Date of transition | ||||||||||
December 31, 2007 | January 1, 2008 | |||||||||
Balances | Adjustments | Balances | ||||||||
Capital | 34,233 | - | 34,233 | |||||||
Tax incentive reserve | 37,058 | - | 37,058 | |||||||
Retained earnings | 29,372 | (690 | ) | {a} | 28,682 | |||||
Shareholders’ equity | 100,663 | (690 | ) | 99,973 | ||||||
Summary of adjustments | |||
{a} Adjustments against retained earnings | |||
{a1} Adjustment of
trade accounts receivable to present value
|
(799 | ) | |
{a2}
Adjustment of trade accounts payable to present
value
|
109 | ||
Total | (690 | ) | |
b) | Summary of changes in accounting practices for the first-time adoption of Law 11638/07 and Provisional Act 449/08: |
Deferred charges | |
Deferred charges as of December 31, 2007 will be maintained up to its full realization through amortization or write-off against the net income for the year. Deferred charges were recorded for their recoverable value. | |
Adjustments to present value | |
Trade accounts receivable and trade accounts payable were adjusted to present value based on interest rates reflecting the nature of receivables and payables in terms of maturity and payment conditions on the dates of the related transactions. | |
The effects of adjustments to present value from the first-time adoption of Law 11638/07 and Provisional Act 449/08 were recorded in retained earnings. | |
Donations and investment grants | |
Tax incentives received by the Company prior to the first-time adoption of Law 11638/07 and Provisional Act 449/08 were recorded as capital reserve in shareholders’ equity, which were merged to the capital. | |
Beginning 2008, tax incentives have been recognized in income, as received. | |
Statements of cash flows and value added | |
Replacement of the statement of changes in financial position by the statement of cash flows and inclusion of the statement of value added. |
3.11 Changes in Accounting practices adopted in Brazil effective from January 1, 2010 | |
With the advent of Law no. 11638/07, which amended the Brazilian corporate law to enable the convergence of accounting practices adopted in Brazil with those contained in International Financial Reporting Standards (IFRS), new standards and technical accounting pronouncements have been issued in line with international standards by Brazilian Accounting Pronouncements Committee (CPC). | |
As of the date of preparation of these financial statements, 40 new technical accounting pronouncements, guidelines and interpretations had been issued by the CPC and approved by the CVM Deliberations and resolutions of the Federal Accounting Council - CFC, with mandatory implementation in 2010. Pronouncements, guidelines and interpretations of the CPC that are applicable to the Company, given its current operations, are: |
Standard | Description | ||
CPC 16 | Inventories | ||
CPC 20 | Borrowing costs | ||
CPC 23 | Accounting policies, change in accounting estimates and errors | ||
CPC 24 | Events after the reporting period | ||
CPC 25 | Provisions, contingent liabilities and contingent assets | ||
CPC 26 | Presentation of financial statements | ||
CPC 27 | Property, plant and equipment | ||
CPC 30 | Revenue | ||
CPC 32 | Income taxes | ||
CPC 33 | Employee benefits | ||
CPC 38 | Financial instruments: Recognition and measurement | ||
CPC 39 | Financial instruments: Presentation | ||
CPC 40 | Financial instruments: Disclosures | ||
CPC 43 | First-time adoption of Technical Pronouncements CPC 15 to 40 | ||
OCPC 03 | Financial instruments: Recognition, measurement and presentation | ||
ICPC 10 | Interpretation on the first-time adoption to Property, Plant and Equipment and | ||
Investment Property of Technical Pronouncements CPC 27, 28, 37 and 43 |
Company’s Management is analyzing the impacts of changes introduced by
these new pronouncements. In the case of adjustments arising from adoption of
new practices from January 1, 2010, the Company will assess the need to
remeasure the effects that would be produced in its financial statements for
2009, for comparison, as if these new procedures had been in place since the
beginning of the year ended December 31, 2009.
4. | CASH AND CASH EQUIVALENTS | |
Temporary cash
investments refer to Bank Deposits Certificates (CDB) and are linked to
rate variations of interbank deposit certificate – CDI. Temporary cash
investments are remunerated as shown
below:
|
2009 | 2008 | |||
Unaudited | ||||
Cash and bank deposits | 14,205 | 1,578 | ||
Temporary cash investments | ||||
CDB – 99.50% CDI | 8,528 | - | ||
CDB – 100.00% CDI | 51,151 | 12,957 | ||
CDB – 100.50% CDI | 10,448 | - | ||
CDB – 100.40% CDI | 27,755 | - | ||
CDB – 100.50% CDI | - | 12,109 | ||
CDB – 100.80% CDI | - | 6,717 | ||
97,882 | 31,783 | |||
Total | 112,087 | 33,361 | ||
5. | TRADE ACCOUNTS RECEIVABLE | |
The balances of
trade accounts receivable on December 31 are presented as
follows:
|
2009 | 2008 | |||
Unaudited | ||||
Trade accounts receivable from third parties – domestic market | 64,465 | 60,470 | ||
Trade accounts receivable from third parties – foreign market | 651 | 2,772 | ||
Trade accounts receivable from related parties – domestic market | 3,226 | 915 | ||
Trade accounts receivable from related parties – foreign market | 3,434 | 2,816 | ||
Total | 71,776 | 66,973 | ||
6. | RECOVERABLE TAXES | |
The balances of taxes recoverable as of December 31 are presented as follows: |
2009 | 2008 | |||
Unaudited | ||||
IPI (Federal VAT) | 1,526 | 2,126 | ||
ICMS (State VAT) | 7,003 | 10,255 | ||
IRPJ (Income tax) and CS (Social contribution) | 188 | 767 | ||
ICMS on fixed assets acquisitions | 2,905 | 3,252 | ||
PIS on fixed assets acquisitions | 340 | 398 | ||
COFINS on fixed assets acquisitions | 1,592 | 1,836 | ||
Total | 13,554 | 18,634 | ||
Current | 11,252 | 12,820 | ||
Noncurrent | 2,302 | 5,814 |
The balance of
recoverable taxes recorded in noncurrent assets comprises ICMS, PIS and
COFINS on acquisitions on fixed assets, which are recoverable in 48
months, according to current legislation. Of the ICMS recoverable balance,
R$ 5,423 (Unaudited) (R$ 8,456 on December 31, 2008) refer to the purchase
of Randon’s credits and will be offset according to schedule prepared by
Secretaria da Fazenda do Estado do Rio
Grande do Sul.
