2014 ANNUAL REPORT
www.institutocarlylebrasil.com.br/en
CARLYLE BRAZIL INSTITUTE TABLE OF CONTENTS: 1 2
3
4 5
02
MESSAGE FROM THE PRESIDENT
03
ABOUT US
04
How we Operate
06
Selection Process for the NGOs
08
Our Partners
10
Our Investors
14
OUR INVESTMENTS - THE NGOS
18
CEAP
18
Verdescola Institute
22
CASD Vestibulares
26
WHY INVEST
28
AUDITED FINANCIAL STATEMENTS
30
MESSAGE FROM THE PRESIDENT
RESULTS OF OUR INVESTMENTS It is with great pleasure that we present the first annual activity report of the Carlyle Brazil Institute, a pioneering social project led by the office of the Carlyle Group in Brazil and with enormous potential for replicability in other countries where we operate. As the results presented here demonstrate, we have come a long way since our launch, in March 2012, towards our goal of assuring the financial sustainability of the Non-Governmental Organizations (NGOs) that we support. But we still have a lot to do to guarantee the continued development of each one, by further expanding the scope of the benefits they offer to the communities where they operate and to society as a whole. This is the first time that Carlyle has applied its Private Equity methodology for social purposes. Through the Institute, we have started to invest in Brazilian organizations that focus on improving education, which is essential for guaranteeing a more promising future with more development opportunities for all people. Besides providing financial support, we apply a distinctive partnership model, since we believe that the greatest investment we can make is to leave a legacy for each one of these NGOs, helping them guarantee the continuity of their work. All the results achieved so far have been possible thanks to the collective effort and commitment of the Carlyle Group’s nine strategic partners, namely Cosin Consulting, Maksen, McKinsey, Publicis, MSLGROUP Andreoli, Pinheiro Neto Advogados, PwC, Sitawi Finanças do Bem and Professor José Maria Ramos, which have all embraced the project, and to the hard work conducted through the partnerships between each of them and the management of the selected NGOs. Since the launch of the Carlyle Brazil Institute, its innovative format has attracted the interest of hundreds of organizations that are recognized for doing serious work in the field of education. In total, 732 institutions downloaded the form to participate in our first selection process, and we received applications from 220 NGOs. Of these, seven finalists competed to be among the three selected organizations. Since the start of its activities, the Carlyle Brazil Institute has raised approximately R$6.6 million, of which R$5.1 million have already been invested in the three organizations, in services provided by our internationally renowned partners in their fields and money raised from various sources, such as the campaigns organized by Tok&Stok and Ri Happy/PBKids with their customers. The figure also includes the financial contributions from these two companies, monthly donations made by Bank of America Merrill Lynch and its employees and the staff of the Carlyle Group in Brazil and the United States, as well as important contributions from the Credit Suisse Hedging-Griffo Institute and Deutsche Bank. We are fully confident that this is just the beginning of a project that has great potential to make a big difference in people’s lives in the years ahead. For now, we are very grateful for all the dedication of our partners in the day-to-day activities of the chosen organizations and for the support of investors in our initiative. We have only made it this far, with such positive results, thanks to the active involvement and commitment of each one of them. The Carlyle Brazil Institute does not pretend to solve the problem of education in Brazil, but it can, through its initiatives with the assisted institutions, give many people the opportunity to develop their full potential and help build a more just country.
Juan Carlos Felix president of the Carlyle Brazil Institute and co-head of Carlyle South America
Fernando Borges co-head of Carlyle South America
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ABOUT US The Carlyle Brazil Institute is a pioneering social initiative created voluntarily by the staff at the office of the Carlyle Group – one of the world’s largest investment funds – in Brazil. Its main distinction from other existing third sector projects in the country is the application of the Private Equity methodology, used to raise investments and transfer business management knowledge, in its support for Brazilian Non-Governmental Organizations (NGOs) that have projects in the field of education. Its primary mission is to contribute to the improvement of education in Brazil and, as such, it aims to transform these NGOs by enabling them to continually develop and become selfsustainable. As such, it helps these organizations to further enhance the social impacts and benefits that they already generate in the communities where they operate. According to its working strategy, the Carlyle Brazil Institute invests all the voluntary donations it receives from Carlyle’s portfolio companies and other companies from different business sectors, as well as contributions from its own employees in Brazil and other countries, in the selected NGOs over a period that varies from three to five years. At the same time, it employs the expertise and knowledge of its partners in a project that is divided into five fronts: Strategic Consulting, Auditing, Legal Advice, Public Relations and Communication and Advertising. As such, it develops a suitable governance structure in partnership with the management of the selected organizations. During this period, the Institute works continually with the NGOs on their management strategy and implements the best administrative practices with a view to improving their efficiency and the social impacts they generate. At all times with the ongoing support and intense involvement of senior executives from both Carlyle and our partner companies who are appointed to head up the projects in each of the assisted organizations. For example, we currently have the leadership of Hector Nuñez, CEO (Chief Executive Officer) of the Ri Happy/PB Kids chain of stores, and João Fernando Vassão, CSO (Chief Strategy Officer) of the Publicis advertising agency, working with two of the supported NGOs: CEAP and the Verdescola Institute. Through this strategy, the organizations are expected to achieve levels of development that permit them to continue the implemented projects without the support of the Carlyle Brazil Institute. In other words, to become self-sustainable so they can continue growing and benefiting an ever growing number of people.uam na O foco de trabalho do Instituto Carlyle s de áreas
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05
CARLYLE BRAZIL INSTITUTE - MODUS OPERANDI Financial investment: R$ 5.055.000,00 Institutional Development (brand & communication) Human Resources (staff & qualification) Infrastructure: Software, hardware, maintenance and space rental
NGOs
MANAGEMENT OF THE NGO
Each NGO has the support of a team formed to assist it in each front, always led by a senior executive of the Carlyle Group or partner company
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FRONTS The team is formed by experts in the 5 fronts, facilitated by the Carlyle Brazil Institute, together with a team appointed by the NGO
The actions are implemented by the NGO’s team with the supervision and support of the Carlyle Brazil Institute and its partners
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SERVICES
STRATEGIC CONSULTING
AUDIT
LEGAL ADVICE
PUBLIC RELATIONS
COMMUNICATION AND ADVERTISING
Define strategy and action plan Implement detailed action plan (with short, medium and long term vision) Gather the resources necessary for its execution (team and financial support) Support and monitor the execution Measure the results
Assure greater accuracy of the financial statements An audit of the NGO’s financial statements by one of the world’s 4 largest auditing firms Enable the best information on the real economic, asset and financial situation of the audited organization Give more credibility to the financial statements of the audited organization for investors
Review the certificates and legal documents required by the nonprofit sector Advise the organizations on the laws governing the nonprofit sector (taxation, tax incentives, income generation and intellectual property law)
Diagnose the internal and external communication (where it stands and what it could be) Develop a communication strategy and plan in accordance with the needs identified in the diagnosis Execute and support the action plan Monitor PR results Communicate the achieved results to investors and society
Assess the communication and advertising needs of each organization with its different stakeholders Develop strategic communication position, concept, materials and campaigns Work to uphold the strategic and creative consistency of the brands
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CARLYLE BRAZIL INSTITUTE - MODUS OPERANDI PHASE 1 2-3 MONTHS
Team meets to develop the strategic plan (management of the NGO, Carlyle Brazil Institute and Partners) Develop a 3-5 year strategic plan Define operational KPIs for measuring the results
