SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16
OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934


For the month of August, 2016

(Commission File No. 1-14862 )

 

 
BRASKEM S.A.
(Exact Name as Specified in its Charter)
 
N/A
(Translation of registrant's name into English)
 


Rua Eteno, 1561, Polo Petroquimico de Camacari
Camacari, Bahia - CEP 42810-000 Brazil
(Address of principal executive offices)



Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ___X___       Form 40-F ______

Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1). _____

Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7). _____

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ______       No ___X___

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _____.


 
 

 

Braskem S.A.

Quarterly Information (ITR) at

June 30, 2016

and Independent Auditors’ Report Review

 

 

 

 


 
 
 

Report on review of interim financial information

 

 

To Shareholders, Members of the Board and Management

Braskem S.A.

Camaçari - Bahia

 

 

Introduction

We have reviewed the accompanying individual and consolidated interim financial information of Braskem S.A. (the “Company”) included in the Quarterly Financial Information for the quarter ended June 30, 2016, which comprises the balance sheet as of June 30, 2016, the statements of profit or loss and comprehensive income for the three-month and six-month periods then ended, changes in equity and cash flows for the six-month period then ended, and notes to the interim financial information.

 

Management is responsible for the preparation and presentation of this individual interim financial information in accordance with CPC 21(R1) Technical Pronouncement - Interim Financial Reporting and the consolidated interim financial information in accordance with CPC 21(R1) and international standard IAS 34 - Interim Financial Reporting , issued by the International Accounting Standards Board - IASB, as well as for the presentation of this quarterly information in accordance with the standards issued by CVM - Brazilian Securities and Exchange Commission, applicable to the preparation of interim financial information. Our responsibility is to express a conclusion on this interim financial information based on our review.

 

Scope of review

We conducted our review in accordance with Brazilian and international review standards applicable to interim financial information (NBC TR 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity , respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

1

 
 

 

Conclusion on the individual interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual interim financial information referred to above is not prepared, in all material respects, in accordance with CPC 21(R1) applicable to the preparation of interim financial information and presented in accordance with the standards issued by CVM - Brazilian Securities and Exchange Commission.

 

Conclusion on the consolidated interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial information referred to above is not prepared, in all material respects, in accordance with CPC 21(R1) and IAS 34, issued by the IASB, applicable to the preparation of interim financial information and presented in accordance with the standards issued by CVM - Brazilian Securities and Exchange Commission.

 

Emphasis of a matter

We draw attention to notes 18 (a) and (b) to the interim financial information that discloses the allegations, events and actions taken by the Company related to the internal investigation in progress, dialogues with the competent authorities and the progress of the class action brought against it in the United States courts.  During the course of the second quarter, the Company became aware of additional allegations regarding unlawful facts involving the Company, arising from the scope of investigations into third parties. Within this scenario, the Company will begin dialogues with the Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) to confirm the veracity of such allegations, any parallel investigations and any agreements, which may imply the enforcement of fines and/or other sanctions by the competent authorities and other parties involved.  At present, the Company is unable to reasonably estimate potential losses to be accounted for and, therefore, no provision was recorded in the interim financial information . Our conclusion does not contain modifications in relation to these matters.

Other matters

 

Statements of value added

We also reviewed the individual and consolidated statements of value added for the six-month period ended June 30, 2016, prepared under the responsibility of the Company's management, whose presentation on the interim financial information is required under the standards issued by CVM - Brazilian Securities and Exchange Commission applicable to the preparation of Interim Financial Information and considered as additional information by IFRS, which do not require the presentation of the statement of value added. These statements have been submitted to the same review procedures described above and, based on our review, nothing has come to our attention that causes us to believe that the accompanying statements of value added are not prepared, in all material respects, in accordance with the individual and consolidated interim financial information taken as a whole.

 

 

São Paulo, August 2, 2016

 

 

KPMG Auditores Independentes

CRC 2SP014428/O-6

Original report in Portuguese signed by

Anselmo Neves Macedo

Accountant CRC 1SP160482/O-6

 

 

2

 

Braskem S.A.

 

Balance sheet

at June 30, 2016

All amounts in thousands of reais                                                                                                                                      

 

 

 

 

       

Consolidated

 

Parent company

Assets

Note

 

Jun/2016

 

Dec/2015

 

Jun/2016

 

Dec/2015

           

 

     

 

Current assets

                 
 

Cash and cash equivalents

3

 

6,740,633

 

7,439,723

 

3,223,019

 

4,773,251

 

Financial investments

4

 

428,219

 

1,172

 

528

 

1,172

 

Trade accounts receivable

5

 

2,085,423

 

2,735,144

 

2,629,232

 

2,526,510

 

Inventories

6

 

5,031,098

 

5,517,206

 

3,678,830

 

4,131,128

 

Taxes recoverable

8

 

771,216

 

1,272,004

 

354,404

 

762,824

 

Dividends and interest on capital

7

   

1,998

 

99,118

 

87,655

 

Prepaid expenses

   

158,248

 

166,170

 

115,182

 

139,668

 

Related parties

7

 

10,382

 

10,507

 

325,526

 

118,661

 

Derivatives operations

14.3

 

19,187

 

53,662

 

19,187

 

12,616

 

Other receivables

   

199,124

 

300,901

 

123,080

 

248,488

       

 

 

 

 

 

 

 

       

15,443,530

 

17,498,487

 

10,568,106

 

12,801,973

                     

Non-current assets

                 
 

Financial investments

4

 

 

 

46,193

 

 

 

46,193

 

Trade accounts receivable

5

 

27,447

 

19,822

 

3,601,791

 

4,279,433

 

Advances to suppliers

6

 

69,068

 

135,046

 

69,068

 

135,046

 

Taxes recoverable

8

 

1,298,820

 

1,304,056

 

1,187,639

 

1,198,301

 

Deferred income tax and social contribution

16

 

1,550,792

 

3,226,507

 

268,110

 

2,179,354

 

Judicial deposits

   

279,993

 

277,093

 

271,436

 

268,572

 

Related parties

7

 

310,212

 

144,633

 

287,539

 

124,645

 

Insurance claims

   

69,398

 

63,199

 

69,398

 

60,778

 

Derivatives operations

14.3

   

12,280

 
 

Other receivables

   

257,350

 

298,057

 

131,158

 

125,898

 

Investments

9

 

82,284

 

86,354

 

4,704,703

 

4,593,775

 

Property, plant and equipment

10

 

30,371,667

 

33,961,963

 

16,068,991

 

16,542,078

 

Intangible assets

11

 

2,834,887

 

2,887,604

 

2,539,578

 

2,572,341

       

 

 

 

 

 

 

 

       

37,151,918

 

42,462,807

 

29,199,411

 

32,126,414

                     

Total assets

   

52,595,448

 

59,961,294

 

39,767,517

 

44,928,387

 

 

 

 

The Management notes are an integral part of the financial statements.

 

1

 


 
 

Braskem S.A.

 

Balance sheet

at June 30, 2016

All amounts in thousands of reais   Continued

   

 

       

Consolidated

 

Parent company

Liabilities and shareholders' equity

Note

 

Jun/2016

 

Dec/2015

 

Jun/2016

 

Dec/2015

           

 

     

 

Current liabilities

                 
 

Trade payables

   

7,781,968

 

11,698,695

 

8,508,046

 

9,557,676

 

Borrowings

12

 

2,644,860

 

1,968,540

 

3,119,987

 

2,567,124

 

Project finance

13

 

464,466

 

302,266

 
 

Derivatives operations

14.3

 

32,726

 

57,760

 

841

 

8,351

 

Payroll and related charges

   

412,291

 

605,059

 

321,151

 

446,125

 

Taxes payable

15

 

594,574

 

744,660

 

281,053

 

221,305

 

Dividends

19(b)

 

2,050

 

753,668

 

2,050

 

753,668

 

Advances from customers

   

72,532

 

119,680

 

25,081

 

44,528

 

Sundry provisions

17

 

69,609

 

93,942

 

59,261

 

67,190

 

Accounts payable to related parties

7

   

2,274,951

 

4,297,735

 

Other payables

   

436,893

 

337,959

 

253,304

 

207,730

       

 

 

 

 

 

 

 

       

12,511,969

 

16,682,229

 

14,845,725

 

18,171,432

                     

Non-current liabilities

                 
 

Trade payables

   

138,976

 

57,148

 

1,681,977

 

3,420,281

 

Borrowings

12

 

21,036,636

 

25,370,260

 

7,019,895

 

8,207,012

 

Project finance

13

 

9,898,313

 

11,975,167

 
 

Derivatives operations

14.3

 

959,434

 

1,184,741

 

837,439

 

1,184,741

 

Taxes payable

15

 

29,692

 

26,716

 

28,131

 

25,825

 

Accounts payable to related parties

7

   

8,809,350

 

10,905,207

 

Non-controlling loan in Braskem Idesa

   

1,573,753

 

1,538,784

 
 

Deferred income tax and social contribution

16

 

658,907

 

731,241

 
 

Post-employment benefits

   

138,501

 

154,707

 

54,166

 

54,166

 

Provision for losses on subsidiaries

     

84,586

 

137,013

 

Sundry provisions

17

 

683,348

 

653,972

 

605,380

 

571,349

 

Other payables

   

92,083

 

248,618

 

5,914

 

179,873

       

 

 

 

 

 

 

 

       

35,209,643

 

41,941,354

 

19,126,838

 

24,685,467

                     

Shareholders' equity

19

               
 

Capital

   

8,043,222

 

8,043,222

 

8,043,222

 

8,043,222

 

Capital reserve

   

232,430

 

232,430

 

232,430

 

232,430

 

Revenue reserves

   

2,634,655

 

2,882,019

 

2,634,655

 

2,882,019

 

Other comprehensive income

   

(6,316,244)

 

(9,085,256)

 

(6,316,244)

 

(9,085,256)

 

Treasury shares

   

(49,819)

 

(49,819)

 

(927)

 

(927)

 

Accumulated profit

   

1,201,818

   

1,201,818

 
       

 

 

 

 

 

 

 

 

Total attributable to the Company's shareholders

   

5,746,062

 

2,022,596

 

5,794,954

 

2,071,488

                     
 

Non-controlling interest in Braskem Idesa

   

(872,226)

 

(684,885)

 
           

 

     

 

       

4,873,836

 

1,337,711

 

5,794,954

 

2,071,488

                     

Total liabilities and shareholders' equity

   

52,595,448

 

59,961,294

 

39,767,517

 

44,928,387

 

 

 

 

 

 

 

The Management notes are an integral part of the financial statements.

 

2

 


 
 

Braskem S.A.

 

Statement of operations and statement of comprehensive income

at June 30, 2016

All amounts in thousands of reais

 

 

       

 

 

 

 

 

 

Consolidated

                     
   

Note

 

2Q2016

 

YTD2016

 

2Q2015

 

YTD2015

                     

Net sales revenue

 

21

 

11,886,174

 

24,058,115

 

11,591,774

 

21,787,096

Cost of products sold

     

(8,632,099)

 

(17,556,704)

 

(8,827,607)

 

(17,418,096)

                     

Gross profit

     

3,254,075

 

6,501,411

 

2,764,167

 

4,369,000

                     

Income (expenses)

                   

Selling and distribution

     

(355,538)

 

(675,415)

 

(260,467)

 

(522,391)

General and administrative

     

(373,560)

 

(722,277)

 

(299,787)

 

(596,883)

Research and development

     

(40,034)

 

(82,628)

 

(42,338)

 

(82,157)

Results from equity investments

 

9(c)

 

11,690

 

13,377

 

7,736

 

9,739

Other operating income (expenses), net

 

22

 

(126,078)

 

(190,683)

 

(49,855)

 

(89,748)

                     
       

2,370,555

 

4,843,785

 

2,119,456

 

3,087,560

                     

Financial results

 

23

               

Financial expenses

     

(1,515,007)

 

(2,727,297)

 

(663,438)

 

(1,855,540)

Financial income

     

(368,919)

 

(632,034)

 

47,334

 

650,657

                     
       

(1,883,926)

 

(3,359,331)

 

(616,104)

 

(1,204,883)

                     

Profit before income tax and

                   

social contribution

     

486,629

 

1,484,454

 

1,503,352

 

1,882,677

                     

Current and deferred income tax and social contribution

 

16

 

(205,919)

 

(456,847)

 

(448,565)

 

(623,898)

                     

Profit for the period

     

280,710

 

1,027,607

 

1,054,787

 

1,258,779

                     

Attributable to:

                   

Company's shareholders

     

412,983

 

1,187,717

 

1,096,182

 

1,347,585

Non-controlling interest in Braskem Idesa

     

(132,273)

 

(160,110)

 

(41,395)

 

(88,806)

                     

Profit for the period

     

280,710

 

1,027,607

 

1,054,787

 

1,258,779

 

 

 

 

The Management notes are an integral part of the financial statements.

 

3

 


 
 

Braskem S.A.

 

Statement of operations and statement of comprehensive income

at June 30, 2016

All amounts in thousands of reais Continued

                                                                                                                                                                                                                                                                                                                                                  

 

 

         

 

 

 

 

 

 

Parent company

                       
     

Note

 

2Q2016

 

YTD2016

 

2Q2015

 

YTD2015

                       

Net sales revenue

 

21

 

8,744,353

 

17,692,509

 

8,070,195

 

15,327,073

 

Cost of products sold

     

(6,658,704)

 

(13,812,465)

 

(6,019,071)

 

(12,086,080)

                       

Gross profit

     

2,085,649

 

3,880,044

 

2,051,124

 

3,240,993

                       

Income (expenses)

                   
 

Selling and distribution

     

(229,497)

 

(452,122)

 

(182,869)

 

(377,806)

 

General and administrative

     

(208,657)

 

(402,698)

 

(213,576)

 

(422,991)

 

Research and development

     

(27,653)

 

(50,718)

 

(24,666)

 

(52,026)

 

Results from equity investments

 

9(c)

 

282,241

 

1,067,870

 

392,366

 

457,057

 

Other operating income (expenses), net

 

22

 

(71,986)

 

(133,487)

 

930

 

4,770

                       
         

1,830,097

 

3,908,889

 

2,023,309

 

2,849,997

                       

Financial results

 

23

               
 

Financial expenses

     

(635,894)

 

(1,370,318)

 

(502,005)

 

(2,153,669)

 

Financial income

     

(619,957)

 

(1,294,607)

 

(70,621)

 

1,095,525

                       
         

(1,255,851)

 

(2,664,925)

 

(572,626)

 

(1,058,144)

                       

Profit before income tax and

                   

social contribution

     

574,246

 

1,243,964

 

1,450,683

 

1,791,853

                       
 

Current and deferred income tax and social contribution

 

16

 

(161,263)

 

(56,247)

 

(354,501)

 

(444,268)

                       

Profit for the period

     

412,983

 

1,187,717

 

1,096,182

 

1,347,585

 

 

 

 

 

The Management notes are an integral part of the financial statements.

 

4

 


 
 

Braskem S.A.

 

Statement of operations and statement of comprehensive income

at June 30, 2016

All amounts in thousands of reais   Continued

                                                                                                                                                                                                                                                                                                                                                 

 

         

 

 

 

 

 

 

Consolidated

                       
     

Note

 

2Q2016

 

YTD2016

 

2Q2015

 

YTD2015

                       

Profit for the period

     

280,710

 

1,027,607

 

1,054,787

 

1,258,779

                       

Other comprehensive income or loss:

                   

Items that will be reclassified subsequently to profit or loss

                   
 

Fair value of cash flow hedge

     

151,913

 

179,831

 

118,074

 

(271,629)

 

Income tax and social contribution

     

(54,348)

 

(68,307)

 

(31,162)

 

91,804

 

Fair value of cash flow hedge - Braskem Idesa

     
 

Income tax and social contribution

     
 

Fair value of cash flow hedge from jointly-controlled

     

(2,761)

 

(12,765)

 
         

94,804

 

98,759

 

86,912

 

(179,825)

                       
 

Exchange variation of foreign sales hedge

 

14.4(a.i)

 

2,213,130

 

4,433,659

 

712,212

 

(3,016,428)

 

Sales Hedge - transfer to profit or loss

 

14.4(a.i)

 

345,443

 

767,243

 
 

Income tax and social contribution on exchange variation

     

(869,915)

 

(1,768,307)

 

(242,152)

 

1,025,586

 

Exchange variation of foreign sales hedge - Braskem Idesa

 

14.4(a.ii)

 

(914,249)

 

(1,093,972)

 

(186,404)

 

(565,736)

 

Sales Hedge - transfer to profit or loss - Braskem Idesa

     

14,297

 

14,297

 
 

Income tax on exchange variation - Braskem Idesa

     

274,275

 

328,192

 

98,737

 

169,721

         

1,062,981

 

2,681,112

 

382,393

 

(2,386,857)

                       
 

Foreign subsidiaries currency translation adjustment

     

40,643

 

(23,989)

 

(136,516)

 

301,242

             

 

     

 

 

Total

     

1,198,428

 

2,755,882

 

332,789

 

(2,265,440)

                       

Total comprehensive income (loss) for the year

     

1,479,138

 

3,783,489

 

1,387,576

 

(1,006,661)

 

 

The Management notes are an integral part of the financial statements .

5

 


 
 

Braskem S.A.

 

Statement of operations and statement of comprehensive income

at June 30, 2016

All amounts in thousands of reais, except for earnings per share     Continued

                                                                                                                                                                                                                                                                                          

 

         

 

 

 

 

 

 

Parent company

                       
     

Note

 

2Q2016

 

YTD2016

 

2Q2015

 

YTD2015

                       

Profit for the period

     

412,983

 

1,187,717

 

1,096,182

 

1,347,585

                       

Other comprehensive income or loss:

                   

Items that will be reclassified subsequently to profit or loss

                   
 

Fair value of cash flow hedge

     

219,366

 

358,953

 

53,555

 

(257,876)

 

Income tax and social contribution

     

(74,584)

 

(122,044)

 

(18,209)

 

87,678

 

Fair value of cash flow hedge - Braskem Idesa

     

(50,590)

 

(134,342)

 

48,389

 

(10,314)

 

Income tax and social contribution

     

15,177

 

40,303

 

(9,715)

 

3,094

 

Fair value of cash flow hedge from jointly-controlled

     

(2,761)

 

(12,765)

 
         

106,608

 

130,105

 

74,020

 

(177,418)

                       
 

Exchange variation of foreign sales hedge

 

14.4(a.i)

 

2,213,130

 

4,433,659

 

712,212

 

(3,016,428)

 

Sales Hedge - transfer to profit or loss

 

14.4(a.i)

 

345,443

 

767,243

 
 

Income tax and social contribution on exchange variation

     

(869,915)

 

(1,768,307)

 

(242,152)

 

1,025,586

 

Exchange variation of foreign sales hedge - Braskem Idesa

 

14.4(a.ii)

 

(685,687)

 

(820,479)

 

(139,803)

 

(424,302)

 

Sales Hedge - transfer to profit or loss - Braskem Idesa

     

10,723

 

10,723

 
 

Income tax on exchange variation - Braskem Idesa

     

205,706

 

246,144

 

74,053

 

127,291

         

1,219,400

 

2,868,983

 

404,310

 

(2,287,853)

                       
 

Foreign subsidiaries currency translation adjustment

     

(79,984)

 

(215,975)

 

(123,505)

 

295,854

             

 

     

 

 

Total

     

1,246,024

 

2,783,113

 

354,825

 

(2,169,417)

                       

Total comprehensive income (loss) for the year

     

1,659,007

 

3,970,830

 

1,451,007

 

(821,832)

                       
                       
                       
               

 

 

 

Parent company

               

 

YTD2016

 

YTD2015

     

Note

         

Basic and diluted

 

Basic and diluted

Profit per share attributable to the shareholders of the Company

                   

of continued operations at the end of the period (R$)

 

20

               

(expressed in reais)

                   
 

Earnings per share - common

             

1.4927

 

1.6937

 

Earnings per share - preferred shares class "A"

             

1.4927

 

1.6936

 

Earnings per share - preferred shares class "B"

             

0.6065

 

0.6062

 

 

The Management notes are an integral part of the financial statements .