|
||
7. | INVENTORIES | |
Inventories as
of December 31 are presented as
follows:
|
2009 | 2008 | |||
Unaudited | ||||
Finished products | 4,216 | 1,998 | ||
Work in process | 18,612 | 15,944 | ||
Raw materials | 30,356 | 28,913 | ||
Advances to suppliers | 31 | 655 | ||
Imports in transit | 2 | 4,731 | ||
Total | 53,217 | 52,241 | ||
8. | PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS | |
Property, plant
and equipment and intangible assets as of December 31 are presented as
follows:
|
Annual | 2009 | 2008 | ||||||||||
Depreciation | Accumulated | |||||||||||
Rate (%) | Cost | depreciation | Net | Net | ||||||||
Property, plant and equipment | Unaudited | Unaudited | Unaudited | Unaudited | ||||||||
Land | - | 1,648 | - | 1,648 | 1,648 | |||||||
Buildings | 1.44 | 26,920 | (2,978 | ) | 23,942 | 11,680 | ||||||
Machinery and equipment | 9.90 | 126,884 | (72,565 | ) | 54,319 | 46,140 | ||||||
Molds and dies | 14.13 | 10,238 | (4,161 | ) | 6,077 | 5,133 | ||||||
Installations | 3.80 | 4,196 | (1,312 | ) | 2,884 | 2,233 | ||||||
Furniture and fixtures | 9.03 | 1,339 | (545 | ) | 794 | 776 | ||||||
Vehicles | 9.29 | 569 | (387 | ) | 182 | 231 | ||||||
Computer equipment | 24.80 | 1,420 | (1,019 | ) | 401 | 542 | ||||||
Advances to suppliers | - | 97 | - | 97 | 1,909 | |||||||
Property,
plant and equipment in progress
|
- | 1,562 | - | 1,562 | 15,599 | |||||||
Total | 174,873 | (82,967 | ) | 91,906 | 85,894 | |||||||
Intangible assets | ||||||||||||
Software | 15.40 | 2,445 | (1,676 | ) | 769 | 1,000 |
The Company revised
the useful life of its fixed assets, which have depreciated by new rates, as
shown in the table above. The effects of this change were recognized
prospectively as of January 1, 2009. This change in the useful lives reduced
depreciation expense by R$ 443 (Unaudited).
9. | DEFERRED CHARGES | |
Deferred
charges as of December 31 are presented as
follows:
|
2009 | 2008 | |||||
Unaudited | ||||||
Costs of studies and projects | 5,554 | 5,554 | ||||
Accumulated amortization | (3,353 | ) | (2,260 | ) | ||
Total | 2,201 | 3,294 | ||||
10. | LOANS AND FINANCING | |
Loans and
financing were obtained to finance the construction of the industrial
facilities, development of quality processes, financing exports and
machinery imports. The loans and financing were obtained from several
financial institutions through funds obtained by such institutions from
the BNDES (Brazilian National Bank for Social and Economic
Development).
|
Type: | Annual financial charges | 2009 | 2008 | ||||
Unaudited | |||||||
Import/Export | |||||||
ACC – Advance on Foreign Exchange Contracts | Exchange Variation + 5.2% | - | 2,416 | ||||
Financing | |||||||
FINAME -Financiamento de Máquinas e Equipamentos (Unibanco) | 173 | ||||||
BNDES – Banco Nacional do Desenvolvimento Econômico e Social – subloan A/C | Var. Cambial + 2.5% | 920 | 1,605 | ||||
BNDES – Banco Nacional do Desenvolvimento Econômico e Social – subloan B | URTJLP + 4.5% | 3,129 | 6,876 | ||||
BNDES – Banco Nacional do Desenvolvimento Econômico e Social – subloan B | URTJLP + 3% | 10,007 | 12,986 | ||||
BNDES – Banco Nacional do Desenvolvimento Econômico e Social – subloan C | UMBND + 4.5% | 509 | 1,507 | ||||
BNDES – Banco Nacional do Desenvolvimento Econômico e Social – subloan D | URTJLP + 2.5% | 607 | 787 | ||||
BNDES – Banco Nacional do Desenvolvimento Econômico e Social – subloan A | Var. Cambial + 2.5% | 4,595 | - | ||||
BNDES – Banco Nacional do Desenvolvimento Econômico e Social – subloan BCDE | URTJLP + 4.5% | 30,801 | - | ||||
BRADESCO – FINEP | TJLP + 0.5% | 12,018 | 11,893 | ||||
VOTORANTIM - EXIM | TJLP | 33,208 | 12,410 | ||||
FUNDOPEM – ICMS | IPCA + 3% | 3,367 | 3,120 | ||||
Financing of imported machinery | |||||||
FININP - Banco Bradesco | Exchange Variation+2.5% | 1,155 | 2,460 | ||||
FININP – ABN | Exchange variation +2.9% | 182 | 682 | ||||
FININP – ABN | Exchange variation+2.5% | - | 486 | ||||
Total | 100,498 | 57,401 | |||||
Current | 11,138 | 22,555 | |||||
Noncurrent | 89,360 | 34,846 |
URTJLP = Reference unit of Brazilian long-term interest rate; UMBND = Monetary unit of Brazilian National Bank of
Social and Economic
Development; TJLP = Brazilian long-term interest rate; IPCA =
National index for the consumer
price
|
Maturities of
long-term debts are presented as
follows:
|
Maturity | 2009 | 2008 | |||
Unaudited | |||||
2010 | - | 13,578 | |||
2011 | 11,895 | 6,150 | |||
2012 | 45,462 | 6,066 | |||
2013 | 11,265 | 4,716 | |||
2014 | 8,543 | 1,964 | |||
2015 | 6,843 | 1,964 | |||
2016 and following | 5,352 | 408 | |||
Total | 89,360 | 34,846 | |||
The loans and
financing from the BNDES and FINAME are collateralized by financed
machinery and equipment of the Company and its shareholders.
|
11. |
TRANSACTIONS
WITH RELATED PARTIES
|
|
Transactions and balances with related
parties as of December 31 are presented as
follows:
|
Randon | ArvinMeritor Companies | |||||||||||||||||||||||
Companies (*) | (**) | Officers and managers | Total | |||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |||||||||||||||||
Balance sheet | Unaudited | Unaudited | Unaudited | Unaudited | ||||||||||||||||||||
Trade accounts receivable | 2,522 | 1,254 | 4,138 | 2,477 | - | - | 6,660 | 3,731 | ||||||||||||||||
Receivables from related parties | 853 | 880 | - | - | - | - | 853 | 880 | ||||||||||||||||
Trade accounts payable | 6,579 | 7,513 | 5 | - | - | - | 6,584 | 7,513 | ||||||||||||||||
Payables to related parties | - | 2,388 | - | - | - | - | - | 2,388 | ||||||||||||||||
Dividends and interest on capital payable | 3,175 | 17,409 | 999 | 4,761 | - | - | 4,174 | 22,170 | ||||||||||||||||
Other payables | - | - | - | - | 3,379 | 2,585 | 3,379 | 2,585 | ||||||||||||||||
Commissions payable (other payables) | - | - | 511 | 701 | - | - | 511 | 701 | ||||||||||||||||
2009 | 2008 | 2007 | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | |||||||||||||
Statement of income | Unaudited | Unaudited | Unaudited | Unaudited | ||||||||||||||||||||
Sales of products and goods | 138,637 | 180,781 | 140,472 | 13,999 | 24,827 | 36,104 | - | - | - | 152,636 | 205,608 | 176,576 | ||||||||||||
Purchase of products and goods | 51,400 | 65,871 | 44,007 | - | - | 453 | - | - | - | 51,400 | 65,871 | 44,460 | ||||||||||||
Purchase of ICMS credits | 3,035 | 8,546 | 3,540 | - | - | - | - | - | - | 3,035 | 8,546 | 3,540 | ||||||||||||
Financial expenses | 7 | 15 | 18 | - | - | - | 301 | 272 | 187 | 308 | 287 | 205 | ||||||||||||
Financial income | - | 237 | 113 | - | - | - | - | - | - | - | 237 | 113 | ||||||||||||
Commissions expenses | - | - | - | - | 230 | 355 | - | - | - | - | 230 | 355 | ||||||||||||
General and administrative expenses | 5,078 | 4,842 | 4,649 | - | - | - | - | - | - | 5,078 | 4,842 | 4,649 |
(*)
Includes:
|
Randon S.A. Implementos e Participações,
Randon Veículos Ltda., Jost Brasil Sistemas Automotivos Ltda., Master
Sistemas Automotivos Ltda., Fras-le Argentina and Randon
Argentina
|
(**) Includes:
Meritor Heavy Vehicle Systems LLC. and Meritor do Brasil Ltda.