Detail the planning in a short, medium and long term action plan
PHASE 2 3 MONTHS
PHASE 3 2-3 YEARS
Form the working teams for each action Implement the actions and measure the results Continuity of the partnership is contingent on the targets of the action plan being met
Diminishing financial support – to guarantee the autonomy and sustainability of the NGO Broadening and strengthening of the NGO’s knowledge in the 5 fronts Replicability of the model and/or expansion of the service Self-sustainability
3 TO 5 YEARS
Ongoing measurement of results Monthly accountability Annual impact presentation and renewal of the partnership
SELECTION OF THE NGOS The Carlyle Brazil Institute focuses on medium-sized Non-Governmental Organizations that operate in the field of education and that are already recognized for their serious and credible work, as is the case with the three organizations it currently supports, and whose primary focus is the personal and professional development of children and young 08
people in at-risk areas. Meanwhile, they must also be NGOs that need support for their projects to become sustainable and to expand their scope. Before they can become Carlyle Brazil Institute partners, therefore, the organizations undergo a meticulous selection and due diligence process to determine whether they will benefit from the Institute’s support. For the duration of the partnership, all the results of the NGOs are audited by respected market institutions, such as PwC and KPMG. In addition to having proven credibility, the organizations must be aligned with the Institute’s mission of improving education by helping hundreds of people to develop so they can pursue their dreams and contribute to the construction of a more just country with more opportunities.
PHASE I: GRANT PROPOSAL
732 220
132
NGOs downloaded the granting notice
registered through the notice
NGOs met the Institute’s basic criteria: have a focus on education, be located in the state of São Paulo and have a history of at least five years
PHASE II: DUE DILIGENCE AND ROAD SHOW
12 7
3
selected for the final phase
selected for a visit (road show)
chosen for immediate support
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RESPECTED PARTNERS The implementation of a social project with a pioneering format in the nonprofit sector involves challenges that require distinctive expertise and a great deal of dedication. This is why the Carlyle Brazil Institute has been so careful in selecting its partners, which in addition to being national and international references in their respective fields, are also aligned with the Institute’s purpose of making a difference in people’s lives. Learn more about the role of each one in the Carlyle Brazil Institute:
STRATEGIC CONSULTING MCKINSEY Present in Brazil for more than 25 years, Mckinsey is a global management consulting firm that provides services to major companies around the world on issues such as strategy, organization, technology and operations. It develops and implements recommendations based on deep analysis and broad international experience. In its partnership with the Carlyle Brazil Institute, its work involved collecting socio-economic information in the region where the Verdescola Institute is located. It also developed suggestions for KPIs (Key Performance Indicators) for future assessments.
MAKSEN Maksen is a strategic consulting firm that operates globally. With comprehensive international experience, it develops projects in information technology and in communication and engineering networks that are known for their innovation, and it handles clients in a number of diversified markets and cultures. For the Carlyle Brazil Institute, it offered, in the reporting period, to provide consulting services and develop a strategic plan for CEAP for the next 3 to 5 years, as well as a fundraising plan to ensure the sustainability of the organization. It also ran some important initiatives to attract partners and support for the development of the CEAP Education Forum.
COSIN CONSULTING Founded 10 years ago by enterprising professionals from the Consulting and Financial Services sectors, Cosin has already worked in the main capital cities of Brazil and other countries. It calls itself a business “builder”, since it takes a distinctive approach that is more pragmatic compared to other companies on the market. In the partnership with the Carlyle Brazil Institute, it worked primarily on mapping the internal processes of the Verdescola Institute, in areas such as Projects, Human Resources, Fundraising, Marketing, Accounts Receivable and Payable, Procurement and Information Technology. It then developed plans to improve these processes. Cosin also worked on the preparation of the strategic planning for CASD Vestibulares in 2014.
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“We have worked with the Carlyle Brazil Institute since its conception and we soon became supporters of this pioneering project. It is extremely important to contribute to the development and professionalization of NGOs that work in the field of education, particularly in the way the Institute does: it not only provides financial support, but contributes to the structuring of these organizations, making them stronger and more sustainable”. Ari Kertesz, partner at McKinsey& Co. “Before hearing about the Carlyle Institute, we hadn’t found a social initiative that was compatible with our working philosophy, which is sustainable transformation and generation of a long-term impact. The work developed by the Institute is extremely important, considering that Brazilian NGOs still have a long way to go to achieve maturity in the way they operate. What’s more, the Institute has a unique capacity to mobilize and maintain a network of relevant contacts with organizations and professionals that can work together towards the same goals as the NGOs. The support of the Institute, both financial and managerial, is essential to promote and leverage the development of the nonprofit sector in Brazil.” Sérgio Lee, head of Maksen in Brasil “The partnership with the Carlyle Brazil Institute is different from any of the social initiatives we had previously developed. And our members have been very involved in this project, which has been very rewarding. The idea of helping improve the management of the NGOs, with a focus on the sustainability of these organizations, is undoubtedly innovative in the nonprofit sector in Brazil”. Carlos Silvares, partner at Cosin Consulting
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“The Carlyle Institute has decided to contribute to the improvement of education in the country in an innovative way: enabling NGOs in this field to become self-sustainable and to continue making a difference in the lives of people and of society in general. There is no doubt that education is the foundation for any country that wants to be prepared for the future. We are very proud of our involvement with the Institute since the conception of the idea, and of having collaborated actively with our expertise in communication for the ongoing development of the organizations it supports.” Paulo Andreoli, chairman of MSLGROUP Andreoli for Latin America “The success of the Carlyle Brazil Institute’s model is based on two pillars: a profound respect for the DNA of the NGOs and the active participation in their management. This unique combination creates stronger organizations that grow and expand their reach without losing sight of their original mission. In the complex and competitive world we live in, it’s not enough to have good intentions. You need a strategy, working methodology and good relationships to guarantee the durability of an organization. For these reasons, I believe that the pioneering operating model of the Institute is here to stay”. João Fernando Vassão, CSO (Chief Strategy Officer) of Publicis Worldwide Brasil “The only path to progress in Brazil is through the improvement of education. Unfortunately, governments alone cannot meet all the challenges, hence the importance of NGOs that work in this field. The Carlyle Brazil Institute plays the very important role of intermediating the support of people and companies that want to contribute – with knowledge, time and money – to the development of these organizations that, by helping improve people’s lives, help improve the country as a whole”. Miguel Tornovsky, partner at Pinheiro Neto Advogados
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COMMUNICATION AND PR MSLGROUP ANDREOLI With more than 22 years’ experience on the Brazilian market, MSLGROUP Andreoli launched the concept of communication and corporate affairs in the country. Fifteen years ago it joined MSLGROUP, which belongs to Publicis Groupe, the world’s third largest communication group. The agency plans, designs, measures and maintains the reputation of large companies, bringing direct results to the business of each one. In the partnership with the Institute, it worked primarily on strategic communication planning for the NGOs, by developing Public and Press Relations initiatives to enhance the positive exposure in the media. MSLGROUP Andreoli was also involved in building the image and reputation of the organizations to make them more attractive in the eyes of potential investors and partners.