6

 


 
 

Braskem S.A.

 

Statement of changes in shareholder’s equity

All amounts in thousands of reais

 

 

 

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

     

Attributed to shareholders' interest

         
             

Revenue reserves

             

Total

       
                     

Additional

 

Other

         

Braskem

 

Non-controlling

 

Total

         

Capital

 

Legal

 

Retained

 

dividends

 

comprehensive

 

Treasury

 

Retained

 

shareholders'

 

interest in

 

shareholders'

 

Note

 

Capital

 

reserve

 

reserve

 

earnings

 

proposed

 

income

 

shares

 

earnings

 

interest

 

Braskem Idesa

 

equity

                                               

At December 31, 2014

   

8,043,222

 

232,430

 

71,542

 

394,121

 

270,517

 

(2,924,057)

 

(48,892)

     

6,038,883

 

(144,533)

 

5,894,350

                     
                     

Comprehensive income for the period:

                   

Profit for the period

     

1,347,585

 

1,347,585

 

(88,806)

 

1,258,779

Exchange variation of foreign sales hedge, net of taxes

     

(2,287,853)

   

(2,287,853)

 

(99,004)

 

(2,386,857)

Fair value of cash flow hedge, net of taxes

     

(177,418)

   

(177,418)

 

(2,407)

 

(179,825)

Foreign currency translation adjustment

               

295,854

          

295,854

 

5,388

 

301,242

                   

(2,169,417)

     

1,347,585

 

(821,832)

 

(184,829)

 

(1,006,661)

                       

Equity valuation adjustments:

                     

Realization of additional property, plant and equipment price-level restatement, net of taxes

   

(13,619)

   

13,619

     

Realization of deemed cost of jointly-controlled investment, net of taxes

                      

(482)

         

482

              
                   

(14,101)

      

14,101

           
                       

Contribution to shareholders:

                   

Repurchase of treasury shares

         

(927)

   

(927)

   

(927)

Additional dividends proposed

                 

(270,517)

      

 

        

(270,517)

      

(270,517)

       

(270,517)

   

(927)

   

(271,444)

   

(271,444)

                                              

At June 30, 2015

   

8,043,222

 

232,430

 

71,542

 

394,121

      

(5,107,575)

 

(49,819)

 

1,361,686

 

4,945,607

 

(329,362)

 

4,616,245

                                               

At December 31, 2015

   

8,043,222

 

232,430

 

229,992

 

2,404,663

 

247,364

 

(9,085,256)

 

(49,819)

     

2,022,596

 

(684,885)

 

1,337,711

                                               

Comprehensive income for the period:

                         

Profit for the period

           

1,187,717

 

1,187,717

 

(160,110)

 

1,027,607

Exchange variation of foreign sales hedge, net of taxes

       

2,868,983

     

2,868,983

 

(187,871)

 

2,681,112

Fair value of cash flow hedge, net of taxes

       

130,105

     

130,105

 

(31,346)

 

98,759

Foreign currency translation adjustment

                      

(215,975)

           

(215,975)

 

191,986

 

(23,989)

         

2,783,113

   

1,187,717

 

3,970,830

 

(187,341)

 

3,783,489

                   

Equity valuation adjustments:

                 

Realization of additional property, plant and equipment price-level restatement, net of taxes

   

(13,619)

   

13,619

 

Realization of deemed cost of jointly-controlled investment, net of taxes

                      

(482)

      

482

             
         

(14,101)

   

14,101

 
           

Contribution to shareholders:

         

Additional dividends proposed

19(b)

               

(247,364)

            

(247,364)

      

(247,364)

       

(247,364)

   

(247,364)

   

(247,364)

                     

At June 30, 2016

   

8,043,222

 

232,430

 

229,992

 

2,404,663

      

(6,316,244)

 

(49,819)

 

1,201,818

 

5,746,062

 

(872,226)

 

4,873,836

 

 

 

The Management notes are an integral part of the financial statements.

 

7

 


 
 

Braskem S.A.

 

Statement of changes in shareholder’s equity

All amounts in thousands of reais

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Parent company

 

 

 

 

 

 

 

Revenue reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

Other

 

 

 

 

 

Total

 

 

 

 

 

Capital

 

Legal

 

Retained

 

dividends

 

comprehensive

 

Treasury

 

Retained

 

shareholders'

 

Note

 

Capital

 

reserve

 

reserve

 

earnings

 

proposed

 

income

 

shares

 

earnings

 

equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2014

 

 

8,043,222

 

232,430

 

71,542

 

394,121

 

270,517

 

(2,924,057)

 

 

 

 

 

6,087,775

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income for the period:

 

 

 

 

 

 

 

 

 

 

Profit for the period

 

 

 

 

 

 

 

1,347,585

 

1,347,585

Exchange variation of foreign sales hedge, net of taxes

 

 

 

(2,287,853)

 

 

 

 

 

(2,287,853)

Fair value of cash flow hedge, net of taxes

 

 

 

(177,418)

 

 

 

 

 

(177,418)

Foreign subsidiaries currency translation adjustment

 

 

         

 

295,854

 

 

 

 

 

295,854

 

 

 

 

(2,169,417)

 

 

 

1,347,585

 

(821,832)

 

 

 

 

 

 

 

 

 

 

 

Equity valuation adjustments:

 

 

 

 

 

 

 

 

 

 

Realization of additional property, plant and equipment price-level restatement, net of taxes

 

 

 

(13,619)

 

 

 

13,619

 

 

Realization of deemed cost of jointly-controlled investment, net of taxes

 

 

         

 

(482)

 

 

 

482

 

 

 

 

 

(14,101)

 

 

 

14,101

 

 

 

 

 

 

 

 

 

 

 

Contribution to shareholders:

 

 

 

 

 

 

 

 

Repurchase of treasury shares

 

 

 

(927)

 

 

 

(927)

Additional dividends proposed

 

 

       

 

(270,517)

 

 

 

 

 

 

 

(270,517)

 

 

 

 

(270,517)

 

 

 

(927)

 

 

 

(271,444)

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2015

 

 

8,043,222

 

232,430

 

71,542

 

394,121

 

 

 

(5,107,575)

 

(927)

 

1,361,686

 

4,994,499

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2015

 

 

8,043,222

 

232,430

 

229,992

 

2,404,663

 

247,364

 

(9,085,256)

 

(927)

 

 

 

2,071,488

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income for the period:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

 

 

1,187,717

 

1,187,717

Exchange variation of foreign sales hedge, net of taxes

 

2,868,983

 

 

 

 

 

2,868,983

Fair value of cash flow hedge, net of taxes

 

130,105

 

 

 

 

 

130,105

Foreign currency translation adjustment

         

 

(215,975)

 

 

 

 

 

(215,975)

 

 

2,783,113

 

 

 

1,187,717

 

3,970,830

 

 

 

 

 

 

 

 

 

Equity valuation adjustments:

 

 

 

 

 

 

 

 

Realization of additional property, plant and equipment price-level restatement, net of taxes

 

(13,619)

 

 

 

13,619

 

 

Realization of deemed cost of jointly-controlled investment, net of taxes

         

 

(482)

 

 

 

482

 

 

 

 

(14,101)

 

 

 

14,101

 

 

 

 

 

 

 

 

 

 

 

Contribution to shareholders:

 

 

 

 

 

 

 

 

Additional dividends proposed

19(b)

 

       

 

(247,364)

 

 

 

 

 

 

 

(247,364)

 

 

 

 

(247,364)

 

 

 

 

 

 

 

(247,364)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2016

 

 

8,043,222

 

232,430

 

229,992

 

2,404,663

 

 

 

(6,316,244)

 

(927)

 

1,201,818

 

5,794,954

                                       

 

 

 

The Management notes are an integral part of the financial statements.

 

8

 


 
 

Braskem S.A.

 

Statement of cash flows

at June 30, 2016

All amounts in thousands of reais

 

 

 

       

Consolidated

 

Parent company

   

Note

 

Jun/2016

 

Jun/2015

 

Jun/2016

 

Jun/2015

               

Profit before income tax and social contribution

   

1,484,454

1,882,677

1,243,964

1,791,853

       

Adjustments for reconciliation of profit

   
 

Depreciation, amortization and depletion

   

1,255,691

1,013,033

1,030,708

858,105

 

Results from equity investments

9(c)

 

(13,377)

(9,739)

(1,067,870)

(457,057)

 

Interest and monetary and exchange variations, net

   

978,082

1,289,967

1,070,796

1,425,789

 

Other

   

12,959

5,301

12,930

2,784

       

 

 

 

 

       

3,717,809

4,181,239

2,290,528

3,621,474

               

Changes in operating working capital

           
 

Held-for-trading financial investments

   

(409,333)

17,441

18,356

47,102

 

Trade accounts receivable

   

641,982

(56,633)

574,901

(1,096,623)

 

Inventories

   

509,635

84,906

421,318

77,181

 

Taxes recoverable

   

686,777

572,522

459,258

255,034

 

Prepaid expenses

   

7,922

37,112

24,486

28,003

 

Other receivables

   

(25,407)

(28,390)

(253,384)

88,381

 

Trade payables

   

(2,351,316)

(1,254,099)

(1,304,351)

(1,468,685)

 

Taxes payable

   

(21,623)

 

62,521

26,699

(8,351)

 

Advances from customers

   

(47,148)

 

(22,873)

(19,447)

(14,376)

 

Sundry provisions

   

5,043

 

(67,385)

26,102

(50,448)

 

Other payables

   

(179,173)

 

(251,109)

(208,102)

(439,105)

       

 

 

 

 

 

Cash from operations

   

2,535,168

 

3,275,252

2,056,364

1,039,587

                 
 

Interest paid

   

(686,246)

 

(468,707)

(240,328)

(206,358)

 

Income tax and social contribution paid

   

(668,126)

 

(50,425)

(40,176)

(21,736)

       

 

 

 

 

 

Net cash generated by operating activities

   

1,180,796

 

2,756,120

1,775,860

811,493

                 

Proceeds from the sale of fixed assets

   

114

 

686

19

165

Acquisitions to property, plant and equipment

(i)

 

(1,469,520)

 

(1,827,907)

(452,744)

(445,120)

Acquisitions of intangible assets

   

(16,348)

 

(9,670)

(16,348)

(9,670)

Held-for-maturity financial investments

   

38,353

 

(11)

38,353

(11)

       

 

 

 

 

 

Net cash used in investing activities

   

(1,447,401)

 

(1,836,902)

(430,720)

(454,636)

                 

Short-term and Long-term debit

             
 

Obtained borrowings

   

1,937,284

 

2,659,341

1,957,182

1,086,423

 

Payment of borrowings

   

(1,865,492)

 

(3,049,074)

(1,781,594)

(1,977,850)

Project finance

13

 
 

Obtained borrowings

   

153,126

 

1,250,201

 

Payment of borrowings

   

(227,201)

 

(370,979)

Related parties

   
 

Obtained loans

   

491,307

 

Payment of loans

   

(2,071,978)

(569,738)

 

Transactions current active

   

1,766

Dividends paid

   

(998,982)

 

(482,074)

(998,982)

(482,074)

Repurchase of treasury shares

     

(927)

(927)

       

 

 

 

 

 

Net cash provided by (used in) financing activities

   

(1,001,265)

 

6,488

(2,895,372)

(1,451,093)

                 

Exchange variation on cash of foreign subsidiaries

   

568,780

 

(98,040)

       

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

   

(699,090)

 

827,666

(1,550,232)

(1,094,236)

                     

Represented by

               
 

Cash and cash equivalents at the beginning of the period

   

7,439,723

 

3,993,359

4,773,251

2,416,288

 

Cash and cash equivalents at the end of the period

   

6,740,633

 

4,821,025

3,223,019

1,322,052

       

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

   

(699,090)

 

827,666

(1,550,232)

(1,094,236)

 

 

(i)     Includes capitalized financial charges paid: Jun/2016 – Consolidated – R$252,722 and Parent Company – R$33.640.

 

 

 

The Management notes are an integral part of the financial statements.

 

9

 


 
 

Braskem S.A.

 

Statement of value added

at June 30, 2016

All amounts in thousands of reais

 

  

     

Consolidated

 

Parent company

     

Jun/2016

 

Jun/2015

 

Jun/2016

Jun/2015

                 

Revenue

 

27,518,032

 

24,924,969

 

21,134,901

18,157,578

 

Sale of goods, products and services

 

27,679,895

 

25,015,605

 

21,279,280

18,152,348

 

Other income (expenses), net

 

(120,608)

 

(68,644)

 

(105,631)

25,741

 

Allowance for doubtful accounts

 

(41,255)

 

(21,992)

 

(38,748)

(20,511)

Inputs acquired from third parties

 

(19,885,100)

 

(19,885,116)

 

(15,994,167)

(13,918,563)

 

Cost of products, goods and services sold

 

(19,021,330)

 

(19,252,315)

 

(15,401,979)

(13,709,007)

 

Material, energy, outsourced services and others

 

(859,438)

 

(630,297)

 

(588,183)

(206,988)

 

Impairment of assets

 

(4,332)

 

(2,504)

 

(4,005)

(2,568)

Gross value added

 

7,632,932

 

5,039,853

 

5,140,734

4,239,015

                 

Depreciation, amortization and depletion

 

(1,255,691)

 

(1,013,033)

 

(1,030,708)

(858,105)

                 

Net value added produced by the entity

 

6,377,241

 

4,026,820

 

4,110,026

3,380,910

                 

Value added received in transfer

 

(618,571)

 

660,538

 

(226,372)

1,552,638

 

Results from equity investments

 

13,377

 

9,739

 

1,067,870

457,057

 

Financial income

 

(632,034)

 

650,657

 

(1,294,607)

1,095,525

 

Other

 

86

 

142

 

365

56

                 

Total value added to distribute

 

5,758,670

 

4,687,358

 

3,883,654

4,933,548

                 
                 

Personnel

 

633,499

 

557,720

 

367,622

432,858

 

Direct compensation

 

501,476

 

436,854

 

276,132

324,672

 

Benefits

 

100,976

 

94,454

 

61,693

77,010

 

FGTS (Government Severance Pay Fund)

 

31,047

 

26,412

 

29,797

31,176

                 

Taxes, fees and contribuitions

 

1,256,130

 

893,164

 

865,147

836,676

 

Federal

 

358,506

 

517,922

 

130,869

536,329

 

State

 

880,893

 

363,551

 

724,118

295,337

 

Municipal

 

16,731

 

11,691

 

10,160

5,010

                 

Remuneration on third parties' capital

 

2,841,434

 

1,977,695

 

1,462,803

2,316,429

 

Financial expenses (including exchange variation)

 

2,716,894

 

1,847,122

 

1,362,557

2,149,196

 

Rentals

 

124,540

 

130,573

 

100,246

167,233

                 

Remuneration on own capital

 

1,027,607

 

1,258,779

 

1,188,082

1,347,585

 

Profit for the period

 

1,187,717

 

1,347,585

 

1,187,717

1,347,585

 

Dividends

   

365

 

Non-controlling interests in loss for the period

 

(160,110)

 

(88,806)

 
               

Value added distributed

 

5,758,670

 

4,687,358

 

3,883,654

4,933,548

 

 

 

The Management notes are an integral part of the financial statements.

 

10

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

1.                        Operations

 

Braskem S.A. (hereinafter “Parent Company”) is a public corporation headquartered in Camaçari, Bahia (“BA”), which jointly with its subsidiaries (hereinafter “Braskem” or “Company”) is controlled by Odebrecht S.A. (“Odebrecht”), which directly and indirectly holds interests of 50.11% and 38.32% in its voting and total capital, respectively.

 

(a)                     Significant corporate and operating events impacting these financial statements

 

In December 2015, Braskem commissioned the petrochemical complex of its indirect subsidiary Braskem Idesa S.A.P.I (“Braskem Idesa”) in Mexico with the startup of the utilities area, followed by the cracker in March 2016. The first polyethylene (“PE”) lot was produced on april. The complex houses an ethylene gas-based cracker and three polyethylene plants – two high-density and one low-density - with combined annual PE production capacity of 1.05 million tons * .

 

Braskem holds 75% indirect interest in Braskem Idesa and the remaining 25% pertains to Etileno XXI, S.A. de C.V.

 

Other corporate events of 2015 and which did not produce significant impact on these financial statements were presented in the 2015 annual financial statements of the Company (Note 1(a)).

 

* unreviwed

 

(b)                     Net working capital

 

On June 30, 2016, net working capital at the Parent Company was negative R$4,277,619 (negative R$5,369,459 on December 31, 2015). On the other hand, consolidated net working capital was positive R$2,931,561 (positive R$816,258 on December 31, 2015).  The consolidated figures are used in the management of working capital, since the Company uses mechanisms to transfer funds between the companies efficiently without jeopardizing the fulfillment of the commitments of each of the entities forming the consolidated statements. For this reasons, any analysis of the Parent Company’s working capital will not reflect the actual liquidity position of the consolidated group.

 

2.                        Summary of significant accounting policies

 

There were no changes in the accounting practices used in the preparation of the Quarterly Information in relation to those presented in the December 31, 2015 financial statements.

 

2.1.                  Basis of preparation

 

This Quarterly Information should be read together with the financial statements of Braskem as of December 31, 2015, which were prepared and presented in accordance with accounting practices adopted in Brazil, including the pronouncements issued by the Brazilian Accounting Pronouncements Committee (CPC), and in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

 

The preparation of the quarterly information requires the use of certain critical accounting estimates. It also requires the Management of the Company to exercise its judgment in the process of applying its accounting policies. There were no significant changes in the assumptions and judgments made by the Company’s management in the use of estimates for the preparation of the Quarterly Information in relation to those used in the December 31, 2015 financial statements.

 

11

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

 

Issue of these financial statements was authorized by the Executive Board on August 1, 2016.

 

2.1.1              Consolidated and parent company quarterly information

 

The consolidated Quarterly Information was prepared and is being presented in accordance with the pronouncements CPC 21 and IAS 34 - Interim Financial Reporting, which establish the minimum content for interim financial statements. The parent company information was prepared and is being presented in accordance with CPC pronouncement.