|
Management’s
compensation in the year ended on December 31 is represented by nominal
salary of R$ 910 in 2009 (Unaudited) (R$ 689 in 2008 and R$ 626 in 2007)
and profit sharing of R$ 1,164 (Unaudited) (R$ 850 in 2008 and R$ 662 in
2007).
|
Loan agreements
with officers and managers are subject to DI-extra rate published by
Ambima.
|
Debits and
credits with the parent company Randon S.A. Implementos e Participações
are subject to financial market rates (“DI-extra” published by Ambima
(National Association of Financial Market
Institutions).
|
General and
administrative expenses refer to the allocation of corporate costs and
administrative assistance services incurred by the parent company Randon
S.A. Implementos e
Participações.
|
Commercial Transactions | |
The commercial transactions with related parties follow the prices and terms established by the agreement signed between the parties. The agreement takes into account the term, volume and specifications of the products purchased by the related parties, which are not comparable to sales to unrelated parties. | |
12. | PENSION PLAN |
The Company co-sponsors RANDONPREV, a defined contribution pension plan under a capitalization regime whose main objective is to provide benefits that supplement those provided by the government plans. The pension plan expenses included in the statements of income for the years ended December 31, 2009, 2008 and 2007 totaled R$ 306 (Unaudited), R$ 297, and R$ 263 respectively. | |
13. | CONTINGENCIES |
The Company, through its attorneys, has challenged at the administrative and judicial level the collection of certain taxes, labor and civil proceedings. Based on the opinion of its attorneys, the Company recorded a reserve for contingencies in the amount of R$ 141 (Unaudited) (R$ 136 as of December 31, 2008) to cover probable losses that may result from the final outcome of such proceedings. | |
The contingent liabilities as of December 31, 2009 are as follows: | |
Likelihood of losses - Unaudited | |||||||||
Contingency | Probable | Possible | |||||||
Tax | - | 2,277 | |||||||
Labor | 141 | 284 | |||||||
Total | 141 | 2,561 | |||||||
The Company has administrative
proceedings in progress for which, based on the opinion of its attorneys
and in accordance with Accounting practices adopted in Brazil, no reserves
for contingencies have been recorded since the proceedings have been
assessed as possible or remote likelihood of loss.
Tax
ICMS (State VAT) – The Company was
assessed for an alleged irregularity in the calculation of the ICMS
reduction benefit through the FUNDOPEM/NOSSO EMPREGO. The total amount,
including principal, penalties and interest is R$ 7,801. On January 24,
2008, as a result of the defense presented by the Company against the
above-mentioned infraction note, the ICMS debt was recalculated by the tax
authorities. Based on the notice sent by tax authorities to the Company at
that date, management estimates that the total amount of the tax
assessment will be reduced to approximately R$ 2,277, including principal,
penalties and interest.
|
14. FINANCIAL INSTRUMENTS |
The estimated fair value of financial
instruments has been determined using available market information and
appropriate valuation methodologies. However, considerable judgment was
required in the interpretation of market data to develop the most
appropriate fair value estimates. Consequently, the estimates presented
herein are not necessarily indicative of the amounts the Company could
realize in a current exchange market. The use of different market
valuation methodologies may have a material effect on the fair value
estimates.
The management of these instruments is
done through operating strategies, aimed at liquidity, profitability and
security. The Company’s financial instruments management policy consists
of ongoing monitoring of contracted rates compared to market rates. The
Company does not have transactions involving derivative financial
instruments or any other risk assets for speculative
purposes.
|
Balances breakdown
In compliance with
Brazilian Securities and Exchange Commission (CVM) Instruction 235/95, the
carrying amount and fair value of the financial instruments included in the
balance sheets are as follows:
2009 | 2008 | |||||||
Carrying | Fair | Carrying | Fair | |||||
amount | value | amount | value | |||||
Description | Unaudited | Unaudited | ||||||
Temporary cash investments | 97,882 | 97,882 | 31,783 | 31,783 | ||||
Trade accounts receivable | 71,776 | 71,776 | 66,973 | 66,973 | ||||
Receivables from parent company | 853 | 853 | 880 | 880 | ||||
Other accounts receivable | 826 | 826 | 1,886 | 1,886 | ||||
Trade accounts payable | 48,915 | 48,915 | 21,388 | 21,388 | ||||
Loans and financing: | ||||||||
In local currency | 93,137 | 93,137 | 48,245 | 48,245 | ||||
In foreign currency | 7,361 | 7,361 | 9,156 | 9,156 | ||||
Payables to parent company | - | - | 2,388 | 2,388 | ||||
Other accounts payable | 3,423 | 3,423 | 5,287 | 5,287 |
Criteria, assumptions
and limitations used in the calculation of the market value
- Temporary cash investments
The balances of
temporary cash investments have their market values close to their book
balances.
- Trade accounts receivable
The balances of trade
accounts receivable have their market values close to their book
balances.
- Receivables from parent company and other receivables
The balance of
accounts receivables from parent company and other accounts receivable have
their market values close to their book values.
- Trade accounts payable
The balances of trade
accounts payable have their market values close to their book
values.
- Payables to related companies and other accounts payable
The balances of
accounts payable to related companies and other accounts payable have their
market values close to their book values.
- Loans and financing
Loans and financing
are recorded at the contractual interest of each transaction, as shown in Note
no. 10.
- Limitations
The
market values were estimated at the balance sheet date, based on relevant market
information. The changes in the assumptions may significantly affect the
estimates presented.
- Management of financial risks
The Company is
exposed to the following risks associated with its operating activities and
financing, including the utilization of its financial instruments:
i. Credit risk
ii. Market risk
ii. Market risk
The Company, through
its Parent Company, has Hedge Transaction Policy prepared by the Planning and
Finance Committee and endorsed by the Executive Board. The objective of such
policy is to standardize the procedures of the Company while defining
responsibilities and limitations involving hedge operations. These procedures
are aimed to reduce the effects of fluctuation if exchange rates of foreign
currency amounts estimated in the cash flow with no speculative
purposes.
The monthly-estimated
cash flow in foreign currency is taken as a basis for the twelve following
months, either based on the Strategic Plan projections or on the updated
expectations of each company. The instruments used are conservative and are
previously approved by the same committee.
a. Credit risk
The sales policies of the Company are governed by credit policies
determined by its management and are intended to minimize customer default
risks. This objective is achieved by management through a careful selection of
the customer portfolio, which considers the customer ability to pay (credit
analysis).
b. Market risk
Represented by the risk that changes in the market, such as changes in
the exchange rates, interest rates and in prices will affect the income of the
Company or the value of its financial instruments. The objective in managing
market risks is to control the exposure to market risks within acceptable
parameters, optimizing their return.