PUBLICIS Publicis is one of the world’s three largest advertising agencies and it focuses on brand building for leading market names. Among its main distinctions is the fact that it has a deep knowledge of the consumer of all types of products and services, and the ongoing commitment to the results that are sought by its clients. For the Institute, Publicis worked on the development of an integrated Institutional Communication plan that covers the media, digital and events areas of the supported NGOs. It has also upgraded the visual identity of these organizations and its team of professionals has worked on the creation of institutional materials, such as folders and newsletters.
LEGAL ADVICE AND AUDITING PINHEIRO NETO ADVOGADOS The Pinheiro Neto Advogados law firm first opened its doors in 1942 and has since grown into a benchmark in Brazilian legal and economic circles. Today it has a solid organizational structure consisting of a legal and administrative staff with nearly 800 professionals in the cities of São Paulo, Rio de Janeiro and Brasília. For the Institute, it provided, in the reporting period, legal advice on certificates and legal documents required by the nonprofit sector and it also advised the organizations on laws governing the nonprofit sector on taxation, tax incentives, income generation and intellectual property law.
PWC A firm that operates globally and offers clients from all sectors Auditing, Tax, Corporate Transactions and Consulting services. Through its partnership with the Institute, PwC audited the accounts of CEAP. During the auditing process, CEAP revised some of its practices and made improvements to its financial statements. This is the first time that CEAP has been audited by one of the sector’s leading firms.
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INVESTORS The Carlyle Brazil Institute also benefits from companies that contribute financially to the initiatives developed together with the supported NGOs, whether through campaigns staged with their customers or through regular contributions made regardless of specific funding drives. In addition to the companies of The Carlyle Group, the employees of the parent company in the United States and the subsidiary in Brazil have also invested time and money in the Institute.
GROUP COMPANIES: RI HAPPY / PBKIDS These two Carlyle Group portfolio companies are Brazil’s leading toy retailer with hundreds of stores located across the country. They stand out for their personalized service, product variety and competitive prices. In the reporting period, they organized campaigns, such as the one staged at Christmas time with their store customers who spent more than R$90. If these shoppers paid an extra R$2, they received a gift from the store while contributing to the organizations assisted by the Carlyle Brazil Institute. In addition to the campaigns, the company also supports the Institute through monthly donations.
TOK & STOK
A reference in furniture and decoration in Brazil, Tok&Stok is present in various states across the country and is known for offering quality design at low prices and for selling exclusive and functional products. This Carlyle Group portfolio company in Brazil stocks more than 12,000 items inspired by the latest international trends in decoration. In the partnership with the Institute, it staged a campaign with shoppers at its 36 stores in 2014 called “Donation at the Checkout”, which encouraged customers to make a donation of R$5, R$10 or R$15 upon making their purchase. The funds raised went towards the NGOs supported by the Carlyle Brazil Institute.
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CVC CVC is the largest tour operator in Latin America and it has transformed the Brazilian tourism market with its innovative strategies, such as chartering planes and adopting a retail model for selling its products. The company makes a monthly donation to support the initiatives run by the Institute with the assisted NGOs.
PARTNER COMPANIES The funding received through the partnership with institutions such as the Credit Suisse Hedging Griffo Institute, Deutsche Bank and Bank of America Merrill Lynch to support the selected NGOs stands at approximately R$450,000.
BANK OF AMERICA MERRILL LYNCH One of the world’s leading financial institutions that works with 140,000 companies in nearly 150 countries, each with their own challenges and opportunities. It offers financial products and services that are tailored to the needs of each client. Bank of America Merrill Lynch has also raised funds – from its employees and clients – to invest in the NGOs supported by the Carlyle Brazil Institute in accordance with the strategic planning developed for each one.
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CREDIT SUISSE HEDGING-GRIFFO INSTITUTE The primary social investment of the bank Credit Suisse in Brazil. Its goal is to contribute to the development of the country through education. In June of 2014, it donated funds to CEAP.
DEUTSCHE BANK Deutsche Bank has been in Brazil for more than 100 years. With a strong global presence, it has commercial and investment portfolios, and operates primarily handling mergers and acquisitions and capital market operations. Its clients include major national and international companies, in addition to financial institutions and local and foreign investors. Through the Carlyle Brazil Institute, it donated to CEAP in 2014.
TECNISA Active in the Brazilian real estate market for 37 years, Tecnisa is today one of the leading companies in this sector and it is known primarily for innovating on all fronts. It has projects in different regions of the country, in cities such as Brasília, Curitiba, Fortaleza, Manaus, São José dos Campos, Salvador, Santos and São Paulo. The financial support it gave to the Carlyle Brazil Institute was made through Bank of America Merrill Lynch.
