Management Report 2020
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Management Report 2020
favored by the appreciation of the dollar. Regarding the logistics chain, it is
worth noting that there were no significant disruptions in the operations and
export logistics, as well as in the operations for receiving inputs, which are
already largely acquired.
Regarding firm sales commitments to customers, the Company does not expect
material changes in its composition, since its origin lies in a strong correlation
with the way in which negotiations are carried out and the players chosen as
commercial partners, having not been identified, to date, issues related to
these commitments.
Additionally, at times like this, concerns about cash, financial leverage, cost
efficiency and debts subject to exchange variation are accentuated and, in this
sense, the Company is well positioned to overcome the effects arising from
COVID-19, being possible to highlight also the risk management policy applied
by the Company consistently in recent years. Short- and long-term liquidity are
preserved and, even eventual changes in shipments and receipts, are sized so
that they do not materially affect the Company's financial position. Accordingly,
the Company has not identified any relevant risks in relation to its ability to
continue operating.
2. Summary of significant accounting practices
a) Declaration of accounting
The individual and consolidated financial statements were prepared in accord-
ance with accounting practices adopted in Brazil, which comprise the provi-
sions of corporate legislation, as provided for in Law No. 6404/76 with amend-
ments to Law No. 11638/07 and Law No. 11.941/09, and the accounting pro-
nouncements, interpretations and guidance issued by the Accounting Pro-
nouncements Committee ("CPC"), approved by the Brazilian Securities and Ex-
change Commission ("CVM") and also in accordance with the International Ac-
counting Standards ("IFRS") issued by the International Accounting Standards
Board ("IASB") and interpretations issued by the International Financial Re-
porting Interpretations Committee ("IFRIC").
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SLC
Agrícola
The Company's management believes that all the relevant information in the
financial statements is being evidenced and corresponds to that used by it in
its management, as provided for in OCPC 7 Evidence in the Disclosure of
General Purpose Financial-Accounting Reports. We highlight, even though the
accounting policies considered immaterial were not included in the financial
statements.
The issuance of the individual and consolidated financial statements was au-
thorized by the Board on March 17, 2021.
b) Basis of measurement
The individual and consolidated financial statements have been prepared
based on historical cost, except for the following material items recognized on
the statements of financial position:
Derivative financial instruments measured at fair value;
Biological assets, not classified as carrying plants, measured at fair value,
using the market approach, less sales expenses and costs to be incurred
from pre-harvest;
Investment property, measured at fair value;
Share-based payment transactions, measured at fair value at the grant
date.
c) Functional currency and foreign currency transactions and balances
The individual and consolidated financial statements are presented in Brazilian
Real (BRL), which is the functional currency of the Company and its subsidiar-
ies.
Foreign currency transactions are initially recorded at the exchange rate of the
functional currency prevailing on the transaction date. Monetary assets and
liabilities denominated in foreign currency are converted at the functional cur-
rency exchange rate prevailing at the balance sheet date.
Foreign exchange gains and losses resulting from the settlement of such trans-
actions and from translation at year-end exchange rates on monetary assets
and liabilities in foreign currencies are recognized in the income statement,
except when deferred in equity as qualified cash flow hedge transactions.
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