NOTE 18 - RELATED-PARTY TRANSACTIONS
a) Intercompany loans
|
|
|
2017 |
|
2016 |
|
|
Assets |
|
|
|
|
|
|
Joint venture |
|
|
|
|
|
|
Gerdau Corsa SAPI de C.V. |
|
7 |
|
48 |
|
|
Others |
|
|
|
|
|
|
Fundação Gerdau |
|
51,832 |
|
57,493 |
|
|
|
|
|
|
|
|
|
|
|
51,839 |
|
57,541 |
|
|
|
|
|
|
|
|
|
|
|
2017 |
|
2016 |
|
2015 |
|
|
Net financial income |
|
95 |
|
(2,457 |
) |
2,712 |
|
|
|
|
|
|
|
|
|
|
b) Operations with related parties
During the years ended December 31, 2017 and 2016, the Company, through its subsidiaries, entered into commercial operations with some of its associate companies and joint ventures including sales of R$ 630,190 as of December 31, 2017 (R$ 421,415 as of December 31, 2016) and purchases in the amount of R$ 121,618 as of December 31, 2017 (R$ 141,275 as of December 31, 2016). The net amount totals R$ 508,572 as of December 31, 2017 (R$ 280,140 as of December 31, 2016).
During the years ended December 31, 2017 and 2016, the Company and its subsidiaries made transactions with controlling shareholders, directly or indirectly, mainly guarantees provided by the controlling in guarantees of debentures, on which the Company pays a fee of 0.95 % p.a. on the amount guaranteed. The effect of these transactions was an expense of R$ 689 (R$ 4,732 as of December 31, 2016). Additionally, the Company recorded income of R$ 801 (R$ 1,001 as of December 31, 2016), derived from rental agreement.
Guarantees granted
|
Related Party |
|
Relationship |
|
Object |
|
Original |
|
Maturity |
|
2017 |
|
2016 |
|
|
GTL Trade Finance Inc. |
|
Subsidiary |
|
10-year Bond |
|
1,744,000 |
|
Oct/17 |
|
— |
|
2,577,296 |
|
|
GTL Trade Finance Inc. |
|
Subsidiary |
|
30-year Bond |
|
1,118,000 |
|
Apr/44 |
|
1,654,000 |
|
1,629,550 |
|
|
Diaco S.A. |
|
Joint-venture |
|
Financing Agreements |
|
137,700 |
|
Aug/18 |
|
128,019 |
|
397,238 |
|
|
Armacero-Matco S.A., Salomon Sack S.A. |
|
Subsidiary |
|
Financing Agreements |
|
214,793 |
|
Dec/18 |
|
226,700 |
|
— |
|
|
Gerdau Holding Inc. |
|
Subsidiary |
|
10-year Bond |
|
2,188,125 |
|
Jan/20 |
|
1,711,649 |
|
1,801,389 |
|
|
Gerdau Trade Inc. |
|
Subsidiary |
|
10-year Bond |
|
2,117,750 |
|
Jan/21 |
|
1,570,546 |
|
3,345,222 |
|
|
Gerdau Corsa S.A.P.I. de C.V. |
|
Joint-venture |
|
Financing Agreements |
|
1,973,313 |
|
Jul/18 - Dec/21 |
|
1,797,856 |
|
2,061,260 |
|
|
Gerdau Summit Aços Fundidos e Forjados S.A. |
|
Joint-venture |
|
Financing Agreements |
|
130,164 |
|
Aug/25 |
|
6,550 |
|
— |
|
|
GTL Trade Finance Inc., Gerdau Holdings Inc. |
|
Subsidiary |
|
10-year Bond |
|
2,606,346 |
|
Apr/24 |
|
3,031,974 |
|
2,987,154 |
|
|
Sipar Aceros S.A. |
|
Subsidiary |
|
Financing Agreements |
|
436,959 |
|
Sep/18 - Sep/21 |
|
85,920 |
|
434,706 |
|
|
Gerdau Trade Inc. |
|
Subsidiary |
|
10-year Bond |
|
1,501,275 |
|
Apr/23 |
|
1,792,291 |
|
1,832,625 |
|
|
Gerdau Steel India Ltd. |
|
Subsidiary |
|
Financing Agreements |
|
98,359 |
|
Sep/18 - Feb/19 |
|
287,690 |
|
354,585 |
|
|
Gerdau Steel India Ltd. |
|
Subsidiary |
|
Financing Agreements |
|
— |
|
Indetermined |
|
— |
|
55,130 |
|
|
Comercial Gerdau Bolivia |
|
Subsidiary |
|
Financing Agreements |
|
— |
|
nov/17 |
|
— |
|
13,036 |
|
|
Gerdau Açominas S.A. |
|
Subsidiary |
|
Financing Agreements |
|
2,960,203 |
|
Jan/20 - Feb/21 |
|
2,158,271 |
|
2,627,205 |
|
|
Gerdau Ameristeel US. Inc. |
|
Subsidiary |
|
Bond 25 yers |
|
103,596 |
|
Oct/37 |
|
168,708 |
|
166,214 |
|
|
Gerdau Ameristeel US. Inc. |
|
Subsidiary |
|