Foreign exchange rate risk
The results of the Company are susceptible to significant variations due
to the effects of the volatility of the foreign exchange rates on assets and
liabilities indexed to foreign currencies, mainly the U.S. dollar, which closed
2009 with a negative variation of 25.49% (positive variation of 32% in 2008).
The Company is exposed to currency risk (exchange rate risk) on sales,
purchases and loans denominated in a currency different from that usually used
by the Company.
The Company's net exposure to the risk of foreign exchange rate on
December 31 is as follows:
2009 | 2008 | |||||
Unaudited | ||||||
A. Financing | (7,361 | ) | (9,156 | ) | ||
B. Suppliers / Commissions | (1,155 | ) | (899 | ) | ||
C. Net assets | 5,682 | 12,234 | ||||
D. Net exposure (A+B+C) | (2,834 | ) | 2,179 | |||
Interest rate risk
The results of the Company are susceptible to significant variations
arising from loans and financing contracted at floating interest rates.
The Company does not have derivative financial instruments to protect
variations in interest rates.
In accordance with its financial policies, the
Company has not conducted operations involving financial instruments on a
speculative basis.
Price risk
Price risk relates to the possibility of fluctuations in market prices of
the products sold or manufactured by the Company and other inputs used in the
manufacturing process. These price oscillations may cause substantial
alterations in the income and costs of the Company. To mitigate these risks, the
Company continuously monitors the local and international markets, seeking to
anticipate price movements.
15.
CAPITAL
Subscribed capital is represented by 100,000 shares totaling R$ 71,291
(Unaudited) held among the shareholders, as shown in the table below:
Shareholder | Quotas | R$ | % | ||||
Unaudited | Unaudited | Unaudited | |||||
Randon S.A. Implementos e Participações | 22,881 | 16,312 | 22.881 | ||||
Master Sistemas Automotivos Ltda. | 53,177 | 37,910 | 53.177 | ||||
Meritor Heavy Vehicle Systems, LLC. | 23,942 | 17,069 | 23.942 | ||||
Total | 100,000 | 71,291 | 100.000 | ||||
As established by the joint-venture agreement and ratified by the
shareholders in the meeting minutes for approval of profit allocation, Randon is
entitled to receive non-proportional dividends in the amount of the tax benefit
from Fundopem.
In April 2009, Suspensys paid dividends and interest on capital allocated
on December 31, 2008. Of the dividends calculated in 2008, R$ 2,289 (Unaudited)
was allocated to net equity, as established in the shareholders’ meeting
minutes.
In June 2009, dividends and interest on capital in the amount of R$
27,559 (Unaudited) were distributed as dividends paid in advance. The
distribution was as follows: R$ 17,260 (Unaudited) corresponding to the partial
net income for the period. Of this total, R$ 3,725 (Unaudited) was through
interest on capital and R$ 13,535 (Unaudited) as dividends. The balance of R$
10,300 (Unaudited) refers to the income reserve distributed.
In August 2009, dividends were distributed to the shareholder Randon S.A.
Implementos e Participações, as provided in clause 10 of the Joint-Venture
Agreement signed on August 15, 2002, in the amount of R$ 9,840 (Unaudited). The
distribution was as follows: R$ 7,657 (Unaudited) corresponding to the partial
net income for the period and R$ 2,183 (Unaudited) corresponding to the income
reserve.
During 2009, the Company also recorded R$ 4,910 (Unaudited) (R$ 4,174 net
of tax - Unaudited) as interest on capital, which was not distributed until
December 31, 2009.
16. TAX INCENTIVE
It refers to tax incentives obtained in 2009 and 2008, respectively in
the amounts of R$ 13,013 (Unaudited) and R$ 11,578 from the Fundopem/Nosso
Empresa. This ICMS reduction benefit granted to the Company is calculated on a
monthly basis and is contingent upon the creation of direct or indirect jobs in
the State of Rio Grande do Sul. The tax incentives received are recognized in
income in the year of their receipt.
17. INCOME TAX AND
SOCIAL CONTRIBUTION
Reconciliation of income tax and social contribution - Charges for income
tax and social contribution for the year ended December 31 are reconciled to the
statutory rates as follows:
2009 (Unaudited) | 2008 | 2007 | |||||||||||||||
IRPJ | CSLL | IRPJ | CSLL | IRPJ | CSLL | ||||||||||||
Income before income tax and social contribution | 83,449 | 83,449 | 108,070 | 108,070 | 78,636 | 78,636 | |||||||||||
Statutory rate | 25% | 9% | 25% | 9% | 25% | 9% | |||||||||||
Income tax and social contribution at statutory rates | 20,862 | 7,510 | 27,018 | 9,726 | 19,659 | 7,077 | |||||||||||
Effects of taxes on: | |||||||||||||||||
Interest on capital
expense
|
(2,159 | ) | (777 | ) | (1,546 | ) | (556 | ) | (1,191 | ) | (429 | ) | |||||
Industrial
development program
|
(1,859 | ) | (670 | ) | (2,187 | ) | (787 | ) | (747 | ) | (269 | ) | |||||
Tax incentive
– Fundopem
|
(3,253 | ) | (1,171 | ) | (2,895 | ) | (1,042 | ) | - | - | |||||||
Others
|
(73 | ) | 126 | 143 | (14 | ) | 284 | 43 | |||||||||
(7,344 | ) | (2,492 | ) | (6,485 | ) | (2,399 | ) | (1,654 | ) | (655 | ) | ||||||
Income tax and social contribution before deductions | 13,518 | 5,018 | 20,533 | 7,327 | 18,005 | 6,422 | |||||||||||
Income tax deductions and other adjustments | (430 | ) | - | (611 | ) | (119 | ) | (191 | ) | - | |||||||
Income tax and social contribution expense | 13,088 | 5,018 | 19,922 | 7,208 | 17,814 | 6,422 | |||||||||||
Current | 11,408 | 4,805 | 20,477 | 7,415 | 19,225 | 6990 | |||||||||||
Deferred | 1,680 | 213 | (555 | ) | (207 | ) | (1,411 | ) | (568 | ) |
a) Deferred income tax and social contribution:
2009 (Unaudited) | 2008 | ||||||||
Temporary | Deferred | Temporary | Deferred | ||||||
differences | taxes | differences | taxes | ||||||
Temporary differences | |||||||||
Provision for profit sharing program (administrators) | 1,784 | 606 | 2,450 | 833 | |||||
Provision for profit sharing program (employees) | 2,384 | 811 | 3,353 | 1,140 | |||||
Provision for profit sharing program (directors) | 939 | 85 | 850 | 77 | |||||
Provision for contingences | 136 | 46 | 136 | 46 | |||||
Provision for warranties | 1,689 | 574 | 1,274 | 433 | |||||
Other temporary addictions | 1,211 | 412 | 810 | 275 | |||||
Total Assets | 8,143 | 2,534 | 8,873 | 2,804 | |||||
Accelerated depreciation – Law 11.774 | (6,491 | ) | (1,623 | ) | - | - | |||
Total Liabilities | (6,491 | ) | (1,623 | ) | - | - |
18. | FINANCIAL INCOME AND EXPENSES |
The financial income and expenses
for the years ended December 31 are represented as follows:
2009 | 2008 | 2007 | ||||||
Unaudited | ||||||||
Financial income | ||||||||
Income from temporary cash investments | 5,010 | 4,613 | 2,977 | |||||
Interest received and discounts obtained | 157 | 143 | 74 | |||||
Foreign exchange gains on liabilities | 2,828 | 10,945 | 3,916 | |||||
Adjustment to present value of trade accounts receivable | 5,713 | 11,279 | - | |||||
13,708 | 26,980 | 6,967 | ||||||
Financial expenses | ||||||||
Interest on loans and financing | (5,491 | ) | (5,006 | ) | (3,969 | ) | ||
Banking expenses | (124 | ) | (148 | ) | (97 | ) | ||
Foreign exchange losses on assets | (3,116 | ) | (6,918 | ) | (3,871 | ) | ||
Adjustment to present value of trade accounts payable | (218 | ) | (4,518 | ) | - | |||
Other financial expenses | (2,507 | ) | (667 | ) | (1,408 | ) | ||
(11,456 | ) | (17,257 | ) | (9,345 | ) | |||
Financial income (expenses), net | (2,252 | ) | 9,723 | (2,378 | ) |
19. | SUMMARY AND RECONCILIATION OF THE DIFFERENCES BETWEEN ACCOUNTING PRACTICES ADOPTED IN BRAZIL (BR GAAP) AND ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA (U.S. GAAP) |
The financial statements of the Company are prepared in accordance with BR GAAP. Note 3 to the consolidated financial statements summarizes the accounting policies adopted by the Company. BR GAAP differs from U.S. GAAP in certain significant respects, which are summarized below: | |