 

The individual and consolidated Statement of Value Added (“DVA”) is required under Brazilian corporations law and under the accounting practices adopted in Brazil for public companies. IFRS does not require the presentation of this statement.

 

2.1.2              Consolidated quarterly information

 

The consolidated quarterly information includes the quarterly information of the Parent Company and companies in which it, directly or indirectly, maintains a controlling equity interest or controls the activities, as presented below:

12

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

 

 

         

Total interest - %

                   
         

Headquarters

 

Jun/2016

 

Dec/2015

Direct and Indirect subsidiaries

               

Alclor Química de Alagoas Ltda ("Alclor")

 

(i)

 

Brazil

   

100.00

Braskem America Finance Company ("Braskem America Finance")

     

USA

 

100.00

 

100.00

Braskem America, Inc. (“Braskem America”)

     

USA

 

100.00

 

100.00

Braskem Argentina S.A. (“Braskem Argentina”)

     

Argentina

 

100.00

 

100.00

Braskem International GmbH ("Braskem Austria")

 

(ii)

 

Austria

 

100.00

 

100.00

Braskem Austria Finance GmbH ("Braskem Austria Finance")

 

(iii)

 

Austria

     

100.00

Braskem Europe GmbH ("Braskem Alemanha")

     

Germany

 

100.00

 

100.00

Braskem Finance Limited (“Braskem Finance”)

     

Cayman Islands

 

100.00

 

100.00

Braskem Idesa

     

Mexico

 

75.00

 

75.00

Braskem Idesa Servicios S.A. de CV ("Braskem Idesa Serviços")

     

Mexico

 

75.00

 

75.00

Braskem Incoporated Limited ("Braskem Inc")

     

Cayman Islands

 

100.00

 

100.00

Braskem Mexico Proyectos S.A. de C.V. SOFOM ("Braskem México Sofom")

     

Mexico

 

100.00

 

100.00

Braskem Mexico, S. de RL de CV ("Braskem México")

     

Mexico

 

100.00

 

100.00

Braskem Mexico Servicios S. RL de CV ("Braskem México Serviços")

     

Mexico

 

100.00

 

100.00

Braskem Netherlands B.V. ("Braskem Holanda")

     

Netherlands

 

100.00

 

100.00

Braskem Netherlands Finance B.V. (“Braskem Holanda Finance”)

     

Netherlands

 

100.00

 

100.00

Braskem Netherlands Inc. B.V. (“Braskem Holanda Inc”)

     

Netherlands

 

100.00

 

100.00

Braskem Petroquímica Chile Ltda. (“Braskem Chile”)

     

Chile

 

100.00

 

100.00

Braskem Petroquímica Ltda. ("Braskem Petroquímica")

     

Brazil

 

100.00

 

100.00

Quantiq Distribuidora Ltda. ("Quantiq")

     

Brazil

 

100.00

 

100.00

IQAG Armazéns Gerais Ltda. ("IQAG")

     

Brazil

 

100.00

 

100.00

Lantana Trading Co. Inc. (“Lantana”)

     

Bahamas

 

100.00

 

100.00

                   

Specific Purpose Entity ("SPE")

               

Fundo de Investimento Multimercado Crédito Privado Sol (“FIM Sol”)

     

Brazil

 

100.00

 

100.00

Fundo de Investimento Caixa Júpiter Multimercado

Crédito Privado Longo Prazo ("Fundo Júpiter")

 

 

 

Brazil

 

100.00

 

100.00

 

 

(i)          Merged into the subsidiary Braskem Petroquímica in April 2016.

(ii)        In the process of dissolution.

(iii)       Dissolved in January 2016.

 

2.2.                  Foreign currency translation

 

The information on foreign currency translation was presented in the 2015 annual financial statements of the Company, in Note 2.2.

 

 

13

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(a)                     Brazilian real as functional currency

 

The Company has a few associates abroad using Brazilian real as the functional currency. Transactions and balances in foreign currency are translated into the functional currency using foreign exchange rates on the dates of the transactions or at the end of the period, as applicable. Foreign exchange gains and losses resulting from the settlement of these transactions and translation at foreign exchange rates at the end of the year, relating to monetary assets and liabilities in foreign currency, are recognized in the statement of operations for the year as “financial income” and “financial expenses”, respectively, except when classified as “hedge accounting,” in which case these are recognized under shareholders' equity as cash flow hedge operations.

 

(b)                     Exchange variation effects

 

The main effects from exchange variation in these financial statements are shown below:

 

 

 

End of period rate

 

Average rate for period ended

 

Jun/2016

 

Dec/2015

 

Variation

 

Jun/2016

 

Jun/2015

 

Variation

U.S. dollar - Brazilizan real

3.2098

 

3.9048

 

-17.80%

 

3.7017

 

2.9715

 

24.57%

U.S. dollar - Mexican peso

18.5100

 

17.3700

 

6.56%

 

18.0712

 

15.1405

 

19.36%

U.S. dollar - Euro

0.8994

 

0.9187

 

-2.09%

 

0.8957

 

0.8969

 

-0.13%

 

 

 

2.3.                  Reconciliation of equity and profit (loss) for the period between Parent Company and consolidated

 

 

       

Shareholders' equity

 

Profit for the period

       

Jun/2016

 

Dec/2015

 

Jun/2016

 

Jun/2015

                   

 

Parent company

   

5,794,954

 

2,071,488

 

1,187,717

 

1,347,585

 

Braskem shares owned by subsidiary

   

(48,892)

 

(48,892)

 
 

Non-controlling interest in Braskem Idesa

   

(872,226)

 

(684,885)

 

(160,110)

 

(88,806)

Consolidated

   

4,873,836

 

1,337,711

 

1,027,607

 

1,258,779

 

 

3.                        Cash and cash equivalents

 

The information on cash and cash equivalents was presented in the 2015 annual financial statements of the Company, in Note 5.

 

 

         

Consolidated

         

Jun/2016

 

Dec/2015

               

Cash and banks

   

(i)

2,255,217

 

873,966

Cash equivalents:

           
 

Domestic market

     

2,448,427

 

2,428,995

 

Foreign market

   

(i)

2,036,989

 

4,136,762

Total

     

6,740,633

 

7,439,723

 

(i)          On June 30, 2016, it includes cash and banks of R$38,623 (R$96,830 on December 31, 2015) and cash equivalents of R$26,870 (R$37,809 on December 31, 2015) of the subsidiary Braskem Idesa, available for its exclusive use.

 

 

14

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

4.                        Financial investments

 

The information on financial investments was presented in the 2015 annual financial statements of the Company, in Note 6.

 

       

Consolidated

       

Jun/2016

 

Dec/2015

Held-for-trading

 

0

 

Time deposit investments

(i)

427,688

 
 

Other

 

0

531

 

1,172

Held-to-maturity

 

0

 

Quotas of investment funds in credit rights

0

 

46,193

Total

   

428,219

 

47,365

             

Current assets

   

428,219

 

1,172

Non-current assets

     

46,193

Total

   

428,219

 

47,365

 

 

(i)     This investment was given as guarantee to cover Braskem’s obligation related to the constitution of a reserve account for the project finance of the subsidiary Braskem Idesa.

 

 

5.                        Trade accounts receivable

 

 

The information on trade accounts receivable was presented in the 2015 annual financial statements of the Company, in Note 7.

 

         

Consolidated

 

Parent company

         

Jun/2016

 

Dec/2015

 

Jun/2016

 

Dec/2015

Consumers:

                   
 

Domestic market

     

1,252,641

 

1,439,133

 

1,281,767

 

1,370,971

 

Foreign market

     

1,229,458

 

1,643,807

 

5,278,014

 

5,724,982

Allowance for doubtful accounts

   

(369,229)

 

(327,974)

 

(328,758)

 

(290,010)

Total

     

2,112,870

 

2,754,966

 

6,231,023

 

6,805,943

                       

Current assets

     

2,085,423

 

2,735,144

 

2,629,232

 

2,526,510

Non-current assets

     

27,447

 

19,822

 

3,601,791

 

4,279,433

Total

     

2,112,870

 

2,754,966

 

6,231,023

 

6,805,943

 

 

15

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

6.                        Inventories

 

The information on inventories was presented in the 2015 annual financial statements of the Company, in Note 8.

 

 

         

Consolidated

 

Parent company

         

Jun/2016

 

Dec/2015

 

Jun/2016

 

Dec/2015

                       

Finished goods

     

3,566,927

 

3,928,446

 

2,513,458

 

2,812,657

Raw materials, production inputs and packaging

   

886,144

 

1,008,217

 

741,154

 

879,608

Maintenance materials

     

313,992

 

289,568

 

185,056

 

196,432

Advances to suppliers

     

245,977

 

315,234

 

234,405

 

304,816

Imports in transit and other

   

87,126

 

110,787

 

73,825

 

72,661

Total

     

5,100,166

 

5,652,252

 

3,747,898

 

4,266,174

                       

Current assets

     

5,031,098

 

5,517,206

 

3,678,830

 

4,131,128

Non-current assets

     

69,068

 

135,046

 

69,068

 

135,046

Total

     

5,100,166

 

5,652,252

 

3,747,898

 

4,266,174

 

 

16

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

7.         Related parties

 

The information concerning related parties was presented in the 2015 annual financial statements of the Company, in Note 9.

 

(a)      Consolidated

    

 

     

Consolidated

     

Balances at June 30, 2016

 

Balances at December 31, 2015

     

Associated companies, Jointly-controlled investment and Related companies

 

Associated companies, Jointly-controlled investment and Related companies

     

Odebrecht and

 

Petrobras and

         

Odebrecht and

 

Petrobras and

       

Balance sheet

 

subsidiaries

 

subsidiaries

 

Other

 

Total

 

subsidiaries

 

subsidiaries

 

Other

 

Total

Assets

                               

Current

                               
 

Trade accounts receivable

 

3,995

 

12,841

 

23,928

 

40,764

 

12,851

 

141,550

 

33,997

 

188,398

 

Inventories

 

141,176

7(b.i)

4,807

   

145,983

 

138,619

7(b.i)

 

138,619

 

Dividends and interest on capital

 
 

Related parties

 

62

 

10,320

   

10,382

   

9,927

 

580

 

10,507

               

Non-current

           
 

Advances to suppliers

         

58,443

7(b.i)

   

58,443

 

Related parties

 
 

Intracompany loan

   

82,065

   

82,065

   

78,332

   

78,332

 

Other receivables

   

228,147

   

228,147

   

66,301

   

66,301

Total assets

 

145,233

 

338,180

 

23,928

 

507,341

 

209,913

 

296,110

 

34,577

 

540,600

                                   

Liabilities

                               

Current

 
 

Trade payables

 

31,720

 

1,534,220

 

1,517

 

1,567,457

 

284,973

 

1,400,485

 

2,011

 

1,687,469

Total liabilities

 

31,720

 

1,534,220

 

1,517

 

1,567,457

 

284,973

 

1,400,485

 

2,011

 

1,687,469

                                   
     

Period ended June 30, 2016

 

Period ended June 30, 2015

     

Associated companies, Jointly-controlled investment and Related companies

 

Associated companies, Jointly-controlled investment and Related companies

     

Odebrecht and

 

Petrobras and

         

Odebrecht and

 

Petrobras and

       
     

subsidiaries

 

subsidiaries

 

Other

 

Total

 

subsidiaries

 

subsidiaries

 

Other

 

Total

Transactions

                               
 

Sales of products

 

30,707

 

1,009,837

 

275,852

 

1,316,396

 

27,279

 

939,454

 

211,527

 

1,178,260

 

Purchases of raw materials, finished goods

 
 

services and utilities

 

859,246

(i)

5,826,466

 

39,933

 

6,725,645

 

1,726,633

(i)

6,605,617

 

26,870

 

8,359,120

 

Financial income (expenses), net

 

160

 

(104,399)

(104,239)

   

2,798

   

2,798

 

Post-employment benefits plan

 
 

Odebrecht previdência Privada ("Odeprev")

   

10,054

 

10,054

     

9,832

 

9,832

 

(i)     Includes expenses with the Braskem Idesa project, of which R$539,096 related to the period ended June 30, 2016, and R$1,591,553 related to the period ended June 30, 2015 (Note 13).

 

17

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(b)      Parent Company

 

     

Balances at June 30, 2016

     

Associated companies, Jointly-controlled investment and associated companies

 

Related companies

 

SPE

 

 

     

Braskem

 

Braskem

 

Braskem

 

Braskem

 

Braskem

 

Braskem

     

Odebrecht and

 

Petrobras and

 

FIM Sol and

   

Balance sheet

 

Inc

 

Holanda

 

Holanda Inc

 

Petroquímica

 

America

 

Argentina

 

Other

 

subsidiaries

 

subsidiaries

 

FIM Júpiter

 

Total

Assets

                                           

Current

         
 

Cash and equivalents

   

387,418

 

387,418

 

Trade accounts receivable

   

1,185,003

   

146,422

 

91,781

 

102,588

 

73,408

 

3,995

 

10,355

   

1,613,552

 

Inventories

 

141,176

7(b.i)

4,807

   

145,983

 

Dividends and interest on capital

   

97,611

   

1,507

     

99,118

 

Related parties

   

49

   

245,245

 

52,588

 

 

 

17,657

 

62

 

9,925

   

325,526

   

Non-current

 

Trade accounts receivable

 

3,575,492

   

3,575,492

 

Related parties

 
 

Loan agreeements

 

13,877

   

92

   

82,065

   

96,034

 

Other receivables

 

191,505

   

191,505

Total assets

 

3,589,369

 

1,185,052

   

489,278

 

144,369

 

102,588

 

92,664

 

145,233

 

298,657

 

387,418

 

6,434,628

 
Liabilities
Current
 

Trade payables

   

3,919,031

   

832,963

 

18

   

861

 

27,078

 

1,510,894

   

6,290,845

 

Accounts payable to related parties

         
 

Advance to export

     

2,072,260

   

18,002

   

2,090,262

 

Other payables

       

184,080

 

593

   

16

   

184,689

                           

Non-current

                         
 

Trade payables

 

1,554,541

         

1,554,541

 

Accounts payable to related parties

         
 

Advance to export

   

7,887,203

 

 

 

908,373

       

8,795,576

 

Payable notes

 

12,327

   

1,447

   

13,774

Total liabilities

 

1,566,868

 

3,919,031

 

9,959,463

 

1,018,490

 

926,986

 

 

 

877

 

27,078

 

1,510,894

 

 

 

18,929,687

                                               
     

 

Period ended June 30, 2016

     

Associated companies, Jointly-controlled investment and associated companies

 

Related companies

 

 

     

Braskem

 

Braskem

 

Braskem

 

Braskem

 

Braskem

 

Braskem

     

Odebrecht and

 

Petrobras and

       
     

Inc

 

Holanda

 

Holanda Inc

 

Petroquímica

 

America

 

Argentina

 

Other

 

subsidiaries

 

subsidiaries

 

Other

 

Total

Transactions

                                           
 

Sales of products

 

83,183

 

1,349,464

   

1,062,334

 

110,880

 

149,750

 

441,938

 

30,437

 

987,501

 

 

 

4,215,487

 

Purchases of raw materials, finished products

 
 

services and utilities

 

160,378

 

2,308,173

   

2,107,124

   

45,590

 

311,394

 

5,348,381

   

10,281,040

 

Financial income (expenses), net

 

(399,819)

 

520,893

 

1,859,698

 

(3)

 

148,617

 

(30,941)

 

(11,875)

 

164

 

(104,399)

   

1,982,335

 

General and administrative expenses - Odeprev

   

9,378

 

9,378

 

18

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

 

 

     

Balances at December 31, 2015

     

Associated companies, Jointly-controlled investment and associated companies

 

Related companies

SPE

 

 

     

Braskem

 

Braskem

 

Braskem

 

Braskem

 

Braskem

 

Braskem

 

Braskem

     

Odebrecht and

 

Petrobras and

 

FIM Sol and

   

Balance sheet

 

Inc

 

Holanda

 

Holanda Inc

 

Petroquímica

 

America

 

Austria

 

Argentina

 

Other

 

subsidiaries

 

subsidiaries

 

FIM Júpiter

 

Total

Assets

                                           

Current

                                         
 

Cash and equivalents

   

1,461,914

 

1,461,914

 

Trade accounts receivable

   

645,621

   

144,433

 

38,890

 

 

 

202,937

 

66,976

 

12,851

 

138,226

   

1,249,934

 

Inventories

         

138,619

7(b.i)

   

138,619

 

Dividends and interest on capital

       

84,150

 

 

     

84,150

 

Related parties

       

20,039

 

46,648

   

41,987

 

62

 

9,925

   

118,661

     

Non-current

 
 

Trade accounts receivable

 

4,261,535

       

4,261,535

 

Advances to suppliers

   

58,443

7(b.i)

 

58,443

 

Related parties

   
 

Loan agreements

 

16,541

   

113

 

78,332

   

94,986

 

Other receivables

 

 

   

 

 

29,659

   

29,659

Total assets

 

4,278,076

 

645,621

   

248,622

 

85,538

   

202,937

 

109,076

 

209,975

 

256,142

 

1,461,914

 

7,497,901

                                               

Liabilities

                                           

Current

                                           
 

Trade payables

   

3,068,634

   

686,084

 

21

     

2,862

 

27,715

 

1,381,150

   

5,166,466

 

Accounts payable to related parties

         

 

             

 

 

Advance to export

 

15,629

   

4,065,040

   

22,171

             

4,102,840

 

Other payables

   

9,538

   

149,520

 

689

     

35,148

       

194,895

                           

Non-current

                       
 

Trade payables

 

3,280,511

                     

3,280,511

 

Accounts payable to related parties

 
 

Advance to export

 

149,684

   

9,634,023

 

 

 

1,105,058

   

10,888,765

 

Payable notes

 

14,995

   

 

 

1,447

   

16,442

Total liabilities

 

3,460,819

 

3,078,172

 

13,699,063

 

837,051

 

1,127,939

   

38,010

 

27,715

 

1,381,150

 

 

 

23,649,919

                                                   
     

Period ended June 30, 2015

     

Associated companies, Jointly-controlled investment and associated companies

 

Related companies

 

 

     

Braskem

 

Braskem

 

Braskem

 

Braskem

 

Braskem

 

Braskem

 

Braskem

     

Odebrecht and

 

Petrobras and

       
     

Inc

 

Holanda

 

Holanda Inc

 

Petroquímica

 

America

 

Austria

 

Argentina

 

Other

 

subsidiaries

 

subsidiaries

 

Other

 

Total

Transactions

                                             
 

Sales of products

 

69,277

 

1,308,740

   

1,273,418

 

2,454

 

 

 

145,550

 

329,326

 

27,265

 

854,463

   

4,010,493

 

Purchases of raw materials, finished products

 
 

services and utilities

 

1,087,709

 

1,008,224

   

246,151

   

22,663

 

129,989

 

6,261,641

   

8,756,377

 

Financial income (expenses)

 

(578,824)

 

(1,793,554)

   

 

 

(132,799)

 

(75,782)

 

20,227

 

19,493

 

 

 

2,798

   

(2,538,441)

 

General and administrative expenses - Odeprev

   

9,191

 

9,191

 

19

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

The main transactions with related companies in the period ended June 30, 2016, except for those with subsidiaries of the Company, were:

 

(i)                  In March 2016, an agreement was entered into with Usina Conquista do Pontal S.A., with Agro Energia Santa Luzia S.A. and with Odebrecht Agroindustrial Participações S.A. to ensure the continued supply of hydrous ethanol to the Company, with technical flexibilities and differentiated commercial conditions, through an advance duly restated by the market rate and guaranteed by Odebrecht S.A. The Companies that are parties to the agreement are indirectly controlled by Odebrecht S.A. The price of hydrous ethanol is based on the Monthly Rate published by the Luiz de Queiroz College of Agriculture (ESALQ) Hydrous Fuel – São Paulo, in R$/liter, of the reference month and with a discount. The agreement has an estimated maximum amount of R$305,000 and is valid through April 30, 2017.