REVENUE VS. INVESTMENT (In Reais)
RAISED
SERVICES
4.300.000,00
CASH
2.286.003,96
TOTAL
6.586.003,96
SERVICES
4.300.000,00
CASH
598.000,00
INDIRECT INVESTMENT
157.000,00
INVESTED
TOTAL 16
5.055.000,00
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OUR INVESTMENTS
worked on its image in various regional and national media, helping it become better known and, primarily, recognized on the market for the important social impacts of the project it runs. By doing so, CEAP began to attract the attention of potential partners and investors. This part of the initiative was handled by the public relations agency MSLGROUP Andreoli, another Carlyle Brazil Institute partner that supports both the Institute itself and the communication actions of the selected NGOs. Meanwhile, the advertising agency and Institute partner Publicis Brasil identified together with the NGO the need to work on developing a new visual identity and streamlining its strategic communication
ABOUT CEAP CEAP (Centro Educacional Assistencial Profissionalizante) is a vocational technical school located in the district of Pedreira, in the southside of the city of São Paulo. Founded in 1985 by OSUC – Obras Sociais, Universitárias e Culturais, an NGO that offers free courses to young people aged between 10 and 18 who are properly enrolled in regular schooling and are at greater social risk. Nearly 580 young people are currently taking classes at CEAP, which has already benefited more than 5,000 students since its foundation. Its main distinction lies in the combination of hard and soft skills in a pedagogical framework.
– changing CEAP’s mission, vision and values – thereby reinforcing the work of building the image of the NGO on the market.
PROSPECTING PARTNERS AND FUNDRAISING The hiring of a professional specializing in the nonprofit sector, with the mission to bring in new partners and raise funds for CEAP, was one of the most salient initiatives enabled by the partnership with the Carlyle Brazil Institute in 2014. The professional, in the capacity as director of Institutional Development, a department created last year, is responsible for fundraising, communication and the institutional relationship of the NGO, which permits the full integration of
The new prospects for development created for CEAP by the Carlyle Brazil Institute were reflected in a series of changes at the NGO over the course of 2014. Focusing on the goal to make CEAP self-sustainable, initiatives were developed to strengthen the brand and introduce more effective governance procedures. All this was identified based on a 3-5 year strategic plan developed based on the needs identified by the NGO. The preparation of this plan was facilitated by the Carlyle Brazil Institute and conducted by Maksen Consulting in partnership with the management of the NGO. As a result of this, CEAP 18
each department’s actions. The staff at CEAP also underwent a series of training courses in 2014 on topics such as communication and prospecting. Some of these courses were funded by the partnership with the Carlyle Brazil Institute and the rest were provided for free by the Institute partner companies.
BEFORE THE PARTNERSHIP WITH THE INSTITUTE
Contribute to the growth of people and families so they can fulfill their mission in life
MISSION
BEFORE THE PARTNERSHIP WITH THE INSTITUTE To be an educational model with a Christian perspective that contributes to the betterment of society
VISION
BEFORE THE PARTNERSHIP WITH THE INSTITUTE
VALUES
Family, Training, Virtues
AFTER Create the conditions for educating complete citizens who can transform the world through their work, performed at all times at the service of individual, people and society
AFTER To be an institution that serves as a catalyst for human development, by integrating family, teacher and student in the pedagogical framework
AFTER
Family development, Respect for personality and singularity, Continuous growth of virtues, Consistency of attitudes and behaviors
NEW LOGO DESIGN OF CEAP Before
After
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“The partnership with the Carlyle Brazil Institute is very different from any other support that CEAP has received since its foundation, more than 30 years ago. It has a very important focus on the professionalization of the fundraising, so we can achieve sustainability. In 2014, we advanced on various fronts, with the creation of an institutional development department, and the development of fundraising projects and communication initiatives geared towards enhancing the positive exposure of CEAP in the media and, consequently, in the market. The Institute is also helping us take our mission, vision and values to the level we want”. Marcos Fernando Melo, Executive director at CEAP “The format of the partnership with the Carlyle Brazil Institute is fully aligned with our expectations of achieving the financial sustainability of CEAP. It is a partnership in the broadest sense of the word, since it is truly a joint effort, with a focus on the ongoing development of the work conducted by CEAP”. Roberto Ueda, educational director of CEAP
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RESULTS IN NUMBERS Over the course of 2014, 150 companies of various sizes and from different sectors were prospected.
41%
5%
of these companies are still contacts for future partnerships.
of these contacts were converted into partnerships in 2014, totaling seven new supporters for CEAP.
Two of CEAP’s projects were approved by the Municipal Fund for the Rights of Children and Adolescents of the Municipal Government of São Paulo – FUMCAD. They are the projects “New Paths: Professional Qualification and Training in Industrial Electricity for adolescents from Pedreira” and “Connected to a better future. Professional qualification and training in basic and applied computing for adolescents from Pedreira”.
82%
of the fundraising target established for 2014 was met in just six months.
In the reporting year, 564 students attended two different courses: Basic Vocational Training, for students enrolled in the 6th to 9th grade of Primary Education, and Technical Vocational Training, which is recognized by the Ministry of Education and Culture, for students who attend Secondary Education at a regular school. SCIENCE FAIR This main event staged by CEAP, considered an important tool for publicizing the work of the NGO, attracted more than 4,500 visitors – namely students, alumni, companies and the
community in general – and presented more than 70 projects developed by the students. As a result of the public and press relations work conducted by MSLGROUP Andreoli, the event was featured on the SPTV daily news program of the Globo television network.
AUDIT Understanding the importance of having a prestigious firm audit the financial results of the NGO and how important this is to successful fundraising, the Institute enlisted the support of its partner the consulting and auditing firm PwC, which audited all the results reported by CEAP for the year.
CEAP PARTNERSHIPS ENABLED BY THE CARLYLE BRAZIL INSTITUTE Credit Suisse - In June 2014, the Credit Suisse HedgingGrifo Institute donated funds to train and qualify students enrolled at the Business Administration course at the NGO. Deustche Bank – The financial institution sealed a oneyear partnership with CEAP to implement initiatives such as the IT Assistant course at the NGO, to train and qualify 36 young people.
FUNDS DONATED OVER THE YEAR: R$ 1.700.000,00 21
VERDESCOLA INSTITUTE
The executives from the Carlyle Brazil Institute, together with the NGO, put into place a series of actions to achieve the long-term goals of the Verdescola Institute: the development of a Quality Program, Replicability of the Methodology and Financial Sustainability. The starting point was to conduct a detailed study of the region where the NGO is located, to identify the demands and opportunities to achieve the desired long-term results. This study was done by the strategic consulting firm Mckinsey &Co., one of the Carlyle Brazil Institute’s partners. Some of the previously identified needs were emphasized in the study. These are: to train the staff, to structure the Financial Department and to support the NGO to improve its infrastructure.
ABOUT THE VERDESCOLA INSTITUTE
Staff training: This included the hiring – and remuneration – of a Project Manager, the development of an Educational Policy Plan and the training of staff by area.
