Investor Presentaiton
From
From
From
Up to
one to
three
five
From
one
three
to five
to ten
year
years
years
years
ten
years
Total
At December 31, 2021
Borrowing (i)
1,826
2,331 10,400
14,869.
6,235 35,661
Derivative financial
instruments
556
272
123
Lease liabilities
371
235
277
102
637
Confirming payables
3,405
Trade payables
6,914
Dividends payable
1,624
29 1,082
31 1,551
3,405
6,914
1,624
Related parties
75
Use of public assets
128
181
326
829
14,824
3,094 11,126 16,437
75
1,960 3,424
8,255 53,736
6.1.1. Derivatives contracted
Accounting policy
Initially, derivatives are recognized at fair value on the date of their contrac-
ting and are subsequently re-measured at their fair value.
The fair value of financial instruments that are not traded on active markets
is determined using valuation techniques. The Company and its subsidiaries
use their judgment to choose between different methods and to define
assumptions that are mainly based on the market conditions existing at the
balance sheet date.
At December 31, 2020
Borrowing
2,258 1,869 11,654 13,418
5,998 35,197
Derivative financial
instruments
514
334
635
Lease liabilities
253
208
169
1,269
173
Confirming payables
2,380
Trade payables
5,404
171 2,923
55
858
2,380
5,404
Dividends payable
44
44
Related parties
11
Use of public assets
100
177
312
828
11
1,213 2,630
10,953
2,599 12,770 15,688 7,437 49,447
(i) For borrowing balances, financial charges are projected until the final maturity of the
contracts. These figures do not consider an adjustment to the fair value of the opera-
tions contracted in Law No. 4131/1962.
The method for recognizing the resulting gain or loss depends on whether
the derivative is designated or not as a hedge instrument in cases of adop-
tion of hedge accounting.
This being the case, the method depends on the nature of the item being
hedged. The Company and its subsidiaries adopt hedge accounting and
designate certain derivatives as:
(i) Cash flow hedge
With a view to ensuring a fixed operating margin in reais for a portion of the
production of the metal businesses, the subsidiaries enter into commodity
forward contracts (zinc, aluminum and nickel) on sales of certain commodi-
ties combined with the sale of US Dollar forward contracts. There is also the
quotation period hedge, which seeks to equalize the periods between the
purchase of concentrate and the sale of the final product of the non-inte-
grated plants, in order to mitigate exposures. These subsidiaries adopt he-
dge accounting for the derivative instruments entered into for this purpose.
The effective portion of changes in the fair value of derivatives that are
designated and qualify as cash flow hedges is recognized in equity within
Carrying value adjustments. The gain or loss relating to the ineffective por-
tion is recognized as Operating income (expenses). The amounts recognized
134
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