(a) Deferred charges | |
BR GAAP allowed until December 31, 2007 the deferral of pre-operating expenses and certain expenses related to research and development. Under BR GAAP, these items are amortized over a period of five to ten years. Under U.S. GAAP, these are recorded as expenses when incurred. | |
(b) VAT tax incentive - Fundopem | |
Under BR GAAP, prior to January 1, 2008, tax incentives related to certain state taxes on revenues were recorded directly in shareholders’ equity. Under U.S. GAAP, these tax incentives are recorded in the statement of income. Beginning January 1, 2008, the tax incentive is recorded in the statement of income under BR GAAP. | |
(c) Capitalization of interest in relation to construction in progress | |
Under accounting practices adopted in Brazil, prior to January 1, 1996 the Company was not required to capitalize the interest cost of borrowed funds as part of the cost of the related asset. Under U.S. GAAP, capitalization of borrowed funds during construction of major facilities is recognized as part of the cost of the related assets. | |
Under Brazilian GAAP exchange losses on foreign currency denominated assets and liabilities are capitalized. Under U.S. GAAP, capitalization of exchange losses is not permitted. | |
(d) Pension Plan Surplus | |
Under Brazilian GAAP, the excess of the fair value of the pension plan assets over the projected benefit obligation is not recognized as an asset on the balance sheet. Under U.S. GAAP, the asset is recognized on the balance sheet as prepaid pension cost. | |
(e) Dividends
Under BR GAAP,
proposed dividends are accounted for in the financial statements in
anticipation of their approval by the shareholders’ meeting. Distributions
characterized as interest on shareholders’ equity as well as minimum
compulsory dividends are accrued for under both BR GAAP and U.S. GAAP. Any
excess of proposed dividends over either the minimum compulsory dividend
or distributions characterized as interest on shareholders’ equity would
not be accounted for under U.S. GAAP, if such proposed dividends are
subject to approval at the annual shareholders’ meeting.
(f) New Accounting Pronouncements
In June 2009,
the Financial Accounting Standards Board (FASB) issued Financial
Accounting Standard (FAS) No. 167, “Amendments to FASB Interpretation No.
46(R)” (FAS 167). FAS 167 is a revision to FASB Interpretation No. 46(R),
“Consolidation of Variable Interest Entities,” and amends the
consolidation guidance for variable interest entities. Additionally, FAS
167 will require additional disclosures about involvement with variable
interest entities and any significant changes in risk exposure due to that
involvement. FAS 167 is effective January 1, 2010 for companies reporting
on a calendar-year basis. We currently do not expect the adoption of the
revised standard to have an effect on our consolidated results of
operations and financial position, when adopted.
In June 2009,
the FASB issued FAS No. 166, “Accounting for Transfers of Financial
Assets” (FAS 166). FAS 166 is a revision to FAS No. 140, “Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities,” and will require more information about transfer of
financial assets, including securitization transactions, and enhanced
disclosures when companies have continuing exposure to the risks related
to transferred financial assets. Additionally, FAS 166 eliminates the
concept of a qualifying special-purpose entity. FAS 166 is effective
January 1, 2010 for companies reporting on a calendar-year basis. We
currently do not expect the adoption of the revised standard to have an
effect on our consolidated results of operations and financial position,
when adopted.
(g) Other Comprehensive Income
Under U.S.
GAAP, SFAS No, 130, “Reporting Comprehensive Income”, requires the
disclosure of comprehensive income. Comprehensive income is comprised of
net income and “other comprehensive income”, which include charges or
credits directly to equity that are not the result of transactions with
shareholders. The Company has not recorded other comprehensive income for
all periods presented.
|
(h) Cash and Cash Equivalents
Under U.S.
GAAP, cash equivalents are defined as short-term, highly liquid
investments, which are both readily convertible to known amounts of cash
and have original maturities of 90 days or less. The Company holds certain
highly liquid, low risk financial investments, comprised principally of
high quality government debt, which are classified as cash equivalents
under BR GAAP. Under U.S. GAAP, since these investments have original
maturities of over 90 days, such investments do not qualify as cash
equivalents. The effect of this difference in classification on the
Company’s balance sheets and statements of cash flows for the periods
presented is as follows:
|
2009 | 2008 | 2007 | ||||||
(Unaudited) | ||||||||
Reconciliation of cash and cash equivalents | ||||||||
Cash and cash equivalents under BR GAAP | 112,087 | 33,361 | 40,073 | |||||
Reclassification of temporary investments | (97,882 | ) | (31,783 | ) | (34,491 | ) | ||
Cash and cash equivalents under U.S. GAAP | 14,205 | 1,578 | 5,582 | |||||
Reconciliation of cash flows | ||||||||
Investing activities under BR GAAP | (16,020 | ) | (51,170 | ) | (12,727 | ) | ||
Cash flows relating to temporary cash investments under U.S. GAAP | (66,099 | ) | 2,708 | (11,551 | ) | |||
Investing activities under U.S. GAAP | (82,119 | ) | (48,462 | ) | (24,278 | ) | ||
Cash and cash equivalents at beginning of the year under BR GAAP | 33,361 | 40,073 | 31,425 | |||||
Reclassification of temporary cash investments at beginning of the year | (31,783 | ) | (34,491 | ) | (22,940 | ) | ||
Cash and cash equivalents at beginning of the year under U.S. GAAP | 1,578 | 5,582 | 8,485 | |||||
Increase(decrease) in cash and cash equivalents under BR GAAP | 78,726 | (6,712 | ) | 8,648 | ||||
Cash flows relating to temporary cash investments under U.S. GAAP | (66,099 | ) | 2,708 | (11,551 | ) | |||
Cash and cash equivalents at end of the year under U.S. GAAP | 14,205 | 1,578 | 5,582 |
(i) Reconciliation of principal differences
between BR GAAP and U.S. GAAP
Reference | 2009 | 2008 | 2007 | ||||||||
(Unaudited) | |||||||||||
Net income under BR GAAP | 65,343 | 80,940 | 54,400 | ||||||||
Deferred charges | 19 | (a) | 1,093 | 996 | 1,040 | ||||||
VAT tax incentive - Fundopem | 19 | (b) | - | - | 8,944 | ||||||
Interest capitalization | 19 | (c) | 1,007 | 126 | (6 | ) | |||||
Pension plan surplus | 19 | (d) | 108 | 61 | 56 | ||||||
Deferred income tax on the above adjustments | (775 | ) | (402 | ) | (371 | ) | |||||
Net income under U.S. GAAP | 66,776 | 81,721 | 64,063 | ||||||||
Reference | 2009 | 2008 | 2007 | ||||||||
(Unaudited) | |||||||||||
Shareholders’ equity under BR GAAP | 170,928 | 145,606 | 100,663 | ||||||||
Deferred charges | 19 | (a) | (2,201 | ) | (3,294 | ) | (4,290 | ) | |||
Reversal of dividends payable | 19 | (e) | - | - | 4,219 | ||||||
Interest capitalization | 19 | (c) | 1,224 | 241 | 115 | ||||||
Pension plan surplus | 19 | (d) | 434 | 326 | 265 | ||||||
Deferred income tax on the above adjustments | 261 | 1,012 | 1,414 | ||||||||
Shareholders’ equity under U.S. GAAP | 170,646 | 143,891 | 102,386 | ||||||||
(2) Financial Statement Schedule for the years
ended September 30, 2009, 2008 and 2007. The following schedule was filed as part of
the Annual Report filed with the SEC on November 20, 2009:
Schedule II - Valuation and Qualifying Accounts
Schedules not filed
with this Annual Report on Form 10-K/A are omitted because of the absence of
conditions under which they are required or because the information called for
is shown in the financial statements or related notes.