Caters to approximately 620 children, young people
Of the 31 employees involved in the Verdescola Institute’s
and adults in socially vulnerable situations through
projects, 21 received training through courses with experts
socio-educational activities that focus on topics such
in each area and also specific training sessions. Additionally,
as environmental education, citizenship, reading, sport
the training project included visits by staff to 11 institutions
and culture. It also offers handicraft workshops that
and four museums, in educational excursions to the city of
can provide a new source of income for mothers from
São Paulo.
the community, as well as helping improve the quality of education for young people and adults in the region.
The initiative also contributed, in 2014, to the implementation of new learning methodologies and to Personalized Learning, which gives the young people more independence in the knowledge process. After the development of the Educational Policy Plan, it
The Verdescola Institute was one of the NGOs selected
was possible to create planning processes, records and
given the seriousness of the work that it has been
assessments, and also to restructure the routines, which
doing since 2008 in the community of Vila do Sahy, on
were divided into four learning blocks: Communication,
the São Paulo state coastline, promoting human and
Arts, Languages, and Sport and the Environment. As a
community development. In 2014, the NGO opened its
result, it was possible to integrate the organization’s
new headquarters building, increasing its capacity to
different departments, areas of knowledge and
cater to more people, which had also been impaired
educators.
due to the lack of proficiency of the staff. Aware of
The staff training by area, which included an
these challenges, the Carlyle Brazil Institute began
Accountability Course for Incentivized Projects, has
working with the organization in 2014, supporting
lent efficiency to the accountability process and
it primarily in the qualification of its technical staff,
streamlined the communication between the financial
in the reduction of its high employee turnover rates
and procurement departments.
and in the development of an Educational Policy Plan that included activities to create planning processes, records and assessments, and to organize the routines. 22
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“The Carlyle Brazil Institute is already part of our history and each new partner we secure through it is a major opportunity for us to make improvements in different areas, which has been essential for the smooth running of our operations. The very close contact we have with the leadership of the Institute is also a distinctive aspect of this partnership, since it allows us to work in lockstep. We have already come a long way and learned a lot since we became part of this project, but I think we are going learn even more in the upcoming years of the partnership. It will, once again, be a time of rapid growth for the Verdescola Institute”. Maria Antônia Civita, president of the Verdescola Institute 24
STRUCTURING OF THE FINANCIAL DEPARTMENT / IMPLEMENTATION OF AN ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM
NGO, from 582 in 2013 to 624 in 2014 - growth of 7.2%.
NEW HEADQUARTERS The
structuring
of
the
Verdescola
Institute’s
financial system required some important actions from the Carlyle Brazil Institute in partnership with the management of the NGO. These included the preparation for the first time of an annual budget, the definition of the fundraising amounts necessary, the unification of the old spreadsheets and the establishment of information security. Speed in obtaining information, the ability to identify individual costs of projects and better management of the financial resources of the Verdescola Institute were some of the results achieved through the initiatives taken in 2014. The implementation of the ERP system, for managing information on operational, administrative and management processes, was also made possible by the partnership with the Carlyle Brazil Institute. The main goal was to centralize and manage the flow of information in the process of developing the NGO’s activities.
INSTALLATION OF A 10 MEGA LINK Among the various benefits derived from the installation of a dedicated link at the Verdescola Institute, it is worth mentioning the increase in the number of simultaneous users (as many as 60 students at a time), the reduction in the amount of telephone lines for the Internet and the establishment of a distance learning system.
INCREASE IN THE NUMBER OF ASSISTED PEOPLE These initiatives also contributed, directly or indirectly, to increasing the number of people assisted by the
The year 2014 represents a landmark in the history of the Verdescola Institute, with the inauguration of its new 3,000 square meter facilities, which house all the organization’s activities that were previously conducted in five houses and a warehouse that it rented in the community. The site has computer labs, reading rooms, a library and supplementary income generation rooms where workshops taken place for the mothers, among other areas. The Carlyle Brazil Institute was responsible for the whole communication plan for the inauguration of the new headquarters, helping Verdescola to gain even more prominence in the regional and national press. The work included the development of an integrated Visual Communication plan by Publicis, with exposure in different types of media. Through the Carlyle Brazil Institute, the agency was also responsible for creating the visual identity of the NGO’s new headquarters, as well as the new brand identity used in all of its institutional material. The Verdescola Institute benefited too from an intense public and press relations drive for the inauguration of the new headquarters, conducted by MSLGROUP Andreoli. In addition to the external communication plan, actions were taken with a view to building relations with all the organization’s stakeholders, mapping the spokespeople and producing and releasing all the content on the topic.
Funds donated over the year: R$ 1.800.000,00
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ABOUT CASD VESTIBULARES Created in the 1970s by undergraduate students from the Aeronautics Institute of Technology, CASD Vestibulares offers free preparatory courses for ‘vestibulares’ (university entrance examinations) to underprivileged young people from the city of São José dos Campos, in the state of São Paulo. It currently has the highest pass rate of all the evening courses from the whole Vale do Paraíba region. It enlists more than 100 volunteers and prepares 520 students annually to compete for places in some of the most selective universities in the country.
The main focus of the Carlyle Brazil Institute’s work with CASD Vestibulares last year was to guarantee the continuity of the activities of Casdinho - the arm of the NGO that prepares low-income students in the 8th and 9th grade for the entrance examination of the Embraer Juarez Wanderley College and for the science olympics that are held in Brazil.
Therefore, besides offering strategic consulting services for the work of the NGO over the next few years, the Carlyle Brazil Institute assured that Casdinho could continue giving its course in 2014, contributing to its mission to diminish the differences between the opportunities available to young people from public and private schools.
This is because the executives at the Institute identified that the headquarters of Casdinho was about to be closed for non-payment of rent. The main support from the Institute came in the form of funds to resolve this issue until another way of funding the course’s headquarters could be set up.
FUNDS DONATED OVER THE YEAR: R$ 400.000,00
The Carlyle Institute team that organized the work with the NGO also delivered a strategic plan for the next 3 to 5 years, which was developed by Cosin Consulting, a partner of the Institute. The organization also benefited from consulting in the area of communication, provided by Publicis, which included the remodeling of the logos of CASD Vestibulares and Casdinho, and legal assistance on the rental contract for the new headquarters of Casdinho, in addition to the donation of teaching materials, by Pinheiro Neto Advogados, both partners of the Institute.