 

(ii)                In March 2016, an agreement was entered into with Refinaria de Petróleo Riograndense S.A. (“RPR”) for the sale of gasoil to RPR to be used as feedstock in the diesel production process, which is renewed on a monthly basis.

 

(iii)              Since March 2016, Braskem has had agreements for the sale of gasoline to RPR, renewable on a monthly basis.

 

(iv)              In June 2016, an agreement was signed for the sale of gasoline to Petrobras Distribuidora, a wholly-owned subsidiary of Petrobras. The agreement expired on July 30, 2016.

 

(v)                In June 2016, an amendment to the agreement with Transpetro was executed for the acquisition of naphtha and condensate handling and storage services by Braskem’s Basic Petrochemicals Unit, located in the Triunfo Industrial Complex. The amendment is worth an estimated R$8 million and is valid through December 2016.

 

(c)                     Key management personnel

 

   

Consolidated

Income statement transactions

 

Jun/2016

 

Jun/2015

Remuneration

       

Short-term benefits to employees and managers

 

16,065

 

14,402

Post-employment benefit

 

174

 

114

Total

 

16,239

 

14,516

 

 

20

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

8.                        Taxes recoverable

 

The information on taxes recoverable was presented in the 2015 annual financial statements of the Company, in Note 10.

 

 

         

Consolidated

 

Parent company

         

Jun/2016

 

Dec/2015

 

Jun/2016

 

Dec/2015

                       

Brazil

                   
 

IPI

     

47,291

 

23,996

 

44,961

 

22,615

 

Value-added tax on sales and services (ICMS) - normal operations

   

376,026

 

403,842

 

282,262

 

310,754

 

ICMS - credits from PP&E

   

123,858

 

121,954

 

117,603

 

115,354

 

Social integration program (PIS) and social contribution

                 
 

on revenue (COFINS) - normal operations

   

22,935

 

69,431

 

22,717

 

69,004

 

PIS and COFINS - credits from PP&E

   

244,520

 

230,030

 

231,536

 

217,482

 

Income tax and social contribution (IR and CSL)

   

770,606

 

944,863

 

621,748

 

779,277

 

REINTEGRA program

   

53,802

 

274,654

 

52,139

 

271,823

 

Federal supervenience

   

166,888

 

173,436

 

161,392

 

168,507

 

Other

     

11,956

 

14,281

 

7,685

 

6,309

                       

Other countries

                   
 

Value-added tax ("VAT")

   

235,360

 

277,751

 
 

Income tax

     

14,017

 

40,263

 
 

Other

     

2,777

 

1,559

 

Total

     

2,070,036

 

2,576,060

 

1,542,043

 

1,961,125

                       

Current assets

     

771,216

 

1,272,004

 

354,404

 

762,824

Non-current assets

   

1,298,820

 

1,304,056

 

1,187,639

 

1,198,301

Total

     

2,070,036

 

2,576,060

 

1,542,043

 

1,961,125

 

21

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

9.                        Investments

 

The information related to investments was presented in the Company’s 2015 annual financial statements, in Note 11.

 

(a)                     Information on investments

 

 

 

           

Interest in total capital

 

Adjusted net profit (loss)

 

Adjusted

           

total (%) - 6/30/2016

 

for the period

 

equity

             

Direct e Indirect

 

Jun/2016

 

Jun/2015

 

Jun/2016

 

Dec/2015

                             

 

Subsidiaries

                         
 

Alclor

           

(1,248)

 

(1,613)

   

35,435

 

Braskem Alemanha

       

100.00

 

949,347

 

86,005

 

2,498,028

 

2,040,998

 

Braskem America

       

100.00

 

770,363

 

38,702

 

2,264,401

 

1,947,177

 

Braskem America Finance

       

100.00

 

210

 

186

 

2,731

 

3,065

 

Braskem Argentina

       

100.00

 

1,495

 

2,600

 

17,641

 

16,146

 

Braskem Austria

 

 

 

 

100.00

 

(96)

 

(1,830)

 

4,183

 

5,118

 

Braskem Austria Finance

         

(30)

   

75

 

Braskem Holanda

       

100.00

 

862,495

 

300,270

 

1,024,736

 

958,377

 

Braskem Holanda Finance

       

100.00

 

(10)

 

(4)

 

(18)

 

(12)

 

Braskem Holanda Inc

       

100.00

 

1,221

 

(88)

 

989

 

(158)

 

Braskem Finance

       

100.00

 

52,426

 

(78,331)

 

(84,586)

 

(137,013)

 

Braskem Idesa

       

75.00

 

(640,440)

 

(534,799)

 

(3,488,902)

 

(1,991,690)

 

Braskem Idesa Serviços

       

75.00

 

1,891

 

4,951

 

7,363

 

8,860

 

Braskem Inc

       

100.00

 

(66,242)

 

312,731

 

777,338

 

843,579

 

Braskem México

       

100.00

 

17,616

 

71,191

 

175,637

 

206,806

 

Braskem México Sofom

       

100.00

 

1,842

   

6,070

 

1,566

 

Braskem México Serviços

       

100.00

 

371

 

2,302

 

3,878

 

3,424

 

Braskem Petroquímica

       

100.00

 

127,598

 

150,512

 

2,168,266

 

2,018,696

 

IQAG

         

100.00

 

5,189

 

2,963

 

15,492

 

16,934

 

Lantana

       

100.00

 

187

 

(121)

 

(860)

 

(1,047)

 

Braskem Chile

       

100.00

 

888

 

1,095

 

8,596

 

7,707

 

Quantiq

       

100.00

 

18,256

 

892

 

262,602

 

244,345

                               

Jointly-controlled investment

                         
 

RPR

         

33.20

 

36,931

 

24,297

 

131,090

 

145,551

 

Odebrecht Comercializadora de Energia S.A. ("OCE")

     

20.00

 

(207)

 

12,473

 

11,234

 

11,441

             

Associates

                         
 

Borealis

       

20.00

 

796

 

5,345

 

158,887

 

158,366

 

 

 

22

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(b)                     Changes in investments – parent company

 

   

Subsidiaries and jointly-controlled investment

           
   

Domestic subsidiaries

 

Foreign subsidiaries

 

Domestic associates

 

Other

 

Total

                     

Balance at Dec/2015

2,418,563

 

2,139,711

 

31,673

 

3,828

 

4,593,775

Dividends and interest on capital

(17,760)

         

(17,760)

Equity of investments

             
 

Effect of results

158,032

 

869,893

 

816

   

1,028,741

 

Adjustment of profit in inventories

7,480

 

(5,182)

     

2,298

Goodwill amortization

(15,960)

       

(15,960)

Equity valuation adjustments

(12,765)

 

(657,651)

     

(670,416)

Currency translation adjustments

 

(215,975)

     

(215,975)

Balance at Jun/2016

2,537,590

 

2,130,796

 

32,489

 

3,828

 

4,704,703

 

(c)                     Equity accounting results – breakdown

 

               

 

 

Parent company

               

Jun/2016

 

Jun/2015

                     

Equity in results of subsidiaries, associate and jointly-controlled

         

1,031,038

 

818,927

Amortization of fair value adjustment

           

(15,960)

 

(15,612)

Provision for losses on investments

           

52,428

 

(346,270)

Other

           

364

 

12

               

1,067,870

 

457,057

 

 

23

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(d)                     Impacts on consolidation of Braskem Idesa

 

In compliance with IFRS 12 and CPC 45, the Company is presenting the financial statements of the subsidiary in which it holds non-controlling interest and the effects on the Company’s consolidated statements.

 

   

 

Balance sheet

 

Consolidated Braskem

           
     

Ex consolidated Braskem Idesa

 

Braskem Idesa consolidated (i)

 

Eliminations

 

Consolidated

Assets

 

Jun/2016

 

Dec/2015

 

Jun/2016

 

Dec/2015

 

Jun/2016

 

Dec/2015

 

Jun/2016

 

Dec/2015

         

 

     

 

     

 

     

 

Curent

                               
 

Cash and cash equivalents

 

6,675,140

 

7,305,084

 

65,493

 

134,640

   

6,740,633

 

7,439,724

 

Financial investments

 

428,219

 

1,172

   

428,219

 

1,172

 

Trade accounts receivable

 

1,973,354

 

2,632,142

 

148,045

 

120,848

 

(35,976)

 

(17,846)

 

2,085,423

 

2,735,144

 

Inventories

 

4,765,784

 

5,344,077

 

265,314

 

173,129

   

5,031,098

 

5,517,206

 

Taxes recoverable

 

614,665

 

1,052,933

 

156,551

 

219,071

   

771,216

 

1,272,004

 

Other receivables

 

315,132

 

504,034

 

71,866

 

29,260

(ii)

(57)

 

(57)

 

386,941

 

533,237

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

14,772,294

 

16,839,442

 

707,269

 

676,948

 

(36,033)

 

(17,903)

 

15,443,530

 

17,498,487

Non-current

                               
 

Taxes recoverable

 

1,298,766

 

1,303,987

 

54

 

69

   

1,298,820

 

1,304,056

 

Deferred tax

 

451,510

 

2,401,091

 

1,099,282

 

825,416

   

1,550,792

 

3,226,507

 

Related parties

 

4,912,320

 

4,556,671

 

(ii)

(4,602,108)

 

(4,412,038)

 

310,212

 

144,633

 

Other receivables

 

785,027

 

906,033

 

513

 

32,011

   

785,540

 

938,044

 

Property, plant and equipment

 

18,752,088

 

19,545,128

 

12,354,466

 

15,134,641

(iii)

(734,887)

 

(717,806)

 

30,371,667

 

33,961,963

 

Intangible

 

2,698,470

 

2,806,734

 

136,417

 

80,870

   

2,834,887

 

2,887,604

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

28,898,181

 

31,519,644

 

13,590,732

 

16,073,007

 

(5,336,995)

 

(5,129,844)

 

37,151,918

 

42,462,807

                                   

Total assets

 

43,670,475

 

48,359,086

 

14,298,001

 

16,749,955

 

(5,373,028)

 

(5,147,747)

 

52,595,448

 

59,961,294

                                   

Liabilities

                               

Current

                               
 

Trade payables

 

7,593,013

 

11,287,141

 

224,931

 

429,400

 

(35,976)

 

(17,846)

 

7,781,968

 

11,698,695

 

Borrowings

 

2,644,860

 

1,968,540

   

2,644,860

 

1,968,540

 

Project finance

   

464,466

 

302,266

   

464,466

 

302,266

 

Payroll and related charges

 

400,531

 

582,921

 

11,760

 

22,138

   

412,291

 

605,059

 

Taxes payable

 

565,512

 

709,695

 

29,062

 

34,965

   

594,574

 

744,660

 

Other payables

 

495,218

 

1,313,201

 

118,592

 

49,808

   

613,810

 

1,363,009

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

11,699,134

 

15,861,498

 

848,811

 

838,577

 

(35,976)

 

(17,846)

 

12,511,969

 

16,682,229

                                   

Non-current

                               
 

Loan agreements

 

21,036,636

 

25,370,260

   

21,036,636

 

25,370,260

 

Project finance

   

9,898,313

 

11,975,167

   

9,898,313

 

11,975,167

 

Accounts payable to related parties

   

4,699,812

 

4,372,482

(ii)

(4,699,812)

 

(4,372,482)

 
 

Non-controlling loan in Braskem Idesa

 

(v)

1,573,753

 

1,538,784

   

1,573,753

 

1,538,784

 

Provision for losses on subsidiaries

 

2,616,677

 

2,054,654

 

(iv)

(2,616,677)

 

(2,054,654)

 
 

Other payables

 

2,571,966

 

3,050,078

 

128,975

 

7,065

   

2,700,941

 

3,057,143

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

26,225,279

 

30,474,992

 

16,300,853

 

17,893,498

 

(7,316,489)

 

(6,427,136)

 

35,209,643

 

41,941,354

                                   

Shareholders' equity

                               
 

Attributable to the Company's shareholders

5,746,062

 

2,022,596

 

(2,851,663)

 

(1,982,120)

 

2,851,663

 

1,982,120

 

5,746,062

 

2,022,596

 

Non-controlling interest

 
 

in Braskem Idesa

   

(872,226)

 

(684,885)

 

(872,226)

 

(684,885)

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

5,746,062

 

2,022,596

 

(2,851,663)

 

(1,982,120)

 

1,979,437

 

1,297,235

 

4,873,836

 

1,337,711

                                   

Total liabilities and shareholders' equity

 

43,670,475

 

48,359,086

 

14,298,001

 

16,749,955

 

(5,373,028)

 

(5,147,747)

 

52,595,448

 

59,961,294

 

 

(i)          Consolidation of Braskem Idesa with its direct subsidiary Braskem Idesa Serviços.

(ii)      Loan from Braskem as part of shareholders’s contribution to the project.

(iii)       Adjustment corresponding to the capitalization of a portion of financial charges of the loan granted by Braskem to Braskem Idesa.

(iv)       Provision recorded in the subsidiary Braskem Holanda for the negative shareholders' equity of Braskem Idesa.

(v)        The loan show in this item is owed to the non-controlling shareholder as part of shareholders’s contribution to the project and will be paid solely with the cash generated from the project.

 

24

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

 

     

Consolidated Braskem

           
     

Ex consolidated Braskem Idesa

 

Braskem Idesa consolidated

 

Eliminations

 

Consolidated

     

Jun/2016

 

Jun/2015

 

Jun/2016

 

Jun/2015

 

Jun/2016

 

Jun/2015

 

Jun/2016

 

Jun/2015

                                   

Net sales revenue

 

23,792,548

 

21,648,879

 

318,476

 

187,994

 

(52,909)

 

(49,777)

 

24,058,115

 

21,787,096

 

Cost of products sold

 

(17,333,912)

 

(17,253,360)

 

(259,479)

 

(197,658)

 

36,687

 

32,922

 

(17,556,704)

 

(17,418,096)

                                   
     

6,458,636

 

4,395,519

 

58,997

 

(9,664)

 

(16,222)

 

(16,855)

 

6,501,411

 

4,369,000

                                   

Income (expenses)

                               
 

Selling and distribution

 

(631,367)

 

(505,841)

 

(44,048)

 

(16,550)

   

(675,415)

 

(522,391)

 

General and administrative

 

(657,630)

 

(595,387)

 

(88,759)

 

(18,351)

 

24,112

 

16,855

 

(722,277)

 

(596,883)

 

Research and development

 

(82,628)

 

(82,157)

   

(82,628)

 

(82,157)

 

Results from equity investments

 

(466,953)

 

(257,642)

   

963

 

480,330

 

266,418

 

13,377

 

9,739

 

Other operating
income (expenses), net

 

(176,421)

 

(88,028)

 

(14,262)

 

(1,720)

   

(190,683)

 

(89,748)

                                   
     

4,443,637

 

2,866,464

 

(88,072)

 

(45,322)

 

488,220

 

266,418

 

4,843,785

 

3,087,560

                                   

Financial results

                               
 

Financial expenses

 

(2,091,486)

 

(1,769,098)

 

(739,361)

 

(85,181)

 

103,550

 

(1,261)

 

(2,727,297)

 

(1,855,540)

 

Financial income

 

(554,267)

 

837,510

 

30,019

 

52,591

 

(107,786)

 

(239,444)

 

(632,034)

 

650,657

                                   
     

(2,645,753)

 

(931,588)

 

(709,342)

 

(32,590)

 

(4,236)

 

(240,705)

 

(3,359,331)

 

(1,204,883)

                                   

Profit before income tax

                               

and social contribution

 

1,797,884

 

1,934,876

 

(797,414)

 

(77,912)

 

483,984

 

25,713

 

1,484,454

 

1,882,677

                                   
 

IR and CSL - current and deferred

 

(610,167)

 

(587,291)

 

153,320

 

(36,607)

   

(456,847)

 

(623,898)

     

(610,167)

 

(587,291)

 

153,320

 

(36,607)

   

(456,847)

 

(623,898)

                                   

Profit for the period

 

1,187,717

 

1,347,585

 

(644,094)

 

(114,519)

 

483,984

 

25,713

 

1,027,607

 

1,258,779

 

 

25

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

Statement of cash flows

 

Consolidated Braskem

                       
     

Ex consolidated Braskem Idesa

 

Braskem Idesa consolidated

 

Eliminations

 

Consolidated

     

Jun/2016

 

Jun/2015

 

Jun/2016

 

Jun/2015

 

Jun/2016

 

Jun/2015

 

Jun/2016

 

Jun/2015

                                   

Profit before income tax
and social contribution

 

1,797,884

 

1,934,876

 

(797,414)

 

(77,912)

 

483,984

 

25,713

 

1,484,454

 

1,882,677

     

Adjustments for reconciliation of profit

 
 

Depreciation, amortization and depletion

 

1,203,874

 

1,012,731

 

59,707

 

302

 

(7,890)

   

1,255,691

 

1,013,033

 

Results from equity investments

 

466,953

 

256,679

   

(480,330)

 

(266,418)

 

(13,377)

 

(9,739)

 

Interest and monetary and exchange variations, net

214,597

 

866,544

 

909,746

 

423,423

 

(146,261)

   

978,082

 

1,289,967

 

Other

 

12,935

 

5,301

 

24

   

12,959

 

5,301

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

3,696,243

 

4,076,131

 

172,063

 

345,813

 

(150,497)

 

(240,705)

 

3,717,809

 

4,181,239

                                   

Changes in operating working capital

 
 

Held-for-trading financial investments

 

(409,333)

 

17,441

   

(409,333)

 

17,441

 

Trade accounts receivable

 

651,049

 

(52,278)

 

(27,197)

 

(22,201)

 

18,130

 

17,846

 

641,982

 

(56,633)

 

Inventories

 

553,548

 

(1,592)

 

(43,913)

 

86,498

   

509,635

 

84,906

 

Taxes recoverable

 

626,156

 

258,075

 

60,621

 

314,447

   

686,777

 

572,522

 

Other receivables

 

5,899

 

5,024

 

(23,384)

 

3,698

   

(17,485)

 

8,722

 

Trade payables

 

(2,128,717)

 

(989,504)

 

(204,469)

 

(246,749)

 

(18,130)

 

(17,846)

 

(2,351,316)

 

(1,254,099)

 

Taxes payable

 