(3) Exhibits
3-a | Restated Articles of Incorporation of ArvinMeritor, filed as Exhibit 4.01 to ArvinMeritor’s Registration Statement on Form S-4, as amended (Registration Statement No. 333-36448) ("Form S-4"), is incorporated by reference. | |
3-b | By-laws of ArvinMeritor, filed as Exhibit 3 to ArvinMeritor's Quarterly Report on Form 10-Q for the quarterly period ended June 29, 2003 (File No. 1-15983), is incorporated by reference. | |
4-a | Rights Agreement, dated as of July 3, 2000, between ArvinMeritor and The Bank of New York (successor to EquiServeTrust Company, N.A.), as rights agent, filed as Exhibit 4.03 to the Form S-4, is incorporated by reference. | |
4-b | Indenture, dated as of April 1, 1998, between ArvinMeritor and The Bank of New York Mellon Trust Company (as successor to BNY Midwest Trust Company as successor to The Chase Manhattan Bank), as trustee, filed as Exhibit 4 to Meritor's Registration Statement on Form S-3 (Registration No. 333-49777), is incorporated by reference. | |
4-b-1 | First Supplemental Indenture, dated as of July 7, 2000, to the Indenture, dated as of April 1, 1998, between ArvinMeritor and The Bank of New York Mellon Trust Company (as successor to BNY Midwest Trust Company as successor to The Chase Manhattan Bank), as trustee, filed as Exhibit 4-b-1 to ArvinMeritor's Annual Report on Form 10-K for the fiscal year ended September 30, 2000 (File No. 1-15983) (“2000 Form 10-K”), is incorporated by reference. | |
4-b-2 | Third Supplemental Indenture, dated as of June 23, 2006, to the Indenture, dated as of April 1, 1998, between ArvinMeritor and The Bank of New York Mellon Trust Company (as successor to BNY Midwest Trust Company as successor to The Chase Manhattan Bank), as trustee (including Subsidiary Guaranty dated as of June 23, 2006), filed as Exhibit 4.2 to ArvinMeritor’s Current Report on Form 8-K, dated June 23, 2006 and filed on June 27, 2006 (File No. 1-15983)(“June 23, 2006 Form 8-K”), is incorporated by reference. | |
4-c | Indenture dated as of July 3, 1990, as supplemented by a First Supplemental Indenture dated as of March 31, 1994, between ArvinMeritor and The Bank of New York Mellon Trust Company (as successor to BNY Midwest Trust Company as successor to Harris Trust and Savings Bank), as trustee, filed as Exhibit 4-4 to Arvin's Registration Statement on Form S-3 (Registration No. 33-53087), is incorporated by reference. | |
4-c-1 | Second Supplemental Indenture, dated as of July 7, 2000, to the Indenture dated as of July 3, 1990, between ArvinMeritor and The Bank of New York Mellon Trust Company (as successor to BNY Midwest Trust Company as successor to Harris Trust and Savings Bank), as trustee, filed as Exhibit 4-c-1 to the 2000 Form 10-K, is incorporated by reference. | |
4-c-2 | Fourth Supplemental Indenture, dated as of June 23, 2006, to the Indenture, dated as of July 3, 1990, between ArvinMeritor and The Bank of New York Mellon Trust Company (as successor to BNY Midwest Trust Company as successor to Harris Trust and Savings Bank), as trustee (including Subsidiary Guaranty dated as of June 23, 2006), filed as Exhibit 4.3 to the June 23, 2006 Form 8-K, is incorporated by reference. | |
4-d | Indenture, dated as of March 7, 2006, between ArvinMeritor and The Bank of New York Mellon Trust Company (as successor to BNY Midwest Trust Company) as trustee, filed as Exhibit 4.1 to ArvinMeritor’s Current Report on Form 8-K, dated March 7, 2006 and filed on March 9, 2006 (File No. 1-15983), is incorporated by reference. | |
4-d-1 | First Supplemental Indenture, dated as of June 23, 2006, to the Indenture, dated as of March 7, 2006, between ArvinMeritor and The Bank of New York Mellon Trust Company (as successor to BNY Midwest Trust Company) as trustee (including Subsidiary Guaranty dated as of June 23, 2006), filed as Exhibit 4.1 to the June 23, 2006 Form 8-K, is incorporated by reference. | |
4-e | Indenture, dated as of February 8, 2007, between ArvinMeritor and The Bank of New York Trust Company, N.A., as trustee (including form of Subsidiary Guaranty dated as of February 8, 2007), filed as Exhibit 4-a to ArvinMeritor’s Quarterly Report on Form 10-Q for the quarterly period ended April 1, 2007 (File No. 1-15983), is incorporated by reference. |
10-a | Credit Agreement, dated as of June 23, 2006, by and among ArvinMeritor, ArvinMeritor Finance Ireland, the institutions from time to time parties thereto as lenders, JP Morgan Chase Bank, National Association, as Administrative Agent, Citicorp North America, Inc. and UBS Securities LLC, as Syndication Agents, ABN AMRO Bank N.V., BNP Paribas and Lehman Commercial Paper Inc., as Documentation Agents, and J.P. Morgan Securities Inc. and Citigroup Global Markets, as Joint Lead Arrangers and Joint Book Runners, filed as Exhibit 10.1 to the June 23, 2006 Form 8-K, is incorporated by reference. | |
10-a-1 | Subsidiary Guaranty, dated as of June 23, 2006, by and among the subsidiary guarantors and JPMorgan Chase Bank, National Association, as Administrative Agent, for the benefit of itself, the lenders and other holders of guaranteed obligations, filed as Exhibit 10.2 to the June 23, 2006 Form 8-K, is incorporated by reference. | |
10-a-2 | Pledge and Security Agreement, dated as of June 23, 2006, by and among ArvinMeritor, the subsidiaries named therein and JPMorgan Chase Bank, National Association, as Administrative Agent, filed as Exhibit 10.3 to the June 23, 2006 Form 8-K, is incorporated by reference. | |
10-a-3 | Amendment No. 1 to Credit Agreement, dated as of February 23, 2007, among ArvinMeritor, the financial institutions party thereto and JPMorgan Chase Bank, National Association, as Administrative Agent, filed as Exhibit 10 to the Current Report on Form 8-K dated and filed on February 23, 2007 (File No. 1-15983), is incorporated by reference. | |
10-a-4 | Amendment No. 2 to Credit Agreement, dated as of October 2, 2007, among ArvinMeritor, the financial institutions party thereto and JPMorgan Chase Bank, National Association, as Administrative Agent, filed as Exhibit 10 to the Current Report on Form 8-K dated October 2, 2007 and filed on October 3, 2007 (File No. 1-15983), is incorporated by reference. | |