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WHY INVEST The Carlyle Brazil Institute is one of the few social initiatives that offers more than just financial resources to Non-Governmental Organizations operating in Brazil. By applying its Private Equity expertise in the partnerships established with organizations in the field of education, it also helps them make significant improvements to their administrative and financial management that are essential, in the medium and long term, to make them stronger and self-sustainable. Using the Private Equity methodology, the Carlyle Brazil Institute works together with the management of the selected NGOs for a period of 3 to 5 years, to help them devise the best strategy and action plans with a view to the ongoing development of these organizations. The transfer of knowledge occurs through respected partners of the Carlyle Brazil Institute in the legal, strategic consulting, auditing, advertising and public relations fields. Always in keeping with the aspirations of the NGOs and respecting each one’s DNA. As such, besides providing the necessary financial support, the Institute gives these organizations the opportunity to acquire experience in areas that are extremely important for guaranteeing the continuity of their initiatives. By launching a pioneering project in Brazil and the world, the Carlyle Brazil Institute has started to reshape the work of the nonprofit sector and presented new alternatives for the education sector, which is so important to transform the lives of people and of society as a whole. Contact us by email at carlyle-brazil-institute@carlyle.com or by telephone at +55 (11) 3568-7700 and discover what you can do to further expand the scope of the projects that have helped hundreds of families build a more dignified life for themselves.
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FINANCIAL STATEMENTS CARLYLE BRAZIL INSTITUTE December 31st, 2014 with Independent Auditor’s Report
CONTENTS 1 2 3 4 5 6 7 8
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Independent auditor’s report on Financial Statements Audited financial statements Balance sheets Statements of surplus Statements of comprehensive surplus Statements of changes in net worth Cash flow statements Notes to financial statements
31
A free translation from Portuguese into English of Independent Auditor’s Report on financial statements prepared in Brazilian currency in accordance with accounting practices adopted in Brazil.
INDEPENDENT AUDITOR’S REPORT ON FINANCIAL STATEMENTS
BOARD OF TRUSTEES AND DIRECTORS
CARLYLE BRASIL INSTITUTE We have audited the accompanying financial statements of Associação Carlyle (“Entity”), which comprise the balance sheet as at December 31, 2014, and the related statements of surplus, statements of comprehensive surplus, statements of changes in net worth and cash flow statements for the year then ended, and a summary of significant accounting practices and other explanatory information.
MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting practices adopted in Brazil and for the internal controls management determines as necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
AUDITOR’S RESPONSIBILITY Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Brazilian and international standards on auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether these financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the preparation and fair presentation of the Entity’s financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control. An audit also includes evaluating the appropriateness of accounting practices used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
OPINION ON THE FINANCIAL STATEMENTS In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Associação Carlyle at December 31, 2014, its operating surplus and cash flows for the year then ended, in accordance with accounting practices adopted in Brazil, which comprise the pronouncements, interpretations and guidance issued by Brazilian Financial Accounting Standards Board (CPC) and the guidance set out in Interpretation ITG No. 2002 - Not-forProfit Organizations, approved by Brazil’s National Association of State Boards of Accountancy (CFC). São Paulo, March 20th, 2015. ERNST & YOUNG Auditores Independentes S.S. CRC-2SP015199/O-6 Anderson Pascoal Constantino Accountant - CRC-1SP190451/O-5
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Rafael Doratioto Oliveira Accountant - CRC-1SP291026/O-3
BALANCE SHEETS Years ended December 31st, 2014 and 2013 (In Reais)
ASSETS Current assets
Note
Cash and cash equivalents Short term investments
Noncurrent assets
4
5
Property and equipment, net
Total assets
12/31/2014
12/31/2013
10
10
1.159.402
1.085.933
1.159.412
1.085.943
3.005
3.884
3.005
3.884
1.162.417
1.089.827
12/31/2014
12/31/2013
49
80
LIABILITIES AND NET WORTH Current liabilities
Note
Trade accounts payable
Payroll and related charges
6
5.782
7.413
Tax payable
7
-
59.768
Accrued vacation and related charges
8
10.878
10.383
16.709
77.644
1.145.708
1.012.183
1.145.708
1.012.183
Total liabilities and net worth
1.162.417
1.089.827
Net worth Accumulated surplus
9
See accompanying notes.
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STATEMENTS OF SURPLUS
Years ended December 31st, 2014 and 2013
(In Reais)
REVENUES Note Contributions and donations received
10
Gains from short-term investments
2014
2013
874.438
1.133.030
101.157
30.405
975.595
1.163.435
(598.217)
(30.000)
(598.217)
(30.000)
377.378
1.133.435
Operating Costs Donations
11
Gross surplus Operating expenses Personnel expenses
12
(183.955)
(119.379)
General and administrative
13
(37.015)
(47.141)
Financial expenses
14
(22.883)
(13.697)
(243.853)
(180.217)
133.525
953.218
Surplus in the year
STATEMENTS OF COMPREHENSIVE SURPLUS
Years ended December 31st, 2014 and 2013 (In Reais)
Surplus in the year Other comprehensive surplus
Comprehensive surplus for the year
See accompanying notes.
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2014
2013
133.525
953.218
-
-
133.525
953.218
STATEMENTS OF CHANGES IN NET WORTH
Years ended December 31st, 2014 and 2013 (In Reais) Net worth
Accumulated surplus
Total
Balances at December 31, 2012
-
58.965
58.965
Surplus in the year
-
953.218
953.218
Balances at December 31, 2013
-
1.012.183
1.012.183
Surplus in the year
-
133.525
133.525
Balances at December 31, 2014
-
1.145.708
1.145.708
2014
2013
133.525
953.218
879
513
134.404
953.731
Other assets
-
166
-
166
CASH FLOW STATEMENTS
Years ended December 31st, 2014 and 2013 (In Reais)
CASH FLOW FROM OPERATING ACTIVITIES Surplus in the year Adjustments due to: Depreciation and amortization (Increase) decrease in operating assets:
Increase (decrease) in operating liabilities: Trade accounts payable
(30)
(324)
(1.631)
7.413
(59.768)
59.768
494
10.383
(60.935)
77.240
73.469
1.031.137
(73.469)
(1.026.880)
-
(4.397)
(73.469)
(1.031.277)
-
(140)
Cash and cash equivalents at beginning of year
10
150
Cash and cash equivalents at end of year
10
10
Payroll and related charges Tax payable Accrued vacation and related charges Net cash provided by operating activities
Cash flow from investing activities Short term investments Acquisition of property and equipment Net cash used in investing activities Increase in cash and cash equivalents
See accompanying notes.
