Consolidation of subsidiaries

3 Months Ended

12 Months Ended

Mar. 31, 2018

Dec. 31, 2017

3.	Consolidation of subsidiaries


At March 31, 2018
Company	Assets		Liabilities		Equity			Net income (loss) for the period			Ownership – %		Level
PagSeguro Brazil		12,158,276		7,848,351		4,309,925			57,768			99,99	Direct
Net+Phone		1,101,314		1,066,680		34,634			(9,323	)		99,99	Indirect
Boa Compra		700,068		679,402		20,666			705			99,99	Indirect
BCPS		1,559		291		1,268			319			99,50	Indirect
R2TECH		3,188		858		2,330			764			51,00	Indirect
BIVA		2,464		2,217		(247	)		(1,174	)		74,93	Indirect
FIDC		259,710		71,357		188,353			6,657			90,00	Indirect

The operational context of the subsidiaries is to be read in conjunction with the annual financial statements for the year ended December 31, 2017.

BIVA:

On January 15 and March 12, 2018, PagSeguro Brazil acquired an additional interest of BIVA (15.12% and 0.50%, respectively), bringing total interest to 74.93% of BIVA’s total share capital (59.31% as of December 31, 2017). The total amount paid for this acquisition was R$4,650. For more details see note 9.

FIDC:

On March 29, 2018, two investors contributed capital in the amount of R$ 20 million in the subsidiary, acquiring only senior and mezzanine quotes PagSeguro Brazil’s equity ownership is 90% in the FIDC as of March 31, 2018 (100% as of December 31, 2017). On March 31, 2018 the share capital of the FIDIC is composed of subordinated quotes, senior quotes and mezzanine quotes. PagSeguro Brasil owns 100% of the subordinated quotes. The senior and mezzanine quotes pay 107% of the Interbank Deposit Certificate (CDI) with annual amortization of interest.

4.	Consolidation of subsidiaries


	At December 31, 2017
Company	Assets		Liabilities		Equity		Net income (loss) for the year			Ownership – %		Level
PagSeguro Brazil		7,553,504		6,686,516		866,988		478,781			99.99	Direct
Net+Phone		1,018,218		974,260		43,958		(8,441	)		99.99	Indirect
Boa Compra		629,246		609,284		19,962		5,715			99.99	Indirect
BCPS		1,236		251		985		429			99.50	Indirect
R2TECH		2,460		894		1,566		1,307			51.00	Indirect
BIVA		2,482		1,730		752		(1,569	)		59.31	Indirect
FIDC		182,163		404		181,759		1,758			100	Indirect

Operations of the subsidiaries

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PagSeguro Brazil: is engaged in providing financial technology solutions and services and the corresponding related activities. PagSeguro Brazil has investments in the following companies:

Net+Phone: Is mainly engaged in acquisition and selling POS (Point of sale) devices and similar items. On July 29, 2016, UOL transferred its investment in Net+Phone to PagSeguro Brazil, as a capital contribution, in the amount of R$ 44,317.

Boa Compra: Allows its clients to operate cross-border transactions where the merchant and consumer are located in different countries across Latin America, Spain, Portugal and Turkey. On April 5, 2011, UBN Internet Ltda. (“UBN”), a subsidiary of UOL, acquired a 51% equity interest in Boa Compra. On July 26, 2013, UBN acquired additional 24% equity interest, increasing its total ownership in Boa Compra to 75%. In May 2016, UBN acquired the remaining 25% equity interest, becoming the owner of 100% of Boa Compra. On July 29, 2016, UBN’s equity interest in Boa Compra was spun off to its parent company UOL. Subsequently, UOL transferred its 100% equity interest in Boa Compra to PagSeguro Brazil as a capital contribution, in the total amount of R$ 12,034.

BCPS: On January 1, 2017, PagSeguro Brazil acquired 99.5% of the share capital and obtained the control of BCPS. BCPS’s main activity is to enable clients of the PagSeguro Brazil Group to operate cross-border transactions where the merchant and the consumer are located in different countries of Latin America, Spain, Portugal and Turkey.

R2TECH: On May 2, 2017, PagSeguro Brazil acquired 51% of the share capital and obtained the control of R2TECH. R2TECH’s main activity is in the information technology industry, focused on the processing of back-office solutions, including sales reconciliation, gateway solutions and services, the capture of credit cards with administrators and acquirers.

BIVA: On October 3, 2017, PagSeguro Brazil acquired a controlling interest of 51.41% in BIVACO Holdings SA, whose main objective is to acquire participations in other companies, commercial or civil, as partner, shareholder or quotaholder, as well as the management of these holdings. In November 2017, PagSeguro Brazil acquired an additional interest in BIVA, bringing our total interest to 59.3% of BIVA’s. BIVA has investments in the following subsidiaries:

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Biva Serviços Financeiros S.A : whose main objective is the intermediation between investors, financial institution and credit borrowers by medium of electronic platform;

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Biva Correspondente Bancário Ltda: whose main objective is to structure financing for small and medium enterprises following the model crowdfunding, in the peer-to-peer modality.

FIDC: On October 4, 2017, FIDC was constituted for the purpose of acquiring payables to third parties held by PagSeguro Brazil (“Assignor”). PagSeguro Brazil consolidates the financial statements of FIDC, which represents an investment fund constituted to finance the growth of PagSeguro Brazil’s early payment of receivables feature. The consolidation is justified by the fact that the risks of default and the responsibility for expenses and administration related to the FIDC are linked to subordinated quotas held by the PagSeguro Brazil.