10-a-5 | Amendment No. 3 to Credit Agreement, dated as of October 26, 2007, among ArvinMeritor, the financial institutions party thereto and JPMorgan Chase Bank, National Association, as Administrative Agent, filed as Exhibit 10 to the Current Report on Form 8-K dated October 26, 2007 and filed on October 30, 2007 (File No. 1-15983), is incorporated by reference. | |
10-a-6 | Amendment No. 4 to Credit Agreement, dated as of December 10, 2007, among ArvinMeritor, the financial institutions party thereto and JPMorgan Chase Bank, National Association, as Administrative Agent, filed as Exhibit 10 to the Current Report on Form 8-K filed on December 11, 2007 is incorporated herein by reference. | |
*10-b-1 | 1997 Long-Term Incentives Plan, as amended and restated, filed as Exhibit 10 to ArvinMeritor’s Current Report on Form 8-K dated and filed on April 20, 2005 (File No. 1-15983), is incorporated by reference. | |
*10-b-2 | Form of Restricted Stock Agreement under the 1997 Long-Term Incentives Plan, filed as Exhibit 10-a-2 to Meritor’s Annual Report on Form 10-K for the fiscal year ended September 30, 1997 (File No. 1-13093), is incorporated by reference. | |
*10-b-3 | Form of Option Agreement under the 1997 Long-Term Incentives Plan, filed as Exhibit 10(a) to Meritor's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1998 (File No. 1-13093), is incorporated by reference. | |
*10-b-4 | Form of Performance Share Agreement under the 1997 Long-Term Incentives Plan, filed as Exhibit 10-b to ArvinMeritor’s Current Report on Form 8-K, dated December 7, 2004 and filed on December 9, 2004 (File No. 1-15983), is incorporated by reference. | |
*10-b-5 | Description of Performance Goals Established in connection with 2009-2011 Cash Performance Plan under the 1997 Long-Term Incentives Plan, filed as Exhibit 10-a to ArvinMeritor’s Current Report on Form 8-K, dated December 9, 2008 (File No. 1-15983), is incorporated by reference. | |
*10-b-6 | Description of Performance Goals Established in connection with 2008-2010 Cash Performance Plan under the 2007 Long Term Incentive Plan, filed as Exhibit 10a to the Current Report on Form 8-K filed on December 19, 2007 is incorporated herein by reference. |
*10-b-7 | Description of Annual Incentive Goals Established for Fiscal year 2010 under the Incentive Compensation Plan, filed as Exhibit 10a to the Current Report on Form 8-K filed on November 12, 2009 is incorporated herein by reference. | |
*10-b-7a | Description of Performance Goals established in connection with 2010-2012 Cash Performance Plan, filed as Exhibit 10-b to Current Report on Form 8-K filed on November 12, 2009 is incorporated herein by reference. | |
*10-c | 2007 Long-Term Incentive Plan, as amended, filed as Exhibit 10-a to ArvinMeritor’s Quarterly Report on Form 10-Q for the quarterly period ended April 1, 2007 (File No. 1-15983), is incorporated by reference. | |
*10-c-1 | Form of Restricted Stock Agreement under the 2007 Long-Term Incentive Plan, filed as Exhibit 10-c-1 to ArvinMeritor’s Annual Report on Form 10-K for the fiscal year ended September 30, 2007. | |
*10-d | Description of Compensation of Non-Employee Directors, filed as Exhibit 10d to ArvinMeritor’s 2009 Form 10-K for the fiscal year ended September 27, 2009, is incorporated herein by reference. | |
*10-e | 2004 Directors Stock Plan, filed as Exhibit 10-a to ArvinMeritor’s Quarterly Report on Form 10-Q for the quarterly period ended March 28, 2004 (File No. 1-15983), is incorporated by reference. | |
*10-e-1 | Form of Restricted Share Unit Agreement under the 2004 Directors Stock Plan, filed as Exhibit 10-c-3 to ArvinMeritor’s Annual Report on Form 10-K for the fiscal year ended October 3, 2004 (File No. 1-15983), is incorporated by reference. | |
*10-e-2 | Form of Restricted Stock Agreement under the 2004 Directors Stock Plan, filed as Exhibit 10-c-4 to ArvinMeritor’s Annual Report on Form 10-K for the fiscal year ended October 2, 2005 (Filed No. 1-15983), is incorporated by reference. | |
*10-e-3 | Option Agreement under the 2007 Long-Term Incentive Plan between ArvinMeritor and Charles G. McClure filed as Exhibit 10-c to ArvinMeritor’s Quarterly report on Form 10-Q for the quarterly period ended June 30, 2008 is incorporated herein by reference. | |
*10-e-4 | Restricted Stock Agreement under the 2007 Long-term Incentive Plan between ArvinMeritor and Charles G. McClure filed as Exhibit 10-d to ArvinMeritor’s Quarterly Report on form 10-Q for the quarterly period ended June 30, 2008 is incorporated herein by reference. | |
*10-f | Incentive Compensation Plan, as amended and restated as of November 6, 2009, filed as Exhibit 10.6 to ArvinMeritor’s Form 10-Q for the Quarter ended January 3, 2010, is incorporated herein by reference. | |
*10-f-1 | Form of Deferred Share Agreement, filed as Exhibit 10-a to ArvinMeritor’s Quarterly Report on Form 10-Q for the quarterly period ended January 2, 2005 (File No. 1-15983), is incorporated by reference. | |
*10-g | Copy of resolution of the Board of Directors of ArvinMeritor, adopted on July 6, 2000, providing for its Deferred Compensation Policy for Non-Employee Directors, filed as Exhibit 10-f to the 2000 Form 10-K, is incorporated by reference. | |
*10-h | Deferred Compensation Plan, filed as Exhibit 10-e-1 to Meritor's Annual Report on Form 10-K for the fiscal year ended September 30, 1998 (File No. 1-13093), is incorporated by reference. | |
*10-i | 1998 Stock Benefit Plan, as amended, filed as Exhibit (d)(2) to ArvinMeritor's Schedule TO, Amendment No. 3 (File No. 5-61023), is incorporated by reference. | |
*10-j | Employee Stock Benefit Plan, as amended, filed as Exhibit (d)(3) to ArvinMeritor’s Schedule TO, Amendment No. 3 (File No. 5-61023), is incorporated by reference. | |
*10-k | 1988 Stock Benefit Plan, as amended, filed as Exhibit 10 to Arvin's Quarterly Report on Form 10-Q for the quarterly period ended July 3, 1988, and as Exhibit 10(E) to Arvin's Quarterly Report on Form 10-Q for the quarterly period ended July 4, 1993 (File No. 1-302), is incorporated by reference. | |
10-l | Loan and Security Agreement dated as of September 8, 2009 among ArvinMeritor Receivables Corporation, ArvinMeritor, Inc., GMAC Commercial Finance LLC, and the Lenders from time to time party thereto (the "Loan Agreement"), dated September 8, 2009 and filed as exhibit 10a to ArvinMeritor’s Current Report on Form 8-K filed on September 10, 2009, is incorporated herein by reference. |