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NOTES TO FINANCIAL STATEMENTS
Years ended December 31st, 2014 and 2013 (In Reais)
1. OPERATIONS Associação Carlyle (“Entity” or “Association”) was established on August 5, 2011 as a not-for-profit organization primarily engaged in promoting and supporting initiatives which contribute to promoting education and culture, sustainable development, citizenship, human rights and sports. As a not-for-profit organization, the Association is exempt from Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL), under the terms of articles 12 and 15 of Law No. 9532/97 (as amended by Law No. 9718/98) and article 174 of Decree No. 3000, of March 26, 1999 (Income Tax Regulations - RIR), as long as the requirements set out in law No. 9790/99 are complied with, to wit: The Entity must pay no compensation whatsoever to its Board of Trustees or directors for the services provided (except compensation paid to directors not appointed in the Entity’s charter, whose relationship with the Entity is strictly of an employment nature); The Entity must fully apply its funds in maintaining and developing its social purpose; The Entity must fully record its revenues and expenses and comply with all formal requirements which ensure that these revenues and expenses are fairly recorded; The Entity must preserve in good order, for a five-year period as from issue date, the documents which evidence the origin of its revenues and settlement of its expenses, as well as any other acts or operations which may change the Entity’s net worth; The Entity must file, on an annual basis, its Income Tax Return, in accordance with the provisions issued by the Brazilian IRS; The Entity must pay the taxes withheld on salaries paid and social security contribution of employees, and also comply with the accessory obligations derived therefrom. The Association is subject to 1% levy referring to federal contribution on gross revenue for Social Integration Program (PIS) on monthly payroll and must compute and pay Social Security Tax (INSS) and Unemployment Compensation Fund (FGTS) on payroll.
2. PRESENTATION OF FINANCIAL STATEMENTS The financial statements for the years ended December 31, 2014 and 2013 are prepared in accordance with accounting practices adopted in Brazil, which comprise the pronouncements, interpretations and guidance issued by Brazilian Financial Accounting Standards Board (CPC) and the guidance set out in Interpretation ITG No. 2002 - Not-for-Profit Organizations, approved by Brazil’s National Association of State Boards of Accountancy (CFC). These financial statements were prepared in accordance with several measurement bases used in accounting estimates. Accounting estimates involved in the preparation of the financial statements were based on both objective and subjective factors and use of professional judgment by Management to determine the adequate amounts to be recorded in the financial statements. Significant items subject to these estimates and assumptions include selection of
36
useful lives of property and equipment, and their recoverability in operations, credit risk analysis in order to determine the allowance for doubtful accounts, as well as the assessment of other risks to determine other provisions, including provision for legal and administrative proceedings. Settlement of transactions involving these estimates may result in amounts significantly different from those recorded in the financial statements due to the probabilistic treatment inherent in the estimate process. The Entity reviews its estimates and assumptions at least on an annual basis. The Entity has adopted all the standards, revised standards and interpretations issued by Brazilian FASB (CPC) that were effective as at December 31, 2014. The financial statements were prepared under the historical cost convention, except for certain assets and liabilities classified as financial instruments, which are measured at fair value. Authorization to conclude the preparation of the accompanying financial statements was provided by the Executive Board on March 20, 2015.
3. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES Significant accounting practices adopted by the Entity for preparing these financial statements are as follows:
A) CALCULATION OF SURPLUS - REVENUES AND EXPENSES Revenues from contributions and donations are recorded on an accrual basis, as determined by CFC Interpretation No. 2002 (Not-for-profit entities), by means of a timely document and actual receipt of the donation.
B) ACCOUNTING ESTIMATES The preparation of financial statements in accordance with accounting practices adopted in Brazil requires the exercise of judgment by management in determining and recording certain estimates, which are established by use of assumptions referring to future events. Significant items recorded based on accounting estimates include provisions for the adjustment of assets to probable realizable or recoverable values, marketable securities at market value, provisions for indemnity, and provisions for losses in general. Settlement of transactions involving these estimates may result in amounts significantly different from those recorded in the financial statements due to the uncertainties underlying their estimation process. Entity management reviews its estimates and assumptions on an annual basis.
C) CASH AND CASH EQUIVALENTS These include cash, bank balances, and short-term investments with immediate liquidity (all bank accounts and short-term investments readily redeemable are considered cash equivalents) and subject to low risk of change in market value.
D) SHORT TERM INVESTMENTS Financial investments classified as marketable securities substantially comprise government loan funds.
E) OTHER ASSETS AND LIABILITIES Assets are recognized in the balance sheet when their future economic benefits are likely to flow to the Entity, and their cost or value can be reliably measured. Liabilities are recognized in the balance sheet when the Entity has a legal or constructive obligation arising from past events, the settlement of which is expected to result in an outflow of economic benefits.
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Provisions are recorded reflecting the best estimates of the risk involved. Liabilities payable to suppliers and social and labor charges are recorded at original amounts. Assets and liabilities are classified as current when their realization or settlement is likely to occur within the next twelve months. They are otherwise stated as noncurrent.
F) PROPERTY AND EQUIPMENT, NET These items are represented by Entity operating assets, registered at acquisition cost or at their original amount, less accumulated depreciation, calculated by the straight-line method at rates which take into consideration the useful life of the assets at the annual rates mentioned in Note 5, and subject to analysis for their recoverability in operations.
G) IMPAIRMENT OF ASSETS Management annually tests the net book value of assets in order to determine whether there are any events or changes in economic, operating, or technological circumstances that may indicate impairment. When such evidence is found and the net book value exceeds the recoverable amount, a provision for impairment is set up to adjust the net book value to the recoverable amount.
H) FUNCTIONAL AND REPORTING CURRENCY The Entity’s functional currency is the Real, which is the same currency used to prepare and present its financial statements.
I) INCOME AND SOCIAL CONTRIBUTION TAXES Being a not-for-profit organization, the Entity enjoys the benefit of tax-exemption referring to federal taxes, under articles 167 to 174 of the Income Tax Regulations approved by Decree No. 3000 of March 26, 1999 and article 195 of the Brazilian Federal Constitution.
J) SOCIAL CONTRIBUTION TAX ON GROSS REVENUE FOR SOCIAL INTEGRATION PROGRAM (PIS) Being a not-for-profit organization, the Entity is subject to PIS levy, calculated on payroll and at the rate of 1%, under Law No. 9532/97.
K) SOCIAL CONTRIBUTION TAX ON GROSS REVENUE FOR SOCIAL SECURITY FINANCING (COFINS) Being a not-for-profit organization, the Entity is exempt from paying COFINS on revenues from its own activities, under Law No. 9718/98 and No. 10833/03.