(279,020)

 

55,243

 

257,397

 

7,278

   

(21,623)

 

62,521

 

Other payables

 

(381,758)

 

(554,467)

 

160,480

 

213,100

   

(221,278)

 

(341,367)

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash from operations

 

2,334,067

 

2,814,073

 

351,598

 

701,884

 

(150,497)

 

(240,705)

 

2,535,168

 

3,275,252

                                   
 

Interest paid

 

(411,724)

 

(240,299)

 

(274,522)

 

(228,408)

   

(686,246)

 

(468,707)

 

Income tax and social contribution paid

 

(668,126)

 

(50,425)

     

(668,126)

 

(50,425)

     

 

 

 

 

 

 

 

   

 

 

 

Net cash generated by operating activities

 

1,254,217

 

2,523,349

 

77,076

 

473,476

 

(150,497)

 

(240,705)

 

1,180,796

 

2,756,120

                                   

Proceeds from the sale of fixed assets

 

114

 

686

   

114

 

686

Acquisitions to property, plant and equipment

 

(594,220)

 

(536,411)

 

(1,025,797)

 

(1,532,201)

 

150,497

 

240,705

 

(1,469,520)

 

(1,827,907)

Acquisitions of intangible assets

 

(16,348)

 

(9,670)

   

(16,348)

 

(9,670)

Held-for-maturity financial investments

 

38,353

 

(11)

   

38,353

 

(11)

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

(572,101)

 

(545,406)

 

(1,025,797)

 

(1,532,201)

 

150,497

 

240,705

 

(1,447,401)

 

(1,836,902)

                             

Short-term and long-term debt

                         
 

Obtained borrowings

 

1,937,284

 

2,659,341

   

1,937,284

 

2,659,341

 

Payments of borrowings

 

(1,865,492)

 

(3,049,074)

   

(1,865,492)

 

(3,049,074)

Project finance

     
 

Obtained funds

   

153,126

 

1,250,201

   

153,126

 

1,250,201

 

Payments

 

1,111

   

(228,312)

 

(370,979)

   

(227,201)

 

(370,979)

Related parties

       
 

Obtained loans (payment of loans )

 

(925,183)

 

(244,322)

 

925,183

 

244,322

   

Dividends paid

 

(998,982)

 

(482,074)

     

(998,982)

 

(482,074)

Repurchase of treasury shares

   

(927)

     

(927)

     

 

 

 

 

 

 

 

   

 

 

 

Net cash used in financing activities

 

(1,851,262)

 

(1,117,056)

 

849,997

 

1,123,544

   

(1,001,265)

 

6,488

                             

Exchange variation on cash of foreign subsidiaries

 

539,202

 

(81,051)

 

29,578

 

(16,989)

   

568,780

 

(98,040)

     

 

 

 

 

 

 

 

   

 

 

 

Increase (decrease) in cash and cash equivalents

 

(629,944)

 

779,836

 

(69,146)

 

47,830

   

(699,090)

 

827,666

                             

Represented by

                         
 

Cash and cash equivalents at the beginning for the period

7,305,084

 

3,659,495

 

134,639

 

333,864

   

7,439,723

 

3,993,359

 

Cash and cash equivalents at the end for the period

6,675,140

 

4,439,331

 

65,493

 

381,694

   

6,740,633

 

4,821,025

     

 

 

 

 

 

 

 

   

 

 

 

Increase (decrease) in cash and cash equivalents

 

(629,944)

 

779,836

 

(69,146)

 

47,830

   

(699,090)

 

827,666

                             

 

26

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

10.                    Property, plant and equipment

 

The information on property, plant and equipment was presented in the Company’s 2015 annual financial statements, in Note 12.

 

       

Consolidated

       

 

 

 

 

Jun/2016

 

 

 

 

 

Dec/2015

           

Accumulated

         

Accumulated

   
           

depreciation/

         

depreciation/

   
       

Cost

 

depletion

 

Net

 

Cost

 

depletion

 

Net

                             

Land

   

447,122

   

447,122

 

479,621

   

479,621

Buildings and improvements

   

5,198,083

 

(967,219)

 

4,230,864

 

5,435,600

 

(904,324)

 

4,531,276

Machinery, equipment and installations

 

36,238,608

 

(15,340,341)

 

20,898,267

 

37,401,007

 

(14,513,744)

 

22,887,263

Projects in progress

 

(i)

4,276,234

   

4,276,234

 

5,506,044

   

5,506,044

Other

   

1,215,118

 

(695,938)

 

519,180

 

1,212,365

 

(654,606)

 

557,759

Total

   

47,375,165

 

(17,003,498)

 

30,371,667

 

50,034,637

 

(16,072,674)

 

33,961,963

 

(i)        On June 30, 2016, the main amounts included in this account refer to the expenses with the subsidiary Braskem Idesa project (R$1,331,347) and expenses with planned shutdown maintenance which is in preparation or in progress (R$671,711). The balance corresponds mainly to diverse projects aimed at maintenance of plants’ production capacity.

 

 

 

The capitalized charges in the period ended June 30, 2016 were R$298,804 (R$364,435 on June 30, 2015).

 

There were no significant events or circumstances in the period ended June 30, 2016 that indicate the need for impairment testing on the property, plant and equipment.

 

11.                    Intangible assets

 

The information on intangible assets was presented in the 2015 annual financial statements of the Company, in Note 13.

 

 

       

Consolidated

       

 

 

 

 

Jun/2016

 

Dec/2015

           

Accumulated

         

Accumulated

   
       

Cost

 

amortization

 

Net

 

Cost

 

amortization

 

Net

                             

Goodwill based on future profitability

 

3,187,722

 

(1,128,804)

 

2,058,918

 

3,187,722

 

(1,128,804)

 

2,058,918

Trademarks and patents

 

349,092

 

(103,284)

 

245,808

 

298,438

 

(100,782)

 

197,656

Software and use rights

 

575,214

 

(403,830)

 

171,384

 

536,786

 

(336,029)

 

200,757

Contracts with customers and suppliers

 

690,446

 

(331,669)

 

358,777

 

795,782

 

(365,509)

 

430,273

Total

   

4,802,474

 

(1,967,587)

 

2,834,887

 

4,818,728

 

(1,931,124)

 

2,887,604

 

There were no significant events or circumstances in the period ended June 30, 2016 that indicated the need for updating the impairment testing of intangible assets with indefinite useful life made in the end of 2015, or that indicated the need to perform an impairment testing of intangible assets with definite useful life.

 

 

27

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

12.                    Borrowings

 

The information on borrowings was presented in the 2015 annual financial statements of the Company, in Note 14.

 

 

                 

 

 

Consolidated

         

Annual financial charges

 

Jun/2016

 

Dec/2015

Foreign currency

                   
 

Bonds

     

Note 12 (a)

     

14,001,487

 

17,004,617

 

Advances on exchange contracts

 

US dollar exchange variation + 3.40%

666,711

 

255,809

 

Export prepayment

   

Note 12 (b)

     

740,860

 

549,036

 

BNDES

     

Note 12 (c)

     

265,891

 

409,076

 

Export credit notes

   

Note 12 (d)

     

1,155,063

 

1,405,227

 

Working capital

   

US dollar exchange variation + 1.70% above Libor

1,568,250

 

1,907,145

 

Transactions costs

           

(223,709)

 

(248,838)

                 

18,174,553

 

21,282,072

                       
 

Current liabilities

           

1,601,821

 

763,071

 

Non-current liabilities

           

16,572,732

 

20,519,001

 

Total

             

18,174,553

 

21,282,072

                       

Local currency

                   
 

Export credit notes

   

Note 12 (d)

     

2,099,076

 

2,350,965

 

BNDES

     

Note 12 (c)

     

2,772,877

 

3,001,776

 

BNB/ FINAME/ FINEP/ FUNDES

 

6.45%

     

576,012

 

642,739

 

BNB/ FINAME/ FINEP/ FUNDES

 

TJLP + 1.90%

   

2,015

 

2,177

 

Fundo de Desenvolvimento do Nordeste (FDNE)

6.50%

     

49,456

 

51,939

 

Other

     

CDI + 0.04%

   

21,693

 

23,714

 

Transactions costs

             

(14,186)

 

(16,582)

                 

5,506,943

 

6,056,728

                       
 

Current liabilities

           

1,043,039

 

1,205,469

 

Non-current liabilities

           

4,463,904

 

4,851,259

 

Total

             

5,506,943

 

6,056,728

                       

Foreign currency and local currency

               
 

Current liabilities

           

2,644,860

 

1,968,540

 

Non-current liabilities

           

21,036,636

 

25,370,260

 

Total

             

23,681,496

 

27,338,800

                       
                       
             

 

 

Parent company

                 

Jun/2016

 

Dec/2015

Foreign currency

                   
 

Current liabilities

           

2,076,948

 

1,361,655

 

Non-current liabilities

           

2,555,991

 

3,355,752

                 

4,632,939

 

4,717,407

Local currency

                   
 

Current liabilities

           

1,043,039

 

1,205,469

 

Non-current liabilities

           

4,463,904

 

4,851,260

                 

5,506,943

 

6,056,729

                       

Foreign currency and local currency

               
 

Current liabilities

           

3,119,987

 

2,567,124

 

Non-current liabilities

           

7,019,895

 

8,207,012

 

Total

             

10,139,882

 

10,774,136

 

 

 

28

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(a)                     Bonds

 

 

     

Issue amount

     

Interest

 

Consolidated

Issue date

 

 

US$

 

Maturity

 

(% per year)

 

Jun/2016

 

Dec/2015

September - 2006

   

275,000

 

January - 2017

 

8.00

 

185,476

 

225,637

June - 2008

   

500,000

 

June - 2018

 

7.25

 

427,204

 

539,327

May - 2010

   

400,000

 

May - 2020

 

7.00

 

154,611

 

188,088

May - 2010

   

350,000

 

May - 2020

 

7.00

 

1,135,008

 

1,380,764

October - 2010

   

450,000

 

no maturity date

 

7.38

 

1,469,858

 

1,757,160

April - 2011

   

750,000

 

April - 2021

 

5.75

 

2,428,067

 

2,953,803

July - 2011

   

500,000

 

July - 2041

 

7.13

 

1,655,086

 

2,013,453

February - 2012

   

250,000

 

April - 2021

 

5.75

 

812,063

 

987,894

February - 2012

   

250,000

 

no maturity date

 

7.38

 

816,588

 

976,200

May - 2012

   

500,000

 

May - 2022

 

5.38

 

1,618,798

 

1,969,307

July - 2012

   

250,000

 

July - 2041

 

7.13

 

827,543

 

1,006,727

February - 2014

 

(i)

500,000

 

February - 2024

 

6.45

 

1,647,457

 

2,004,171

May - 2014

 

(ii)

250,000

 

February - 2024

 

6.45

 

823,728

 

1,002,086

Total

   

5,225,000

         

14,001,487

 

17,004,617

 

(i)     Effective interest rate including transaction costs is 7.78% p.a.;

(ii)    Effective interest rate including transaction costs is 7.31% p.a.

 

(b)                     Export prepayments

 

 

     

Initial amount

               
     

of the transaction

         

Consolidated

Issue date

 

 

US$

 

Maturity

 

Charges (% per year)

 

Jun/2016

 

Dec/2015

January - 2013

   

200,000

 

November - 2022

 

US dollar exchange variation + semiannual Libor + 3.40%

 

418,875

 

549,036

May - 2016

   

50,000

 

May - 2017

 

US dollar exchange variation + semiannual Libor + 3.35%

 

161,017

 

June- 2016

   

50,000

 

December - 2016

 

US dollar exchange variation + semiannual Libor + 3.55%

 

160,968

 

Total

   

300,000

         

740,860

 

549,036

 

 

 

29

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(c)                     BNDES borrowings

 

               

 

 

Consolidated

Projects

 

Issue date

 

Maturity

 

Charges (% per year)

 

Jun/2016

 

Dec/2015

                     

Foreign currency

                   

Other

 

2006

 

October - 2016

 

US dollar exchange variation + 6.91

 

1,053

 

3,204

Braskem Qpar expansion

 

2007/2008

 

April - 2016

 

US dollar exchange variation + 6.89

 

 

 

2,426

Green PE

 

2009

 

July - 2017

 

US dollar exchange variation + 6.69

 

16,506

 

29,352

Limit of credit II

 

2009

 

January - 2017

 

US dollar exchange variation + 6.69

 

20,956

 

47,353

New plant PVC Alagoas

 

2010

 

January - 2020

 

US dollar exchange variation + 6.69

 

92,899

 

128,806

Limit of credit III

 

2011

 

October - 2018

 

US dollar exchange variation + 6.53 to 6.56

 

98,581

 

149,495

Butadiene

 

2011

 

January - 2021

 

US dollar exchange variation + 6.56

 

35,896

 

48,440

               

265,891

 

409,076

                     

Local currency

                   

Other

 

2006

 

September - 2016

 

TJLP + 2.80

 

4,531

 

13,501

Braskem Qpar expansion

 

2007/2008

 

February - 2016

 

TJLP + 2.15 to 3.30

 

 

 

5,372

Green PE

 

2009

 

June - 2017

 

TJLP + 0.00 to 4.78

 

80,014

 

119,201

Limit of credit II

 

2009

 

January - 2017

 

TJLP + 2.58 to 3.58

 

46,087

 

85,004

Limit of credit II

 

2009

 

January - 2021

 

4.00 to 4.50

 

86,643

 

96,698

New plant PVC Alagoas

 

2010

 

December - 2019

 

TJLP + 0.00 to 3.58

 

207,506

 

235,641

New plant PVC Alagoas

 

2010

 

December - 2019

 

5.50

 

23,387

 

26,732

Limit of credit III

 

2011

 

December - 2021

 

TJLP + 0.00 to 3.58

 

1,017,124

 

1,154,552

Limit of credit III

 

2011

 

December - 2021

 

SELIC + 2.32 to 2.78

 

274,863

 

284,263

Limit of credit III

 

2011

 

December - 2021

 

3.50 to 7.00

 

209,303

 

230,198

Butadiene

 

2011

 

December - 2020

 

TJLP + 0.00 to 3.45

 

87,364

 

96,407

Finem

 

2014

 

March - 2021

 

TJLP + 0.00 to 2.78

 

212,023

 

215,372

Finem

 

2014

 

March - 2021

 

SELIC + 2.78

 

167,039

 

160,603

Finem

 

2014

 

March - 2021

 

6.00

 

6,330

 

6,664

Limit of credit IV

 

2015

 

January - 2022

 

TJLP + 0.00 a 2.62

 

176,498

 

140,024

Limit of credit IV

 

2015

 

January - 2022

 

SELIC + 2.32

 

174,165

 

131,544

               

2,772,877

 

3,001,776

                     

Total

             

3,038,768

 

3,410,852

 

 

 

30

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(d)                     Export credit notes (“NCE”)

 

 

 

     

Initial amount

         

 

 

Consolidated

Issue date

 

 

of the transaction

 

Maturity

 

Charges (% per year)

 

Jun/2016

 

Dec/2015

                     

Foreign currency

 

US$

               

November - 2006

 

167,014

 

May - 2018

 

Us dollar exchange variation + 8.10

 

253,237

 

308,069

April - 2007

 

101,605

 

March - 2018

 

Us dollar exchange variation + 7.87

 

163,402

 

198,782

May - 2007

 

146,010

 

May - 2019

 

Us dollar exchange variation + 7.85

 

242,310

 

294,840

January - 2008

 

266,430

 

February - 2020

 

Us dollar exchange variation + 7.30

 

496,114

 

603,536

   

681,059

         

1,155,063

 

1,405,227

                     

Local currency

 

Reais

               

April - 2010

   

50,000

 

October - 2021

 

105% of CDI

 

36,672

 

36,653

June - 2010

   

200,000

 

October - 2021

 

105% of CDI

 

146,689

 

146,611

February - 2011

   

250,000

 

October - 2021

 

105% of CDI

 

146,689

 

146,611

April - 2011

(i)

 

450,000

 

April - 2019

 

112,5% of CDI

 

464,031

 

464,039

June - 2011

 

 

80,000

 

October - 2021

 

105% of CDI

 

58,676

 

58,644

August - 2011

(i)

 

400,000

 

August - 2019

 

112,5% of CDI

 

405,713

 

405,478

June - 2012

 

 

100,000

 

October - 2021

 

105% of CDI

 

73,345

 

73,305

September - 2012

 

 

300,000

 

October - 2021

 

105% of CDI

 

220,034

 

219,917

October - 2012

 

 

85,000

 

October - 2021

 

105% of CDI

 

62,343

 

62,310

February - 2013

(ii)

 

100,000

 

September - 2017

 

8.00

 

101,183

 

101,118

February - 2013

 

 

100,000

 

February - 2016

 

8.00

   

101,248

February - 2013

(ii)

 

50,000

 

September - 2017

 

8.00

 

50,440

 

50,440

February - 2013

 

 

100,000

 

February - 2016

 

8.00

   

101,118

March - 2013

 

 

50,000

 

March - 2016

 

8.00

   

50,253

June - 2014

(ii)

 

50,000

 

June - 2017

 

7.50

 

50,000

 

50,010

June - 2014

(ii)

 

17,500

 

June - 2017

 

8.00

 

17,500

 

17,504

June - 2014

(ii)

 

10,000

 

June - 2017

 

8.00

 

10,000

 

10,002

September - 2014

 

 

100,000

 

August - 2020

 

108% of CDI

 

104,699

 

104,642

November - 2014

(ii)

 

150,000

 

November - 2017

 

8.00

 

151,062

 

151,062

     

2,642,500

         

2,099,076

 

2,350,965

                       

Total

               

3,254,139

 

3,756,192

 

(i)          The Company enters into swap transactions to offset the variation in the Interbank Certificate of Deposit (CDI) rate (Note 14.3.1 (a.i)).

(ii)        The Company enters into swap transactions for these contracts (from fixed rate to 67.10% to 92.70% of CDI) (Note 14.3.1).

 

31

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(e)                     Payment schedule

 

The maturity profile of amounts maturing in the long-term is as follows:

 

 

 

       

Consolidated

       

Jun/2016

 

Dec/2015

2017

     

916,111

 

1,737,331

2018

     

2,334,397

 

2,633,143

2019

     

3,042,935

 

3,320,800

2020

     

2,390,097

 

2,757,234

2021

     

3,572,521

 

4,257,177

2022

     

1,711,259

 

2,071,030

2023

     

7,797

 

7,540

2024

     

2,423,733

 

2,944,726

2025 and thereafter

     

4,637,786

 

5,641,279

Total

     

21,036,636

 

25,370,260

 

 

(f)                      Guarantees

 

Braskem gave collateral for part of its borrowings as follows:

 

 

 

       

Total

 

Total

   

Loans

 

Maturity

 

Jun/2016

 

guaranteed

 

Guarantees

                 

BNB

 

December - 2022

 

144,444

 

144,444

 

Mortgage of plants, pledge of machinery and equipment

BNB

 

August - 2024

 

232,418

 

232,418

 

Bank surety

BNDES

 

December - 2021

 

3,038,768

 

3,038,768

 

Mortgage of plants, land and property, pledge of machinery and equipment

FUNDES

 

June - 2020

 

127,791

 

127,791

 

Mortgage of plants, land and property, pledge of machinery and equipment

FINEP

 

July - 2024

 

71,359

 

71,359

 

Bank surety

FINAME

 

February - 2022

 

2,015

 

2,015

 

Pledge of equipment

Total

     

3,616,795

 

3,616,795

   

 

 

32

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

13.                    Project finance

 

The information on project finance was presented in the 2015 annual financial statements in Note 15.