Bond 30 yers |
|
46,460 |
|
May/37 |
|
76,084 |
|
74,959 |
|
|
Gerdau Aços Longos S.A. |
|
Subsidiary |
|
Financing Agreements |
|
556,247 |
|
Oct/24 - Dec/30 |
|
282,534 |
|
318,784 |
|
|
Gerdau Aços Longos S.A. |
|
Subsidiary |
|
Financing Agreements |
|
7,007 |
|
Dec/18 |
|
7,007 |
|
304,194 |
|
|
Siderurgica Zuliana, C.A. |
|
Subsidiary |
|
Financing Agreements |
|
50,010 |
|
Dec/18 |
|
33,080 |
|
65,182 |
|
|
Gerdau Ameristeel Corporation; Gerdau Ameristeel US Inc.; Gerdau Macsteel Inc.; Comercial Gerdau Bolivia S.A.; Gerdau Aza S.A.; Gerdau Metaldom S.A.; Sipar Aceros S.A.; Gerdau Hungria Holdings LLC; Aceros Corsa S.A. de C.V.; Gerdau Corsa S.A.P.I de C.V.; Gerdau GTL México S.A. de C.V.; Sidertul S.A. de C.V.; Steelchem Trading Corporation; Empresa Siderúrgica Del Perú S.A.A.; Gerdau Hungria Y CIA, S.R.C and Gerdau Laisa S.A. |
|
Subsidiary and Joint-venture |
|
Financing Agreements |
|
— |
|
Oct/20 |
|
178,200 |
|
635,525 |
|
|
Gerdau Aços Especiais S.A. |
|
Subsidiary |
|
Financing Agreements |
|
70,000 |
|
feb/20 |
|
— |
|
63,000 |
|
c) Debentures
Debentures are held by direct or indirect shareholders in the amount of R$ 348 as of December 31, 2017 (R$ 33,438 as of December 31, 2016), which corresponds to 63 debentures (5,964 as of December 31, 2016).
d) Price and interest
Loan agreements between Brazilian companies carry interest based on the CDI (Interbank Deposit Certificate) and Libor rate plus exchange variance, when applicable. Sales of products and purchases of inputs are made under terms and conditions agreed between the parties.
e) Key Management compensation
The cost of the key management salaries, variable compensation and benefits was R$ 33,942 during 2017 (R$ 33,686 in 2016). In 2017, contributions to management’s defined contribution pension plans totaled R$ 1,327 (R$ 1,359 in 2016).
Stock options granted to management are as follows:
|
|
|
2017 |
|
||
|
|
|
Number of |
|
Weighted |
|
|
|
|
|
|
R$ |
|
|
Balance as of January 1, 2015 |
|
1,564,341 |
|
19.53 |
|
|
|
|
|
|
|
|
|
Options Forfeited |
|
(1,130,091 |
) |
19.56 |
|
|
Others |
|
112,420 |
|
— |
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2015 |
|
546,670 |
|
18.36 |
|
|
|
|
|
|
|
|
|
Options Forfeited |
|
(148,491 |
) |
20.49 |
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2016 |
|
398,179 |
|
16.64 |
|
|
|
|
|
|
|
|
|
Options Forfeited |
|
(217,819 |
) |
15.11 |
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2017 |
|
180,360 |
|
17.91 |
|
|
|
|
|
|
|
|
At the end of the year, the Restricted Shares resulting from the conversion process within the key management were:
|
|
|
2017 |
|
2016 |
|
|
Available at beginning of the year |
|
4,831,999 |
|
1,669,557 |
|
|
Granted |
|
1,353,930 |
|
3,399,729 |
|
|
Exercised |
|
(240,619 |
) |
(237,287 |
) |
|
Forfeited |
|
|
|
— |
|
|
|
|
|
|
|
|
|
Available at the end of the year |
|
5,945,310 |
|
4,831,999 |
|
|
|
|
|
|
|
|
Additional information on the long-term incentive plan are presented in Note 25.
The cost of long-term incentive plans recognized in income and attributable to key management (members of Board of Directors and executive officers) totaled R$ 14,609 during 2017 (R$ 14,095 and R$ 10,999 during 2016 and 2015, respectively).
Additionally, for the year ended December 31, 2017, the compensation for the members of the Advisory Board was R$ 0 (R$ 1,958 in 2016 and R$ 1,129 in 2015, being the amount of 2015 the compensation of the Advisory Board as from its creation in May/15).