Management Report 2020
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Management Report 2020
ASSETS
Fair value through profit or loss
Cash and cash equivalents
Fair value
Consolidated
Book value
12/31/2020
12/31/2019
Level 2
12/31/2020
1,604,053
Short term financial Investments
Subtotal
663
1,604,716
829,427
55,992
885,419
1,604,053
663
1,604,716
Amortized cost
Trade accounts receivable
207,283
178,405
207,283
Receivables from related parties
8
11
8
Other accounts receivable
33,907
Subtotal
241,198
76,905
255,321
33,907
241,198
Fair value of hedge instruments
Operations with Derivatives
245,372
Subtotal
245,372
TOTAL ASSETS
2,091,286
45,336
45,336
1,186,076
245,372
245,372
2,091,286
LIABILITIES
Liabilities at the amortized cost
Level 2
12/31/2019
829,427
55,992
885,419
178,405
11
76,905
255,321
45,336
45,336
1,186,076
Loans and financing
2,417,283
1,859,766
2,422,429
Suppliers
1,101,769
Payables to related parties
Other accounts payable
Third-party lease liability
Leases to pay
Securities payable
Subtotal
118
176,390
934,284
5,283
12,979
4,648,106
922,000
125
123,584
629,716
225
13,685
3,549,101
1,101,769
118
176,390
934,284
5,283
12,979
4,653,252
1,840,398
922,000
125
123,584
629,716
225
13,685
3,529,733
Fair value of hedge instruments
Derivatives payable
Subtotal
TOTAL LIABILITIES
417,121
417,121
5,065,227
60,873
60,873
3,609,974
417,121
417,121
5,070,373
a) Policy of use, objectives and strategies
60,873
60,873
3,590,606
The objective of the use of financial derivative instruments by the Company
and its subsidiaries is the protection of operating margins. The Company cre-
ated an Executive Risk Management Committee in July 2008 and approved the
Risk Management Policy at the meeting of the Board of Directors on October
29, 2008. The Risk Management Executive Committee is the liaison body be-
tween the Board of Directors and the Company's Executive Board. Its mission
SLC
Agrícola
involves the daily support to the decisions of the Executive Board, the moni-
toring of compliance with the established risk limits and, when appropriate,
the preliminary analysis and evaluation of proposals for adjustments or refor-
mulation of policies or risk limits for subsequent submission to the Board of
Directors for deliberation.
Derivative transactions are carried out with prime financial institutions (insti-
tutions in the country with "Rating" of at least "A" in at least one of the three
main international rating agencies, namely: Moody's, S&P and/or Fitch), ob-
serving limits and exposures to the exchange, commodities and interest risks
of its counterparties on a regular basis.
b) Gains (losses) from financial instruments under parent company and con-
solidated shareholders' equity
Forward contract (NDF) and commodity swap transactions (see note 22.h) are
fixed to protect future sales exposure in dollars. In addition, debt swap oper-
ations aim to protect the future exchange rate variation of dollar loans. These
operations are documented for registration through the hedge accounting
methodology in accordance with CPC 48 and IFRS 9. The Company records in
a specific shareholders' equity account the unrealized effects of these instru-
ments contracted for its own operations or those contracted on a consolidated
basis to cover future sales.
c) Currency risk
In order to protect the sales revenues of the Company and its subsidiaries,
which are subject to exchange rate volatility, financial derivative instruments
are used, whose portfolio basically consists of NDF (Non-Deliverable Forward)
contracts.
These operations are carried out directly with financial institutions, in an over
the counter environment, where there are no margin calls. The impact on the
cash flow of the Company and its subsidiaries occurs only on the date of set-
tlement of the contracts. However, it should be considered that the settlement
of these financial transactions is associated with the receipt of sales, which
are also associated with foreign exchange variation, thus offsetting any gains
or losses in hedging derivative instruments due to exchange rate variations.
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