 

 

   

US$

         

Consolidated

Identification

 

Contract value

 

Value received

 

Maturity

 

Charges (% per year)

 

Jun/2016

 

Dec/2015

Project finance I

 

700,000

 

700,000

 

February - 2027

 

Us dollar exchange variation + quarterly Libor + 3.25

 

2,294,323

 

2,720,874

Project finance II

 

210,000

 

189,996

 

February - 2027

 

Us dollar exchange variation + 6.17

 

685,738

 

740,902

Project finance III

 

600,000

 

600,000

 

February - 2029

 

Us dollar exchange variation + 4.33

 

1,959,630

 

2,334,133

Project finance IV

 

660,000

 

680,004

 

February - 2029

 

Us dollar exchange variation + quarterly Libor + 3.88

 

2,159,547

 

2,645,645

Project finance V

 

400,000

 

400,000

 

February - 2029

 

Us dollar exchange variation + quarterly Libor + 4.65

 

1,308,124

 

1,557,360

Project finance VI

 

90,000

 

89,994

 

February - 2029

 

Us dollar exchange variation + quarterly Libor + 2.73

 

293,668

 

349,464

Project finance VII

 

533,095

 

533,095

 

February - 2029

 

Us dollar exchange variation + quarterly Libor + 4.64

 

1,743,107

 

2,075,524

Transactions costs

           

(124,011)

 

(173,240)

Total

 

3,193,095

 

3,193,089

         

10,320,126

 

12,250,662

                         

VAT borrowings (i)

         

November - 2029

 

2.00% above TIIE (ii)

 

42,653

 

26,771

                   

42,653

 

26,771

                         
                   

10,362,779

 

12,277,433

                         

Current liabilities

                 

464,466

 

302,266

Non-current liabilities

               

9,898,313

 

11,975,167

Total

                 

10,362,779

 

12,277,433

 

(i)        Financing for Braskem IDESA obtained in Mexican peso paid exclusively using the reimbursement of value-added taxes.

(ii)      TIIE – “ Tasa de Interés Interbancaria de Equilibrio ” – basic interest rate in Mexico, similar to the CDI overnight rate in Brazil.

 

The long-term financing maturity, by year, is as follows:

 

   

Consolidated

   

Jun/2016

 

Dec/2015

2017

 

339,362

 

687,211

2018

 

711,860

 

840,247

2019

 

739,202

 

872,994

2020

 

867,222

 

1,025,621

2021

 

990,746

 

1,172,569

2022

 

825,388

 

977,593

2023

 

1,092,787

 

1,294,219

2024

 

1,182,270

 

1,400,843

2025

 

1,181,783

 

1,398,554

2026

 

1,040,497

 

1,210,426

2027 and thereafter

 

927,196

 

1,094,890

Total

 

9,898,313

 

11,975,167

 

14.                    Financial instruments

 

The information related to financial instruments was presented in the 2015 financial statements of the Company, in Note 16.

 

 

33

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

14.1.              Fair value hierarchy

 

Level 1 – fair value obtained through prices quoted (without adjustments) in active markets for identical assets or liabilities, such as the stock exchange;

 

Level 2 – fair value obtained from financial models using directly observable market data, such  as discounted cash flow, when the instrument is a forward purchase/sale or a swap contract, or such as the Black-Scholes model, when the instrument has the characteristics of an option. To measure the credit risk of the parties involved in derivative instruments, Braskem uses the CVA (Credit Valuation Adjustments) or DVA (Debt Valuation Adjustments) models, which calculates the mark-to-market of each transaction. The Company adopts the credit ratings of counterparties for positive flows and its own rating to negative flows, available and disclosed by rating agencies renowned, as a necessary premise to extract the probability of default.

 

 

34

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

14.2.              Non-derivative financial instruments – consolidated

 

 

 

Note

 

Classification by category

 

Fair value

hierarchy

 

Book value

 

Fair value

         

Jun/2016

 

Dec/2015

 

Jun/2016

 

Dec/2015

                             

Cash and cash equivalents

 

3

                       

Cash and banks

             

2,255,217

 

873,966

 

2,255,217

 

873,966

Financial investments in Brazil

     

Held-for-trading

 

Level 2

 

 

 

605,770

 

 

 

605,770

Financial investments in Brazil

     

Loans and receivables

     

2,448,427

 

1,823,225

 

2,448,427

 

1,823,225

Financial investments abroad

     

Held-for-trading

 

Level 2

 

2,036,989

 

4,136,762

 

2,036,989

 

4,136,762

               

6,740,633

 

7,439,723

 

6,740,633

 

7,439,723

                             

Financial investments

 

4

                       

Time deposit investments

     

Held-for-trading

 

Level 2

 

427,688

 

 

 

427,688

 

 

Other

     

Held-for-trading

 

Level 2

 

531

 

1,172

 

531

 

1,172

Quotas of receivables investment fund

     

Held-to-maturity

     

 

 

46,193

 

 

 

46,193

               

428,219

 

47,365

 

428,219

 

47,365

                             

Trade accounts receivable

 

5

         

2,112,870

 

2,754,966

 

2,112,870

 

2,754,966

                   

Related parties credits

 

7

 

Loans and receivables

     

320,594

 

155,140

 

320,594

 

155,140

                   

Trade payables

             

7,920,944

 

11,755,843

 

7,920,944

 

11,755,843

                   

Borrowings

 

12

             

Foreign currency - Bond

         

Level 1

 

14,001,487

 

17,004,617

 

13,906,409

 

14,434,854

Foreign currency - other borrowings

             

4,396,775

 

4,526,293

 

4,396,775

 

4,526,293

Local currency

             

5,521,129

 

6,073,310

 

5,521,129

 

6,073,310

               

23,919,391

 

27,604,220

 

23,824,313

 

25,034,457

                             

Project finance

 

13

         

10,486,790

 

12,450,673

 

10,486,790

 

12,450,673

                   

Non-controlling loan in Braskem Idesa

             

1,573,753

 

1,538,784

 

1,573,753

 

1,538,784

                   

Other payables (BNDESPAR)

             

168,577

 

273,294

 

168,577

 

273,294

 

 

35

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

14.3.              Derivative financial instruments designated and not designated for hedge accounting

 

14.3.1    Changes

   

 

                       

Net

         

Net

           

Operation characteristics

     

(Asset)/

         

(Asset)/

       

Fair value

 

Principal

     

Accumulated

 

Liability

 

Change in

 

Financial

 

Liability

Identification

 

Note

 

hierarchy

    exposure  

Derivatives

 

OCI (equity)

 

Dec/2015

 

fair value

 

settlement

 

Jun/2016

                                     

Non-hedge accounting

                                   

transactions

                                   

Exchange swap

     

Level 2

 

Argentine peso

Dollar

     

(38,990)

 

4,154

 

34,836

 

Interest rate swaps

     

Level 2

 

Fixed rate

 

CDI

     

8,351

 

(2,254)

 

(5,256)

 

841

                       

(30,639)

 

1,900

 

29,580

 

841

                                     

Hedge accounting

                                   

transactions

                                   

Exchange swap

 

14.3.1 (a.i)

 

Level 2

 

CDI

 

Dollar+Interests

513,670

 

1,172,125

 

(358,655)

 

4,782

 

818,252

Interest rate swaps

 

14.3.1 (a.i)

 

Level 2

 

Libor

 

Fixed price

 

473,710

 

35,073

 

149,984

 

(31,177)

 

153,880

                   

987,380

 

1,207,198

 

(208,671)

 

(26,395)

 

972,132

                                     

Derivatives operations

                                   

Current assets

                     

(53,662)

         

(19,187)

Non-current assets

                     

(12,280)

         

-

Current liabilities

                     

57,760

         

32,726

Non-current liabilities

                     

1,184,741

         

959,434

                       

1,176,559

         

972,973

 

(a)                     Operations designated for hedge accounting

 

(a.i)        Swaps related to export credit notes (NCE)

 

 

 

Identification

 

 

 

Hedge

 

Maturity

 

 

 

Fair value, net

 

Nominal value

 

Financial charges per year

 

 

Jun/2016

 

Dec/2015

Swap NCE I

 

200,000

 

Exchange variation + 6.15%

 

August - 2019

 

213,544

 

301,325

Swap NCE II

 

100,000

 

Exchange variation + 6.15%

 

August - 2019

 

103,797

 

147,021

Swap NCE III

 

100,000

 

Exchange variation + 6.15%

 

August - 2019

 

101,733

 

144,496

Swap NCE IV

 

100,000

 

Exchange variation + 5.50%

 

April - 2019

 

85,370

 

124,071

Swap NCE V

 

100,000

 

Exchange variation + 5.50%

 

April - 2019

 

85,284

 

123,966

Swap NCE VI

 

150,000

 

Exchange variation + 7.90%

 

April - 2019

 

139,845

 

203,675

Swap NCE VII

 

100,000

 

Exchange variation + 4.93%

 

April - 2019

 

88,679

 

127,571

Total

 

850,000

         

818,252

 

1,172,125

                     

Derivatives operations

                   

Current assets

             

(19,187)

 

(12,616)

Non-Current liabilities

             

837,439

 

1,184,741

Total

         

818,252

 

1,172,125

 

 

 

36

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(a.ii)       Hedge operation by Braskem Idesa related to project finance

 

This hedge operation shares the same guarantees with the Project finance.

 

Interest rate swap linked to Libor

 

 

 

Identification

 

Nominal value

 

Hedge

 

Maturity

 

 

 

Fair value, net

 

US$

 

interest rate per year

 

 

Jun/2016

 

Dec/2015

Swap Libor I

 

299,996

 

1.9825%

 

May - 2025

 

35,158

 

7,997

Swap Libor II

 

299,996

 

1.9825%

 

May - 2025

 

35,176

 

8,050

Swap Libor III

 

299,996

 

1.9825%

 

May - 2025

 

35,154

 

7,956

Swap Libor IV

 

129,976

 

1.9825%

 

May - 2025

 

15,232

 

3,465

Swap Libor V

 

132,996

 

1.9825%

 

May - 2025

 

15,595

 

3,569

Swap Libor VI

 

149,932

 

1.9825%

 

May - 2025

 

17,565

 

4,036

Total

 

1,312,892

         

153,880

 

35,073

                     

Derivatives operations

                   

Non-current assets

               

(12,280)

Current liabilities

             

31,885

 

47,353

Non-current liabilities

             

121,995

 

Total

             

153,880

 

35,073

 

 

14.4.              Non-derivative liabilities designated for export hedge accounting

 

(a.i)        Future exports in U.S. dollars

 

On May 1, 2013, Braskem S.A. designated non-derivative financial instrument liabilities, denominated in U.S. dollars, as hedge for the flow of its highly probable future exports. Thus, the impact of exchange rates on future cash flows in dollars derived from these exports will be offset by the foreign exchange variation on the designated liabilities, partly eliminating the volatility of results.

 

Exports that were designated and not yet realized are shown below:

 

 

 

 

 

 

 

 

 

Total nominal value

         

 

US$

 

 

 

 

 

 

 

2016

 

 

 

 

 

421,744

2017

 

 

 

 

 

829,685

2018

 

 

 

 

 

787,894

2019

 

 

 

 

 

733,980

2020

 

 

 

 

 

724,000

2021

 

 

 

 

 

716,000

2022

 

 

 

 

 

719,000

2023

 

 

 

 

 

718,372

2024

 

 

 

 

 

688,853

 

 

 

 

 

 

6,339,528

 

 

The following table provides the balances of exchange variation recognized in the Company’s net financial income (expenses) due to the realization of exports designated for hedge accounting for the period ended June 30, 2016:

37

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

 

 

 

       

Conversion rate

       
   

Total nominal

 

at Inception

 

Closing rate

 

Total nominal

   

value US$

 

R$/US$

 

R$/US$

 

value R$

                 

First quarter

 

206.951

 

2.0017

 

4.0399

 

421,800

Second quarter

 

210.752

 

2.0017

 

3.6408

 

345,443

               

767,243

 

 

The following table provides the changes related to hedge operations in the quarter:

 

 

 

       

 

 

 

 

US$

           

Exports in

   
       

Dec/2015

 

the period

 

Jun/2016

                 

Designated balance

     

6,757,231

 

(417.703)

 

6,339,528

 

 

On June 30, 2016, the maturities of the financial liabilities designated as this hedge, within the scope of the consolidated balance sheet, were as follows:

 

 

 

         

 

Total nominal value

         

 

US$

         

 

 

2016

       

 

1,345,430

2017

       

 

605,407

2018

       

 

1,147,280

2019

       

 

444,236

2020

       

 

570,782

2021

       

 

1,017,703

2022

       

 

519,837

2024

       

 

688,853

         

 

6,339,528

 

The changes in foreign exchange variation and Income Tax and Social Contribution under “Other comprehensive income” are as follows:

 

 

 

Exchange

     

Net

 

variation

 

IR and CSL

 

effect

           

At December 31, 2015

(12,859,687)

 

4,372,294

 

(8,487,393)

Exchange variation recorded in the period on OCI / IR and CSL

4,433,659

 

(1,507,444)

 

2,926,215

Exchange variation transferred to profit or loss / IR and CSL

767,243

 

(260,863)

 

506,380

At June 30, 2016

(7,658,785)

 

2,603,987

 

(5,054,798)

 

38

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(a.ii)       Liabilities related to the Project Finance of future sales in U.S. dollar

 

On June 30, 2016, hedged sales were distributed as follows:

 

 

           

Total nominal value

           

US$

             

2016

         

51,415

2017

         

183,253

2018

         

221,790

2019

         

229,270

2020

         

266,690

2021

         

303,392

2022

         

253,204

2023

         

333,093

2024

         

359,559

2025

         

357,903

2026

         

309,240

2027

         

152,103

2028

         

124,654

2029

         

31,164

           

3,176,730

 

 

In May 2016, Braskem Idesa prepaid US$12.230 of the Project Finance debt that was designated as hedge instrument of future sales. As a result of the decision, this amount was discontinued prospectively. The following table provides the balance of exchange variation of the discontinued amount, on June 30, 2016, which is recorded in Braskem Idesa’s shareholders’ equity under “Other comprehensive income” and will be transferred to financial income (expenses) according to the schedule of future hedged sales as they occur:

 

 

 

       

Conversion rate

           
   

Total nominal

 

at Inception

 

Closing rate

 

Total nominal

 

Total nominal

   

value US$

 

MXN/US$

 

MXN/US$

 

value MXN

 

value R$

                     

Hedge descontinued

12,230

 

13.4541

 

17.9915

 

55,000

 

10,212

               

55.000

 

10,212

 

 

 

39

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

The following table provides the balances of exchange variation recognized in Braskem Idesa’s financial income (expenses) due to the realization of future sales designated for hedge accounting over the course of the period ended June 30, 2016:

 

   

Total nominal

 

at Inception

 

Closing rate

 

Total nominal

 

Total nominal

   

value US$

 

MXN/US$

 

MXN/US$

 

value MXN

 

value R$

                     

Second quarter/2016 sales

16,359

 

13.4541

 

18.1409

 

77,000

 

14,297

               

77,000

 

14,297

 

 

 

The following table shows the changes related to hedge operations in 2016:

 

   

 

 

 

 

 

 

US$

       

Sales in

 

Hedge

   
   

Dec/2015

 

the period

 

descontinued

 

Jun/2016

                 

Designated balance

 

3,193,089

 

(16,359)

 

(12,230)

 

3,164,500

 

 

On June 30, 2016, the maturities of financial liabilities were distributed as follows:

 

 

           

Total nominal value

           

US$

             

2016

         

51,316

2017

         

182,900

2018

         

221,363

2019

         

228,828

2020

         

266,177

2021

         

302,808

2022

         

252,717

2023

         

332,452

2024

         

358,869

2025

         

357,214

2026

         

308,644

2027

         

150,469

2028

         

124,414

2029

         

26,329

           

3,164,500

 

 

 

40

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

The changes in foreign exchange variation and Income Tax and Social Contribution under “Other comprehensive income” are as follows:

 

 

 

Exchange

     

Net

 

variation

 

IR

 

effect

           

At December 31, 2015

(2,246,820)

 

674,046

 

(1,572,774)

Exchange variation recorded in the period on OCI / IR

(1,093,972)

 

332,538

 

(761,434)

Exchange variation transferred to profit or loss / IR

14,297

 

(4,346)

 

9,951

At June 30, 2016

(3,326,495)

 

1,002,238

 

(2,324,257)

 

 

14.5.              Credit quality of financial assets

 

(a)                     Trade accounts receivable

 

On June 30, 2016, the credit ratings for the domestic market were as follows:

 

 

 

 

 

 

(%)

 

 

 

Jun/2016

 

Dec/2015

1

Minimum risk

 

8.62

 

7.67

2

Low risk

 

35.87

 

42.84

3

Moderate risk

 

32.21

 

33.07

4

High risk

 

21.02

 

13.74

5

Very high risk

(i)

2.27

 

2.69

 

(i) Most clients in this group are inactive and the respective accounts are in the process of collection actions in the courts. Clients in this group that are still active buy from Braskem and pay in advance.

 

Default indicators for the periods ended :

 

 

Last 12 months

 

Domestic

 

Export

 

Market

 

Market

June 30, 2016

0.27%

 

0.10%

December 31, 2015

0.39%

 

0.70%

June 30, 2015

0.26%

 

0.71%

 

(b)                     Other financial assets

 

In order to determine the credit ratings of counterparties in financial assets classified as cash and cash equivalents, held-for-trading, held-to-maturity and loans and receivables, Braskem uses credit rating from the following agencies: Standard & Poor’s, Moody’s and Fitch Ratings within the limits established in its financial policy approved by the Board of Directors.

 

41

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

 

 

     

Jun/2016

 

Dec/2015

Financial assets with risk assessment

         

AAA

   

3,020,322

 

5,982,393

AA+

   

101,384

 

AA

   

5,030

 

27,753

AA-

   

1,429,225

 

163,188

A+

   

2,207,026

 

1,076,803

A

   

8,775

 

69,576

A-

   

342,052

 

120,219

BBB+

   

51,388

 
     

7,165,202

 

7,439,932

Financial assets without risk assessment

 

(i)

     

Quotas of investment funds in credit rights

     

46,193

Other financial assets with no risk assessment

   

3,650

 

963

     

3,650

 

47,156

         

Total

   

7,168,852

 

7,487,088

 

(i)          Investments approved by the Management of the Company, as permitted by the financial policy.