10-m | Third Amended and Restated Purchase and Sale Agreement dated as of September 8, 2009 (the "Purchase Agreement") among ArvinMeritor Receivables Corporation and Meritor Heavy Vehicle Braking Systems (U.S.A.), Inc. and Meritor Heavy Vehicle Systems LLC, filed as exhibit 10b to ArvinMeritor’s Current Report on Form 8-K, dated September 8, 2009 and filed on September 10, 2009, is incorporated herein by reference. | |
*10-n | Employment agreement between the company and Charles G. McClure, Jr., dated as of September 14, 2009, filed as Exhibit 10n to ArvinMeritor’s 2009 Form 10-K for the fiscal year ended September 27, 2009, is incorporated herein by reference. | |
*10-o | Employment agreement between the company and James D. Donlon, III, filed as Exhibit 10b to ArvinMeritor’s Current Report on Form 8-K, dated September 14, 2009 and filed on September 18, 2009 (File No. 1-15983), is incorporated by reference. | |
*10-q | Employment agreement between ArvinMeritor and Carsten J. Reinhardt, dated as of September 14, 2009, filed as Exhibit 10q to ArvinMeritor’s 2009 Form 10-K for the fiscal year ended September 27, 2009, is incorporated herein by reference. | |
*10-r | Employment agreement, dated as of September 14, 2009, between ArvinMeritor and Jeffrey A. Craig, filed as Exhibit 10r to ArvinMeritor’s 2009 Form 10-K for the fiscal year ended September 27, 2009, is incorporated herein by reference. | |
*10-s | Employment agreement, dated as of September 14, 2009, between ArvinMeritor and Vernon Baker, filed as Exhibit 10s to ArvinMeritor’s 2009 Form 10-K for the fiscal year ended September 27, 2009, is incorporated herein by reference. | |
*10-t | Employment agreement, dated as of September 14, 2009, between ArvinMeritor and Mary Lehmann, filed as Exhibit 10t to ArvinMeritor’s 2009 Form 10-K for the fiscal year ended September 27, 2009, is incorporated herein by reference. | |
*10-u | Employment agreement, dated as of September 14, 2009, between ArvinMeritor and Lin Cummins, filed as Exhibit 10u to ArvinMeritor’s 2009 Form 10-K for the fiscal year ended September 27, 2009, is incorporated herein by reference. | |
*10-v | Employment agreement, dated as of September 14, 2009, between ArvinMeritor and Barbara Novak, filed as Exhibit 10v to ArvinMeritor’s 2009 Form 10-K for the fiscal year ended September 27, 2009, is incorporated herein by reference. | |
*10-w | Form of employment letter between ArvinMeritor and its executives, filed as Exhibit 10-a to ArvinMeritor’s Current Report on Form 8-K, dated September 14, 2009 and filed on September 18, 2009 (File No. 1-15983), is incorporated by reference. | |
10-x | Receivables Purchase Agreement dated November 19, 2007 between ArvinMeritor CVS Axles France and Viking Asset Purchaser and CitiCorp Trustee Company Limited, filed as Exhibit 10-t to ArvinMeritor’s Report on Form 10-K for the fiscal year ended September 30, 2008 is incorporated herein by reference. | |
10-y | Receivables Purchase Agreement dated March 13, 2006 between Meritor HVS AB and Nordic Finance Limited and CitiCorp Trustee Company Limited filed as Exhibit 10-u to ArvinMeritor’s Report on Form 10-K for the fiscal year ended September 30, 2008 is incorporated herein by reference. | |
10-z | Amendment, dated July 25, 2007, to Receivables Purchase Agreement dated March 13, 2006 between Meritor HVS AB and Nordic Finance Limited and CitiCorp Trustee Company Limited filed as Exhibit 10-v to ArvinMeritor’s Report on Form 10-K for the fiscal year ended September 30, 2008 is incorporated herein by reference. | |
10-zz | Purchase and Sale Agreement dated August 4, 2009 among ArvinMeritor, Iochpe-Maxion, S.A. and the other parties listed therein, filed as Exhibit 10 to ArvinMeritor’s Report on Form 10-Q for the Quarter ended June 28, 2009 is incorporated by reference. | |
12 | Computation of ratio of earnings to fixed charges, filed as Exhibit 12 to ArvinMeritor’s 2009 Form 10-K for the fiscal year ended September 27, 2009, is incorporated herein by reference. | |
21 | List of subsidiaries of ArvinMeritor, filed as Exhibit 21 to ArvinMeritor’s 2009 Form 10-K for the fiscal year ended September 27, 2009, is incorporated herein by reference. |
23-a | Consent of Vernon G. Baker, II, Esq., Senior Vice President and General Counsel of ArvinMeritor, filed as Exhibit 23a to ArvinMeritor’s 2009 Form 10-K for the fiscal year ended September 27, 2009, is incorporated herein by reference. | |
23-b | Consent of Deloitte & Touche LLP, independent registered public accounting firm, filed as Exhibit 23b to Amendment No. 1 to ArvinMeritor’s 2009 Form 10-K for the fiscal year ended September 27, 2009, is incorporated herein by reference. | |
23-c | Consent of Bates White LLC, filed as Exhibit 23c to Amendment No. 1 to ArvinMeritor’s 2009 Form 10-K for the fiscal year ended September 27, 2009, is incorporated herein by reference. | |
23-d | Consent of Deloitte Touche Tohmatsu Auditores Independentes. # | |
24 | Power of Attorney authorizing certain persons to sign this Annual Report on Form 10-K on behalf of certain directors and officers of ArvinMeritor filed as Exhibit 24 to ArvinMeritor’s 2009 Form 10-K for the fiscal year ended September 27, 2009, is incorporated herein by reference. | |
31-a |
Certification of the Chief
Executive Officer pursuant to Rule 13a-14(a) under the Exchange Act. #
|
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31-b |
Certification of the Chief
Financial Officer pursuant to Rule 13a-14(a) under the Exchange Act. #
|
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32-a |
Certification of the Chief
Executive Officer pursuant to Rule 13a-14(b) under the Exchange Act and 18
U.S.C. Section 1350.#
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32-b |
Certification of the Chief
Financial Officer pursuant to Rule 13a-14(b) under the Exchange Act and 18
U.S.C. Section 1350.#
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* | Management contract or compensatory plan or arrangement. | |
# | Filed herewith. |
SIGNATURES
Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ARVINMERITOR, INC. | |||
By: | /s/ Jeffrey A. Craig | ||
Jeffrey A. Craig | |||
Senior Vice President and Chief Financial Officer |
Date: June 25,
2010