L) PROVISIONS FOR LEGAL AND ADMINISTRATIVE PROCEEDINGS The Entity recognizes provisions for tax, civil and labor proceedings. Assessment of the likelihood of loss includes an evaluation of available evidence, the hierarchy of laws, available case law, recent court decisions and their relevance in the legal system, as well as the opinion of external legal advisors. The provisions are reviewed and adjusted to take into account changes in circumstances, such as the applicable statute of limitations, outcomes of tax inspections, or additional exposures that may be identified based on new issues or court decisions.
M) FINANCIAL INSTRUMENTS Financial instruments are only recognized as from the date when the Entity becomes party to the contractual provisions of referred to financial instruments. Upon recognition, they are initially registered at fair value plus transaction costs directly attributable to their acquisition or issue.
38
N) CASH FLOW STATEMENTS The cash flow statements were prepared and presented in accordance with Technical Pronouncement CPC 03 – Cash Flow Statements, issued by the Brazilian FASB (CPC).
O) INSURANCE The Entity takes out life insurance for its employees. Insurance expenses are recorded on a straight-line basis over the term of the policies.
4. SHORT TERM INVESTMENTS These refer to short-term investments substantially comprised of federal government bonds - Financial Treasury Bills (LFT) indexed at the Interbank Deposit Certificate (“CDI”) variation.
5. PROPERTY AND EQUIPMENT, NET Cost
IT equipment
Balance at December 31st, 2012
-
Additions
4.397
Write-offs
Balance at December 31st, 2013
Balance at December 31 , 2014
4.397 -
4.397
4.397
-
-
-
-
st
-
-
Additions Write-offs
Total
4.397
4.397
Accumulated depreciation Balance at December 31st, 2012
-
-
(513)
(513)
-
-
Balance at December 31 , 2013
(513)
(513)
Additions
(879)
(879)
Write-offs
-
-
Additions Write-offs st
Balance at December 31st, 2014
(1.392)
(1.392)
3.884
3.884
Property and equipment, net Balance at December 31st, 2013 Balance at December 31 , 2014 st
3.005
3.005
IT equipment is depreciated on a straight-line basis over 5 years. As at December 31st, 2014 and 2013, the Association had no property and equipment items given in guarantee of any nature.
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6. PAYROLL AND RELATED CHARGES 12/31/2014
12/31/2013
INSS payable
471
3.007
FGTS payable
1.257
1.034
3.844
2.521
210
851
5.782
7.413
Withholding Income Tax (IRRF) payable PIS on payroll
7. TAX PAYABLE Until May 15th, 2014, the Entity was subject to Estate and Gift Tax - Estate and Gift Tax (ITD/ITCMD) in accordance with Law No. 10705 of December 28th, 2000. Individual donations under 2,500 S達o Paulo State Fiscal Units (UFESP) are not subject to this levy. The ITD/ITCMD base is the total amount donated by a company or individual over the fiscal year. Even if the individual donations made by a company or individual are under 2,500 UFESPs (therefore exempt), in case the total donated by this company or individual exceeds 2,500 UFESPs in the fiscal year, the calculation base shall be the total amount received from this sponsor. In accordance with Tax Administration Coordination Office (CAT) Proceeding No. 51224-141075/2014 filed on January 30th, 2014, the Entity is exempt from paying the Estate and Gift Tax - Estate and Gift Tax (ITD/ITCMD) in the period from May 15th, 2014 to May 14th, 2015, under the terms of paragraph 2 of article 6 of Law No. 10705/00, as worded by Law No. 10992/01, and paragraph 1 of article 6 and article 9 of Decree No. 46655/02.
8. ACCRUED VACATION AND RELATED CHARGES 12/31/2014
12/31/2013
Accrued vacation pay (including one-third vacation bonus)
8.148
7.778
Provision for vacation INSS
2.078
1.963
Provision for vacation FGTS
652
622
10.878
10.383
9. NET WORTH This is comprised of surpluses accumulated, whose amounts were (and will be) reinvested in the expansion and maintenance of Entity operations.
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10. CONTRIBUTIONS AND DONATIONS RECEIVED Operating income directly received by the Association derives basically from contributions and donations.
2014
2013
210.000
200.000
182.520
140.530
Carlyle Brasil Consultoria em Investimentos Ltda.
-
43.700
Bank of America Merrill Lynch Banco Múltiplo S.A.
42.565
32.840
Charities Aid Foundation of America
80.920
69.399
-
108.187
CVC Brasil Operadora e Agência de Viagens S.A. Estok Comércio e Representações S.A
Brazil Foundation
Ri-Happy Brinquedos S.A. 360.000
389.924
Other
5.974
195.754
( - ) ITCMD (Note 7)
(7.541)
(47.304)
874.438
1.133.030
11. DONATIONS In 2014, the following donations were made by the Entity, pursuant to a careful analysis of the projects and purposes of each institution.
2014
2013
Instituto Educadores sem Fronteiras
-
7.500
AFESU - Associação Feminina de Estudos Sociais e Universitários
-
7.500
Associação Crescer no Campo
-
7.500
Associação Instituto ProA
-
7.500
14.116
-
175.825
-
408.276
-
598.217
30.000
Associação Curso Vencedor OSUC – Obras Sociais Universitárias e Culturais Instituto Verde Escola
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12. PERSONNEL EXPENSES
2014
2013
Salaries
90.232
68.667
Vacation pay
19.142
7.778
13th monthly salary
11.303
5.833
Health care plan
21.551
8.532
587
319
INSS
29.409
20.981
FGTS
9.226
6.582
PIS on payroll
1.521
687
Health Medical Control Program
984
-
183.955
119.379
2014
2013
-
11.020
Insurance plan
13. GENERAL AND ADMINISTRATIVE EXPENSES
Legal advisory services Printing services
3.549
12.848
Advertising and promotion
6.500
809
Telephone and Internet
3.765
1.583
209
624
Transportation and parking
4.208
5.996
Meals
13.952
9.339
879
513
3.953
4.409
37.015
47.141
Mail and express mail
Depreciation Other
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14. FINANCIAL EXPENSES
2014
2013
18.405
-
3.882
12.628
Tax on Financial Transactions (IOF)
516
1.040
Bank charges
80
29
Loss on short-term investments Fine and interest on late payment of ITD/ITCMD
22.883
13.697
Since the Entity is not subject to income tax payment, income tax withheld on gains from short-term investments amounting to R$ 18,405 will not be recovered and shall be considered a loss.
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