 

14.6.              Sensitivity analysis

 

Financial instruments, including derivatives, may be subject to changes in their fair value as a result of the variation in commodity prices, foreign exchange rates, interest rates, shares and share indexes, price indexes and other variables. The sensitivity of the derivative and non-derivative financial instruments to these variables are presented below:

 

(a)                     Selection of risks

 

On June 30, 2016, the main risks that can affect the value of Braskem’s financial instruments are:

 

·       Brazilian real/U.S. dollar exchange rate;

·       Brazilian real/Mexican peso exchange rate;

·       Libor floating interest rate;

·       Selic interest rate;

·       CDI interest rate; and

·       TJLP interest rate.

 

For the purposes of the risk sensitivity analysis, Braskem presents the exposures to currencies as if they were independent, that is, without reflecting in the exposure to a foreign exchange rate the risks of the variation in other foreign exchange rates that could be directly influenced by it.

 

(b)                     Value at risk

 

The value at risk of the derivatives held by Braskem which is defined as the loss that could result in one month as from June 30, 2016, with a probability of 5%, and under normal market conditions, was estimated by the Company at US$31,018 for the NCE exchange rate swap (Note 14.3.1(a.i)); US$9,566 for the swap of Libor related to Braskem Idesa’s project (Note 14.3.1 (a.ii)).

 

42

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(c)                     Selection of scenarios

 

(c.1)       Probable scenario

 

The Market Readout published by the Central Bank of Brazil was used to create the probable scenario for the U.S. dollar/Brazilian real exchange rate, Selic basic interest rate and the CDI interest rate, using the reference date of June 30, 2016. According to the Market Readout, at the end of 2016, the U.S. dollar will appreciate by 12.16% against the Brazilian real, compared to the closing PTAX rate at June 30, 2016, while the Selic rate will be 13.75% p.a. The Selic rate is used as a reference for analyses of sensitivity to the CDI.

 

The probable scenario for the TJLP is an increase of 0.50% from the current rate of 7.5%, in line with the size of the government’s most recent decisions to increase or decrease the rate. The Market Readout does not publish forecasts for the Libor interest rate. Therefore, to determine the probable scenario, Braskem considered a 5% increase on current market levels.

 

 

43

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(c.2)       Possible and extreme adverse scenarios

 

The sensitivity values in the table below are the changes in the value of the financial instruments in each scenario: 

    

 

   

 

 

 

 

Gain (loss)

       

Possible adverse

 

Extreme adverse

Instrument / Sensitivity

 

Probable

(25%)

 

(50%)

             

Brazilian real/U.S. dollar exchange rate

           

Bonds

 

(1,676,558)

 

(3,447,857)

 

(6,895,714)

BNDES

 

(32,323)

 

(66,473)

 

(132,945)

Working capital / structured operations

 

(331,060)

 

(680,828)

 

(1,361,657)

Export prepayments

 

(88,403)

 

(181,803)

 

(363,605)

Project finance

 

(1,254,568)

 

(2,580,032)

 

(5,160,063)

Advance on exchange contracts - ACC

 

(81,049)

 

(166,678)

 

(333,355)

Swaps

 

(207,364)

 

(426,450)

 

(645,538)

Exchange rate contracts

 

625,310

 

1,285,956

 

2,571,912

             

Brazilian real/Mexican Peso exchange rate

 

Working capital / structured operations

 

(16,085)

 

(10,663)

 

(21,326)

             

Selic interest rate

           

BNDES

 

13,050

 

(99,732)

 

(212,114)

             

Libor floating interest rate

           

Working capital / structured operations

 

(1,681)

 

(8,406)

 

(16,813)

Export prepayments

 

(1,478)

 

(7,390)

 

(14,781)

Swaps

 

3,893

 

19,274

 

38,082

             

CDI interest rate

           

NCE

 

13,823

 

(102,889)

 

(213,751)

NCA

 

21,412

 

(165,623)

 

(356,051)

Swaps and NCE

 

227

 

(1,572)

 

(3,069)

Financial investments in local currency

 

(4,735)

 

33,461

 

66,453

             
   

Probable

 

Possible adverse

 

Extreme adverse

Instrument / Sensitivity

 

8.0%

 

8.5%

 

9.0%

             

TJLP interest rate

           

BNDES

 

(48,154)

 

(97,352)

 

(147,611)

Other government agents

 

(54)

 

(109)

 

(166)

 

44

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

15.                    Taxes payable

 

The information related to taxes payable was presented in the Company’s 2015 annual financial statements, in Note 17.

 

 

 

         

Consolidated

 

Parent company

         

Jun/2016

 

Dec/2015

 

Jun/2016

 

Dec/2015

Parent Company and subsidiaries in Brazil

                 
 

IPI

     

68,124

 

61,784

 

62,418

 

48,579

 

IR and CSL

     

185,096

 

175,963

 

68,384

 

31,325

 

ICMS

     

149,078

 

149,811

 

128,824

 

110,669

 

Other

     

80,695

 

88,198

 

49,558

 

56,557

                       

Other countries

                   
 

Income tax

     

57,461

 

238,645

 
 

Value-added tax

     

83,812

 

56,975

 

Total

     

624,266

 

771,376

 

309,184

 

247,130

                       

Current liabilities

     

594,574

 

744,660

 

281,053

 

221,305

Non-current liabilities

     

29,692

 

26,716

 

28,131

 

25,825

Total

     

624,266

 

771,376

 

309,184

 

247,130

 

 

16.                    Income tax (“IR”) and social contribution (“CSLL”)

 

The information related to income tax and social contribution was presented in the Company’s 2015 annual financial statements, in Note 19.

 

(a)                     Reconciliation of the effects of income tax and social contribution on profit or loss

 

 

       

Consolidated

 

Parent company

       

Jun/2016

 

Jun/2015

 

Jun/2016

 

Jun/2015

                     

Income before IR and CSL

     

1,484,454

 

1,882,677

 

1,243,964

 

1,791,853

                     

IR and CSL at the rate of 34%

     

(504,714)

 

(640,110)

 

(422,948)

 

(609,230)

       

Permanent adjustments to the IR and CSL calculation basis

     

IR and CSL on equity in results of investees

     

4,548

 

3,311

 

368,242

 

160,704

IR and CSL on prior years

     

6,729

 

 

 

6,729

 

 

Other permanent adjustments

     

36,590

 

12,901

 

(8,270)

 

4,258

                     

Effect of IR and CSL on results of operations

     

(456,847)

 

(623,898)

 

(56,247)

 

(444,268)

                     

Breakdown of IR and CSL:

                   
                     

Current IR and CSL

     

(550,769)

 

(122,275)

 

(35,354)

 

(2,982)

Deferred IR and CSL

     

93,922

 

(501,623)

 

(20,893)

 

(441,286)

Total IR and CSL on income statement

     

(456,847)

 

(623,898)

 

(56,247)

 

(444,268)

                     
                     

 

 

45

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(b)                     Breakdown of deferred income tax and social contribution

 

     

     

Consolidated

 

Parent company

Assets

   

Jun/2016

 

Dec/2015

 

Jun/2016

 

Dec/2015

Tax losses (IR) and negative base (CSL)

   

2,214,321

 

2,144,798

 

258,265

 

288,285

Goodwill amortized

   

5,321

 

6,017

 

5,321

 

6,017

Exchange variations

   

1,142,876

 

2,925,895

 

1,133,294

 

2,917,700

Temporary adjustments

   

82,151

 

50,628

 

749,403

 

823,784

Business combination

   

190,289

 

189,403

 

89,769

 

89,770

Deferred charges - write-off

   

 

 

20,848

 

 

 

20,848

     

3,634,958

 

5,337,589

 

2,236,052

 

4,146,404

                   

Liabilities

                 

Amortization of goodwill based on future profitability

   

751,980

 

735,019

 

663,152

 

646,194

Tax depreciation

   

845,292

 

815,243

 

773,437

 

746,432

Temporary differences

   

438,941

 

521,030

 

11,245

 

11,702

Business combination

   

207,526

 

217,182

 

75,948

 

79,154

Additional indexation PP&E

   

103,716

 

110,731

 

103,716

 

110,731

Amortization of fair value adjustments on
the assets from the acquisiton of Braskem Qpar

   

276,606

 

289,528

 

276,606

 

289,529

Other

   

119,012

 

153,590

 

63,837

 

83,308

     

2,743,073

 

2,842,323

 

1,967,941

 

1,967,050

                   

Net

   

891,885

 

2,495,266

 

268,111

 

2,179,354

                   

Presentation in the Balance Sheet:

                 

Assets

   

1,550,792

 

3,226,507

 

268,110

 

2,179,354

(-) Liabilities

   

658,907

 

731,241

 

 

 

46

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(c)                     Net balance of deferred income and social contribution tax assets and liabilities (consolidated)

 

 

           

 

 

Jun/2016

           

Headquarters

 

IR and CSL

 

 

         

(Country)

 

Asset

 

Liability

 

Balance

                       

Assets

                     

Braskem

       

Brazil

 

2,236,051

 

(1,967,941)

 

268,110

Braskem Argentina

       

Argentina

 

11,122

   

11,122

Braskem Alemanha

       

Germany

 

65,006

   

65,006

Braskem Idesa

       

Mexico

 

1,149,663

 

(50,381)

 

1,099,282

Braskem México Serviços

       

Mexico

 

1,594

   

1,594

Braskem Chile

       

Chile

 

121

     

Quantiq

       

Brazil

 

6,679

 

(1,643)

 

5,036

Braskem Petroquímica - business combination effects

     

Brazil

 

100,521

 

 

 

100,521

               

3,570,757

 

(2,019,965)

 

1,550,671

                         

Liabilities

                     

Braskem America

       

USA

 

 

 

(427,695)

 

(427,695)

Braskem Petroquímica

       

Brazil

 

64,201

 

(163,835)

 

(99,634)

Braskem Petroquímica - business combination effects

     

Brazil

 

 

 

(131,578)

 

(131,578)

               

64,201

 

(723,108)

 

(658,907)

                         
                         
                         
                         
           

 

 

Dec/2015

           

Headquarters

 

IR and CSL

 

 

           

(Country)

 

Asset

 

Liability

 

Balance

                       

Assets

                     

Braskem

       

Brazil

 

4,146,404

 

(1,967,050)

 

2,179,354

Braskem Argentina

       

Argentina

 

8,235

   

8,235

Braskem Alemanha

       

Germany

 

104,785

   

104,785

Braskem Idesa

       

Mexico

 

890,723

 

(65,306)

 

825,417

Braskem México Serviços

       

Brasil

 

2,894

 

 

 

2,894

Quantiq

       

Brasil

 

7,811

 

(1,623)

 

6,188

Braskem Petroquímica - business combination effects

     

Brazil

 

99,634

 

 

 

99,634

               

5,260,486

 

(2,033,979)

 

3,226,507

                         

Liabilities

                     

Braskem America

       

USA

 

 

 

(509,328)

 

(509,328)

Braskem Petroquímica

       

Brazil

 

76,978

 

(160,812)

 

(83,834)

Braskem Petroquímica - business combination effects

     

Brazil

 

 

 

(138,029)

 

(138,029)

Braskem Chile

       

Chile

 

125

 

(175)

 

(50)

               

77,103

 

(808,344)

 

(731,241)

 

(d)                     Realization of deferred income tax and social contribution

           

In the period ended June 30, 2016, there were no material events or circumstances that indicate any compromise of the realization of these deferred taxes.

 

 

47

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

17.                    Sundry provisions

 

The information on sundry provisions was presented in the 2015 annual financial statements of the Company, in Note 20.

 

       

Consolidated

 

Parent company

       

Jun/2016

 

Dec/2015

 

Jun/2016

 

Dec/2015

Provision for customers rebates

   

41,733

 

46,929

 

32,162

 

22,606

Provision for recovery of environmental damages

   

100,837

 

127,227

 

88,451

 

112,887

Judicial and administrative provisions

   

593,416

 

554,479

 

541,459

 

501,292

Other

     

16,971

 

19,279

 

2,569

 

1,754

Total

     

752,957

 

747,914

 

664,641

 

638,539

                     

Current liabilities

     

69,609

 

93,942

 

59,261

 

67,190

Non-current liabilities

   

683,348

 

653,972

 

605,380

 

571,349

Total

     

752,957

 

747,914

 

664,641

 

638,539

 

 

The composition of provisions for judicial and administrative suits is as follows:

 

 

     

Consolidated

 

Parent company

       

Jun/2016

 

Dec/2015

 

Jun/2016

 

Dec/2015

Labor claims

     

169,046

 

158,711

 

160,700

 

148,884

                     

Tax claims

                   

Normal operations

                 

IR and CSL

     

8,029

 

8,029

 

8,029

 

8,029

PIS and COFINS

   

4,495

 

4,495

 

4,495

 

4,495

ICMS - other

     

22,601

 

22,601

 

22,601

 

22,601

Other tax claims

   

48,604

 

38,337

 

47,995

 

38,317

       

83,729

 

73,462

 

83,120

 

73,442

                     

Business Combination

                 

IR and CSL

     

42,830

 

40,223

 

PIS and COFINS

   

47,785

 

44,771

 

47,785

 

44,771

ICMS - interstate purchases

   

208,636

 

195,320

 

208,636

 

195,320

ICMS - other

     

15,331

 

14,364

 

15,331

 

14,364

       

314,582

 

294,678

 

271,752

 

254,455

                     

Societary claims and other

   

26,059

 

27,628

 

25,887

 

24,511

                     
       

593,416

 

554,479

 

541,459

 

501,292

 

 

48

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

18.                    Contingencies

 

(a)                     Allegations

 

Braskem and its subsidiaries are subject to a number of anti-corruption laws in the countries where they operate, including Federal Law 12,846/2013, or the Brazilian Anticorruption Law, which came into force on January 28, 2014, and the U.S. Foreign Corrupt Practices Act.

 

In early March 2015, in connection with the operation by Brazilian Federal Police called Operation Car Wash (Lava Jato), statements made by defendants in judicial proceedings of a criminal nature were made public, in which Braskem, certain former managers and one former executive were mentioned in allegations asserting that improper payments were made in exchange for favorable treatment in connection with certain feedstock supply agreements entered into with Petrobras.

 

In light of said facts, the Company's Management and Board of Directors immediately approved the engagement of law firms with vast experience in similar cases in the United States and Brazil (“Expert Firms”) to conduct an independent internal investigation into the allegations mentioned above ("Investigation"). Through said Expert Firms, Braskem voluntarily contacted the agencies regulating the capital markets in Brazil (Securities and Exchange Commission of Brazil - CVM) and the United States (Securities and Exchange Commission – SEC), as well as the U.S. Department of Justice – DoJ, to advise them of the launch of the Investigation.

 

The Expert Firms report directly to an Ad Hoc committee of the Board of Directors of the Company and to the applicable authorities. The Company, through the Expert Firms, has maintained frequent contact and cooperated with said authorities. The cooperation of the Company with said authorities included voluntarily producing documents, responding to requests for documents, including formal requests by the SEC (subpoena) in February and July 2016, as well as an official request by the Office of the Federal Controller General in July 2016. In this context, the Company will begin dialogues with the DoJ and the SEC to clarify additional allegations of unlawful acts arising in connection with the investigations involving third parties. The future flow of information between the Company, the DoJ and the SEC, as well as any information obtained during the Investigation but not yet verified by the Expert Firms, may confirm the allegations of said unlawful acts.

 

At this time, the Company is unable to measure the extent to which the confirmation of said allegations, any parallel investigations or any agreement with the applicable authorities may impact the Company and the resources needed to remedy such matters. The Company cannot predict the actions that the applicable authorities in Brazil and abroad may take on this matter, but the range of possibilities includes fines and lawsuits against the Company or even against its current or former officers, directors and employees.

 

Therefore, the confirmation of the abovementioned allegations, any parallel investigations, or any agreements entered into with the applicable authorities may have a material adverse effect on the business, reputation, financial situation and results of operations of the Company, as well as on the liquidity and trading price of its securities.

 

The financial exposure to which the Company may be subject includes the payment of fines and the obligation to compensate third parties and, to the extent permitted by law, the current and former officers, directors and employees against losses incurred as a result of the facts, whose value cannot be measured. Moreover, adverse publicity associated with all these facts could have a material adverse effect on the Company’s business, including a decrease in the demand for its products, among other effects that cannot be determined or estimated at this time.

 

Also in connection with Operation Car Wash, the Company cannot predict whether and how the investigations, or any decision or action by authorities involving the majority shareholders of Braskem, Odebrecht S.A. and Petróleo Brasileiro S.A. – Petrobras, or any of their subsidiaries, could affect the Company.

 

If any fines and/or other sanctions are imposed by the authorities with jurisdiction over the Company and others involved, at this time, neither the Management nor its legal counsel and Expert Firms have sufficient information to reliably estimate the potential losses to be recorded and, therefore, based on current accounting practices, no provision has been recorded in this Quarterly Financial Information.

 

The management of the Company is committed to taking all necessary measures to clarify the facts and will keep the market informed of any developments in this matter.

 

 

 

49

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(b)                     Class actions

A class action has been filed with the U.S. courts by the Boilermaker-Blacksmith National Pension Trust, as Lead Plaintiff, alleging that the Company has made misrepresentations and/or omissions in certain filings at the SEC that allegedly concealed the existence of improper payments. The Company engaged an expert U.S. law firm to represent it and filed its initial defense (motion to dismiss) on July 6, 2016.

The Company cannot predict the outcome of this process. The Company may be cited as defendant in other lawsuits. Furthermore, the Company may be required, to the extent permitted by law, to indemnify directors, officers and employees who are defendants in lawsuits such as these. Such lawsuit has demanded significant time and dedication from the Management of the Company. Moreover, the Company may also incur financial obligations that could have a material adverse effect on its businesses, reputation, financial situation and results of its operations, as well as on the liquidity and trading price of its securities.

(c)                     Labor

 

(c.1)       The labor action disclosed in Note 23 (a.i) of the 2015 financial statements ended after the payment made under a settlement between the parties.

 

(c.2)       In the class action suits filed by the Trade Union of Petrochemical and Chemical Workers of Triunfo, Rio Grande do Sul, in the third quarter of 2010, claiming the payment of overtime related to breaks during work shifts (“Breaks”) and the inclusion of overtime in the calculation of the weekly remunerated rest (“WRR”), in the restated amount of R$377,560, the following developments occurred in the period: (i) Breaks: the Superior Labor Court (“TST”) upheld the appeal by Braskem to eliminate breaks during work shifts, with the Trade Union filing an appeal at the TST, which rejected the appeal and handed down a final and unappealable decision in favor of Braskem. The amount of this suit is R$332,640; and (ii) WRR: judgment for plaintiff in the suit involving the inclusion of overtime in the calculation of the weekly remunerated rest, which was upheld by the Regional Appellate Labor Court ("TRT"), for which Braskem appealed to the TST, which ordered the case to be sent back to the TRT for a new trial. However, as the TRT did not judge on the merits, Braskem appealed once again to the TST. After examining the appeal, the TST handed down a new decision granting the claim. Braskem will enter into motion for clarification and special appeal at the Supreme Court (“STF”). The amount of this suit is R$44,920.

 

No judicial deposit or other form of security was made for these suits.

 

The description of the main contingent liabilities of the Company was presented in the 2015 annual financial statements, in Note 23.

 

 

50

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

19.                    Shareholders’ Equity

 

The information related to the Company’s shareholders’ equity was presented in its 2015 annual financial statements, in Note 24.

 

(a)                     Capital

 

     

Amount of shares

             

Preferred

     

Preferred

           
     

Common

     

shares

     

shares

           
     

shares

 

%

 

class A

 

%

 

class B

 

%

 

Total

 

%

                                   

OSP e Odebrecht

   

226,334,623

 

50.11%

 

79,182,498

 

22.95%

     

305,517,121

 

38.32%

Petrobras

   

212,426,952

 

47.03%

 

75,761,739

 

21.96%

     

288,188,691

 

36.15%

ADR

(i)

   

35,480,046

 

10.28%

     

35,480,046

 

4.45%

Other

   

12,907,077

 

2.86%

 

153,343,937

 

44.45%

 

593,618

 

100.00%

 

166,844,632

 

20.93%

Total

   

451,668,652

 

100.00%

 

343,768,220

 

99.64%

 

593,618

 

100.00%

 

796,030,490

 

99.85%

Treasury shares

               

 

             

 

Treasury shares owned by subsidiary
of Braskem Petroquímica

(ii)

   

1,234,758

 

0.36%

   

1,234,758

 

0.15%

Total

   

451,668,652

 

100.00%

 

345,002,978

 

100.00%

 

593,618

 

100.00%

 

797,265,248

 

100.00%

 

(i)                   American Depositary Receipts traded on the New York Stock Exchange (USA);

(ii)                  These share are considered “treasury shares” in the consolidated shareholders’ equity, amounting to R$48,892.

 

(b)                     Dividends

 

On April 6, 2016, the Annual Shareholders Meeting approved dividends in the amount of R$1,000,000, which started to be paid on April 15, 2016, of which R$567,620 was paid to the holders of common shares and R$432,020 and R$360 was paid to the holders of class “A" and class “B" preferred shares, respectively.

 

51

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

(c)                 Other comprehensive income - shareholders' equity

 

 

     

Consolidated

             

Defined

         

Foreign

               
     

Additional

 

Deemed

 

benefit

 

Foreign

     

currency

 

Loss

 

Total

       
     

indexation of

 

cost of

 

plan actuarial

 

sales

 

Cash flow

 

translation

 

on interest

 

Braskem

 

Non-controlling

   
     

PP&E

 

PP&E

 

Gain (loss)

 

hedge

 

hedge

 

adjustment

 

in subsidiary

 

shareholders'

 

interest in

   
     

(i)

 

(i)

 

(ii)

 

(iii)

 

(iii)

 

(iv)

 

(v)

 

interest

 

Braskem Idesa

 

Total

                                           

On December 31, 2014

 

244,831

 

18,275

 

(11,647)

 

(3,263,732)

 

(289,667)

 

387,287

 

(9,404)

 

(2,924,057)

 

(115,385)

 

(3,039,442)

                     

Additional indexation

                 
 

Realization by depreciation or write-off assets

 

(20,635)

   

(20,635)

   

(20,635)

 

Income tax and social contribution

 

7,016

   

7,016

   

7,016

     

Deemed cost of jointly-controlled investment

 
 

Realization by depreciation or write-off assets

     

(730)

   

(730)

   

(730)

 

Income tax and social contribution

     

248

   

248

   

248

       

Foreign sales hedge

       

-

 

Exchange rate

   

(3,440,730)

     

(3,440,730)

 

(141,434)

 

(3,582,164)

 

Income tax and social contribution

   

1,152,877

     

1,152,877

 

42,430

 

1,195,307

       

Fair value of Cash flow hedge

   
 

Change in fair value

       

(243,136)

   

(243,136)

 

8,732

 

(234,404)

 

Transfer to profit or loss

       

(25,054)

   

(25,054)

 

(12,171)

 

(37,225)

 

Income tax and social contribution

       

90,772

   

90,772

 

1,032

 

91,804

             

Foreign currency translation adjustment

         

295,854

   

295,854

 

(99,004)

 

196,850

             

On June 30, 2015

 

231,212

 

17,793

 

(11,647)

 

(5,551,585)

 

(467,085)

 

683,141

 

(9,404)

 

(5,107,575)

 

(315,800)

 

(5,423,375)

                                           

On December 31, 2015

 

217,595

 

17,309

 

(12,496)

 

(9,666,973)

 

(728,296)

 

1,097,009

 

(9,404)

 

(9,085,256)

 

(476,708)

 

(9,561,964)

                                           

Additional indexation

                           
 

Realization by depreciation or write-off assets

 

(20,635)

   

(20,635)

   

(20,635)

 

Income tax and social contribution

 

7,016

   

7,016

   

7,016

     

Deemed cost of jointly-controlled investment

 
 

Realization by depreciation or write-off assets

   

(730)

   

(730)

   

(730)

 

Income tax and social contribution

   

248

   

248

   

248

             

Foreign sales hedge

         
 

Exchange rate

     

3,613,180

   

3,613,180

 

(273,493)

 

3,339,687

 

Transfer to profit or loss

     

777,966

   

777,966

 

3,574

 

781,540

 

Income tax and social contribution

     

(1,522,163)

   

(1,522,163)

 

82,048

 

(1,440,115)

         

Fair value of Cash flow hedge

     
 

Change in fair value

   

239,487

   

239,487

 

(38,128)

 

201,359

 

Transfer to result

   

(14,876)

   

(14,876)

 

(6,652)

 

(21,528)

 

Income tax and social contribution

   

(81,741)

   

(81,741)

 

13,434

 

(68,307)

     

Fair value of cash flow hedge from jointly-controlled

   

(12,765)

   

(12,765)

   

(12,765)

                     

Foreign currency translation adjustment

     

(215,975)

   

(215,975)

 

191,986

 

(23,989)

                           

On June 30, 2016

 

203,976

 

16,827

 

(12,496)

 

(6,797,990)

 

(598,191)

 

881,034

 

(9,404)

 

(6,316,244)

 

(503,939)

 

(6,820,183)

                                           

(i)

Realization as the asset is depreciated or written-off.

(ii)

Realization upon extinction of the plan.

(iii)

Realization upon maturity, prepayment or loss of efficacy for hedge accounting.

(iv)

Realization upon write-off of subsidiary abroad.

(v)

Realization upon divestment or transfer of control of subsidiary.

 

52

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

20.                    Earnings per share

 

The information related to the earnings per share of the Company was presented in its 2015 annual financial statements, in Note 25.

 

The table below shows the reconciliation of profit or loss for the period adjusted for the amounts used to calculate basic and diluted earnings per share.

 

   

Basic and diluted

   

Jun/2016

 

Jun/2015

         

Profit for the period attributed to Company's shareholders

 

1,187,717

 

1,347,585

   

Distribution of dividends attributable to priority:

 

Preferred shares class "A"

 

208,409

 

208,409

Preferred shares class "B"

 

360

 

360

   

208,769

 

208,769

         

Distribution of 6% ​​of unit value of common shares

 

273,824

 

273,824

   

Distribution of plus income, by class

 

Common shares

 

400,387

 

491,145

Preferred shares class "A"

 

304,737

 

373,847

   

705,124

 

864,992

   

Reconciliation of income available for distribution, by class (numerator):

 

Common shares

 

674,211

 

764,969

Preferred shares class "A"

 

513,146

 

582,256

Preferred shares class "B"

 

360

 

360

   

1,187,717

 

1,347,585

         

Weighted average number of shares, by class (denominator):

       

Common shares

 

451,668,652

 

451,668,652

Preferred shares class "A"

 

343,768,220

 

343,799,059

Preferred shares class "B"

 

593,618

 

593,818

   

796,030,490

 

796,061,529

         

Profit per share (in R$)

       

Common shares

 

1.4927

 

1.6937

Preferred shares class "A"

 

1.4927

 

1.6936

Preferred shares class "B"

 

0.6065

 

0.6062

 

(i)          Calculation of weighted average of outstanding shares at the beginning of the period, adjusted by the number of shares repurchased during the first half of 2015, multiplied by a weighted time factor:

 

 

 

 

Preferred shares class "A"

 

Outstanding

 

Weighted

 

shares

 

average

 

 

 

Balance at December 31, 2014

343,848,120

 

343,848,120

 

 

 

 

Repurchase of treasury shares

(80,000)

 

(49,061)

 

 

 

 

Balance at June 30, 2015

343,768,120

 

343,799,059

 

 

53

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

21.                    Net sales revenues

 

The information on net sales revenue was presented in the 2015 annual financial statements of the Company, in Note 26.

 

         

Consolidated

 

Parent company

         

Jun/2016

 

Jun/2015

 

Jun/2016

 

Jun/2015

Sales revenue

                   
 

Domestic market

     

16,342,825

 

15,210,330

 

16,618,288

 

14,322,729

 

Foreign market

     

11,523,172

 

9,948,859

 

4,810,345

 

3,974,170

         

27,865,997

 

25,159,189

 

21,428,633

 

18,296,899

Sales deductions

                   

Tributos

Taxes

     

(3,621,780)

 

(3,228,509)

 

(3,586,771)

 

(2,825,275)

Devoluções de vendas e outros

Sales returns

     

(186,102)

 

(143,584)

 

(149,353)

 

(144,551)

         

(3,807,882)

 

(3,372,093)

 

(3,736,124)

 

(2,969,826)

                       

Net sales revenue

     

24,058,115

 

21,787,096

 

17,692,509

 

15,327,073

 

 

22.                    Other operating income (expenses), net

 

   

 

 

Consolidated

   

Jun/2016

 

Jun/2015

Expenses idle and hipernated plants

(i)

(100,613)

 

(36,983)

Results with fixed assets and investments

 

(30,575)

 

(3,510)

Cost of inventory adjustments and losses in the movement of raw materials

 

(30,346)

 

(9,455)

Provision judicial and administrative, processes

 

(17,642)

 

(17,886)

Other

 

(11,507)

 

(21,914)

   

(190,683)

 

(89,748)

 

(i)     Includes in the period ended on June 30 2016, the amount of R$54,105 relating to verified idle in the starting process of the subsidiary Braskem Idesa (Note 1(a)).

 

 

54

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

23.                    Financial results

    

The information on financial results was presented in the 2015 annual financial statements of the Company, in Note 29.

 

         

Consolidated

 

Parent company

         

Jun/2016

 

Jun/2015

 

Jun/2016

 

Jun/2015

Financial incomes

                   
 

Interest income

     

234,312

 

174,805

 

181,723

 

121,605

 

Monetary variations

   

122,836

 

71,897

 

115,447

 

52,800

 

Exchange rate variations

   

(1,012,062)

 

377,890

 

(1,613,308)

 

905,211

 

Other

     

22,880

 

26,065

 

21,531

 

15,909

         

(632,034)

 

650,657

 

(1,294,607)

 

1,095,525

                       

Financial expenses

                   
 

Interest expenses

     

(974,318)

 

(748,168)

 

(788,114)

 

(805,721)

 

Monetary variations

   

(209,193)

 

(174,926)

 

(209,200)

 

(173,391)

 

Exchange rate variations

   

(1,042,813)

 

(467,309)

 

27,113

 

(826,247)

 

Inflation adjustments on fiscal debts

   

(45,674)

 

(23,950)

 

(43,096)

 

(20,658)

 

Discounts granted

     

(54,469)

 

(78,631)

 

(45,148)

 

(49,966)

 

Loans transaction costs - amortization

   

(29,392)

 

(34,447)

 

(2,611)

 

(2,805)

 

Adjustment to present value - appropriation

   

(273,615)

 

(240,812)

 

(256,787)

 

(232,515)

 

Other

     

(97,823)

 

(87,297)

 

(52,475)

 

(42,366)

         

(2,727,297)

 

(1,855,540)

 

(1,370,318)

 

(2,153,669)

Total

     

(3,359,331)

 

(1,204,883)

 

(2,664,925)

 

(1,058,144)

 

 

 

       

Consolidated

 

Parent company

       

Jun/2016

 

Jun/2015

 

Jun/2016

 

Jun/2015

Interest income

                   

Held for sale

     

46,231

 

39,371

 

38,389

 

11,532

Loans and receivables

   

151,177

 

92,539

 

126,717

 

84,041

Held-to-maturity

     

9,410

 

16,198

 

9,410

 

16,198

       

206,818

 

148,108

 

174,516

 

111,771

Other assets not classifiable

   

27,494

 

26,697

 

7,207

 

9,834

Total

     

234,312

 

174,805

 

181,723

 

121,605

 

 

 

55

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

24.                    Expenses by nature

 

The information on expenses by nature was presented in the 2015 annual financial statements of the Company, in Note 30.

 

         

Consolidated

 

Parent company

         

Jun/2016

 

Jun/2015

 

Jun/2016

 

Jun/2015

                       

Classification by nature:

                 
 

Raw materials other inputs

   

(14,195,122)

 

(14,571,985)

 

(11,170,618)

 

(9,861,681)

 

Personnel expenses

   

(1,300,278)

 

(1,134,897)

 

(941,919)

 

(800,247)

 

Outsourced services

   

(991,243)

 

(753,417)

 

(682,757)

 

(562,818)

 

Tax expenses

   

(6,134)

 

(6,254)

 

(2,588)

 

(3,531)

 

Depreciation, amortization and depletion

   

(1,255,691)

 

(1,013,033)

 

(1,030,708)

 

(858,105)

 

Freights

   

(1,020,593)

 

(829,557)

 

(735,962)

 

(587,078)

 

Other expenses, net

   

(458,646)

 

(400,132)

 

(286,938)

 

(260,673)

 

Total

   

(19,227,707)

 

(18,709,275)

 

(14,851,490)

 

(12,934,133)

                       

Classification by function:

                 
 

Cost of products sold

   

(17,556,704)

 

(17,418,096)

 

(13,812,465)

 

(12,086,080)

 

Selling and distribution

   

(675,415)

 

(522,391)

 

(452,122)

 

(377,806)

 

General and administrative

   

(722,277)

 

(596,883)

 

(402,698)

 

(422,991)

 

Research and development

   

(82,628)

 

(82,157)

 

(50,718)

 

(52,026)

 

Other operating income (expenses), net

   

(190,683)

 

(89,748)

 

(133,487)

 

4,770

 

Total

   

(19,227,707)

 

(18,709,275)

 

(14,851,490)

 

(12,934,133)

 

 

 

56

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

25.                    Segment information

 

The information by segment was presented in the 2015 annual financial statements, in Note 31.

 

     

 

 

 

 

 

 

 

 

 

 

 

 

Jun/2016

                 

Operating expenses

   
     

Net

 

Cost of

     

Selling, general

 

Results from

 

Other operating

   
     

sales

 

products

 

Gross

 

and distribuition

 

equity

 

income

 

Operating

     

revenue

 

sold

 

profit

 

expenses

 

investments

 

(expenses), net

 

profit (loss)

Reporting segments

                         
 

Basic petrochemicals

 

12,105,795

 

(9,757,057)

 

2,348,738

 

(314,736)

   

(61,608)

 

1,972,394

 

Polyolefins

 

10,407,556

 

(8,219,988)

 

2,187,568

 

(628,662)

   

(33,523)

 

1,525,383

 

Vinyls

 

1,482,236

 

(1,404,303)

 

77,933

 

(110,970)

   

(1,772)

 

(34,809)

 

Chemical distribuition

 

423,712

 

(338,829)

 

84,883

 

(66,991)

   

1,041

 

18,933

 

USA and Europe

 

4,832,660

 

(3,102,676)

 

1,729,984

 

(252,403)

   

2,767

 

1,480,348

 

Mexico

(i)

334,324

 

(264,431)

 

69,893

 

(94,327)

   

(55,399)

 

(79,833)

Total

 

29,586,283

 

(23,087,284)

 

6,498,999

 

(1,468,089)

   

(148,494)

 

4,882,416

                             

Other segments

 

6,012

 

(7,401)

 

(1,389)

 

(1,876)

   

(18,799)

 

(22,064)

Corporate unit

   

(64,824)

 

13,377

 

(23,390)

 

(74,837)

                             

 

Braskem consolidated before

eliminations and reclassifications

 

29,592,295

 

(23,094,685)

 

6,497,610

 

(1,534,789)

 

13,377

 

(190,683)

 

4,785,515

                               

Eliminations and reclassifications

 

(5,534,180)

 

5,537,981

 

3,801

 

54,469

   

58,270

                               

Total

 

24,058,115

 

(17,556,704)

 

6,501,411

 

(1,480,320)

 

13,377

 

(190,683)

 

4,843,785

                               
                               
     

 

 

 

 

 

 

 

 

 

 

 

 

Jun/2015

                 

Operating expenses

   
     

Net

 

Cost of

     

Selling, general

 

Results from

 

Other operating

   
     

sales

 

products

 

Gross

 

and distribuition

 

equity

 

income

 

Operating

     

revenue

 

sold

 

profit

 

expenses

 

investments

 

(expenses), net

 

profit (loss)

Reporting segments

                         
 

Basic petrochemicals

 

11,184,383

 

(9,401,637)

 

1,782,746

 

(287,506)

   

(30,370)

 

1,464,870

 

Polyolefins

 

9,597,434

 

(7,477,317)

 

2,120,117

 

(572,486)

   

(26,670)

 

1,520,961

 

Vinyls

 

1,244,675

 

(1,111,741)

 

132,934

 

(102,204)

   

13,533

 

44,263

 

USA and Europe

 

3,734,956

 

(3,302,766)

 

432,190

 

(186,766)

   

805

 

246,229

 

Chemical distribuition

 

408,016

 

(322,962)

 

85,054

 

(61,326)

   

(533)

 

23,195

Total

 

26,169,464

 

(21,616,423)

 

4,553,041

 

(1,210,288)

   

(43,235)

 

3,299,518

                             

Other segments

(ii)

273,579

 

(274,286)

 

(707)

 

(48,100)

   

(29,903)

 

(78,710)

Corporate unit

 

(21,674)

 

9,739

 

(16,610)

 

50,086

     
Braskem consolidated before

eliminations and reclassifications

 

26,443,043

 

(21,890,709)

 

4,552,334

 

(1,280,062)

 

9,739

 

(89,748)

 

3,270,894

                               

Eliminations and reclassifications

 

(4,655,947)

 

4,472,613

 

(183,334)

 

78,631

   

(183,334)

                               

Total

 

21,787,096

 

(17,418,096)

 

4,369,000

 

(1,201,431)

 

9,739

 

(89,748)

 

3,087,560

                               

 

(i)          With the operational startup of Braskem Idesa, the Company began to report the “Mexico” segment, which includes activities related to PE production (Note 1(a)).

(ii)        This segment includes the results of the subsidiary Braskem Idesa, which, in 2015, was in the pre-operational phase (non-reporting segment).

 

57

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2016

All amounts in thousands, unless otherwise stated

 

 

 

58

 

 

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  August 5 , 2016
  BRASKEM S.A.
 
 
  By:      /s/     Pedro v an Langendonck Teixeira de Freitas
 
    Name: Pedro v an Langendonck Teixeira de Freitas
    Title: Chief Financial Officer

 

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.